As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Active International Allocation Portfolio Class I	$	1,000.00	$	1,362.70	$	1,020.66	$	5.29	$	4.52		0.89	%
Active International Allocation Portfolio Class A		1,000.00		1,361.20		1,019.20		7.00		5.99		1.18
Active International Allocation Portfolio Class L		1,000.00		1,357.60		1,016.39		10.31		8.82		1.74
Active International Allocation Portfolio Class C		1,000.00		1,356.00		1.015.13		11.79		10.08		1.99
Active International Allocation Portfolio Class IS		1,000.00		1,363.50		1,020.91		4.99		4.27		0.84
Active International Allocation Portfolio Class IR		1,000.00		1,363.50		1,020.91		4.99		4.27		0.84

* Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 184/366 (to reflect the most recent one-half year period).

** Annualized.

Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

The Fund seeks long-term capital appreciation.

Performance

For the fiscal year ended December 31, 2020, the Fund's Class I shares had a total return based on net asset value and reinvestment of distributions per share of 30.48%, net of fees. The Fund's Class I shares outperformed the Fund's benchmark, the MSCI All Country World ex USA Index (the "Index"), which returned 10.65%.

Please keep in mind that high double-digit returns are highly unusual and cannot be sustained. Investors should also be aware that these returns were primarily achieved during favorable market conditions.

Factors Affecting Performance

• 2020 was a year of stark contrasts: the virus caused illness and death, job losses, business failures and wholesale disruption to our families, work and social lives. Conversely, asset markets flourished and global equity markets rose to record highs as a result of massive amounts of fiscal and monetary support.

• For the full year, our overweights to media and entertainment, semiconductors, and gold and copper mining stocks contributed to portfolio performance. Our underweight to banks was also positive, as were the zero allocations to Australia and Italy and overweights to Germany and the Netherlands.

• Detractors from 2020 portfolio performance included an overweight to and positioning in energy services and beverages, and a zero allocation to health care technology stocks. From a country perspective, the small allocation to Argentina (which was sold in the first quarter of 2020) was negative for performance, as was the overweight to Brazil and underweights to Japan and China. The Fund sometimes uses derivative instruments to manage certain market or currency exposures. This detracted from performance in the period.

Management Strategies

• In the fourth quarter of 2020, on the back of positive news on the vaccine as well as a fairly decisive outcome of the U.S. elections, global investors have demonstrated their belief in a robust cyclical recovery in 2021. The vaccines are a game-changer, and their use should allow the world to return to a somewhat normal environment as herd immunity is reached, although there are still many variables to consider in

determining the exact timing of a return to widespread social interaction and travel. We are encouraged by the speed of the vaccine discovery, and see this development as demonstrating the incredible power of science, data and technology available to us today. We note that optimistic 2021 forecasts rely on additional fiscal spending and pent-up demand to close the very large output gap.

• In December when we looked forward to 2021, our investment outlook at the time anticipated a solid economic recovery in the first half of the new year fueled by the ample liquidity supplied by central banks, potential additional fiscal spending in the U.S., as well as some normalization of economic activity as vaccinations are rolled out. However, since then, virus cases and deaths have climbed, a more contagious new variant of the virus has been discovered and has since spread, and restrictions, particularly in Europe, have correspondingly tightened. Additionally, the rollout of vaccines has been disappointing. On the back of this, it now seems likely that the rebound will be further postponed. It is also clear to us that further fiscal and monetary support are even more critical to continue to bridge economies until the vaccination rate is widespread, economies can normalize and growth can recover. Our base case for 2021 is more moderate.

• Once the vaccinations are more widespread, we expect a solid economic recovery fueled by the ample liquidity supplied by central banks, a potential new fiscal package from the U.S., as well as some normalization of economic activity as vaccinations are rolled out. However, we see a risk to more optimistic forecasts, particularly in the U.S., as potential political constraints could limit the fiscal spending outlook, while the trail of COVID-19 leaves many industries displaced and with higher debt levels, with the pain concentrated in small and medium enterprises that form the backbone of many local economies.

• Therefore, while 2021 will in many ways be a return to business as usual, it has to be remembered that even prior to the onset of the global pandemic, the global economy was less than robust as a result of high global debt levels, challenging demographics and deglobalization. While monetary support and fiscal stimulus, as well as a new friendlier to trade administration in Washington, are all positive factors, many of the structural issues that were

holding back the global economy are still there. Many industries face a weak demand backdrop, while their indebtedness has increased. Therefore, we think that while the economic outlook since November has clearly improved, the degree of optimism being exhibited by global stock markets today may be hard to achieve as the pace of economic recovery from the lows plateaus and the comparisons get harder after May.

• This is why, as the calendar moves further into 2021, we see a more challenging fundamental environment, although with an important caveat. That caveat is that policy is likely to stay stimulative, while the pain seen by small and medium enterprises is likely to benefit the large corporates. This means that asset prices should still be well-supported by liquidity, while many companies will be reporting significant market share gains that will somewhat offset loss of economic momentum. In many ways, this environment is likely to look similar to the environment seen during the fourth quarter of 2020. Given this constructive but moderate view, we are maintaining our barbell positioning that has been successful for the past 18 months. Although on absolute valuations, large value sectors such as financials and energy look cheap, we are cautious on the fundamental improvements needed for these businesses. Central banks are likely to keep rates pinned at low levels for years, hurting the profitability of the financial sector, while it is hard to see the oil oversupply issues abating without a large cut in U.S. domestic oil production that would need to be coupled with several years of above-average growth in global demand.

• For the first quarter, our expectation is that economic data is likely to be mixed. In the U.S., there are signs of softening in the labor markets, making the recently passed $900 billion fiscal package crucial in helping to offset job/wage losses. In China, last year was a year of economic recovery post-virus, government stimulus and a strong renminbi. This year will be a year of less stimulus and stabilizing overall debt levels. Europe posted solid fourth quarter 2020 economic growth based primarily on exports to Asia and will likely suffer in the first quarter of 2021 as the new virus strains necessitate lockdowns and restrictive measures. U.S. bond yields above 1%, energy and financials rallying and a strengthening Australian dollar seem

Performance Compared to the MSCI All Country World ex USA Index⁽¹⁾, the Active International Allocation Blend Index⁽²⁾, the Lipper International Large-Cap Growth Funds Index⁽³⁾ and the Lipper International Multi-Cap Growth Funds Index⁽⁴⁾

	Period Ended December 31, 2020 Total Returns⁽⁵⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽¹¹⁾
Fund — Class I Shares w/o sales charges⁽⁶⁾		30.48	%		10.93	%		6.53	%		6.53	%
Fund — Class A Shares w/o sales charges⁽⁷⁾		30.10			10.56			6.19			5.94
Fund — Class A Shares with maximum 5.25% sales charges⁽⁷⁾		23.26			9.37			5.62			5.71
Fund — Class L Shares w/o sales charges⁽⁸⁾		29.38			9.98			—			8.96
Fund — Class C Shares w/o sales charges⁽⁹⁾		29.13			9.69			—			6.30
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁹⁾		28.13			9.69			—			6.30
Fund — Class IS Shares w/o sales charges⁽¹⁰⁾		30.55			—			—			33.32
Fund — Class IR Shares w/o sales charges⁽¹⁰⁾		30.55			—			—			33.32
MSCI All Country World ex USA Index		10.65			8.93			4.92			6.00
Active International Allocation Blend Index		10.65			8.19			5.87			5.82
Lipper International Large-Cap Growth Funds Index		19.39			10.90			7.11			N/A
Lipper International Multi-Cap Growth Funds Index		15.49			9.70			6.14			N/A

Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. Performance assumes that all dividends and distributions, if any, were reinvested. For the most recent month-end performance figures, please visit www.morganstanley.com/im/shareholderreports. Investment return and principal value will fluctuate so that Fund shares, when redeemed, may be worth more or less than their original cost. Total returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance of share classes will vary due to difference in sales charges and expenses.

⁽¹⁾ The MSCI All Country World ex USA Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed and emerging markets, excluding the United States. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Returns, including periods prior to January 1, 2001, are calculated using the return data of the MSCI All Country World ex USA Index (gross dividends) through December 31, 2000 and the return data of the MSCI All Country World ex USA Index (net dividends) after December 31, 2000. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional

investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Active International Allocation Blend Index is a performance linked benchmark of the old and new benchmark of the Fund, the old benchmark represented by MSCI EAFE Index (a benchmark measures the international equity market performance of developed markets excluding the United States and Canada) from the Fund's inception to December 31, 2016 and the new benchmark represented by MSCI All Country World ex USA Index for periods thereafter. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽³⁾ The Lipper International Large-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper International Large-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper International Large-Cap Growth Funds classification. The Funds' Lipper category changed from Lipper International Multi-Cap Growth Funds to Lipper International Large-Cap Growth Funds.

⁽⁴⁾ The Lipper International Multi-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper International Multi-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index.

⁽⁵⁾ Total returns for the Fund reflect fees waived and expenses reimbursed, if applicable, by the Adviser (as defined herein). Without such waivers and reimbursements, total returns would have been lower.

⁽⁶⁾ Commenced operations on January 17, 1992.

⁽⁷⁾ Commenced offering on January 2, 1996.

⁽⁸⁾ Commenced offering on June 14, 2012.

⁽⁹⁾ Commenced offering on April 30, 2015.

⁽¹⁰⁾ Commenced offering on October 31, 2019.

⁽¹¹⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of Class I of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (99.2%)
Belgium (1.0%)
Anheuser-Busch InBev SA N.V.		30,404	$	2,121
Brazil (1.8%)
Ambev SA ADR		916,103		2,803
Petroleo Brasileiro SA (Preference)		230,481		1,251
				4,054
Canada (6.9%)
Agnico Eagle Mines Ltd.		39,382		2,772
Altus Group Ltd.		25,941		1,001
First Quantum Minerals Ltd.		512,779		9,205
Gildan Activewear, Inc.		79,644		2,227
				15,205
China (6.4%)
Alibaba Group Holding Ltd. ADR (a)		22,403		5,214
China Resources Beer Holdings Co., Ltd. (b)		122,000		1,122
Tencent Holdings Ltd. (b)		57,100		4,108
Tencent Music Entertainment Group ADR (a)		94,130		1,811
Trip.com Group Ltd. ADR (a)		58,933		1,988
				14,243
Denmark (1.4%)
Drilling Co of 1972 A/S (The) (a)		14,139		443
Novo Nordisk A/S Series B		37,166		2,592
				3,035
France (9.4%)
Air Liquide SA		5,440		892
Airbus SE (a)		38,883		4,267
Capgemini SE		10,908		1,697
Dassault Systemes SE		5,613		1,138
EssilorLuxottica SA		4,581		714
Hermes International		463		498
Kering SA		2,026		1,470
L'Oreal SA (BSRM)		3,731		1,424
Legrand SA		6,555		586
LVMH Moet Hennessy Louis Vuitton SE		1,997		1,250
Pernod Ricard SA		7,755		1,489
Remy Cointreau SA		5,608		1,047
Sanofi		11,120		1,078
Ubisoft Entertainment SA (a)		16,975		1,636
Vivendi SA		48,795		1,574
				20,760
Germany (7.8%)
Bayer AG (Registered)		57,833		3,407
Bayerische Motoren Werke AG		4,266		377
CTS Eventim AG & Co. KGaA (a)		30,316		2,026
Duerr AG		34,808		1,423
Infineon Technologies AG		47,928		1,830
Jungheinrich AG (Preference)		31,250		1,397
KION Group AG		15,048		1,305
Linde PLC (a)		7,252		1,912

	Shares		Value (000)
SAP SE		11,726	$	1,519
Siemens Healthineers AG		38,054		1,958
				17,154
India (2.7%)
Apollo Hospitals Enterprise Ltd.		45,661		1,507
ICICI Bank Ltd. (a)		129,188		950
ICICI Prudential Life Insurance Co., Ltd. (a)		144,760		989
Maruti Suzuki India Ltd.		12,004		1,259
Reliance Industries Ltd.		48,168		1,311
				6,016
Ireland (0.3%)
Kerry Group PLC, Class A		4,867		707
Japan (9.8%)
FANUC Corp.		5,150		1,271
Hoya Corp.		7,800		1,080
Keyence Corp.		5,600		3,150
Murata Manufacturing Co., Ltd.		8,700		788
Nexon Co., Ltd.		83,800		2,586
Nintendo Co., Ltd.		1,808		1,161
Shimano, Inc.		4,350		1,018
Shiseido Co., Ltd.		10,300		713
SMC Corp.		2,105		1,285
Sony Corp.		32,993		3,325
Sony Corp. ADR		27,816		2,812
Tokyo Electron Ltd.		5,200		1,942
Unicharm Corp.		13,300		631
				21,762
Korea, Republic of (4.8%)
Samsung Electronics Co., Ltd.		104,272		7,787
SK Hynix, Inc.		26,843		2,932
				10,719
Malta (0.0%)
BGP Holdings PLC (a)(c)		72,261		—	@
Netherlands (4.3%)
Akzo Nobel N.V.		9,009		967
ASML Holding N.V.		6,988		3,384
Koninklijke Philips N.V. (a)		77,023		4,149
Wolters Kluwer N.V.		10,871		916
				9,416
Norway (1.0%)
Adevinta ASA (a)		109,989		1,849
Subsea 7 SA (a)		36,850		379
				2,228
Poland (1.2%)
Allegro.eu SA (a)		119,357		2,706
Singapore (9.5%)
Sea Ltd. ADR (a)		105,951		21,090
Spain (2.2%)
Amadeus IT Group SA		64,631		4,771

	Shares		Value (000)
Sweden (1.5%)
Atlas Copco AB, Class A		12,321	$	633
Epiroc AB, Class A		35,510		645
Telefonaktiebolaget LM Ericsson, Class B		181,320		2,157
				3,435
Switzerland (1.4%)
Givaudan SA (Registered)		246		1,041
Nestle SA (Registered)		16,605		1,963
				3,004
Taiwan (3.8%)
Airtac International Group		32,000		1,028
Taiwan Semiconductor Manufacturing Co., Ltd.		246,000		4,654
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		24,292		2,649
				8,331
Thailand (0.5%)
Muangthai Capital PCL (Foreign Shares) (a)		532,400		1,046
United Kingdom (7.8%)
AstraZeneca PLC		12,945		1,291
Diageo PLC		72,987		2,888
Intertek Group PLC		3,793		293
Keywords Studios PLC (a)		59,074		2,307
Ryanair Holdings PLC ADR (a)		37,133		4,084
Sage Group PLC (The)		72,435		575
Unilever PLC		38,935		2,357
Unilever PLC CVA		44,586		2,674
Weir Group PLC (The) (a)		25,917		705
				17,174
United States (13.7%)
Air Products & Chemicals, Inc.		2,851		779
Booking Holdings, Inc. (a)		1,543		3,437
Charles River Laboratories International, Inc. (a)		6,040		1,509
Cognex Corp.		7,900		634
Estee Lauder Cos., Inc. (The), Class A		5,577		1,485
Farfetch Ltd., Class A (a)		104,568		6,672
ICON PLC (a)		4,120		803
Mastercard, Inc., Class A		1,524		544
Medtronic PLC		6,287		736
Micron Technology, Inc. (a)		103,244		7,762
Mondelez International, Inc., Class A		7,637		447
Newmont Goldcorp Corp. (NYSE)		29,024		1,738
Newmont Goldcorp Corp. (d) (TSX)		29,323		1,755
Palo Alto Networks, Inc. (a)		721		256
Schlumberger Ltd.		46,230		1,009
Visa, Inc., Class A		2,441		534
Xilinx, Inc.		1,930		274
				30,374
Total Common Stocks (Cost $127,620)				219,351
Investment Company (0.6%)
United States (0.6%)
Morgan Stanley China A Share Fund, Inc. (See Note G) (Cost $1,324)		56,878		1,260

	Shares		Value (000)
Short-Term Investment (0.5%)
Investment Company (0.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $1,074)		1,074,225	$	1,074
Total Investments (100.3%) (Cost $130,018) Including $66 of Securities Loaned (e)(f)(g)				221,685
Other Assets in Excess of Liabilities (0.6%)				1,482
Total Written Options Outstanding (–0.9%) (Premiums Received $764)				(2,055	)
Net Assets (100.0%)			$	221,112

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

@ value is less than $500.

(a) Non-income producing security.

(b) Security trades on the Hong Kong exchange.

(c) At December 31, 2020, the Fund held a fair valued security valued at less than $500, representing less than 0.05% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(d) All or a portion of this security was on loan at December 31, 2020.

(e) Securities are available for collateral in connection with open foreign currency forward exchange contracts.

(f) The approximate fair value and percentage of net assets, $125,212,000 and 56.6%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(g) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $130,348,000. The aggregate gross unrealized appreciation is approximately $94,996,000 and the aggregate gross unrealized depreciation is approximately $5,619,000, resulting in net unrealized appreciation of approximately $89,377,000.

ADR American Depositary Receipt.

CVA Certificaten Van Aandelen.

BSRM Berlin Second Regulated Market.

NYSE New York Stock Exchange.

TSX Toronto Stock Exchange.

Foreign Currency Forward Exchange Contracts:

The Fund had the following foreign currency forward exchange contracts open at December 31, 2020:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
Citibank NA	EUR	1,593	$	1,941	3/18/21	$	(9	)
State Street Bank and Trust Co.	HKD	4,194	$	541	3/18/21		(—	@)
State Street Bank and Trust Co.	HKD	8,639	$	1,115	3/18/21		—	@
State Street Bank and Trust Co.	$	2,539	GBP	1,894	3/18/21		51
State Street Bank and Trust Co.	$	2,053	JPY	212,626	3/18/21		9
						$	51

Call Options Written:

The Fund had the following call options written purchased open at December 31, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Received (000)			Unrealized Depreciation (000)
UBS Securities LLC	USD/CNH	CNH	190	Feb-21		72,800		73	$	(1,487	)	$	(682	)	$	(805	)
UBS Securities LLC	USD/CNH	CNH	65	Jan-21		53,000		53		(568	)		(82	)		(486	)
									$	(2,055	)	$	(764	)	$	(1,291	)

@ Value is less than $500.

CNH — Chinese Yuan Renminbi Offshore

EUR — Euro

GBP — British Pound

HKD — Hong Kong Dollar

JPY — Japanese Yen

USD — United States Dollar

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $127,620)	$	219,351
Investments in Securities of Affiliated Issuers, at Value (Cost $2,398)		2,334
Total Investments in Securities, at Value (Cost $130,018)		221,685
Foreign Currency, at Value (Cost $45)		59
Due from Broker		1,820
Tax Reclaim Receivable		359
Receivable for Fund Shares Sold		209
Dividends Receivable		135
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		60
Receivable from Affiliate		—	@
Receivable from Securities Lending Income		—	@
Other Assets		62
Total Assets		224,389
Liabilities:
Options Written, at Value (Premiums received $764)		2,055
Bank Overdraft		640
Payable for Advisory Fees		262
Payable for Fund Shares Redeemed		170
Payable for Professional Fees		29
Payable for Sub Transfer Agency Fees — Class I		13
Payable for Sub Transfer Agency Fees — Class A		7
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Shareholder Services Fees — Class A		14
Payable for Distribution and Shareholder Services Fees — Class L		4
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Custodian Fees		15
Payable for Administration Fees		15
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		9
Due to Broker		5
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Transfer Agency Fees — Class IR		—	@
Other Liabilities		34
Total Liabilities		3,277
Net Assets	$	221,112
Net Assets Consist of:
Paid-in-Capital	$	135,192
Total Distributable Earnings		85,920
Net Assets	$	221,112

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	146,087
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		7,674,972
Net Asset Value, Offering and Redemption Price Per Share	$	19.03
CLASS A:
Net Assets	$	69,135
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,557,731
Net Asset Value, Redemption Price Per Share	$	19.43
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.08
Maximum Offering Price Per Share	$	20.51
CLASS L:
Net Assets	$	5,718
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		296,688
Net Asset Value, Offering and Redemption Price Per Share	$	19.27
CLASS C:
Net Assets	$	144
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		7,485
Net Asset Value, Offering and Redemption Price Per Share	$	19.22
CLASS IS:
Net Assets	$	14
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		735
Net Asset Value, Offering and Redemption Price Per Share	$	19.04
CLASS IR:
Net Assets	$	14
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		735
Net Asset Value, Offering and Redemption Price Per Share	$	19.04
⁽¹⁾ Including: Securities on Loan, at Value:	$	66

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $242 of Foreign Taxes Withheld)	$	1,873
Dividends from Securities of Affiliated Issuers (Note G)		134
Income from Securities Loaned — Net		11
Total Investment Income		2,018
Expenses:
Advisory Fees (Note B)		1,161
Shareholder Services Fees — Class A (Note D)		137
Distribution and Shareholder Services Fees — Class L (Note D)		35
Distribution and Shareholder Services Fees — Class C (Note D)		1
Professional Fees		171
Administration Fees (Note C)		143
Sub Transfer Agency Fees — Class I		65
Sub Transfer Agency Fees — Class A		42
Sub Transfer Agency Fees — Class L		3
Sub Transfer Agency Fees — Class C		—	@
Registration Fees		107
Shareholder Reporting Fees		56
Custodian Fees (Note F)		46
Transfer Agency Fees — Class I (Note E)		5
Transfer Agency Fees — Class A (Note E)		10
Transfer Agency Fees — Class L (Note E)		4
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Transfer Agency Fees — Class IR (Note E)		2
Pricing Fees		8
Directors' Fees and Expenses		4
Interest Expenses		3
Other Expenses		28
Total Expenses		2,035
Waiver of Advisory Fees (Note B)		(204	)
Rebate from Morgan Stanley Affiliate (Note G)		(20	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(10	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(2	)
Net Expenses		1,795
Net Investment Income		223
Realized Gain (Loss):
Investments Sold		(25	)
Investments in Affiliates		(295	)
Foreign Currency Forward Exchange Contracts		(57	)
Foreign Currency Translation		(129	)
Futures Contracts		(3,210	)
Options Written		4,944
Net Realized Gain		1,228
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of $67)		50,321
Investments in Affiliates		285
Foreign Currency Forward Exchange Contracts		28
Foreign Currency Translation		58
Futures Contracts		5
Options Written		(1,291	)
Net Change in Unrealized Appreciation (Depreciation)		49,406
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		50,634
Net Increase in Net Assets Resulting from Operations	$	50,857

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	223		$	2,002
Net Realized Gain		1,228			6,934
Net Change in Unrealized Appreciation (Depreciation)		49,406			27,852
Net Increase in Net Assets Resulting from Operations		50,857			36,788
Dividends and Distributions to Shareholders:
Class I		(57	)		(1,578	)
Class A		(26	)		(537	)
Class L		(2	)		(19	)
Class C		(—	@)		(—	@)
Class IS		(—	@)		(—	@)
Class IR		(—	@)		(—	@)
Total Dividends and Distributions to Shareholders		(85	)		(2,134	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		13,746			8,659
Distributions Reinvested		57			1,571
Redeemed		(28,630	)		(26,981	)
Class A:
Subscribed		5,120			9,097
Distributions Reinvested		26			531
Redeemed		(9,666	)		(12,119	)
Class L:
Exchanged		334			29
Distributions Reinvested		2			18
Redeemed		(637	)		(632	)
Class C:
Subscribed		83			7
Distributions Reinvested		—	@		—	@
Redeemed		(5	)		(12	)
Class IS:
Subscribed		—			10	(a)
Distributions Reinvested		—	@		—	@(a)
Class IR:
Subscribed		—			10	(a)
Distributions Reinvested		—	@		—	@(a)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(19,570	)		(19,812	)
Redemption Fees		—			—	@
Total Increase in Net Assets		31,202			14,842
Net Assets:
Beginning of Period		189,910			175,068
End of Period	$	221,112		$	189,910

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		915			654
Shares Issued on Distributions Reinvested		3			109
Shares Redeemed		(1,939	)		(2,005	)
Net Decrease in Class I Shares Outstanding		(1,021	)		(1,242	)
Class A:
Shares Subscribed		323			654
Shares Issued on Distributions Reinvested		1			36
Shares Redeemed		(672	)		(890	)
Net Decrease in Class A Shares Outstanding		(348	)		(200	)
Class L:
Shares Exchanged		29			3
Shares Issued on Distributions Reinvested		—	@@		1
Shares Redeemed		(44	)		(47	)
Net Decrease in Class L Shares Outstanding		(15	)		(43	)
Class C:
Shares Subscribed		4			1
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		(—	@@)		(1	)
Net Increase (Decrease) in Class C Shares Outstanding		4			(—	@@)
Class IS:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—	@@		—	@@
Net Increase in Class IS Shares Outstanding		—	@@		1	(a)
Class IR:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—	@@		—	@@
Net Increase in Class IR Shares Outstanding		—	@@		1	(a)

(a) For the period October 31, 2019 through December 31, 2019.

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.59		$	12.07		$	14.46		$	11.83		$	12.20
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.04			0.16			0.23			0.19			0.26
Net Realized and Unrealized Gain (Loss)		4.41			2.54			(2.41	)		2.74			(0.34	)
Total from Investment Operations		4.45			2.70			(2.18	)		2.93			(0.08	)
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.18	)		(0.21	)		(0.30	)		(0.29	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	19.03		$	14.59		$	12.07		$	14.46		$	11.83
Total Return⁽⁴⁾		30.48	%		22.41	%		(15.14	)%		24.76	%		(0.67	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	146,087		$	126,860		$	119,925		$	155,550		$	169,589
Ratio of Expenses Before Expense Limitation		1.02	%		0.97	%		0.97	%		1.14	%		0.94	%
Ratio of Expenses After Expense Limitation		0.89	%⁽⁵⁾		0.89	%⁽⁵⁾		0.88	%⁽⁵⁾		0.88	%⁽⁵⁾		0.76	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.89	%⁽⁵⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.24	%⁽⁵⁾		1.22	%⁽⁵⁾		1.67	%⁽⁵⁾		1.44	%⁽⁵⁾		2.18	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.02	%		0.02	%		0.01	%
Portfolio Turnover Rate		37	%		34	%		43	%		22	%		40	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been 0.13% higher and the Ratio of Net Investment Income would have been 0.13% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(5) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.94		$	12.36		$	14.79		$	12.10		$	12.47
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.01	)		0.11			0.19			0.14			0.21
Net Realized and Unrealized Gain (Loss)		4.51			2.61			(2.46	)		2.80			(0.34	)
Total from Investment Operations		4.50			2.72			(2.27	)		2.94			(0.13	)
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.14	)		(0.16	)		(0.25	)		(0.24	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	19.43		$	14.94		$	12.36		$	14.79		$	12.10
Total Return⁽⁴⁾		30.10	%		22.00	%		(15.38	)%		24.29	%		(1.05	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	69,135		$	58,339		$	50,726		$	65,710		$	56,934
Ratio of Expenses Before Expense Limitation		1.31	%		1.25	%		1.26	%		1.48	%		1.32	%
Ratio of Expenses After Expense Limitation		1.19	%⁽⁵⁾		1.22	%⁽⁵⁾		1.19	%⁽⁵⁾		1.23	%⁽⁵⁾		1.14	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.19	%⁽⁵⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.06	)%⁽⁵⁾		0.82	%⁽⁵⁾		1.37	%⁽⁵⁾		1.02	%⁽⁵⁾		1.79	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.02	%		0.02	%		0.01	%
Portfolio Turnover Rate		37	%		34	%		43	%		22	%		40	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.10% higher and the Ratio of Net Investment Income would have been 0.10% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.90		$	12.32		$	14.73		$	12.04		$	12.41
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.09	)		0.05			0.13			0.07			0.14
Net Realized and Unrealized Gain (Loss)		4.47			2.59			(2.46	)		2.79			(0.35	)
Total from Investment Operations		4.38			2.64			(2.33	)		2.86			(0.21	)
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.06	)		(0.08	)		(0.17	)		(0.16	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	19.27		$	14.90		$	12.32		$	14.73		$	12.04
Total Return⁽⁴⁾		29.38	%		21.43	%		(15.87	)%		23.80	%		(1.68	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	5,718		$	4,644		$	4,375		$	6,463		$	6,053
Ratio of Expenses Before Expense Limitation		1.86	%		1.81	%		1.76	%		2.07	%		1.93	%
Ratio of Expenses After Expense Limitation		1.74	%⁽⁵⁾		1.74	%⁽⁵⁾		1.69	%⁽⁵⁾		1.73	%⁽⁵⁾		1.74	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.74	%⁽⁵⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.61	)%⁽⁵⁾		0.35	%⁽⁵⁾		0.92	%⁽⁵⁾		0.54	%⁽⁵⁾		1.20	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.02	%		0.02	%		0.01	%
Portfolio Turnover Rate		37	%		34	%		43	%		22	%		40	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.89		$	12.34		$	14.77		$	12.15		$	12.38
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.12	)		0.00	⁽³⁾		0.09			(0.00	)⁽³⁾		0.14
Net Realized and Unrealized Gain (Loss)		4.46			2.59			(2.45	)		2.83			(0.37	)
Total from Investment Operations		4.34			2.59			(2.36	)		2.83			(0.23	)
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.04	)		(0.07	)		(0.21	)		—
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	19.22		$	14.89		$	12.34		$	14.77		$	12.15
Total Return⁽⁴⁾		29.13	%		21.03	%		(16.04	)%		23.42	%		(1.94	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	144		$	45		$	42		$	23		$	9
Ratio of Expenses Before Expense Limitation		5.66	%		7.49	%		7.18	%		20.06	%		8.58	%
Ratio of Expenses After Expense Limitation		1.99	%⁽⁵⁾		1.99	%⁽⁵⁾		1.98	%⁽⁵⁾		1.97	%⁽⁵⁾		1.99	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.99	%⁽⁵⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.81	)%⁽⁵⁾		0.03	%⁽⁵⁾		0.67	%⁽⁵⁾		(0.03	)%⁽⁵⁾		1.19	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.02	%		0.03	%		0.01	%
Portfolio Turnover Rate		37	%		34	%		43	%		22	%		40	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2020			Period from October 31, 2019⁽¹⁾ to December 31, 2019
Net Asset Value, Beginning of Period	$	14.59		$	13.79
Income from Investment Operations:
Net Investment Income⁽²⁾		0.04			0.00	⁽³⁾
Net Realized and Unrealized Gain		4.42			0.98
Total from Investment Operations		4.46			0.98
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.18	)
Net Asset Value, End of Period	$	19.04		$	14.59
Total Return⁽⁴⁾		30.55	%		7.15	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	14		$	11
Ratio of Expenses Before Expense Limitation		21.16	%		14.33	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		0.84	%⁽⁵⁾		0.84	%⁽⁵⁾⁽⁷⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.84	%⁽⁵⁾		N/A
Ratio of Net Investment Income		0.28	%⁽⁵⁾		0.18	%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%⁽⁷⁾
Portfolio Turnover Rate		37	%		34	%

(1) Commencement of Offering.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Not annualized.

(7) Annualized.

	Class IR
Selected Per Share Data and Ratios	Year Ended December 31, 2020			Period from October 31, 2019⁽¹⁾ to December 31, 2019
Net Asset Value, Beginning of Period	$	14.59		$	13.79
Income from Investment Operations:
Net Investment Income⁽²⁾		0.04			0.00	⁽³⁾
Net Realized and Unrealized Gain on Investments		4.42			0.98
Total from Investment Operations		4.46			0.98
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.18	)
Net Asset Value, End of Period	$	19.04		$	14.59
Total Return⁽⁴⁾		30.55	%		7.15	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	14		$	11
Ratio of Expenses Before Expense Limitation		20.70	%		14.33	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		0.84	%⁽⁵⁾		0.84	%⁽⁵⁾⁽⁷⁾
Ratios of Expenses After Expense Limitation Excluding Interest Expenses		0.84	%⁽⁵⁾		N/A
Ratio of Net Investment Income		0.29	%⁽⁵⁾		0.18	%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%⁽⁷⁾
Portfolio Turnover Rate		37	%		34	%

(1) Commencement of Offering.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Not annualized.

(7) Annualized.

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-one separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Active International Allocation Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions. In addition, Class L shares of the Fund may be exchanged for Class L shares of any Morgan Stanley Multi-Class Fund, even though Class L shares are closed to investors.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1. Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official

closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) futures are valued at the settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign

market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	—	$	4,267	$	—	$	4,267
Airlines		4,084		—		—		4,084
Automobiles		—		1,636		—		1,636
Banks		—		950		—		950
Beverages		2,803		8,667		—		11,470
Chemicals		779		4,812		—		5,591
Communications Equipment		—		2,157		—		2,157

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)			Total (000)
Common Stocks (cont'd)
Consumer Finance	$	—	$	1,046		$	—		$	1,046
Electrical Equipment		—		586			—			586
Electronic Equipment, Instruments & Components		634		3,938			—			4,572
Energy Equipment & Services		1,009		822			—			1,831
Entertainment		22,901		8,983			—			31,884
Food Products		447		2,670			—			3,117
Health Care Equipment & Supplies		736		7,187			—			7,923
Health Care Providers & Services		—		1,507			—			1,507
Household Durables		2,812		3,325			—			6,137
Household Products		—		631			—			631
Information Technology Services		1,078		8,775			—			9,853
Insurance		—		989			—			989
Interactive Media & Services		—		5,957			—			5,957
Internet & Direct Marketing Retail		20,017		—			—			20,017
Leisure Products		—		1,018			—			1,018
Life Sciences Tools & Services		2,312		—			—			2,312
Machinery		—		9,692			—			9,692
Metals & Mining		15,470		—			—			15,470
Oil, Gas & Consumable Fuels		—		2,562			—			2,562
Personal Products		3,842		4,811			—			8,653
Pharmaceuticals		—		8,368			—			8,368
Professional Services		—		1,209			—			1,209
Real Estate Management & Development		1,001		—			—	@		1,001
Semiconductors & Semiconductor Equipment		10,685		14,742			—			25,427
Software		256		3,232			—			3,488
Tech Hardware, Storage & Peripherals		—		7,787			—			7,787
Textiles, Apparel & Luxury Goods		2,227		3,932			—			6,159
Total Common Stocks		93,093		126,258			—	@		219,351
Investment Company		1,260		—			—			1,260
Short-Term Investment
Investment Company		1,074		—			—			1,074
Foreign Currency Forward Exchange Contracts		—		60			—			60
Total Assets		95,427		126,318			—	@		221,745
Liabilities:
Foreign Currency Forward Exchange Contracts		—		(9	)		—			(9	)
Written Options		—		(2,055	)		—			(2,055	)
Total Liabilities		—		(2,064	)		—			(2,064	)
Total	$	95,427	$	124,254		$	—	@	$	219,681

@ Value is less than $500.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stock (000)
Beginning Balance	$	—	@
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		—	@
Realized gains (losses)		—
Ending Balance	$	—	@
Net change in unrealized appreciation (depreciation) from investments still held as of December 30, 2020	$	—	@

@ Value is less than $500.

3. Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-tomarket on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4. Foreign Currency Translation and Foreign
Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

5. Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. The Fund may write call and put options on

stock indexes, futures, securities or currencies it owns or in which it may invest. Writing put options tend to increase the Fund's exposure to the underlying instrument. Writing call options tend to decrease the Fund's exposure to the underlying instruments. When the Fund writes a call or put option, an amount equal to the premium received is recorded as a liability. Any liability recorded is subsequently adjusted to reflect the current value of the options written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or are closed are added to or offset against the proceeds or amount paid on the transaction to determine the net realized gain or loss. The Fund as a writer of an option has no control over whether the underlying future, security or currency may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the future, security or currency underlying the written option. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

As of December 31, 2020, the Fund did not have any outstanding purchased options.

Futures: A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and

even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return and the potential loss from futures contracts can exceed the Fund's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

As of December 31, 2020, the Fund did not have any open futures contracts.

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the

contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of December 31, 2020:

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency Forward
Exchange Contracts

Unrealized Appreciation on
Foreign Currency Forward
Exchange Contracts

Currency Risk

Liability Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency Forward
Exchange Contracts

Unrealized Depreciation on
Foreign Currency Forward
Exchange Contracts

Currency Risk

)

Written Options

Investments, at Value
(Written Options)

Currency Risk

(2,055

)

Total

(2,064

)

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the year ended December 31, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(57	)
Equity Risk	Futures Contracts		(3,210	)
Currency Risk	Purchased Options		(5,278	)(a)
Currency Risk	Written Options		4,944
Total		$	(3,601	)

(a) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	28
Equity Risk	Futures Contracts		5
Currency Risk	Written Options		(1,291	)
Total		$	(1,258	)

At December 31, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives(b)	Assets(c) (000)		Liabilities(c) (000)
Foreign Currency Forward Exchange Contracts	$	60	$	(9	)
Written Options		—		(2,055	)
Total	$	60	$	(2,064	)

(b) Excludes exchange-traded derivatives.

(c) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its

right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Received (000)			Net Amount (not less than $0) (000)
State Street Bank and Trust Co.	$	60		$	(—	@)	$	—		$	60
Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Pledged (000)			Net Amount (not less than $0) (000)
Citibank NA	$	9		$	—		$	—		$	9
State Street Bank and Trust Co.		—	@		(—	@)		—			0
UBS Securities LLC		2,055			—			(1,820	)		235
Total	$	2,064		$	(—	@)	$	(1,820	)	$	244

@ Value is less than $500.

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	8,859,000
Futures Contracts:
Average monthly notional value	$	26,150,000
Purchased Options:
Average monthly notional amount		15,000
Written Options:
Average monthly notional amount		66,000

value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	66	(d)	$	—	$	(66	)(e)(f)	$	0

(d) Represents market value of loaned securities at year end.

(e) The Fund received non-cash collateral of approximately $70,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(f) The actual collateral received is greater than the amount shown here due to overcollateralization.

7. Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares, Class IS shares and Class IR shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets. Effective April 30,

2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

8. Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

9. Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

10. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion				Over $1 billion
	0.65	%			0.60	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.52% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.90% for Class I shares, 1.25% for Class A shares, 1.75% for Class L shares, 2.00% for Class C shares, 0.85% for Class IS shares and 0.85% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $204,000 of advisory fees were waived and approximately $16,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $66,244,000 and $90,290,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory

fees paid were reduced by approximately $2,000 relating to the Fund's investment in the Liquidity Funds.

The Fund invests in Morgan Stanley China A Share Fund, Inc., a closed-end management investment company advised by an affiliate of the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Morgan Stanley China A Share Fund, Inc. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $18,000 relating to the Fund's investment in the Morgan Stanley China A Share Fund, Inc.

The Fund had transactions with Mitsubishi UFJ Financial Group, Inc., and its affiliated broker-dealers, which may be deemed affiliates of the Adviser/Administrator and Distributor under Section 17 the Act.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company/Issuer	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	6,898	$	42,489	$	48,313	$	3
Morgan Stanley China A Share Fund		1,235		—		—		131
Mitsubishi UFJ Financial Group, Inc.		250		—		215		—
Total	$	8,383	$	42,489	$	48,528	$	134

Affiliated Investment Company/Issuer (cont'd)	Realized Gain (Loss) (000)			Change in Unrealized Appreciation (Depreciation) (000)		Value December 31, 2020 (000)
Liquidity Funds	$	—		$	—	$	1,074
Morgan Stanley China A Share Fund		—			25		1,260
Mitsubishi UFJ Financial Group, Inc.		(295	)		260		—
Total	$	(295	)	$	285	$	2,334

Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the year ended December 31, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2020 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to

short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2020 and 2019 was as follows:

2020 Distributions Paid From: Ordinary Income (000)				2019 Distributions Paid From: Ordinary Income (000)
$	85			$	2,134

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Distributable Earnings (000)				Paid-in Capital (000)
$	—	@		$	(—	@)

@ Amount is less than $500.

At December 31, 2020, the Fund had no distributable earnings on a tax basis.

At December 31, 2020, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $3,422,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders. During the year ended December 31, 2020, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $1,602,000.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Active International Allocation Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Active International Allocation Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Active International Allocation Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities law and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of the Company's internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020 by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

President, Strategic Decisions, LLC (consulting) (since February 2009); Director or Trustee of various Morgan Stanley Funds (since August 2006); Chairperson of the Compliance and Insurance Committee (since October 2015); formerly, Chairperson of the Insurance Sub-Committee of the Compliance and Insurance Committee (2007-2015); served as President and Chief Executive Officer of the Nuclear Energy Institute (policy organization) (February 2005-November 2008); retired as Admiral, U.S. Navy after serving over 38 years on active duty including 8 years as Director of the Naval Nuclear Propulsion Program in the Department of the Navy and the U.S. Department of Energy (1996-2004); served as Chief of Naval Personnel (July 1994-September 1996) and on the Joint Staff as Director of Political Military Affairs (June 1992-July 1994); knighted as Honorary Knight Commander of the Most Excellent Order of the British Empire; awarded the Officier de l'Orde National du Mérite by the French Government; elected to the National Academy of Engineering (2009).

Director of Naval and Nuclear Technologies LLP; Director Emeritus of the Armed Services YMCA; Member of the National Security Advisory Council of the Center for U.S. Global Engagement and a member of the CNA Military Advisory Board; Trustee of Fairhaven United Methodist Church; Member of the Board of Advisors of the Dolphin Scholarship Foundation; Director of other various non-profit organizations; formerly, Director of BP plc (November 2010May 2019).

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Chairperson of the Governance Committee (January 2021), Chairperson of the Liquidity and Alternatives Sub-Committee of the Investment Committee (2006-2020); and Director or Trustee of various Morgan Stanley Funds (since August 2006); President, Cedarwood Associates (mutual fund and investment management consulting) (since July 2006); formerly, Senior Managing Director of Victory Capital Management (1993-2006).

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Chairperson of the Equity Investment Committee (since January 2021); Director or Trustee of various Morgan Stanley Funds (since January 2015); Chief Executive Officer, Virginia Commonwealth University Investment Company (since November 2015); Owner, OBIR, LLC (institutional investment management consulting) (since June 2014); formerly, Managing Director, BlackRock, Inc. (February 2011-December 2013); and Chief Executive Officer, General Motors Asset Management (a/k/a Promark Global Advisors, Inc.) (June 2005-May 2010).

Formerly, Member of Virginia Commonwealth University School of Business Foundation (2005-2016); Member of Virginia Commonwealth University Board of Visitors (2013-2015); Member of Committee on Directors for Emerging Markets Growth Fund, Inc. (2007-2010); Chairperson of Performance Equity Management, LLC (2006-2010); and Chairperson, GMAM Absolute Return Strategies Fund, LLC (2006-2010).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Director or Trustee of various Morgan Stanley Funds (since January 2015) Chairman, Opus Capital Group (1996); formerly, Chief Executive Officer, Opus Capital Group (1996-2019); Director, Capvest Venture Fund, LP (May 2000-December 2011); Partner, Adena Ventures, LP (July 1999-December 2010); Director, The Victory Funds (February 2005-July 2008).

Director of Cincinnati Bell Inc. and Member, Audit Committee and Chairman, Governance and Nominating Committee; Director of Service Corporation International and Member, Audit Committee and Investment Committee; Director of Northern Kentucky University Foundation and Member, Investment Committee; Member of Chase College of Law Transactional Law Practice Center Board of Advisors; Director of Best Transport; Director of Chase College of Law Board of Visitors; formerly, Member, University of Cincinnati Foundation Investment Committee; Member, Miami University Board of Visitors (2008-2011); Trustee of Victory Funds (2005-2008) and Chairman, Investment Committee (2007-2008); and Member, Service Provider Committee (2005-2008).

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Senior Partner, Johnson Smick International, Inc. (consulting firm); Chairperson of the Fixed Income, Liquidity and Alternatives Investment Committee (January 2021), Chairperson of the Investment Committee (2006-2020) and Director or Trustee of various Morgan Stanley Funds (since July 1991); Co-Chairman and a founder of the Group of Seven Council (G7C) (international economic commission); formerly, Chairperson of the Audit Committee (July 1991-September 2006), Vice Chairman of the Board of Governors of the Federal Reserve System and Assistant Secretary of the U.S. Treasury.

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Senior Adviser, Kearns & Associates LLC (investment consulting); Chairperson of the Audit Committee (since October 2006) and Director or Trustee of various Morgan Stanley Funds (since August 1994); formerly, Deputy Chairperson of the Audit Committee (July 2003-September 2006) and Chairperson of the Audit Committee of various Morgan Stanley Funds (since August 1994); CFO of the J. Paul Getty Trust (1982-1999).

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Chairperson of the Risk Committee (since January 2021); Managing Director, Aetos Alternatives Management, LP (since March 2000); Co-President, Aetos Alternatives Management, LP (since January 2004) and Co-Chief Executive Officer of Aetos Alternatives Management, LP (since August 2013); Chairperson of the fixed Income Sub-Committee of the Investment committee (2006-2020) and Director or Trustee of various Morgan Stanley Funds (since August 2006); formerly, Managing Director, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management and President, various Morgan Stanley Funds (June 1998-March 2000); Principal, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management (August 1997-December 1999).

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

Director or Trustee of various Morgan Stanley Funds (since January 2017); Managing Director, JPMorgan Asset Management (2004-2016); Oversight and Control Head of Fiduciary and Conflicts of Interest Program (2015-2016); Chief Control Officer-Global Asset Management (2013-2015); President, JPMorgan Funds (2010-2013); Chief Administrative Officer (2004-2013); various other positions including Treasurer and Board Liaison (since 2001).

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Chair of the Boards of various Morgan Stanley Funds (since August 2020); Director or Trustee of various Morgan Stanley Funds (since August 2006); formerly, Vice Chair of the Boards of various Morgan Stanley Funds (January 2020-August 2020); President and Chief Executive Officer of General Motors Asset Management; Chairman and Chief Executive Officer of the GM Trust Bank and Corporate Vice President of General Motors Corporation (August 1994-December 2005).

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

** The Fund Complex includes (as of December 31, 2020) all open-end and closed-end funds (including all of their portfolios) advised by Morgan Stanley Investment Management Inc. (the "Adviser") and any funds that have an adviser that is an affiliated person of the Adviser (including, but not limited to, Morgan Stanley AIP GP LP).

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

President and Principal Executive Officer of the Equity and Fixed Income Funds and the Morgan Stanley AIP Funds (since September 2013) and the Liquidity Funds and various money market funds (since May 2014) in the Fund Complex; Managing Director of the Adviser; Head of Public Markets Product Development (since 2006).

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Managing Director of the Adviser and various entities affiliated with the Adviser; Chief Compliance Officer of various Morgan Stanley Funds and the Adviser (since December 2016) and Chief Compliance Officer of Morgan Stanley AIP GP LP (since 2014). Formerly, Managing Director and Deputy Chief Compliance Officer of the Adviser (2014-2016).

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

Vice President of the Equity and Fixed Income Funds, Liquidity Funds, various money market funds and the Morgan Stanley AIP Funds in the Fund Complex (since June 2017); Executive Director of the Adviser; Head of Product Development for Equity and Fixed Income Funds (since August 2013).

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, but makes the complete schedule of portfolio holdings for the fund's first and third fiscal quarters available on its public website. The holdings for each money market fund are also posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Advantage Portfolio Class I	$	1,000.00	$	1,321.80	$	1,020.91	$	4.90	$	4.27		0.84	%
Advantage Portfolio Class A		1,000.00		1,320.00		1,019.41		6.65		5.79		1.14
Advantage Portfolio Class L		1,000.00		1,321.30		1,020.41		5.48		4.77		0.94
Advantage Portfolio Class C		1,000.00		1,315.30		1,015.89		10.71		9.32		1.84
Advantage Portfolio Class IS		1,000.00		1,322.10		1,021.22		4.55		3.96		0.78

** Annualized.

The Fund seeks long-term capital appreciation.

Performance

For the fiscal year ended December 31, 2020, the Fund's Class I shares had a total return based on net asset value and reinvestment of distributions per share of 74.79%, net of fees. The Fund's Class I shares outperformed the Fund's benchmark, the Russell 1000® Growth Index (the "Index"), which returned 38.49%.

Factors Affecting Performance

• U.S. equities reversed a steep sell-off caused by the COVID-19 pandemic shock, aided by massive fiscal and monetary stimulus that kept liquidity flowing and supported a faster-than-expected rebound in economic activity. Promising vaccine news throughout the year, along with the start of vaccine distribution across the U.S. and Europe in December 2020, also helped investors look past resurgences of the virus and renewed curbs on social and business activity that have slowed the economic recovery in the short term. Political uncertainty eased after the U.S. election in November 2020, with markets taking a positive stance on a Biden administration and the prospect for additional fiscal stimulus in 2021.

• Within the Index, consumer discretionary, information technology and communication services were the top-performing sectors for the year, while energy (the only sector with a negative return), real estate and industrials were the weakest performers.

• Counterpoint Global seeks high quality companies, which we define primarily as those with sustainable competitive advantages. We manage concentrated portfolios that are highly differentiated from the benchmark, with securities weighted on our assessment of the quality of the company and our conviction. The value added or detracted in any period of time will result from stock selection, given our philosophy and process. For the year, the Fund outperformed the Index.

• The long-term investment horizon and conviction-weighted investment approach embraced by the

Performance Compared to the Russell 1000^® Growth Index⁽¹⁾, the Lipper Multi-Cap Growth Funds Index⁽²⁾ and the Lipper Large-Cap Growth Funds Index⁽³⁾

	Period Ended December 31, 2020 Total Returns⁽⁴⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁸⁾
Fund — Class I Shares w/o sales charges⁽⁵⁾		74.79	%		25.53	%		20.28	%		16.93	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		74.27			25.12			19.90			20.80
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		65.11			23.79			19.26			20.19
Fund — Class L Shares w/o sales charges⁽⁵⁾		74.65			25.40			20.16			16.80
Fund — Class C Shares w/o sales charges⁽⁷⁾		73.10			24.24			—			21.91
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁷⁾		72.10			24.24			—			21.91
Fund — Class IS Shares w/o sales charges⁽⁶⁾		74.93			25.58			—			22.33
Russell 1000^® Growth Index		38.49			21.00			17.21			14.28
Lipper Multi-Cap Growth Funds Index		43.16			19.56			15.56			12.87
Lipper Large-Cap Growth Funds Index		38.60			19.55			15.80			12.82

⁽¹⁾ The Russell 1000^® Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000^® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000^® Index is an index of approximately 1,000 of the largest U.S. companies based on a combination of market capitalization and current index membership. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Multi-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Multi-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper Multi-Cap Growth Funds classification. The Funds' Lipper category changed from Lipper Large-Cap Growth Funds to Lipper Multi-Cap Growth Funds.

⁽³⁾ The Lipper Large-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Large-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index.

⁽⁴⁾ Total returns for the Fund reflect fees waived and expenses reimbursed, if applicable, by the Adviser (as defined herein). Without such waivers and reimbursements, total returns would have been lower.

	Shares		Value (000)
Common Stocks (93.1%)
Aerospace & Defense (2.3%)
HEICO Corp., Class A		176,414	$	20,651
Capital Markets (1.7%)
Intercontinental Exchange, Inc.		53,221		6,136
S&P Global, Inc.		28,231		9,280
				15,416
Chemicals (3.2%)
Ecolab, Inc.		94,397		20,424
Sherwin-Williams Co. (The)		11,905		8,749
				29,173
Construction Materials (2.3%)
Martin Marietta Materials, Inc.		71,964		20,436
Containers & Packaging (0.8%)
Ball Corp.		82,104		7,650
Entertainment (7.5%)
Activision Blizzard, Inc.		155,751		14,461
Spotify Technology SA (a)		138,508		43,583
Take-Two Interactive Software, Inc. (a)		46,710		9,706
				67,750
Food & Staples Retailing (2.5%)
Costco Wholesale Corp.		59,722		22,502
Health Care Equipment & Supplies (6.1%)
Danaher Corp.		41,714		9,266
Intuitive Surgical, Inc. (a)		55,527		45,427
				54,693
Health Care Technology (4.7%)
Veeva Systems, Inc., Class A (a)		157,083		42,766
Industrial Conglomerates (1.0%)
Roper Technologies, Inc.		21,068		9,082
Information Technology Services (19.2%)
Adyen N.V. (Netherlands) (a)		5,680		13,198
Okta, Inc. (a)		117,960		29,993
Shopify, Inc., Class A (Canada) (a)		38,274		43,324
Snowflake, Inc., Class A (a)		40,188		11,309
Square, Inc., Class A (a)		206,621		44,969
Twilio, Inc., Class A (a)		90,677		30,694
				173,487
Interactive Media & Services (13.8%)
Facebook, Inc., Class A (a)		159,192		43,485
IAC/InterActiveCorp (a)		108,952		20,630
Match Group, Inc. (a)		91,190		13,787
Twitter, Inc. (a)		871,471		47,190
				125,092
Internet & Direct Marketing Retail (11.5%)
Amazon.com, Inc. (a)		20,557		66,953
Chewy, Inc., Class A (a)		245,437		22,062
Farfetch Ltd., Class A (a)		239,014		15,251
				104,266

	Shares		Value (000)
Metals & Mining (0.1%)
Royal Gold, Inc.		9,747	$	1,037
Oil, Gas & Consumable Fuels (0.2%)
Texas Pacific Land Trust		2,722		1,979
Pharmaceuticals (3.2%)
Royalty Pharma PLC, Class A		388,318		19,435
Zoetis, Inc.		57,487		9,514
				28,949
Software (12.0%)
Avalara, Inc. (a)		82,064		13,532
Coupa Software, Inc. (a)		64,586		21,889
ServiceNow, Inc. (a)		40,769		22,440
Tyler Technologies, Inc. (a)		19,508		8,516
Workday, Inc., Class A (a)		95,002		22,763
Zoom Video Communications, Inc., Class A (a)		58,321		19,673
				108,813
Textiles, Apparel & Luxury Goods (1.0%)
Lululemon Athletica, Inc. (a)		26,291		9,150
Total Common Stocks (Cost $492,933)				842,892
Short-Term Investment (7.1%)
Investment Company (7.1%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $63,846)		63,845,686		63,846
Total Investments Excluding Purchased Options (100.2%) (Cost $556,779)				906,738
Total Purchased Options Outstanding (0.1%) (Cost $3,233)				591
Total Investments (100.3%) (Cost $560,012) (b)(c)				907,329
Liabilities in Excess of Other Assets (–0.3%)				(3,050	)
Net Assets (100.0%)			$	904,279

(a) Non-income producing security.

(b) The approximate fair value and percentage of net assets, $13,198,000 and 1.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $566,430,000. The aggregate gross unrealized appreciation is approximately $350,896,000 and the aggregate gross unrealized depreciation is approximately $9,997,000, resulting in net unrealized appreciation of approximately $340,899,000.

Call Options Purchased:

The Fund had the following call options purchased open at December 31, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.99	Sep-21		121,426,064		121,426	$	115		$	735	$	(620	)
BNP Paribas	USD/CNH	CNH	7.64	Nov-21		140,421,482		140,421		384			763		(379	)
Royal Bank of Scotland	USD/CNH	CNH	7.75	Jan-21		105,617,492		105,617		—	@		461		(461	)
Royal Bank of Scotland	USD/CNH	CNH	8.06	Jul-21		133,439,457		133,439		80			708		(628	)
Royal Bank of Scotland	USD/CNH	CNH	8.48	May-21		90,639,683		90,640		12			566		(554	)
									$	591		$	3,233	$	(2,642	)

@ Value is less than $500.

CNH — Chinese Yuan Renminbi Offshore

USD — United States Dollar

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $496,166)	$	843,483
Investment in Security of Affiliated Issuer, at Value (Cost $63,846)		63,846
Total Investments in Securities, at Value (Cost $560,012)		907,329
Foreign Currency, at Value (Cost $1)		1
Receivable for Fund Shares Sold		5,986
Receivable for Investments Sold		5,265
Dividends Receivable		52
Tax Reclaim Receivable		23
Receivable from Affiliate		—	@
Other Assets		71
Total Assets		918,727
Liabilities:
Payable for Investments Purchased		7,204
Payable for Fund Shares Redeemed		4,823
Payable for Advisory Fees		1,243
Due to Broker		890
Payable for Shareholder Services Fees — Class A		28
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		60
Payable for Professional Fees		14
Payable for Sub Transfer Agency Fees — Class I		66
Payable for Sub Transfer Agency Fees — Class A		11
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		4
Payable for Administration Fees		60
Payable for Transfer Agency Fees — Class I		2
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		2
Payable for Transfer Agency Fees — Class IS		1
Payable for Custodian Fees		8
Other Liabilities		29
Total Liabilities		14,448
Net Assets	$	904,279
Net Assets Consist of:
Paid-in-Capital	$	504,713
Total Distributable Earnings		399,566
Net Assets	$	904,279

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	656,030
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		15,159,190
Net Asset Value, Offering and Redemption Price Per Share	$	43.28
CLASS A:
Net Assets	$	130,176
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,097,863
Net Asset Value, Redemption Price Per Share	$	42.02
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	2.33
Maximum Offering Price Per Share	$	44.35
CLASS L:
Net Assets	$	5,391
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		125,267
Net Asset Value, Offering and Redemption Price Per Share	$	43.04
CLASS C:
Net Assets	$	71,419
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,766,114
Net Asset Value, Offering and Redemption Price Per Share	$	40.44
CLASS IS:
Net Assets	$	41,263
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		950,447
Net Asset Value, Offering and Redemption Price Per Share	$	43.41

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $2 of Foreign Taxes Withheld)	$	1,612
Income from Securities Loaned — Net		232
Dividends from Security of Affiliated Issuer (Note G)		75
Total Investment Income		1,919
Expenses:
Advisory Fees (Note B)		4,109
Shareholder Services Fees — Class A (Note D)		237
Distribution and Shareholder Services Fees — Class L (Note D)		33
Distribution and Shareholder Services Fees — Class C (Note D)		519
Sub Transfer Agency Fees — Class I		476
Sub Transfer Agency Fees — Class A		103
Sub Transfer Agency Fees — Class L		2
Sub Transfer Agency Fees — Class C		28
Administration Fees (Note C)		507
Registration Fees		113
Professional Fees		109
Shareholder Reporting Fees		64
Custodian Fees (Note F)		24
Transfer Agency Fees — Class I (Note E)		6
Transfer Agency Fees — Class A (Note E)		8
Transfer Agency Fees — Class L (Note E)		4
Transfer Agency Fees — Class C (Note E)		11
Transfer Agency Fees — Class IS (Note E)		2
Directors' Fees and Expenses		10
Pricing Fees		3
Other Expenses		34
Total Expenses		6,402
Reimbursement of Class Specific Expenses — Class I (Note B)		(186	)
Rebate from Morgan Stanley Affiliate (Note G)		(40	)
Distribution Fees- Class L Shares Waived (Note D)		(31	)
Net Expenses		6,145
Net Investment Loss		(4,226	)
Realized Gain (Loss):
Investments Sold		98,718
Foreign Currency Translation		(17	)
Net Realized Gain		98,701
Change in Unrealized Appreciation (Depreciation):
Investments		270,284
Foreign Currency Translation		2
Net Change in Unrealized Appreciation (Depreciation)		270,286
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		368,987
Net Increase in Net Assets Resulting from Operations	$	364,761

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(4,226	)	$	(1,207	)
Net Realized Gain		98,701			14,608
Net Change in Unrealized Appreciation (Depreciation)		270,286			59,735
Net Increase in Net Assets Resulting from Operations		364,761			73,136
Dividends and Distributions to Shareholders:
Class I		(31,922	)		(5,355	)
Class A		(6,564	)		(1,499	)
Class L		(269	)		(82	)
Class C		(3,709	)		(792	)
Class IS		(2,037	)		(548	)
Total Dividends and Distributions to Shareholders		(44,501	)		(8,276	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		287,542			196,712
Distributions Reinvested		30,715			5,237
Redeemed		(193,112	)		(102,075	)
Class A:
Subscribed		63,008			52,689
Distributions Reinvested		6,509			1,446
Redeemed		(66,691	)		(26,447	)
Class L:
Exchange		6			—
Distributions Reinvested		264			81
Redeemed		(1,327	)		(361	)
Class C:
Subscribed		15,494			16,430
Distributions Reinvested		3,598			762
Redeemed		(14,501	)		(15,239	)
Class IS:
Subscribed		11,240			2,008
Distributions Reinvested		2,037			548
Redeemed		(13,749	)		(6,464	)
Net Increase in Net Assets Resulting from Capital Share Transactions		131,033			125,327
Total Increase in Net Assets		451,293			190,187
Net Assets:
Beginning of Period		452,986			262,799
End of Period	$	904,279		$	452,986

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		8,865			7,750
Shares Issued on Distributions Reinvested		726			205
Shares Redeemed		(5,822	)		(4,038	)
Net Increase in Class I Shares Outstanding		3,769			3,917
Class A:
Shares Subscribed		1,823			2,101
Shares Issued on Distributions Reinvested		158			58
Shares Redeemed		(2,060	)		(1,074	)
Net Increase (Decrease) in Class A Shares Outstanding		(79	)		1,085
Class L:
Shares Exchanged		—	@@		—
Shares Issued on Distributions Reinvested		6			3
Shares Redeemed		(49	)		(14	)
Net Decrease in Class L Shares Outstanding		(43	)		(11	)
Class C:
Shares Subscribed		473			675
Shares Issued on Distributions Reinvested		91			31
Shares Redeemed		(502	)		(629	)
Net Increase in Class C Shares Outstanding		62			77
Class IS:
Shares Subscribed		275			78
Shares Issued on Distributions Reinvested		48			21
Shares Redeemed		(482	)		(255	)
Net Decrease in Class IS Shares Outstanding		(159	)		(156	)

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	26.06		$	20.98		$	21.45		$	17.47		$	17.40
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.19	)		(0.04	)		(0.01	)		0.00	⁽³⁾		0.07
Net Realized and Unrealized Gain		19.64			5.61			0.87			5.57			0.42
Total from Investment Operations		19.45			5.57			0.86			5.57			0.49
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.04	)
Net Realized Gain		(2.23	)		(0.49	)		(1.33	)		(1.59	)		(0.38	)
Total Distributions		(2.23	)		(0.49	)		(1.33	)		(1.59	)		(0.42	)
Net Asset Value, End of Period	$	43.28		$	26.06		$	20.98		$	21.45		$	17.47
Total Return⁽⁴⁾		74.79	%		26.60	%		3.74	%		32.06	%		2.82	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	656,030		$	296,843		$	156,782		$	54,002		$	42,695
Ratio of Expenses Before Expense Limitation		0.89	%		0.93	%		1.01	%		1.09	%		1.15	%
Ratio of Expenses After Expense Limitation		0.84	%⁽⁵⁾		0.84	%⁽⁵⁾		0.84	%⁽⁵⁾		0.84	%⁽⁵⁾		0.84	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			0.84	%⁽⁵⁾		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.54	)%⁽⁵⁾		(0.15	)%⁽⁵⁾		(0.02	)%⁽⁵⁾		0.02	%⁽⁵⁾		0.38	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		73	%		70	%		79	%		65	%		79	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	25.42		$	20.54		$	21.10		$	17.26		$	17.22
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.28	)		(0.13	)		(0.08	)		(0.06	)		0.01
Net Realized and Unrealized Gain		19.11			5.50			0.85			5.49			0.41
Total from Investment Operations		18.83			5.37			0.77			5.43			0.42
Distributions from and/or in Excess of:
Net Realized Gain		(2.23	)		(0.49	)		(1.33	)		(1.59	)		(0.38	)
Net Asset Value, End of Period	$	42.02		$	25.42		$	20.54		$	21.10		$	17.26
Total Return⁽³⁾		74.27	%		26.20	%		3.37	%		31.64	%		2.47	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	130,176		$	80,743		$	42,959		$	23,715		$	19,850
Ratio of Expenses Before Expense Limitation		N/A			1.21	%		1.29	%		1.39	%		1.43	%
Ratio of Expenses After Expense Limitation		1.15	%⁽⁴⁾		1.19	%⁽⁴⁾		1.17	%⁽⁴⁾		1.19	%⁽⁴⁾		1.19	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.19	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.84	)%⁽⁴⁾		(0.50	)%⁽⁴⁾		(0.37	)%⁽⁴⁾		(0.32	)%⁽⁴⁾		0.04	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		73	%		70	%		79	%		65	%		79	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliate during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	25.95		$	20.92		$	21.42		$	17.46		$	17.40
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.21	)		(0.06	)		(0.05	)		(0.02	)		0.04
Net Realized and Unrealized Gain		19.53			5.58			0.88			5.57			0.43
Total from Investment Operations		19.32			5.52			0.83			5.55			0.47
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.03	)
Net Realized Gain		(2.23	)		(0.49	)		(1.33	)		(1.59	)		(0.38	)
Total Distributions		(2.23	)		(0.49	)		(1.33	)		(1.59	)		(0.41	)
Net Asset Value, End of Period	$	43.04		$	25.95		$	20.92		$	21.42		$	17.46
Total Return⁽³⁾		74.65	%		26.44	%		3.61	%		31.96	%		2.72	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	5,391		$	4,363		$	3,751		$	4,077		$	3,684
Ratio of Expenses Before Expense Limitation		1.66	%		1.69	%		1.82	%		1.87	%		1.85	%
Ratio of Expenses After Expense Limitation		0.95	%⁽⁴⁾		0.95	%⁽⁴⁾		0.98	%⁽⁴⁾		0.96	%⁽⁴⁾		0.91	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			0.95	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.64	)%⁽⁴⁾		(0.25	)%⁽⁴⁾		(0.21	)%⁽⁴⁾		(0.10	)%⁽⁴⁾		0.26	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		73	%		70	%		79	%		65	%		79	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	24.68		$	20.10		$	20.82		$	17.16		$	17.25
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.50	)		(0.29	)		(0.24	)		(0.20	)		(0.12	)
Net Realized and Unrealized Gain		18.49			5.36			0.85			5.45			0.41
Total from Investment Operations		17.99			5.07			0.61			5.25			0.29
Distributions from and/or in Excess of:
Net Realized Gain		(2.23	)		(0.49	)		(1.33	)		(1.59	)		(0.38	)
Net Asset Value, End of Period	$	40.44		$	24.68		$	20.10		$	20.82		$	17.16
Total Return⁽³⁾		73.10	%		25.27	%		2.64	%		30.77	%		1.71	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	71,419		$	42,054		$	32,706		$	11,835		$	6,376
Ratio of Expenses Before Expense Limitation		N/A			1.93	%		2.00	%		2.10	%		2.20	%
Ratio of Expenses After Expense Limitation		1.85	%⁽⁴⁾		1.90	%⁽⁴⁾		1.88	%⁽⁴⁾		1.90	%⁽⁴⁾		1.94	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.90	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Loss		(1.55	)%⁽⁴⁾		(1.20	)%⁽⁴⁾		(1.08	)%⁽⁴⁾		(1.01	)%⁽⁴⁾		(0.72	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		73	%		70	%		79	%		65	%		79	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	26.12		$	21.02		$	21.49		$	17.48		$	17.42
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.16	)		(0.03	)		(0.01	)		0.01			0.08
Net Realized and Unrealized Gain		19.68			5.62			0.87			5.59			0.41
Total from Investment Operations		19.52			5.59			0.86			5.60			0.49
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.05	)
Net Realized Gain		(2.23	)		(0.49	)		(1.33	)		(1.59	)		(0.38	)
Total Distributions		(2.23	)		(0.49	)		(1.33	)		(1.59	)		(0.43	)
Net Asset Value, End of Period	$	43.41		$	26.12		$	21.02		$	21.49		$	17.48
Total Return⁽³⁾		74.93	%		26.64	%		3.74	%		32.22	%		2.79	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	41,263		$	28,983		$	26,601		$	17,542		$	13,273
Ratio of Expenses Before Expense Limitation		N/A			0.83	%		0.93	%		1.01	%		1.05	%
Ratio of Expenses After Expense Limitation		0.79	%⁽⁴⁾		0.80	%⁽⁴⁾		0.80	%⁽⁴⁾		0.80	%⁽⁴⁾		0.80	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			0.80	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.47	)%⁽⁴⁾		(0.10	)%⁽⁴⁾		(0.04	)%⁽⁴⁾		0.07	%⁽⁴⁾		0.46	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		73	%		70	%		79	%		65	%		79	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

The accompanying financial statements relate to the Advantage Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions. In addition, Class L shares of the Fund may be exchanged for Class L shares of any Morgan Stanley Multi-Class Fund, even though Class L shares are closed to investors.

closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	20,651	$	—	$	—	$	20,651
Capital Markets		15,416		—		—		15,416
Chemicals		29,173		—		—		29,173
Construction Materials		20,436		—		—		20,436
Containers & Packaging		7,650		—		—		7,650
Entertainment		67,750		—		—		67,750
Food & Staples Retailing		22,502		—		—		22,502
Health Care Equipment & Supplies		54,693		—		—		54,693
Health Care Technology		42,766		—		—		42,766
Industrial Conglomerates		9,082		—		—		9,082
Information Technology Services		160,289		13,198		—		173,487
Interactive Media & Services		125,092		—		—		125,092
Internet & Direct Marketing Retail		104,266		—		—		104,266
Metals & Mining		1,037		—		—		1,037
Oil, Gas & Consumable Fuels		1,979		—		—		1,979
Pharmaceuticals		28,949		—		—		28,949
Software		108,813		—		—		108,813
Textiles, Apparel & Luxury Goods		9,150		—		—		9,150
Total Common Stocks		829,694		13,198		—		842,892
Call Options Purchased		—		591		—		591
Short-Term Investment
Investment Company		63,846		—		—		63,846
Total Assets	$	893,540	$	13,789	$	—	$	907,329

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of December 31, 2020:

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Purchased Options

Investments, at Value
(Purchased Options)

Currency Risk

591

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(1,100	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)		$(1,681)(c)

At December 31, 2020, the Fund's derivative assets and liabilities are as follows:

Presented in the Statement of Assets and Liabilities	Gross Amounts of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	591	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities(a) (000)		Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
BNP Paribas	$	499	$	—	$	(499	)	$	0
Royal Bank of Scotland		92		—		(92	)		0
Total	$	591	$	—	$	(591	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount					381,622,000

The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

At December 31, 2020, the Fund did not have any outstanding securities on loan.

7. Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8. Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

9. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services

under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $750 million				Next $750 million				Over $1.5 billion
	0.65	%			0.60	%			0.55	%

For the year ended December 31, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.64% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.85% for Class I shares, 1.20% for Class A shares, 0.99% for Class L shares, 1.95% for Class C shares and 0.81% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $186,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares. The Distributor has agreed to waive for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate, the 12b-1 fees on Class L shares of the Fund to the extent it exceeds 0.04% of the average daily net assets of such shares on an annualized basis. For the year ended December 31, 2020, this waiver amounted to approximately $31,000.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than

long-term U.S. Government securities and short-term investments were approximately $489,640,000 and $443,234,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $40,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	30,479			$	273,839			$	240,472			$	75

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	63,846

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the year ended December 31, 2020, the Fund did not engage in any cross-trade transactions.

with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2020 and 2019 was as follows:

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	18,463	$	26,038	$	1,435	$	6,841

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Advantage Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Advantage Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Advantage Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Asia Opportunity Portfolio Class I	$	1,000.00	$	1,367.30	$	1,019.81	$	6.31	$	5.38		1.06	%
Asia Opportunity Portfolio Class A		1,000.00		1,365.20		1,018.45		7.91		6.75		1.33
Asia Opportunity Portfolio Class C		1,000.00		1,360.40		1,014.73		12.28		10.48		2.07
Asia Opportunity Portfolio Class IS		1,000.00		1,367.80		1,020.11		5.95		5.08		1.00

** Annualized.

The Fund seeks long-term capital appreciation.

Performance

For the fiscal year ended December 31, 2020, the Fund's Class I shares had a total return based on net asset value and reinvestment of distributions per share of 52.53%, net of fees. The Fund's Class I shares outperformed the Fund's benchmark, the MSCI All Country Asia ex Japan Net Index (the "Index"), which returned 25.02%.

Factors Affecting Performance

• Equity markets rebounded after the volatility seen in the first quarter of 2020, which had been driven by a broad sell-off due to concerns regarding COVID-19 and its potential impacts to global economic activity. The rebound was a result of a general market recovery from the COVID-19-related decline earlier in the year, as well as optimism following successful COVID-19 vaccine trials and rollouts in various countries. Uncertainty surrounding U.S.-China tensions, U.S. elections and Brexit negotiations also affected markets during the year.

• Asian equity markets advanced by 25.02% for the 12-month period ended December 31, 2020, as measured by the Index. Our team remained focused on assessing company prospects over a longer-term period of three to five years, and owning a portfolio of high quality companies with diverse business drivers not tied to a particular market environment.

• The team manages concentrated portfolios that are highly differentiated from the benchmark, with securities weighted on our assessment of the quality of the company and our conviction. Our longer-term focus results in lower turnover than many of our peers. The value added or detracted in any period of time will typically result from stock selection, given our philosophy and process. For the 12-month period, the Fund outperformed the Index due to favorable stock selection and sector allocation.

• Our stock selection in the consumer staples sector, along with stock selection and a sector overweight

Performance Compared to the MSCI All Country Asia ex Japan Net Index⁽¹⁾ and the Lipper Pacific Region ex Japan Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years		Since Inception⁽⁵⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		52.53	%		27.17	%		—		27.21	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		52.15			26.76			—		26.80
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		44.18			25.39			—		25.45
Fund — Class C Shares w/o sales charges⁽⁴⁾		51.02			25.80			—		25.85
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁴⁾		50.02			25.80			—		25.85
Fund — Class IS Shares w/o sales charges⁽⁴⁾		52.58			27.22			—		27.26
MSCI All Country Asia ex Japan Net Index		25.02			13.58			—		13.52
Lipper Pacific Region ex Japan Funds Index		37.38			14.06			—		13.90

⁽¹⁾ The MSCI All Country Asia ex Japan Net Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of Asia, excluding Japan. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Pacific Region ex Japan Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Pacific Region ex Japan Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 10 funds represented in this Index. As of the date of this report, the Fund was in the Lipper Pacific Region ex Japan Funds classification.

⁽³⁾ Total returns for the Fund reflect fees waived and expenses reimbursed, if applicable, by the Adviser (as defined herein). Without such waivers and reimbursements, total returns would have been lower.

⁽⁴⁾ Commenced operations on December 29, 2015.

⁽⁵⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (90.6%)
China (56.5%)
Alibaba Group Holding Ltd. ADR (a)		85,211	$	19,831
China East Education Holdings Ltd. (b)(c)		2,964,000		7,133
China Resources Beer Holdings Co., Ltd. (b)		2,314,300		21,282
Foshan Haitian Flavouring & Food Co., Ltd., Class A		849,618		26,088
Haidilao International Holding Ltd. (b)(c)		1,361,000		10,496
Hangzhou Tigermed Consulting Co. Ltd. H Shares (a)(b)		347,600		8,061
Huazhu Group Ltd. ADR		78,784		3,548
HUYA, Inc. ADR (a)(c)		1,049,784		20,922
Inner Mongolia Yili Industrial Group Co., Ltd., Class A		1,678,486		11,390
Kweichow Moutai Co., Ltd., Class A		70,894		21,665
Meituan Dianping, Class B (a)(b)		1,014,500		38,189
New Frontier Health Corp.		73,619		633
New Frontier Health Corp. (a)(c)		20,175		173
Shenzhou International Group Holdings Ltd. (b)		876,700		17,182
TAL Education Group ADR (a)		387,614		27,718
Tencent Holdings Ltd. (b)		306,200		22,032
Trip.com Group Ltd. ADR (a)		662,304		22,340
Tsingtao Brewery Co., Ltd. H Shares (b)		962,000		10,079
				288,762
Hong Kong (4.4%)
AIA Group Ltd.		1,714,700		20,895
Alphamab Oncology (a)		686,000		1,439
				22,334
India (17.9%)
HDFC Bank Ltd. (a)		766,637		15,100
HDFC Bank Ltd. ADR (a)		259,489		18,751
ICICI Bank Ltd. ADR (a)		1,710,035		25,411
IndusInd Bank Ltd. (a)		1,117,243		13,710
Kotak Mahindra Bank Ltd. (a)		675,407		18,460
				91,432
Korea, Republic of (4.4%)
NAVER Corp.		83,916		22,621
Taiwan (7.4%)
Nien Made Enterprise Co., Ltd.		621,000		7,221
Silergy Corp.		69,000		5,938
Taiwan Semiconductor Manufacturing Co., Ltd.		1,307,000		24,725
				37,884
Total Common Stocks (Cost $304,799)				463,033
Short-Term Investments (10.6%)
Securities held as Collateral on Loaned Securities (1.7%)
Investment Company (1.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		7,407,430		7,407

	Face Amount (000)		Value (000)
Repurchase Agreements (0.2%)
Barclays Capital, Inc., (0.05%, dated 12/31/20, due 1/4/21; proceeds $226; fully collateralized by a U.S. Government obligation; 1.63% due 11/15/22; valued at $230)	$	226	$	226
HSBC Securities USA, Inc., (0.05%, dated 12/31/20, due 1/4/21; proceeds $881; fully collateralized by a U.S. Government obligation; 0.15% due 10/31/22; valued at $898)		881		881
Merrill Lynch & Co., Inc., (0.06%, 12/31/20, due 1/4/21; proceeds $90; fully collateralized by a U.S. Government obligation; 2.50% due 5/15/46; valued at $92)		90		90
				1,197
Total Securities held as Collateral on Loaned Securities (Cost $8,604)				8,604
	Shares
Investment Company (8.9%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $45,368)		45,368,236		45,368
Total Short-Term Investments (Cost $53,972)				53,972
Total Investments (101.2%) (Cost $358,771) Including $30,532 of Securities Loaned (d)(e)				517,005
Liabilities in Excess of Other Assets (–1.2%)				(5,939	)
Net Assets (100.0%)			$	511,066

(a) Non-income producing security.

(b) Security trades on the Hong Kong exchange.

(d) The approximate fair value and percentage of net assets, $323,706,000 and 63.3%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $367,087,000. The aggregate gross unrealized appreciation is approximately $150,244,000 and the aggregate gross unrealized depreciation is approximately $326,000, resulting in net unrealized appreciation of approximately $149,918,000.

ADR American Depositary Receipt.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $305,996)	$	464,230
Investment in Security of Affiliated Issuer, at Value (Cost $52,775)		52,775
Total Investments in Securities, at Value (Cost $358,771)		517,005
Foreign Currency, at Value (Cost $38)		38
Receivable for Investments Sold		3,491
Receivable for Fund Shares Sold		2,972
Dividends Receivable		89
Receivable from Securities Lending Income		79
Receivable from Affiliate		—	@
Other Assets		75
Total Assets		523,749
Liabilities:
Collateral on Securities Loaned, at Value		8,604
Deferred Capital Gain Country Tax		2,152
Payable for Advisory Fees		843
Payable for Investments Purchased		785
Payable for Fund Shares Redeemed		151
Payable for Shareholder Services Fees — Class A		20
Payable for Distribution and Shareholder Services Fees — Class C		14
Payable for Administration Fees		32
Payable for Custodian Fees		25
Payable for Sub Transfer Agency Fees — Class I		19
Payable for Sub Transfer Agency Fees — Class A		4
Payable for Sub Transfer Agency Fees — Class C		1
Payable for Professional Fees		17
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		—	@
Other Liabilities		13
Total Liabilities		12,683
Net Assets	$	511,066
Net Assets Consist of:
Paid-in-Capital	$	359,205
Total Distributable Earnings		151,861
Net Assets	$	511,066

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	366,758
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		11,561,070
Net Asset Value, Offering and Redemption Price Per Share	$	31.72
CLASS A:
Net Assets	$	98,559
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,150,119
Net Asset Value, Redemption Price Per Share	$	31.29
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.73
Maximum Offering Price Per Share	$	33.02
CLASS C:
Net Assets	$	19,042
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		626,580
Net Asset Value, Offering and Redemption Price Per Share	$	30.39
CLASS IS:
Net Assets	$	26,707
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		840,849
Net Asset Value, Offering and Redemption Price Per Share	$	31.76
⁽¹⁾ Including: Securities on Loan, at Value:	$	30,532

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $152 of Foreign Taxes Withheld)	$	1,375
Income from Securities Loaned — Net		211
Dividends from Security of Affiliated Issuer (Note G)		60
Total Investment Income		1,646
Expenses:
Advisory Fees (Note B)		2,250
Shareholder Services Fees — Class A (Note D)		141
Distribution and Shareholder Services Fees — Class C (Note D)		110
Administration Fees (Note C)		225
Sub Transfer Agency Fees — Class I		116
Sub Transfer Agency Fees — Class A		46
Sub Transfer Agency Fees — Class C		6
Professional Fees		117
Custodian Fees (Note F)		98
Registration Fees		95
Shareholder Reporting Fees		29
Transfer Agency Fees — Class I (Note E)		4
Transfer Agency Fees — Class A (Note E)		4
Transfer Agency Fees — Class C (Note E)		3
Transfer Agency Fees — Class IS (Note E)		2
Directors' Fees and Expenses		7
Pricing Fees		2
Other Expenses		24
Total Expenses		3,279
Rebate from Morgan Stanley Affiliate (Note G)		(39	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Net Expenses		3,239
Net Investment Loss		(1,593	)
Realized Gain (Loss):
Investments Sold (Net of $9 of Capital Gain Country Tax)		6,107
Foreign Currency Translation		(140	)
Net Realized Gain		5,967
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $2,152)		132,043
Foreign Currency Translation		(1	)
Net Change in Unrealized Appreciation (Depreciation)		132,042
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		138,009
Net Increase in Net Assets Resulting from Operations	$	136,416

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(1,593	)	$	(49	)
Net Realized Gain (Loss)		5,967			(1,070	)
Net Change in Unrealized Appreciation (Depreciation)		132,042			24,040
Net Increase in Net Assets Resulting from Operations		136,416			22,921
Dividends and Distributions to Shareholders:
Class I		(3,671	)		(37	)
Class A		(1,035	)		—
Class C		(190	)		—
Class IS		(280	)		(—	@)
Total Dividends and Distributions to Shareholders		(5,176	)		(37	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		275,285			49,930
Distributions Reinvested		3,669			37
Redeemed		(89,217	)		(7,719	)
Class A:
Subscribed		60,482			46,014
Distributions Reinvested		1,027			—
Redeemed		(31,767	)		(13,086	)
Class C:
Subscribed		9,579			4,940
Distributions Reinvested		190			—
Redeemed		(3,635	)		(653	)
Class IS:
Subscribed		18,500			—
Distributions Reinvested		280			—	@
Redeemed		(2,000	)		—
Net Increase in Net Assets Resulting from Capital Share Transactions		242,393			79,463
Redemption Fees		51			29
Total Increase in Net Assets		373,684			102,376
Net Assets:
Beginning of Period		137,382			35,006
End of Period	$	511,066		$	137,382
(1) Capital Share Transactions:
Class I:
Shares Subscribed		11,091			2,659
Shares Issued on Distributions Reinvested		118			2
Shares Redeemed		(3,635	)		(428	)
Net Increase in Class I Shares Outstanding		7,574			2,233
Class A:
Shares Subscribed		2,396			2,421
Shares Issued on Distributions Reinvested		33			—
Shares Redeemed		(1,448	)		(732	)
Net Increase in Class A Shares Outstanding		981			1,689
Class C:
Shares Subscribed		374			269
Shares Issued on Distributions Reinvested		6			—
Shares Redeemed		(168	)		(36	)
Net Increase in Class C Shares Outstanding		212			233
Class IS:
Shares Subscribed		897			—
Shares Issued on Distributions Reinvested		9			—	@@
Shares Redeemed		(66	)		—
Net Increase in Class IS Shares Outstanding		840			—	@@

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016
Net Asset Value, Beginning of Period	$	21.02		$	14.53		$	16.92		$	9.68		$	10.03
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽¹⁾		(0.12	)		0.02			0.01			(0.04	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		11.16			6.47			(2.30	)		7.47			(0.10	)
Total from Investment Operations		11.04			6.49			(2.29	)		7.43			(0.13	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.01	)		—			—			(0.08	)
Net Realized Gain		(0.34	)		—			(0.10	)		(0.19	)		—
Paid-in-Capital		—			—			—			—			(0.14	)
Total Distributions		(0.34	)		(0.01	)		(0.10	)		(0.19	)		(0.22	)
Redemption Fees		0.00	⁽²⁾		0.01			0.00	⁽²⁾		0.00	⁽²⁾		—
Net Asset Value, End of Period	$	31.72		$	21.02		$	14.53		$	16.92		$	9.68
Total Return⁽³⁾		52.53	%		44.74	%		(13.65	)%		76.82	%		(1.34	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	366,758		$	83,805		$	25,479		$	15,913		$	5,405
Ratio of Expenses Before Expense Limitation		N/A			1.28	%		1.67	%		3.10	%		5.28	%
Ratio of Expenses After Expense Limitation		1.06	%⁽⁴⁾		1.08	%⁽⁴⁾		1.09	%⁽⁴⁾		1.06	%⁽⁴⁾		1.08	%⁽⁴⁾
Ratio of Net Investment Income (Loss)		(0.48	)%⁽⁴⁾		0.11	%⁽⁴⁾		0.04	%⁽⁴⁾		(0.27	)%⁽⁴⁾		(0.31	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		44	%		27	%		63	%		50	%		44	%

(1) Per share amount is based on average shares outstanding.

(2) Amount is less than $0.005 per share.

(3) Calculated based on the net asset value as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016
Net Asset Value, Beginning of Period	$	20.79		$	14.42		$	16.84		$	9.67		$	10.03
Income (Loss) from Investment Operations:
Net Investment Loss⁽¹⁾		(0.19	)		(0.06	)		(0.04	)		(0.10	)		(0.08	)
Net Realized and Unrealized Gain (Loss)		11.03			6.42			(2.28	)		7.46			(0.09	)
Total from Investment Operations		10.84			6.36			(2.32	)		7.36			(0.17	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.05	)
Net Realized Gain		(0.34	)		—			(0.10	)		(0.19	)		—
Paid-in-Capital		—			—			—			—			(0.14	)
Total Distributions		(0.34	)		—			(0.10	)		(0.19	)		(0.19	)
Redemption Fees		0.00	⁽²⁾		0.01			0.00	⁽²⁾		0.00	⁽²⁾		—
Net Asset Value, End of Period	$	31.29		$	20.79		$	14.42		$	16.84		$	9.67
Total Return⁽³⁾		52.15	%		44.17	%		(13.89	)%		76.17	%		(1.67	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	98,559		$	45,111		$	6,930		$	2,873		$	535
Ratio of Expenses Before Expense Limitation		N/A			1.56	%		2.05	%		3.50	%		6.36	%
Ratio of Expenses After Expense Limitation		1.34	%⁽⁴⁾		1.37	%⁽⁴⁾		1.44	%⁽⁴⁾		1.44	%⁽⁴⁾		1.44	%⁽⁴⁾
Ratio of Net Investment Loss		(0.76	)%⁽⁴⁾		(0.33	)%⁽⁴⁾		(0.22	)%⁽⁴⁾		(0.69	)%⁽⁴⁾		(0.78	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		44	%		27	%		63	%		50	%		44	%

(1) Per share amount is based on average shares outstanding.

(2) Amount is less than $0.005 per share.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016
Net Asset Value, Beginning of Period	$	20.35		$	14.21		$	16.73		$	9.68		$	10.03
Income (Loss) from Investment Operations:
Net Investment Loss⁽¹⁾		(0.36	)		(0.17	)		(0.15	)		(0.22	)		(0.14	)
Net Realized and Unrealized Gain (Loss)		10.74			6.30			(2.27	)		7.46			(0.10	)
Total from Investment Operations		10.38			6.13			(2.42	)		7.24			(0.24	)
Distributions from and/or in Excess of:
Net Realized Gain		(0.34	)		—			(0.10	)		(0.19	)		—
Paid-in-Capital		—			—			—			—			(0.11	)
Total Distributions		(0.34	)		—			(0.10	)		(0.19	)		(0.11	)
Redemption Fees		0.00	⁽²⁾		0.01			0.00	⁽²⁾		0.00	⁽²⁾		—
Net Asset Value, End of Period	$	30.39		$	20.35		$	14.21		$	16.73		$	9.68
Total Return⁽³⁾		51.02	%		43.21	%		(14.58	)%		74.85	%		(2.44	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	19,042		$	8,445		$	2,582		$	431		$	10
Ratio of Expenses Before Expense Limitation		N/A			2.33	%		2.80	%		5.26	%		27.34	%
Ratio of Expenses After Expense Limitation		2.08	%⁽⁴⁾		2.14	%⁽⁴⁾		2.19	%⁽⁴⁾		2.19	%⁽⁴⁾		2.19	%⁽⁴⁾
Ratio of Net Investment Loss		(1.49	)%⁽⁴⁾		(0.95	)%⁽⁴⁾		(0.92	)%⁽⁴⁾		(1.51	)%⁽⁴⁾		(1.42	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		44	%		27	%		63	%		50	%		44	%

(1) Per share amount is based on average shares outstanding.

(2) Amount is less than $0.005 per share.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016
Net Asset Value, Beginning of Period	$	21.04		$	14.54		$	16.92		$	9.68		$	10.03
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽¹⁾		(0.09	)		0.03			0.01			(0.02	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		11.15			6.48			(2.29	)		7.45			(0.10	)
Total from Investment Operations		11.06			6.51			(2.28	)		7.43			(0.13	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.02	)		—			—			(0.08	)
Net Realized Gain		(0.34	)		—			(0.10	)		(0.19	)		—
Paid-in-Capital		—			—			—			—			(0.14	)
Total Distributions		(0.34	)		(0.02	)		(0.10	)		(0.19	)		(0.22	)
Redemption Fees		0.00	⁽²⁾		0.01			0.00	⁽²⁾		0.00	⁽²⁾		—
Net Asset Value, End of Period	$	31.76		$	21.04		$	14.54		$	16.92		$	9.68
Total Return⁽³⁾		52.58	%		44.82	%		(13.59	)%		76.82	%		(1.29	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	26,707		$	21		$	15		$	17		$	10
Ratio of Expenses Before Expense Limitation		1.03	%		11.85	%		13.31	%		17.65	%		25.20	%
Ratio of Expenses After Expense Limitation		1.01	%⁽⁴⁾		1.03	%⁽⁴⁾		1.04	%⁽⁴⁾		1.04	%⁽⁴⁾		1.04	%⁽⁴⁾
Ratio of Net Investment Income (Loss)		(0.32	)%⁽⁴⁾		0.19	%⁽⁴⁾		0.05	%⁽⁴⁾		(0.18	)%⁽⁴⁾		(0.26	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		44	%		27	%		63	%		50	%		44	%

(1) Per share amount is based on average shares outstanding.

(2) Amount is less than $0.005 per share.

(3) Calculated based on the net asset value as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

The accompanying financial statements relate to the Asia Opportunity Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of

securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	44,162	$	47,270	$	—	$	91,432
Beverages		—		53,026		—		53,026
Biotechnology		—		1,439		—		1,439
Diversified Consumer Services		27,718		7,133		—		34,851
Entertainment		20,922		—		—		20,922

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Food Products	$	—	$	37,478	$	—	$	37,478
Health Care Providers & Services		806		—		—		806
Hotels, Restaurants & Leisure		3,548		10,496		—		14,044
Household Durables		—		7,221		—		7,221
Insurance		—		20,895		—		20,895
Interactive Media & Services		—		44,653		—		44,653
Internet & Direct Marketing Retail		42,171		38,189		—		80,360
Life Sciences Tools & Services		—		8,061		—		8,061
Semiconductors & Semiconductor Equipment		—		30,663		—		30,663
Textiles, Apparel & Luxury Goods		—		17,182		—		17,182
Total Common Stocks		139,327		323,706		—		463,033
Short-Term Investments
Investment Company		52,775		—		—		52,775
Repurchase Agreements		—		1,197		—		1,197
Total Short-Term Investments		52,775		1,197		—		53,972
Total Assets	$	192,102	$	324,903	$	—	$	517,005

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the

event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

As of December 31, 2020, the Fund did not have any outstanding purchased options.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(180	)(a)

(a) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	155	(b)

(b) Amounts are included in Investments in the Statement of Operations.

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount					14,957,000

6. Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	30,532	(c)	$	—	$	(30,532	)(d)(e)	$	0

(d) The Fund received cash collateral of approximately $8,604,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $22,897,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(e) The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of December 31, 2020:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	8,604	$	—	$	—	$	—	$	8,604
Total Borrowings	$	8,604	$	—	$	—	$	—	$	8,604
Gross amount of recognized liabilities for securities lending transactions									$	8,604

7. Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

9. Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment

income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

	First $750 million				Next $750 million				Over $1.5 billion
	0.80	%			0.75	%			0.70	%

For the year ended December 31, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.79% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.10% for Class I shares, 1.45% for Class A shares, 2.20% for Class C shares and 1.05% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020,

approximately $1,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a

Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $313,814,000 and $114,120,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	14,961			$	260,654			$	222,840			$	60

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	52,775

tax purposes. The tax character of distributions paid during fiscal years 2020 and 2019 was as follows:

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	3,766	$	1,410	$	37	$	—

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	—			$	4,138

During the year ended December 31, 2020, the Fund utilized capital loss carryforwards for U. S. federal income tax purposes of approximately $2,541,000.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the year ended December 31, 2020, the Fund did not have any borrowings under the Facility.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Asia Opportunity Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Asia Opportunity Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Asia Opportunity Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
China Equity Portfolio Class I	$	1,000.00	$	1,195.70	$	1,019.30	$	6.40	$	5.89		1.16	%
China Equity Portfolio Class A		1,000.00		1,193.00		1,017.34		8.54		7.86		1.55
China Equity Portfolio Class C		1,000.00		1,189.50		1,013.57		12.66		11.64		2.30
China Equity Portfolio Class IS		1,000.00		1,195.90		1,019.36		6.35		5.84		1.15

** Annualized.

Performance Compared to the MSCI China Net Index⁽¹⁾ and the Lipper China Region Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁵⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		28.80	%		—		—		33.52	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		28.30			—		—		32.98
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		21.59			—		—		27.02
Fund — Class C Shares w/o sales charges ⁽⁴⁾		27.38			—		—		32.05
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁴⁾		26.38			—		—		32.05
Fund — Class IS Shares w/o sales charges⁽⁴⁾		28.82			—		—		33.54
MSCI China Net Index		29.49			—		—		35.70
Lipper China Region Funds Index		36.61			—		—		38.30

⁽¹⁾ The MSCI China Net Index is a free float-adjusted market capitalization index that captures large and mid cap representation across China A shares, H shares, B shares, Red chips, P chips and foreign listings (e.g. ADRs). The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper China Region Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper China Region Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 10 funds represented in this Index. As of the date of this report, the Fund was in the Lipper China Region Funds classification.

⁽⁴⁾ Commenced operations on October 31, 2019.

⁽⁵⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (96.9%)
Banks (6.0%)
China Construction Bank Corp. H Shares (a)		503,000	$	379
China Merchants Bank Co., Ltd. H Shares (a)		51,500		326
Industrial & Commercial Bank of China Ltd. H Shares (a)		211,000		136
				841
Beverages (13.9%)
China Resources Beer Holdings Co., Ltd. (a)		76,000		699
Kweichow Moutai Co., Ltd., Class A		4,100		1,253
				1,952
Capital Markets (4.4%)
Hong Kong Exchanges & Clearing Ltd.		11,200		614
Computers & Peripherals (2.5%)
Xiaomi Corp., Class B (a)(b)		82,000		349
Diversified Consumer Services (6.8%)
New Oriental Education & Technology Group, Inc. ADR (b)		3,300		613
TAL Education Group ADR (b)		4,700		336
				949
Electronic Equipment, Instruments & Components (1.1%)
Universal Scientific Industrial Shanghai Co., Ltd., Class A		50,700		150
Food Products (6.6%)
China Mengniu Dairy Co., Ltd. (a)(b)		110,000		663
Yihai International Holding Ltd. (a)(b)		18,000		267
				930
Health Care Equipment & Supplies (1.5%)
Shandong Weigao Group Medical Polymer Co., Ltd. H Shares (a)		96,000		217
Insurance (2.6%)
Ping An Insurance Group Co. of China Ltd. H Shares (a)		30,500		371
Interactive Media & Services (19.1%)
Tencent Holdings Ltd. (a)		37,200		2,677
Internet & Direct Marketing Retail (20.2%)
Alibaba Group Holding Ltd. (a)(b)		64,228		1,868
Alibaba Group Holding Ltd. ADR (b)		1,034		241
JD Health International, Inc. (a)(b)		4,000		77
Meituan, Class B (a)(b)		17,200		648
				2,834
Pharmaceuticals (4.3%)
CSPC Pharmaceutical Group Ltd. (a)		214,960		219
Jiangsu Hengrui Medicine Co., Ltd., Class A		15,718		268
Joincare Pharmaceutical Group Industry Co. Ltd.		57,500		122
				609
Real Estate Management & Development (0.6%)
China Resources Land Ltd. (a)		22,000		91
Semiconductors & Semiconductor Equipment (2.3%)
Hua Hong Semiconductor Ltd. (a)(b)		58,000		330

	Shares		Value (000)
Textiles, Apparel & Luxury Goods (3.9%)
Shenzhou International Group Holdings Ltd. (a)		27,800	$	545
Wireless Telecommunication Services (1.1%)
China Mobile Ltd. (a)		27,500		157
Total Common Stocks (Cost $9,634)				13,616
Short-Term Investment (3.0%)
Investment Company (3.0%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $415)		415,157		415
Total Investments (99.9%) (Cost $10,049) (c)(d)				14,031
Other Assets in Excess of Liabilities (0.1%)				19
Net Assets (100.0%)			$	14,050

(a) Security trades on the Hong Kong exchange.

(b) Non-income producing security.

(c) The approximate fair value and percentage of net assets, $12,349,000 and 87.9%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $10,406,000. The aggregate gross unrealized appreciation is approximately $4,141,000 and the aggregate gross unrealized depreciation is approximately $516,000, resulting in net unrealized appreciation of approximately $3,625,000.

ADR American Depositary Receipt.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		27.4	%
Internet & Direct Marketing Retail		20.2
Interactive Media & Services		19.1
Beverages		13.9
Diversified Consumer Services		6.8
Food Products		6.6
Banks		6.0
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $9,634)	$	13,616
Investment in Security of Affiliated Issuer, at Value (Cost $415)		415
Total Investments in Securities, at Value (Cost $10,049)		14,031
Due from Adviser		7
Receivable from Affiliate		—	@
Other Assets		39
Total Assets		14,077
Liabilities:
Payable for Professional Fees		15
Payable for Custodian Fees		2
Payable for Transfer Agency Fees — Class I		—-	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Administration Fees		1
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		9
Total Liabilities		27
Net Assets	$	14,050
Net Assets Consist of:
Paid-in-Capital	$	10,215
Total Distributable Earnings		3,835
Net Assets	$	14,050
CLASS I:
Net Assets	$	13,970
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,010,221
Net Asset Value, Offering and Redemption Price Per Share	$	13.83
CLASS A:
Net Assets	$	14
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,010
Net Asset Value, Redemption Price Per Share	$	13.81
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.77
Maximum Offering Price Per Share	$	14.58
CLASS C:
Net Assets	$	52
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,797
Net Asset Value, Offering and Redemption Price Per Share	$	13.72
CLASS IS:
Net Assets	$	14
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,013
Net Asset Value, Offering and Redemption Price Per Share	$	13.83

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $9 of Foreign Taxes Withheld)	$	124
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		125
Expenses:
Professional Fees		115
Offering Costs		101
Advisory Fees (Note B)		96
Registration Fees		19
Shareholder Reporting Fees		15
Administration Fees (Note C)		10
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Custodian Fees (Note F)		7
Directors' Fees and Expenses		2
Pricing Fees		1
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		16
Total Expenses		390
Expenses Reimbursed by Adviser (Note B)		(148	)
Waiver of Advisory Fees (Note B)		(96	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		139
Net Investment Loss		(14	)
Realized Gain:
Investments Sold		56
Foreign Currency Translation		2
Net Realized Gain		58
Change in Unrealized Appreciation (Depreciation):
Investments		3,092
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		3,150
Net Increase in Net Assets Resulting from Operations	$	3,136

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Period from October 31, 2019^ to December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(14	)	$	(16	)
Net Realized Gain		58			5
Net Change in Unrealized Appreciation (Depreciation)		3,092			890
Net Increase in Net Assets Resulting from Operations		3,136			879
Dividends and Distributions to Shareholders:
Class I		(180	)		—
Class A		(—	@)		—
Class C		(—	@)		—
Class IS		(—	@)		—
Total Dividends and Distributions to Shareholders		(180	)		—
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		—			9,970
Distributions Reinvested		180			—
Class A:
Subscribed		—			10
Distributions Reinvested		—	@		—
Class C:
Subscribed		35			10
Distributions Reinvested		—	@		—
Redeemed		(—	@)		—
Class IS:
Subscribed		—			10
Distributions Reinvested		—	@		—
Net Increase in Net Assets Resulting from Capital Share Transactions		215			10,000
Total Increase in Net Assets		3,171			10,879
Net Assets:
Beginning of Period		10,879			—
End of Period	$	14,050		$	10,879
(1) Capital Share Transactions:
Class I:
Shares Subscribed		—			997
Shares Issued on Distributions Reinvested		13			—
Net Increase in Class I Shares Outstanding		13			997
Class A:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—	@@		—
Net Increase in Class A Shares Outstanding		—	@@		1
Class C:
Shares Subscribed		3			1
Shares Issued on Distributions Reinvested		—	@@		—
Shares Redeemed		(—	@@)		—
Net Increase in Class C Shares Outstanding		3			1
Class IS:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—	@@		—
Net Increase in Class IS Shares Outstanding		—	@@		1

^ Commencement of Operations.

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
Selected Per Share Data and Ratios	Year Ended December 31, 2020			Period from October 31, 2019⁽¹⁾ to December 31, 2019
Net Asset Value, Beginning of Period	$	10.88		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.01	)		(0.02	)
Net Realized and Unrealized Gain		3.14			0.90
Total from Investment Operations		3.13			0.88
Distributions from and/or in Excess of:
Net Investment Income		(0.18	)		—
Net Asset Value, End of Period	$	13.83		$	10.88
Total Return⁽³⁾		28.80	%		8.80	%⁽⁵⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	13,970		$	10,846
Ratio of Expenses Before Expense Limitation		3.20	%		5.72	%⁽⁶⁾
Ratio of Expenses After Expense Limitation		1.16	%⁽⁴⁾		1.15	%⁽⁴⁾⁽⁶⁾
Ratio of Net Investment Loss		(0.11	)%⁽⁴⁾		(0.98	)%⁽⁴⁾⁽⁶⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%⁽⁶⁾
Portfolio Turnover Rate		25	%		0	%⁽⁵⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Not annualized.

(6) Annualized.

	Class A
Selected Per Share Data and Ratios	Year Ended December 31, 2020			Period from October 31, 2019⁽¹⁾ to December 31, 2019
Net Asset Value, Beginning of Period	$	10.87		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.06	)		(0.02	)
Net Realized and Unrealized Gain		3.13			0.89
Total from Investment Operations		3.07			0.87
Distributions from and/or in Excess of:
Net Investment Income		(0.13	)		—
Net Asset Value, End of Period	$	13.81		$	10.87
Total Return⁽³⁾		28.30	%		8.70	%⁽⁵⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	14		$	11
Ratio of Expenses Before Expense Limitation		21.25	%		19.30	%⁽⁶⁾
Ratio of Expenses After Expense Limitation		1.54	%⁽⁴⁾		1.54	%⁽⁴⁾⁽⁶⁾
Ratio of Net Investment Loss		(0.50	)%⁽⁴⁾		(1.37	)%⁽⁴⁾⁽⁶⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%⁽⁶⁾
Portfolio Turnover Rate		25	%		0	%⁽⁵⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Not annualized.

(6) Annualized.

	Class C
Selected Per Share Data and Ratios	Year Ended December 31, 2020			Period from October 31, 2019⁽¹⁾ to December 31, 2019
Net Asset Value, Beginning of Period	$	10.86		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.21	)		(0.04	)
Net Realized and Unrealized Gain		3.18			0.90
Total from Investment Operations		2.97			0.86
Distributions from and/or in Excess of:
Net Investment Income		(0.11	)		—
Net Asset Value, End of Period	$	13.72		$	10.86
Total Return⁽³⁾		27.38	%		8.60	%⁽⁵⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	52		$	11
Ratio of Expenses Before Expense Limitation		13.32	%		20.07	%⁽⁶⁾
Ratio of Expenses After Expense Limitation		2.29	%⁽⁴⁾		2.29	%⁽⁴⁾⁽⁶⁾
Ratio of Net Investment Loss		(1.66	)%⁽⁴⁾		(2.12	)%⁽⁴⁾⁽⁶⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%⁽⁶⁾
Portfolio Turnover Rate		25	%		0	%⁽⁵⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Not annualized.

(6) Annualized.

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2020			Period from October 31, 2019⁽¹⁾ to December 31, 2019
Net Asset Value, Beginning of Period	$	10.88		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.01	)		(0.02	)
Net Realized and Unrealized Gain		3.14			0.90
Total from Investment Operations		3.13			0.88
Distributions from and/or in Excess of:
Net Investment Income		(0.18	)		—
Net Asset Value, End of Period	$	13.83		$	10.88
Total Return⁽³⁾		28.82	%		8.80	%⁽⁵⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	14		$	11
Ratio of Expenses Before Expense Limitation		20.92	%		19.05	%⁽⁶⁾
Ratio of Expenses After Expense Limitation		1.14	%⁽⁴⁾		1.14	%⁽⁴⁾⁽⁶⁾
Ratio of Net Investment Loss		(0.10	)%⁽⁴⁾		(0.97	)%⁽⁴⁾⁽⁶⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%⁽⁶⁾
Portfolio Turnover Rate		25	%		0	%⁽⁵⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Not annualized.

(6) Annualized.

The accompanying financial statements relate to the China Equity Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Company ("MSIM Company") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of

such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

2. Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's

investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	—	$	841	$	—	$	841
Beverages		—		1,952		—		1,952
Capital Markets		—		614		—		614
Computers & Peripherals		—		349		—		349
Diversified Consumer Services		949		—		—		949
Electronic Equipment, Instruments & Components		—		150		—		150
Food Products		—		930		—		930
Health Care Equipment & Supplies		—		217		—		217
Insurance		—		371		—		371
Interactive Media & Services		—		2,677		—		2,677

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Internet & Direct Marketing Retail	$	318	$	2,516	$	—	$	2,834
Pharmaceuticals		—		609		—		609
Real Estate Management & Development		—		91		—		91
Semiconductors & Semiconductor Equipment		—		330		—		330
Textiles, Apparel & Luxury Goods		—		545		—		545
Wireless Telecommunication Services		—		157		—		157
Total Common Stocks		1,267		12,349		—		13,616
Short-Term Investment
Investment Company		415		—		—		415
Total Assets	$	1,682	$	12,349	$	—	$	14,031

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

4. Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

5. Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6. Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

7. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 0.80% of the daily net assets of the Fund.

such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $96,000 of advisory fees were waived and approximately $154,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

Effective December 9, 2020, the Adviser has entered into a Sub-Advisory Agreement with the Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley. The Sub-Adviser provides the Fund with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining

accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $3,081,000 and $2,959,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	550			$	1,621			$	1,756			$	1

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	415

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the two-year period ended December 31, 2020 remains subject to examination by taxing authorities.

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	180	$	—	$	—	$	—

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	240			$	18

J. Other: At December 31, 2020, the Fund did not have record owners of 10% or greater.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
China Equity Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of China Equity Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended and the statements of changes in net assets and the financial highlights for the year ended December 31, 2020 and the period from October 31, 2019 (commencement of operations) through December 31, 2019 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of China Equity Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended and the changes in its net assets and its financial highlights for the year ended December 31, 2020 and the period from October 31, 2019 (commencement of operations) through December 31, 2019, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Counterpoint Global Portfolio Class I	$	1,000.00	$	1,399.40	$	1,019.91	$	6.27	$	5.28		1.04	%
Counterpoint Global Portfolio Class A		1,000.00		1,397.80		1,018.15		8.38		7.05		1.39
Counterpoint Global Portfolio Class C		1,000.00		1,392.00		1,014.38		12.87		10.84		2.14
Counterpoint Global Portfolio Class IS		1,000.00		1,399.80		1,020.16		6.97		5.03		0.99

** Annualized.

Performance Compared to the MSCI All Country World Net Index⁽¹⁾ and the Lipper Global Multi-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁵⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		72.70	%		—		—		31.30	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		72.25			—		—		30.87
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		63.14			—		—		28.10
Fund — Class C Shares w/o sales charges⁽⁴⁾		70.89			—		—		29.86
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁴⁾		69.89			—		—		29.86
Fund — Class IS Shares w/o sales charges⁽⁴⁾		72.88			—		—		31.36
MSCI All Country World Net Index		16.25			—		—		12.35
Lipper Global Multi-Cap Growth Funds Index		36.37			—		—		19.35

⁽¹⁾ The MSCI All Country World Net Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed and emerging markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Global Multi-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Global Multi-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper Global Multi-Cap Growth Funds classification.

⁽⁴⁾ Commenced operations on June 29, 2018.

⁽⁵⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (91.6%)
Argentina (0.1%)
Globant SA (a)		85	$	19
Australia (1.1%)
Afterpay Ltd. (a)		678		62
Brookfield Infrastructure Partners LP		1,500		74
Redbubble Ltd. (a)		8,693		37
Xero Ltd. (a)		847		96
				269
Brazil (0.1%)
B3 SA - Brasil Bolsa Balcao		390		5
Magazine Luiza SA		2,509		12
				17
Canada (4.2%)
Brookfield Asset Management, Inc., Class A		1,774		73
Canada Goose Holdings, Inc. (a)		3,087		92
Canadian National Railway Co.		226		25
Colliers International Group, Inc.		1,074		96
Constellation Software, Inc.		88		114
FirstService Corp.		1,322		181
Score Media and Gaming, Inc. (a)		15,910		19
Shopify, Inc., Class A (a)		390		441
Topicus.com, Inc. (a)		164		1
				1,042
China (3.6%)
Alibaba Group Holding Ltd. ADR (a)		474		110
China East Education Holdings Ltd. (b)		3,000		7
China Resources Beer Holdings Co., Ltd. (b)		2,000		18
Foshan Haitian Flavouring & Food Co., Ltd., Class A		5,160		158
Haidilao International Holding Ltd. (b)		2,000		15
Hangzhou Tigermed Consulting Co. Ltd. H Shares (a)(b)		500		12
Huazhu Group Ltd. ADR		89		4
HUYA, Inc. ADR (a)		1,255		25
Inner Mongolia Yili Industrial Group Co., Ltd., Class A		900		6
Meituan, Class B (a)(b)		3,800		143
New Frontier Health Corp. (a)		1,068		9
Shenzhou International Group Holdings Ltd. (b)		800		16
TAL Education Group ADR (a)		3,784		271
Tencent Holdings Ltd. (b)		300		22
Trip.com Group Ltd. ADR (a)		1,772		60
				876
Denmark (1.8%)
Chr Hansen Holding A/S (a)		862		89
DSV Panalpina A/S		2,037		342
Novo Nordisk A/S Series B		66		5
				436
Finland (0.1%)
Revenio Group Oyj		518		32

	Shares		Value (000)
France (3.2%)
Christian Dior SE		227	$	126
Dassault Systemes SE		244		49
EssilorLuxottica SA		109		17
Getlink SE (a)		2,348		41
Hermes International		404		434
L'Oreal SA (BSRM)		68		26
Pernod Ricard SA		254		49
Remy Cointreau SA		164		31
				773
Germany (0.8%)
Adidas AG (a)		156		57
CompuGroup Medical SE & Co. KGaA		426		41
HelloFresh SE (a)		289		22
Puma SE (a)		94		11
Zalando SE (a)		524		58
				189
Hong Kong (0.4%)
AIA Group Ltd.		7,800		95
India (2.5%)
HDFC Bank Ltd. ADR (a)		7,568		547
ICICI Bank Ltd. ADR (a)		4,311		64
				611
Italy (1.3%)
Brunello Cucinelli SpA (a)		354		15
Davide Campari-Milano N.V.		4,859		56
Moncler SpA (a)		3,890		239
				310
Japan (1.7%)
BASE, Inc. (a)		900		85
Demae-Can Co., Ltd. (a)		1,200		37
Freee KK (a)		200		19
Keyence Corp.		300		169
Mercari, Inc.		200		9
Pigeon Corp.		2,200		91
				410
Korea, Republic of (0.2%)
NAVER Corp.		178		48
Mexico (0.2%)
Grupo Aeroportuario del Sureste SAB de CV, Class B (a)		2,620		43
Netherlands (2.1%)
Adyen N.V. (a)		142		330
ASML Holding N.V.		310		150
JDE Peet's N.V. (a)		555		25
Just Eat Takeaway.com N.V (a)		106		12
				517
New Zealand (0.3%)
Ryman Healthcare Ltd.		6,158		68
Poland (0.2%)
Dino Polska SA (a)		586		45

	Shares		Value (000)
Singapore (2.5%)
Sea Ltd. ADR (a)		3,144	$	626
Spain (0.2%)
Aena SME SA (a)		235		41
Sweden (0.6%)
AddLife AB		4,735		83
Cellavision AB (a)		566		21
Evolution Gaming Group AB		134		13
Vitrolife AB (a)		1,633		43
				160
Switzerland (0.5%)
Kuehne & Nagel International AG (Registered)		227		52
Straumann Holding AG (Registered)		55		64
				116
Taiwan (0.5%)
Taiwan Semiconductor Manufacturing Co., Ltd.		1,000		19
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		1,040		113
				132
United Kingdom (2.6%)
Abcam PLC		1,589		34
Abcam PLC ADR (a)		1,842		40
Angle PLC (a)		29,726		20
ASOS PLC (a)		452		29
Atlassian Corp., PLC, Class A (a)		389		91
Blue Prism Group PLC (a)		1,260		30
boohoo Group PLC (a)		1,577		7
Diageo PLC		941		37
Fevertree Drinks PLC		670		23
Intertek Group PLC		200		15
Rentokil Initial PLC (a)		2,035		14
Rightmove PLC (a)		9,681		86
Victoria PLC (a)		24,677		221
				647
United States (60.8%)
10X Genomics, Inc., Class A (a)		875		124
4D Molecular Therapeutics, Inc. (a)		300		12
Activision Blizzard, Inc.		660		61
Adaptive Biotechnologies Corp. (a)		158		9
Adobe, Inc. (a)		188		94
Airbnb, Inc., Class A (a)		191		28
Alnylam Pharmaceuticals, Inc. (a)		137		18
Alphabet, Inc., Class C (a)		49		86
Alteryx, Inc., Class A (a)		135		16
Amazon.com, Inc. (a)		171		557
American Tower Corp. REIT		11		2
ANSYS, Inc. (a)		7		3
Anterix, Inc. (a)		1,643		62
Appfolio, Inc., Class A (a)		1,210		218
Appian Corp. (a)		2,450		397
ASML Holding NV		188		92
At Home Group, Inc. (a)		4,352		67

	Shares		Value (000)
Autodesk, Inc. (a)		8	$	2
Avalara, Inc. (a)		23		4
Ball Corp.		301		28
Berkeley Lights, Inc. (a)		114		10
Berkshire Hathaway, Inc., Class B (a)		25		6
BigCommerce Holdings, Inc. (a)		371		24
Bill.Com Holdings, Inc. (a)		90		12
C3.ai, Inc., Class A (a)		74		10
Cadence Design Systems, Inc. (a)		28		4
Cardlytics, Inc. (a)		2,072		296
Carvana Co. (a)		1,604		384
Chegg, Inc. (a)		28		2
Chewy, Inc., Class A (a)		293		26
Cintas Corp.		59		21
Cloudflare, Inc., Class A (a)		728		55
Colgate-Palmolive Co.		43		4
ContextLogic, Inc., Class A (a)		1,410		26
Copart, Inc. (a)		165		21
CoStar Group, Inc. (a)		24		22
Costco Wholesale Corp.		405		153
Coupa Software, Inc. (a)		708		240
Covetrus, Inc. (a)		20,389		586
Danaher Corp.		12		3
Datadog, Inc., Class A (a)		180		18
DexCom, Inc. (a)		291		108
DocuSign, Inc. (a)		80		18
DoorDash, Inc., Class A (a)		493		70
DraftKings, Inc., Class A (a)		336		16
Dragoneer Growth Opportunities Corp. (a)		1,417		20
Dropbox, Inc., Class A (a)		1,209		27
Ecolab, Inc.		572		124
Editas Medicine, Inc. (a)		141		10
EPAM Systems, Inc. (a)		527		189
Equinix, Inc. REIT		3		2
EVI Industries, Inc. (a)		486		15
Exact Sciences Corp. (a)		155		20
Facebook, Inc., Class A (a)		388		106
Farfetch Ltd., Class A (a)		5,044		322
Fastenal Co.		433		21
Fastly, Inc., Class A (a)		7,987		698
Floor & Decor Holdings, Inc. (a)		924		86
GameStop Corp., Class A (a)		7,211		136
GoodRx Holdings, Inc., Class A (a)		299		12
Guardant Health, Inc. (a)		442		57
Guidewire Software, Inc. (a)		19		2
HealthEquity, Inc. (a)		201		14
HEICO Corp., Class A		1,003		117
Home Depot, Inc. (The)		14		4
IAC/InterActiveCorp (a)		189		36
IDEXX Laboratories, Inc. (a)		5		2
Illumina, Inc. (a)		22		8
Inspire Medical Systems, Inc. (a)		212		40
Intellia Therapeutics, Inc. (a)		186		10

	Shares		Value (000)
United States (cont'd)
Intercontinental Exchange, Inc.		590	$	68
Intuitive Surgical, Inc. (a)		493		403
Linde PLC		64		17
Lululemon Athletica, Inc. (a)		7		2
Madison Square Garden Sports Corp., Class A (a)		14		3
Martin Marietta Materials, Inc.		393		112
Mastercard, Inc., Class A		550		196
Match Group, Inc. (a)		25		4
MercadoLibre, Inc. (a)		123		206
MicroStrategy, Inc., Class A (a)		497		193
Moderna, Inc. (a)		265		28
MongoDB, Inc. (a)		277		99
NanoString Technologies, Inc. (a)		2,585		173
Netflix, Inc. (a)		5		3
NIKE, Inc., Class B		27		4
Northern Star Acquisition Corp. (a)		1,809		28
Nuance Communications, Inc. (a)		223		10
NVIDIA Corp.		7		4
Okta, Inc. (a)		885		225
Opendoor Technologies, Inc. (a)		405		9
Outset Medical, Inc. (a)		246		14
Overstock.com, Inc. (a)		10,232		491
Party City Holdco, Inc. (a)		23,113		142
Passage Bio, Inc. (a)		518		13
Peloton Interactive, Inc., Class A (a)		117		18
Penumbra, Inc. (a)		39		7
Pinterest, Inc., Class A (a)		2,176		143
Pool Corp.		7		3
Progressive Corp. (The)		25		2
Quotient Ltd. (a)		2,160		11
RedBall Acquisition Corp., Class A (a)		225		2
Redfin Corp. (a)		2,471		170
Relay Therapeutics, Inc. (a)		137		6
Ribbit LEAP Ltd. (a)		1,397		21
Roku, Inc. (a)		53		18
Rollins, Inc.		58		2
Roper Technologies, Inc.		60		26
Royal Gold, Inc.		268		28
Royalty Pharma PLC, Class A		9,016		451
S&P Global, Inc.		271		89
salesforce.com, Inc. (a)		322		72
Schrodinger, Inc. (a)		328		26
Seer, Inc. (a)		821		46
Service Corp. International		50		2
ServiceNow, Inc. (a)		290		160
Sherwin-Williams Co. (The)		31		23
Skillz, Inc. (a)		19,546		391
Smartsheet, Inc., Class A (a)		1,140		79
Snap, Inc., Class A (a)		2,910		146
Snowflake, Inc., Class A (a)		710		200
Spotify Technology SA (a)		1,518		478
Square, Inc., Class A (a)		1,917		417

	Shares		Value (000)
Starbucks Corp.		36	$	4
Stitch Fix, Inc., Class A (a)		3,730		219
Synopsys, Inc. (a)		14		4
Take-Two Interactive Software, Inc. (a)		13		3
Teladoc Health, Inc. (a)		48		10
Texas Pacific Land Trust		88		64
Trade Desk, Inc. (The), Class A (a)		186		149
Twilio, Inc., Class A (a)		936		317
Twitter, Inc. (a)		6,714		364
Tyler Technologies, Inc. (a)		56		24
Uber Technologies, Inc. (a)		6,926		353
Unity Software, Inc. (a)		332		51
UTZ Brands, Inc.		7,014		155
Vail Resorts, Inc.		9		2
Veeva Systems, Inc., Class A (a)		1,642		447
Verisk Analytics, Inc.		106		22
Visa, Inc., Class A		568		124
Vroom, Inc. (a)		957		39
Walt Disney Co. (The) (a)		992		180
Waste Connections, Inc.		209		21
Watsco, Inc.		11		2
Wayfair, Inc., Class A (a)		647		146
Workday, Inc., Class A (a)		113		27
Zillow Group, Inc., Class A (a)		220		30
Zillow Group, Inc., Class C (a)		649		84
Zoetis, Inc.		16		3
Zoom Video Communications, Inc., Class A (a)		1,030		347
ZoomInfo Technologies, Inc., Class A (a)		1,936		93
Zynga, Inc., Class A (a)		1,915		19
				14,880
Total Common Stocks (Cost $13,100)				22,402
Preferred Stocks (0.0%)
United States (0.0%)
Overstock.com, Inc. Series A-1 (Cost $1)		176		8
Short-Term Investment (7.9%)
Investment Company (7.9%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $1,944)		1,944,408		1,944
Total Investments Excluding Purchased Options (99.5%) (Cost $15,045)				24,354
Total Purchased Options Outstanding (0.1%) (Cost $51)				10
Total Investments (99.6%) (Cost $15,096) (c)(d)				24,364
Other Assets in Excess of Liabilities (0.4%)				96
Net Assets (100.0%)			$	24,460

Call Options Purchased:

The Fund had the following call options purchased open at December 31, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.99	Sep-21		1,958,561		1,959	$	2		$	12	$	(10	)
BNP Paribas	USD/CNH	CNH	7.64	Nov-21		2,347,349		2,347		7			13		(6	)
JP Morgan Chase Bank NA	USD/CNH	CNH	7.74	Jan-21		1,617,368		1,617		—	@		6		(6	)
JP Morgan Chase Bank NA	USD/CNH	CNH	8.10	Jul-21		2,322,002		2,322		1			11		(10	)
JP Morgan Chase Bank NA	USD/CNH	CNH	8.49	May-21		1,600,649		1,601		—	@		9		(9	)
									$	10		$	51	$	(41	)

@ Value is less than $500.

CNH — Chinese Yuan Renminbi Offshore

USD — United States Dollar

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $13,152)	$	22,420
Investment in Security of Affiliated Issuer, at Value (Cost $1,944)		1,944
Total Investments in Securities, at Value (Cost $15,096)		24,364
Foreign Currency, at Value (Cost $11)		11
Cash		1
Receivable for Investments Sold		341
Due from Adviser		48
Receivable for Fund Shares Sold		9
Tax Reclaim Receivable		3
Dividends Receivable		2
Receivable from Affiliate		—	@
Other Assets		38
Total Assets		24,817
Liabilities:
Payable for Investments Purchased		289
Payable for Custodian Fees		33
Payable for Professional Fees		20
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Administration Fees		2
Payable for Sub Transfer Agency Fees — Class I		1
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		11
Total Liabilities		357
Net Assets	$	24,460
Net Assets Consist of:
Paid-in-Capital	$	14,374
Total Distributable Earnings		10,086
Net Assets	$	24,460

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	23,717
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,247,363
Net Asset Value, Offering and Redemption Price Per Share	$	19.01
CLASS A:
Net Assets	$	696
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		36,854
Net Asset Value, Redemption Price Per Share	$	18.89
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.05
Maximum Offering Price Per Share	$	19.94
CLASS C:
Net Assets	$	27
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,455
Net Asset Value, Offering and Redemption Price Per Share	$	18.60
CLASS IS:
Net Assets	$	20
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,028
Net Asset Value, Offering and Redemption Price Per Share	$	19.03

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $3 of Foreign Taxes Withheld)	$	38
Dividends from Security of Affiliated Issuer (Note G)		4
Total Investment Income		42
Expenses:
Custodian Fees (Note F)		139
Advisory Fees (Note B)		133
Professional Fees		123
Registration Fees		78
Pricing Fees		15
Administration Fees (Note C)		13
Shareholder Reporting Fees		12
Transfer Agency Fees — Class I (Note E)		4
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Sub Transfer Agency Fees — Class I		6
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class C		—	@
Directors' Fees and Expenses		4
Shareholder Services Fees — Class A (Note D)		1
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		22
Total Expenses		556
Expenses Reimbursed by Adviser (Note B)		(238	)
Waiver of Advisory Fees (Note B)		(133	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(3	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(2	)
Net Expenses		174
Net Investment Loss		(132	)
Realized Gain:
Investments Sold		1,835
Foreign Currency Translation		1
Net Realized Gain		1,836
Change in Unrealized Appreciation (Depreciation):
Investments		8,072
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		8,072
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		9,908
Net Increase in Net Assets Resulting from Operations	$	9,776

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(132	)	$	(18	)
Net Realized Gain		1,836			230
Net Change in Unrealized Appreciation (Depreciation)		8,072			1,737
Net Increase in Net Assets Resulting from Operations		9,776			1,949
Dividends and Distributions to Shareholders:
Class I		(654	)		—
Class A		(18	)		—
Class C		(1	)		—
Class IS		(1	)		—
Total Dividends and Distributions to Shareholders		(674	)		—
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		9,074			2,424
Distributions Reinvested		654			—
Redeemed		(5,076	)		—
Class A:
Subscribed		654			4
Distributions Reinvested		18			—
Redeemed		(109	)		(—	@)
Class C:
Subscribed		7			—
Distributions Reinvested		1			—
Class IS:
Distributions Reinvested		1			—
Net Increase in Net Assets Resulting from Capital Share Transactions		5,224			2,428
Total Increase in Net Assets		14,326			4,377
Net Assets:
Beginning of Period		10,134			5,757
End of Period	$	24,460		$	10,134
(1) Capital Share Transactions:
Class I:
Shares Subscribed		753			215
Shares Issued on Distributions Reinvested		34			—
Shares Redeemed		(432	)		—
Net Increase in Class I Shares Outstanding		355			215
Class A:
Shares Subscribed		41			—	@@
Shares Issued on Distributions Reinvested		1			—
Shares Redeemed		(6	)		(—	@@)
Net Increase in Class A Shares Outstanding		36			—	@@
Class C:
Shares Subscribed		—	@@		—
Shares Issued on Distributions Reinvested		—	@@		—
Net Increase in Class C Shares Outstanding		—	@@		—
Class IS:
Shares Issued on Distributions Reinvested		—	@@		—

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,						Period from June 29, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	11.32		$	8.46		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.11	)		(0.03	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		8.34			2.89			(1.41	)
Total from Investment Operations		8.23			2.86			(1.44	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.03	)
Net Realized Gain		(0.54	)		—			—
Paid-in-Capital		—			—			(0.07	)
Total Distributions		(0.54	)		—			(0.10	)
Net Asset Value, End of Period	$	19.01		$	11.32		$	8.46
Total Return⁽³⁾		72.70	%		33.81	%		(14.36	)%⁽⁵⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	23,717		$	10,097		$	5,733
Ratio of Expenses Before Expense Limitation		3.29	%		5.22	%		6.83	%⁽⁶⁾
Ratio of Expenses After Expense Limitation		1.04	%⁽⁴⁾		1.03	%⁽⁴⁾		1.03	%⁽⁴⁾⁽⁶⁾
Ratio of Net Investment Loss		(0.79	)%⁽⁴⁾		(0.25	)%⁽⁴⁾		(0.54	)%⁽⁴⁾⁽⁶⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%⁽⁶⁾
Portfolio Turnover Rate		116	%		67	%		54	%⁽⁵⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Not annualized.

(6) Annualized.

	Class A
	Year Ended December 31,						Period from June 29, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	11.28		$	8.47		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.19	)		(0.06	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		8.34			2.87			(1.40	)
Total from Investment Operations		8.15			2.81			(1.44	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.03	)
Net Realized Gain		(0.54	)		—			—
Paid-in-Capital		—			—			(0.06	)
Total Distributions		(0.54	)		—			(0.09	)
Net Asset Value, End of Period	$	18.89		$	11.28		$	8.47
Total Return⁽³⁾		72.25	%		33.18	%		(14.44	)%⁽⁵⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	696		$	15		$	8
Ratio of Expenses Before Expense Limitation		4.61	%		23.73	%		26.82	%⁽⁶⁾
Ratio of Expenses After Expense Limitation		1.39	%⁽⁴⁾		1.39	%⁽⁴⁾		1.39	%⁽⁴⁾⁽⁶⁾
Ratio of Net Investment Loss		(1.16	)%⁽⁴⁾		(0.62	)%⁽⁴⁾		(0.91	)%⁽⁴⁾⁽⁶⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%⁽⁶⁾
Portfolio Turnover Rate		116	%		67	%		54	%⁽⁵⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Not annualized.

(6) Annualized.

	Class C
	Year Ended December 31,						Period from June 29, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	11.20		$	8.47		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.27	)		(0.14	)		(0.08	)
Net Realized and Unrealized Gain (Loss)		8.21			2.87			(1.40	)
Total from Investment Operations		7.94			2.73			(1.48	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.02	)
Net Realized Gain		(0.54	)		—			—
Paid-in-Capital		—			—			(0.03	)
Total Distributions		(0.54	)		—			(0.05	)
Net Asset Value, End of Period	$	18.60		$	11.20		$	8.47
Total Return⁽³⁾		70.89	%		32.23	%		(14.80	)%⁽⁵⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	27		$	11		$	8
Ratio of Expenses Before Expense Limitation		18.57	%		24.53	%		27.44	%⁽⁶⁾
Ratio of Expenses After Expense Limitation		2.14	%⁽⁴⁾		2.14	%⁽⁴⁾		2.14	%⁽⁴⁾⁽⁶⁾
Ratio of Net Investment Loss		(1.90	)%⁽⁴⁾		(1.37	)%⁽⁴⁾		(1.66	)%⁽⁴⁾⁽⁶⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%⁽⁶⁾
Portfolio Turnover Rate		116	%		67	%		54	%⁽⁵⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Not annualized.

(6) Annualized.

	Class IS
	Year Ended December 31,						Period from June 29, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	11.32		$	8.46		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.10	)		(0.02	)		(0.02	)
Net Realized and Unrealized Gain (Loss)		8.35			2.88			(1.41	)
Total from Investment Operations		8.25			2.86			(1.43	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.03	)
Net Realized Gain		(0.54	)		—			—
Paid-in-Capital		—			—			(0.08	)
Total Distributions		(0.54	)		—			(0.11	)
Net Asset Value, End of Period	$	19.03		$	11.32		$	8.46
Total Return⁽³⁾		72.88	%		33.81	%		(14.34	)%⁽⁵⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	20		$	11		$	8
Ratio of Expenses Before Expense Limitation		19.31	%		23.44	%		26.39	%⁽⁶⁾
Ratio of Expenses After Expense Limitation		0.99	%⁽⁴⁾		0.99	%⁽⁴⁾		0.99	%⁽⁴⁾⁽⁶⁾
Ratio of Net Investment Loss		(0.74	)%⁽⁴⁾		(0.22	)%⁽⁴⁾		(0.51	)%⁽⁴⁾⁽⁶⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%⁽⁶⁾
Portfolio Turnover Rate		116	%		67	%		54	%⁽⁵⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Not annualized.

(6) Annualized.

The accompanying financial statements relate to the Counterpoint Global Portfolio (name changed on January 2, 2020, formerly Global Counterpoint Portfolio). The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at

their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	117	$	—	$	—	$	117
Air Freight & Logistics		—		342		—		342
Banks		611		—		—		611
Beverages		—		214		—		214
Biotechnology		157		77		—		234
Capital Markets		230		5		—		235
Chemicals		164		89		—		253
Commercial Services & Supplies		65		14		—		79
Construction Materials		112		—		—		112
Containers & Packaging		28		—		—		28
Distributors		3		—		—		3
Diversified Consumer Services		275		7		—		282
Diversified Financial Services		6		—		—		6
Diversified Holding Companies		71		—		—		71
Diversified Telecommunication Services		62		—		—		62
Electronic Equipment, Instruments & Components		—		169		—		169
Entertainment		1,435		—		—		1,435
Equity Real Estate Investment Trusts (REITs)		4		—		—		4
Food & Staples Retailing		153		45		—		198
Food Products		155		189		—		344
Health Care Equipment & Supplies		548		137		—		685
Health Care Providers & Services		666		68		—		734
Health Care Technology		535		41		—		576
Hotels, Restaurants & Leisure		54		28		—		82
Household Durables		—		221		—		221
Household Products		4		91		—		95
Industrial Conglomerates		26		—		—		26
Information Technology Services		2,975		477		—		3,452
Insurance		2		95		—		97
Interactive Media & Services		1,092		156		—		1,248
Internet & Direct Marketing Retail		2,216		354		—		2,570
Leisure Products		18		—		—		18
Life Sciences Tools & Services		370		95		—		465
Marine		—		52		—		52
Media		296		—		—		296
Metals & Mining		28		—		—		28
Multi-Line Retail		—		12		—		12
Multi-Utilities		74		—		—		74
Oil, Gas & Consumable Fuels		64		—		—		64

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Personal Products	$	—	$	26	$	—	$	26
Pharmaceuticals		454		5		—		459
Professional Services		44		15		—		59
Real Estate Management & Development		447		—		—		447
Road & Rail		378		—		—		378
Semiconductors & Semiconductor Equipment		209		169		—		378
Software		2,832		195		—		3,027
Specialty Retail		858		—		—		858
Textiles, Apparel & Luxury Goods		98		915		—		1,013
Trading Companies & Distributors		38		—		—		38
Transportation Infrastructure		43		82		—		125
Total Common Stocks		18,017		4,385		—		22,402
Preferred Stocks
Internet & Direct Marketing Retail		8		—		—		8
Call Options Purchased		—		10		—		10
Short-Term Investment
Investment Company		1,944		—		—		1,944
Total Assets	$	19,969	$	4,395	$	—	$	24,364

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

4. Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its

investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of December 31, 2020:

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Purchased Options

Investments, at Value
(Purchased Options)

Currency Risk

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(19	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	24	(c)

At December 31, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	10	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities(a) (000)		Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
BNP Paribas	$	9	$	—	$	—	$	9
JP Morgan Chase Bank NA		1		—		—		1
Total	$	10	$	—	$	—	$	10

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount					6,613,000

or losses pursuant to these contracts and expects the risk of loss to be remote.

First $1 billion				Over $1 billion
	0.80	%			0.75	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $133,000 of advisory fees were waived and approximately $247,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset

Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $21,919,000 and $17,826,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $2,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	2,154			$	9,283			$	9,493			$	4

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	1,944

procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the year ended December 31, 2020, the Fund did not engage in any cross-trade transactions.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the three-year period ended December 31, 2020 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for

tax purposes. The tax character of distributions paid during fiscal years 2020 and 2019 was as follows:

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	442	$	232	$	—	$	—

Permanent differences, due to a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Distributable Earnings (000)				Paid-in Capital (000)
$	—	@		$	(—	@)

@ Amount is less than $500.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	1,142			$	306

During the year ended December 31, 2020, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $88,000.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Counterpoint Global Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Counterpoint Global Portfolio (formerly Global Counterpoint Portfolio) (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the two years in the period then ended and the period from June 29, 2018 (commencement of operations) through December 31, 2018 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Counterpoint Global Portfolio (formerly Global Counterpoint Portfolio) (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the two years in the period then ended and the period from June 29, 2018 (commencement of operations) through December 31, 2018, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Developing Opportunity Portfolio Class I	$	1,000.00	$	1,366.60	$	1,019.41	$	6.78	$	5.79		1.14	%
Developing Opportunity Portfolio Class A		1,000.00		1,366.40		1,017.90		8.57		7.30		1.44
Developing Opportunity Portfolio Class C		1,000.00		1,359.80		1,013.88		13.29		11.34		2.24
Developing Opportunity Portfolio Class IS		1,000.00		1,366.30		1,019.66		6.48		5.53		1.09

** Annualized.

Performance Compared to the MSCI Emerging Markets Net Index⁽¹⁾ and the Lipper Emerginng Markets Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
	One Year		Five Years		Ten Years		Since Inception⁽⁵⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		—		—		—		45.00	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		—		—		—		44.70
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		—		—		—		37.16
Fund — Class C Shares w/o sales charges⁽⁴⁾		—		—		—		43.60
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁴⁾		—		—		—		42.60
Fund — Class IS Shares w/o sales charges⁽⁴⁾		—		—		—		45.10
MSCI Emerging Markets Net Index		—		—		—		19.14
Lipper Emerging Markets Funds Index		—		—		—		21.54

Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. Performance assumes that all dividends and distributions, if any, were reinvested. For the most recent month-end performance figures, please visit www.morganstanley.com/im/shareholderreports. Investment return and principal value will fluctuate so that Fund shares, when redeemed, may be worth more or less than their original cost. Returns for periods less than one year are not annualized. Total returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance of share classes will vary due to difference in sales charges and expenses.

⁽¹⁾ The MSCI Emerging Markets Net Index is a free float-adjusted market capitalization weighted index that is designed to measure equity market performance of emerging markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI Emerging Markets Net Index currently consists of 27 emerging market country indices. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Emerging Markets Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Emerging Markets Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper Emerging Markets Funds classification.

⁽⁴⁾ Commenced operations on February 14, 2020.

⁽⁵⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (89.4%)
Argentina (1.8%)
Globant SA (a)		21,083	$	4,588
Brazil (6.3%)
B3 SA — Brasil Bolsa Balcao		369,465		4,424
Magazine Luiza SA		2,379,255		11,409
				15,833
China (44.5%)
Alibaba Group Holding Ltd. ADR (a)		40,904		9,520
China East Education Holdings Ltd. (b)		1,066,000		2,565
China Resources Beer Holdings Co., Ltd. (b)		558,000		5,131
Foshan Haitian Flavouring & Food Co., Ltd., Class A		402,668		12,364
Haidilao International Holding Ltd. (b)		526,000		4,056
Hangzhou Tigermed Consulting Co. Ltd. H Shares (a)(b)		14,100		327
Huazhu Group Ltd. ADR		48,425		2,181
HUYA, Inc. ADR (a)		470,877		9,385
Kweichow Moutai Co., Ltd., Class A		27,789		8,492
Meituan Dianping, Class B (a)(b)		471,800		17,760
New Frontier Health Corp. (a)		7,725		66
Shenzhou International Group Holdings Ltd. (b)		323,500		6,340
TAL Education Group ADR (a)		170,858		12,218
Tencent Holdings Ltd. (b)		129,300		9,304
Trip.com Group Ltd. ADR (a)		247,252		8,340
Tsingtao Brewery Co., Ltd. H Shares (b)		412,000		4,317
				112,366
Hong Kong (0.2%)
Alphamab Oncology (a)		241,000		505
India (16.2%)
HDFC Bank Ltd. (a)		759,247		14,955
ICICI Bank Ltd. ADR (a)		851,309		12,650
IndusInd Bank Ltd. (a)		527,600		6,474
Kotak Mahindra Bank Ltd. (a)		248,477		6,791
				40,870
Korea, Republic of (4.3%)
NAVER Corp.		40,341		10,875
Mexico (0.7%)
Grupo Aeroportuario del Sureste SAB de CV, Class B (a)		112,265		1,861
Taiwan (7.0%)
Nien Made Enterprise Co., Ltd.		162,000		1,884
Silergy Corp.		42,000		3,614
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		112,666		12,285
				17,783
United States (8.4%)
EPAM Systems, Inc. (a)		23,046		8,258
MercadoLibre, Inc. (a)		7,763		13,005
				21,263
Total Common Stocks (Cost $184,875)				225,944

	Shares		Value (000)
Short-Term Investment (10.2%)
Investment Company (10.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $25,691)		25,691,251	$	25,691
Total Investments (99.6%) (Cost $210,566) (c)(d)				251,635
Other Assets in Excess of Liabilities (0.4%)				917
Net Assets (100.0%)			$	252,552

(a) Non-income producing security.

(b) Security trades on the Hong Kong exchange.

(c) The approximate fair value and percentage of net assets, $131,587,000 and 52.1%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $211,985,000. The aggregate gross unrealized appreciation is approximately $42,917,000 and the aggregate gross unrealized depreciation is approximately $3,267,000, resulting in net unrealized appreciation of approximately $39,650,000.

ADR American Depositary Receipt.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		21.8	%
Internet & Direct Marketing Retail		19.3
Banks		16.3
Short-Term Investments		10.2
Interactive Media & Services		8.0
Beverages		7.1
Semiconductors & Semiconductor Equipment		6.3
Diversified Consumer Services		5.9
Information Technology Services		5.1
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $184,875)	$	225,944
Investment in Security of Affiliated Issuer, at Value (Cost $25,691)		25,691
Total Investments in Securities, at Value (Cost $210,566)		251,635
Foreign Currency, at Value (Cost —@)		—	@
Receivable for Fund Shares Sold		2,390
Receivable for Investments Sold		1,676
Dividends Receivable		49
Prepaid Offering Costs		16
Receivable from Affiliate		—	@
Other Assets		66
Total Assets		255,832
Liabilities:
Payable for Investments Purchased		1,565
Deferred Capital Gain Country Tax		1,112
Payable for Advisory Fees		397
Payable for Offering Costs		103
Payable for Professional Fees		24
Payable for Custodian Fees		18
Payable for Administration Fees		16
Payable for Sub Transfer Agency Fees — Class I		13
Payable for Sub Transfer Agency Fees — Class A		1
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Fund Shares Redeemed		11
Payable for Shareholder Services Fees — Class A		2
Payable for Distribution and Shareholder Services Fees — Class C		5
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Other Liabilities		12
Total Liabilities		3,280
Net Assets	$	252,552
Net Assets Consist of:
Paid-in-Capital	$	214,099
Total Distributable Earnings		38,453
Net Assets	$	252,552
CLASS I:
Net Assets	$	234,923
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		16,201,248
Net Asset Value, Offering and Redemption Price Per Share	$	14.50
CLASS A:
Net Assets	$	11,721
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		810,275
Net Asset Value, Redemption Price Per Share	$	14.47
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.80
Maximum Offering Price Per Share	$	15.27
CLASS C:
Net Assets	$	5,893
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		410,428
Net Asset Value, Offering and Redemption Price Per Share	$	14.36
CLASS IS:
Net Assets	$	15
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	14.51

@ Amount is less than $500.

Statement of Operations	Period from February 14, 2020^ to December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $27 of Foreign Taxes Withheld)	$	192
Dividends from Security of Affiliated Issuer (Note G)		3
Total Investment Income		195
Expenses:
Advisory Fees (Note B)		666
Offering Costs		112
Professional Fees		87
Administration Fees (Note C)		59
Custodian Fees (Note F)		39
Sub Transfer Agency Fees — Class I		32
Sub Transfer Agency Fees — Class A		2
Sub Transfer Agency Fees — Class C		1
Shareholder Services Fees — Class A (Note D)		8
Distribution and Shareholder Services Fees — Class C (Note D)		16
Shareholder Reporting Fees		18
Registration Fees		17
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Directors' Fees and Expenses		1
Pricing Fees		1
Other Expenses		11
Total Expenses		1,078
Waiver of Advisory Fees (Note B)		(196	)
Rebate from Morgan Stanley Affiliate (Note G)		(10	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Net Expenses		870
Net Investment Loss		(675	)
Realized Loss:
Investments Sold (Net of $—@ of Capital Gain Country Tax)		(877	)
Foreign Currency Translation		(68	)
Net Realized Loss		(945	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $1,112)		39,957
Foreign Currency Translation		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		39,957
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		39,012
Net Increase in Net Assets Resulting from Operations	$	38,337

^ Commencement of Operations.

@ Amount is less than $500.

Statement of Changes in Net Assets	Period from February 14, 2020^ to December 31, 2020 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(675	)
Net Realized Loss		(945	)
Net Change in Unrealized Appreciation (Depreciation)		39,957
Net Increase in Net Assets Resulting from Operations		38,337
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		203,978
Redeemed		(4,898	)
Class A:
Subscribed		11,456
Redeemed		(1,392	)
Class C:
Subscribed		5,215
Redeemed		(173	)
Class IS:
Subscribed		10
Net Increase in Net Assets Resulting from Capital Share Transactions		214,196
Redemption Fees		19
Total Increase in Net Assets		252,552
Net Assets:
Beginning of Period		—
End of Period	$	252,552
(1) Capital Share Transactions:
Class I:
Shares Subscribed		16,607
Shares Redeemed		(406	)
Net Increase in Class I Shares Outstanding		16,201
Class A:
Shares Subscribed		922
Shares Redeemed		(112	)
Net Increase in Class A Shares Outstanding		810
Class C:
Shares Subscribed		426
Shares Redeemed		(16	)
Net Increase in Class C Shares Outstanding		410
Class IS:
Shares Subscribed		1

^ Commencement of Operations.

	Class I
Selected Per Share Data and Ratios	Period from February 14, 2020⁽¹⁾ to December 31, 2020
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.10	)
Net Realized and Unrealized Gain		4.60
Total from Investment Operations		4.50
Redemption Fees		0.00	⁽³⁾
Net Asset Value, End of Period	$	14.50
Total Return⁽⁴⁾		45.00	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	234,923
Ratio of Expenses Before Expense Limitation		1.41	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		1.14	%⁽⁵⁾⁽⁷⁾
Ratio of Net Investment Loss		(0.87	)%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%⁽⁷⁾
Portfolio Turnover Rate		18	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(5) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6) Not annualized.

(7) Annualized.

	Class A
Selected Per Share Data and Ratios	Period from February 14, 2020⁽¹⁾ to December 31, 2020
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.13	)
Net Realized and Unrealized Gain		4.60
Total from Investment Operations		4.47
Redemption Fees		0.00	⁽³⁾
Net Asset Value, End of Period	$	14.47
Total Return⁽⁴⁾		44.70	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11,721
Ratio of Expenses Before Expense Limitation		1.72	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		1.44	%⁽⁵⁾⁽⁷⁾
Ratio of Net Investment Loss		(1.17	)%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%⁽⁷⁾
Portfolio Turnover Rate		18	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Not annualized.

(7) Annualized.

	Class C
Selected Per Share Data and Ratios	Period from February 14, 2020⁽¹⁾ to December 31, 2020
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.22	)
Net Realized and Unrealized Gain		4.58
Total from Investment Operations		4.36
Redemption Fees		0.00	⁽³⁾
Net Asset Value, End of Period	$	14.36
Total Return⁽⁴⁾		43.60	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	5,893
Ratio of Expenses Before Expense Limitation		2.53	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		2.24	%⁽⁵⁾⁽⁷⁾
Ratio of Net Investment Loss		(1.97	)%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%⁽⁷⁾
Portfolio Turnover Rate		18	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Not annualized.

(7) Annualized.

	Class IS
Selected Per Share Data and Ratios	Period from February 14, 2020⁽¹⁾ to December 31, 2020
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.07	)
Net Realized and Unrealized Gain		4.58
Total from Investment Operations		4.51
Redemption Fees		0.00	⁽³⁾
Net Asset Value, End of Period	$	14.51
Total Return⁽⁴⁾		45.10	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	15
Ratio of Expenses Before Expense Limitation		17.67	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		1.09	%⁽⁵⁾⁽⁷⁾
Ratio of Net Investment Loss		(0.67	)%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%⁽⁷⁾
Portfolio Turnover Rate		18	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Not annualized.

(7) Annualized.

The accompanying financial statements relate to the Developing Opportunity Portfolio. The Fund seeks long-term capital appreciation.

The Fund commenced operations on February 14, 2020 and offers four classes of shares — Class I, Class A, Class C and Class IS.

mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of

investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	12,650	$	28,220	$	—	$	40,870
Beverages		—		17,940		—		17,940
Biotechnology		—		505		—		505
Capital Markets		—		4,424		—		4,424
Diversified Consumer Services		12,218		2,565		—		14,783
Entertainment		9,385		—		—		9,385
Food Products		—		12,364		—		12,364
Health Care Providers & Services		66		—		—		66
Hotels, Restaurants & Leisure		2,181		4,056		—		6,237
Household Durables		—		1,884		—		1,884
Information Technology Services		12,846		—		—		12,846

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Interactive Media & Services	$	—	$	20,179	$	—	$	20,179
Internet & Direct Marketing Retail		30,865		17,760		—		48,625
Life Sciences Tools & Services		—		327		—		327
Multi-Line Retail		—		11,409		—		11,409
Semiconductors & Semiconductor Equipment		12,285		3,614		—		15,899
Textiles, Apparel & Luxury Goods		—		6,340		—		6,340
Transportation Infrastructure		1,861		—		—		1,861
Total Common Stocks		94,357		131,587		—		225,944
Short-Term Investment
Investment Company		25,691		—		—		25,691
Total Assets	$	120,048	$	131,587	$	—	$	251,635

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statement of Changes in Net Assets.

6. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

First $1 billion				Over $1 billion
	0.90	%			0.85	%

For the period ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.62% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.15% for Class I shares, 1.50% for Class A shares, 2.25% for Class C shares and 1.10% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the period ended December 31, 2020, approximately $196,000 of advisory fees were waived and approximately $2,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

A summary of the Fund's transactions in shares of affiliated investments during the period ended December 31, 2020 is as follows:

Affiliated Investment Company				Value February 14, 2020 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	—			$	145,129			$	119,438			$	3

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	25,691

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the period ended December 31, 2020, the Fund did not engage in any cross-trade transactions.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued

based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. The tax year ended December 31, 2020 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. There were no distributions paid during fiscal year 2020.

Permanent differences, primarily due to a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Distributable Earnings (000)				Paid-in Capital (000)
$	116			$	(116	)

At December 31, 2020, the Fund had no distributable earnings on a tax basis.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Developing Opportunity Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Developing Opportunity Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statements of operations and changes in net assets and the financial highlights for the period from February 14, 2020 (commencement of operations) through December 31, 2020 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Developing Opportunity Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, and the results of its operations, the changes in its net assets and its financial highlights for the period from February 14, 2020 (commencement of operations) through December 31, 2020, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities law and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of the Company's internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020 by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Fixed Income Opportunities Portfolio Class I	$	1,000.00	$	1,107.10	$	1,020.86	$	4.50	$	4.32		0.85	%
Emerging Markets Fixed Income Opportunities Portfolio Class A		1,000.00		1,105.60		1,019.10		6.35		6.09		1.20
Emerging Markets Fixed Income Opportunities Portfolio Class L		1,000.00		1,103.70		1,017.85		7.67		7.35		1.45
Emerging Markets Fixed Income Opportunities Portfolio Class C		1,000.00		1,102.50		1,015.33		10.31		9.88		1.95
Emerging Markets Fixed Income Opportunities Portfolio Class IS		1,000.00		1,107.20		1,021.01		4.34		4.17		0.82

** Annualized.

Performance Compared to the J.P. Morgan Emerging Markets Blended Index (JEMB) — Equal Weighted⁽¹⁾, the Emerging Markets Fixed Income Blend Index⁽²⁾ and the Lipper Emerging Markets Hard Currency Debt Funds Index⁽³⁾

	Period Ended December 31, 2020 Total Returns⁽⁴⁾
				Average Annual
	One Year			Five Years			Ten Years		Since Inception⁽⁸⁾
Fund — Class I Shares w/o sales charges⁽⁵⁾		4.69	%		7.27	%		—		4.90	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		4.33			6.91			—		4.55
Fund — Class A Shares with maximum 3.25% sales charges⁽⁵⁾		0.94			6.20			—		4.15
Fund — Class L Shares w/o sales charges⁽⁵⁾		4.06			6.63			—		4.26
Fund — Class C Shares w/o sales charges⁽⁷⁾		3.63			6.13			—		4.05
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁷⁾		2.64			6.13			—		4.05
Fund — Class IS Shares w/o sales charges⁽⁶⁾		4.84			7.31			—		5.44
J.P. Morgan Emerging Markets Blended Index (JEMB) — Equal Weighted		5.07			7.05			—		4.53
Emerging Markets Fixed Income Blend Index		5.07			6.93			—		5.45
Lipper Emerging Markets Hard Currency Debt Funds Index		3.65			6.56			—		4.49

⁽¹⁾ The J.P. Morgan Emerging Markets Blended Index (JEMB) — Equal Weighted is a blend of 1/3 J.P. Morgan Emerging Markets Bond Global Diversified Index (EMBI Global Diversified Index) (a benchmark that tracks total returns for U.S. dollar-denominated debt instruments issued by emerging markets sovereign and quasi-sovereign entities but limits the weights of countries with larger debt stocks by only including a specified portion of these countries' eligible current face amounts of debt outstanding), 1/3 J.P. Morgan Government Bond Index- Emerging Markets Global Diversified Index (GBI-EM Global Diversified Index) (a benchmark that tracks local currency government bonds issued by emerging markets) and 1/3 J.P. Morgan Corporate Emerging Markets Bond Index Broad Diversified (CEMBI Broad Diversified Index) (a benchmark that tracks performance of corporate issued debt instruments issued by emerging markets).

The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Emerging Markets Fixed Income Blend Index is a performance linked benchmark of the old and new benchmarks of the Fund. The old benchmark represented by J.P. Morgan Emerging Markets Bond Global Index (EMBI Global Index) (a benchmark that tracks total returns for U.S. dollar-denominated debt instruments issued by emerging markets sovereign and quasi-sovereign entities) for period from the Fund's inception to September 25, 2015 and the Blended Index which consists of 1/3 J.P. Morgan EMBI Global Index, 1/3 J.P. Morgan GBI-EM Global Diversified Index, 1/3 J.P. Morgan CEMBI Broad Diversified Index for periods from September 26, 2015 to December 31, 2019 and the new benchmark J.P. Morgan Emerging Markets Blended Index (JEMB)- Equal Weighted for periods thereafter. Following close of business on September 25, 2015, Morgan Stanley Institutional Fund, Inc. Emerging Markets Domestic Debt Portfolio merged into Morgan Stanley Institutional Fund, Inc. Emerging Markets External Debt Portfolio. In conjunction with this Reorganization, the Fund was renamed Morgan Stanley Institutional Fund, Inc. Emerging Markets Fixed Income Opportunities Portfolio and changed its principal investment policy. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽³⁾The Lipper Emerging Market Hard Currency Debt Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Emerging Market Hard Currency Debt Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper Emerging Market Hard Currency Debt Funds classification.

⁽⁴⁾Total returns for the Fund reflect fees waived and expenses reimbursed, if applicable, by the Adviser (as defined herein). Without such waivers and reimbursements, total returns would have been lower.

⁽⁵⁾ Commenced operations on May 24, 2012.

⁽⁶⁾ Commenced offering on September 13, 2013.

⁽⁷⁾Commenced offering on April 30, 2015.

⁽⁸⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of Class I of the Fund, not the inception of the Index.

	Face Amount (000)		Value (000)
Fixed Income Securities (93.0%)
Argentina (2.0%)
Corporate Bonds (1.6%)
Pampa Energia SA,
9.13%, 4/15/29 (a)	$	150	$	133
Province of Santa Fe,
6.90%, 11/1/27 (a)		200		138
Provincia de Cordoba,
7.45%, 9/1/24 (a)		330		206
Provincia de Entre Rios Argentina,
8.75%, 2/8/25 (a)(b)(c)		230		132
Telecom Argentina SA,
8.00%, 7/18/26 (a)		50		47
				656
Sovereign (0.4%)
Argentine Republic Government International Bond,
0.13%, 7/9/30 - 7/9/35 (d)		359		137
1.00%, 7/9/29		24		10
				147
				803
Armenia (1.2%)
Corporate Bond (0.7%)
Ardshinbank CJSC Via Dilijan Finance BV,
6.50%, 1/28/25 (a)		270		259
Sovereign (0.5%)
Republic of Armenia International Bond,
3.95%, 9/26/29		200		203
				462
Bahrain (0.9%)
Sovereign (0.9%)
Bahrain Government International Bond,
7.50%, 9/20/47		300		353
Belarus (0.5%)
Sovereign (0.5%)
Republic of Belarus International Bond,
6.20%, 2/28/30 (a)		200		203
Brazil (5.6%)
Corporate Bonds (1.8%)
CSN Resources SA,
7.63%, 4/17/26 (a)		260		280
Minerva Luxembourg SA,
5.88%, 1/19/28 (a)		200		216
Petrobras Global Finance BV,
6.75%, 6/3/50		140		174
Suzano Austria GmbH,
3.75%, 1/15/31		40		43
				713
Sovereign (3.8%)
Brazil Notas do Tesouro Nacional, Series F,
10.00%, 1/1/23 - 1/1/25	BRL	5,942		1,310

	Face Amount (000)		Value (000)
Brazilian Government International Bond,
3.88%, 6/12/30	$	200	$	211
				1,521
				2,234
Chile (2.6%)
Corporate Bonds (1.7%)
Cencosud SA,
4.38%, 7/17/27		200		225
Colbun SA,
3.15%, 3/6/30 (a)		200		216
VTR Finance,
6.38%, 7/15/28 (a)		225		246
				687
Sovereign (0.9%)
Bonos de la Tesoreria de la Republica en pesos,
2.80%, 10/1/33 (a)	CLP	135,000		184
4.50%, 3/1/26		115,000		186
				370
				1,057
China (5.0%)
Corporate Bonds (2.2%)
Country Garden Holdings Co., Ltd.,
7.25%, 4/8/26	$	260		293
Scenery Journey Ltd.,
11.50%, 10/24/22		250		234
Yuzhou Group Holdings Co. Ltd.,
8.38%, 10/30/24		300		328
				855
Sovereign (2.8%)
China Government Bond,
3.13%, 11/21/29	CNY	4,900		744
3.29%, 10/18/23		940		145
Sinopec Group Overseas Development 2018 Ltd.,
2.95%, 11/12/29 (a)	$	200		211
				1,100
				1,955
Colombia (4.9%)
Corporate Bonds (3.0%)
Banco de Bogota SA,
4.38%, 8/3/27		300		332
Canacol Energy Ltd.,
7.25%, 5/3/25 (a)		200		215
Geopark Ltd.,
6.50%, 9/21/24 (a)		200		208
Grupo Aval Ltd.,
4.38%, 2/4/30 (a)		200		213
Termocandelaria Power Ltd.,
7.88%, 1/30/29 (a)		200		220
				1,188

	Face Amount (000)		Value (000)
Sovereign (1.9%)
Colombian TES,
Series B
6.00%, 4/28/28	COP	951,400	$	298
7.00%, 6/30/32		253,800		82
7.50%, 8/26/26		575,100		195
10.00%, 7/24/24		454,100		162
				737
				1,925
Costa Rica (0.5%)
Sovereign (0.5%)
Costa Rica Government International Bond,
6.13%, 2/19/31 (a)	$	200		187
Dominican Republic (1.8%)
Corporate Bond (0.5%)
AES Andres BV/Dominican Power Partners/ Empresa Generadora de Electricidad It,
(Units)
7.95%, 5/11/26 (a)(e)		200		207
Sovereign (1.3%)
Dominican Republic International Bond,
5.88%, 1/30/60 (a)	DOP	300		332
9.75%, 6/5/26 (a)		10,550		195
				527
				734
Ecuador (0.9%)
Sovereign (0.9%)
Ecuador Government International Bond,
0.00%, 7/31/30 (a)	$	20		10
0.50%, 7/31/30 - 7/31/40 (a)(d)		401		223
0.50%, 7/31/35 - 7/31/40 (d)		241		126
				359
Egypt (3.1%)
Corporate Bond (1.1%)
African Export-Import Bank (The),
3.99%, 9/21/29 (a)		390		419
Sovereign (2.0%)
Arab Republic of Egypt,
5.25%, 10/6/25 (a)		200		213
Egypt Government International Bond,
6.38%, 4/11/31 (a)	EUR	230		303
8.15%, 11/20/59 (a)		260		287
				803
				1,222
El Salvador (0.5%)
Sovereign (0.5%)
El Salvador Government International Bond,
7.12%, 1/20/50 (a)	$	150		135
8.63%, 2/28/29 (a)		80		80
				215

	Face Amount (000)		Value (000)
Gabon (0.5%)
Sovereign (0.5%)
Gabon Government International Bond,
6.63%, 2/6/31 (a)	$	200	$	207
Ghana (0.5%)
Corporate Bond (0.5%)
Kosmos Energy Ltd.,
7.13%, 4/4/26 (a)		200		194
Guatemala (0.9%)
Sovereign (0.9%)
Guatemala Government Bond,
4.88%, 2/13/28		300		346
Hungary (0.6%)
Sovereign (0.6%)
Hungary Government Bond,
3.00%, 8/21/30	HUF	62,000		227
India (0.6%)
Corporate Bond (0.6%)
Greenko Investment Co.,
4.88%, 8/16/23 (a)	$	240		246
Indonesia (7.2%)
Corporate Bonds (1.5%)
Jababeka International BV,
6.50%, 10/5/23 (a)		460		448
Soechi Capital Pte Ltd.,
8.38%, 1/31/23 (a)		200		140
				588
Sovereign (5.7%)
Indonesia Government International Bond,
4.45%, 4/15/70		230		283
Indonesia Treasury Bond,
7.00%, 9/15/30	IDR	3,916,000		302
7.50%, 8/15/32		3,790,000		294
8.13%, 5/15/24		5,017,000		394
8.38%, 3/15/34 - 4/15/39		5,600,000		470
8.75%, 5/15/31		1,310,000		111
9.00%, 3/15/29		1,395,000		119
Pertamina Persero PT,
6.50%, 11/7/48 (a)	$	200		282
				2,255
				2,843
Israel (0.8%)
Corporate Bond (0.8%)
Teva Pharmaceutical Finance Netherlands III BV,
7.13%, 1/31/25		300		332
Jamaica (0.9%)
Sovereign (0.9%)
Jamaica Government International Bond,
8.00%, 3/15/39		250		366

	Face Amount (000)		Value (000)
Jordan (0.6%)
Sovereign (0.6%)
Jordan Government International Bond,
7.38%, 10/10/47 (a)	$	200	$	234
Lebanon (0.1%)
Sovereign (0.1%)
Lebanon Government International Bond,
6.85%, 3/23/27 (b)(c)		266		38
Malaysia (2.3%)
Sovereign (2.3%)
Malaysia Government Bond,
3.96%, 9/15/25	MYR	1,603		431
4.16%, 7/15/21		195		49
4.18%, 7/15/24		762		203
4.23%, 6/30/31		246		69
4.50%, 4/15/30		559		160
				912
Mexico (10.4%)
Corporate Bonds (2.2%)
Alpha Holding SA de CV,
10.00%, 12/19/22 (a)	$	200		172
Financiera Independencia SAB de CV SOFOM ENR,
8.00%, 7/19/24 (a)		250		224
Total Play Telecomunicaciones SA de CV,
7.50%, 11/12/25 (a)		200		200
Trust Fibra Uno,
6.39%, 1/15/50 (a)		240		281
				877
Sovereign (8.2%)
Mexican Bonos,
Series M
7.50%, 6/3/27	MXN	14,668		839
7.75%, 5/29/31		5,070		300
8.00%, 12/7/23		2,072		114
10.00%, 12/5/24		10,128		610
Mexico Government International Bond,
4.50%, 4/22/29	$	200		235
Petroleos Mexicanos,
6.50%, 3/13/27 - 1/23/29		626		656
6.88%, 10/16/25 (a)		135		148
6.95%, 1/28/60		365		344
				3,246
				4,123
Moldova (0.7%)
Corporate Bond (0.7%)
Aragvi Finance International DAC,
12.00%, 4/9/24 (a)		260		284

	Face Amount (000)		Value (000)
Morocco (0.5%)
Sovereign (0.5%)
Morocco Government International Bond,
4.00%, 12/15/50 (a)	$	200	$	207
Nigeria (3.1%)
Corporate Bonds (2.6%)
Fidelity Bank PLC,
10.50%, 10/16/22 (a)		220		235
First Bank of Nigeria Ltd. Via FBN Finance Co. BV,
8.63%, 10/27/25 (a)		200		217
IHS Netherlands Holdco BV,
8.00%, 9/18/27 (a)		270		292
United Bank for Africa PLC,
7.75%, 6/8/22 (a)		300		309
				1,053
Sovereign (0.5%)
Nigeria Government International Bond,
7.14%, 2/23/30 (a)		200		216
				1,269
Panama (1.1%)
Corporate Bond (0.5%)
AES Panama Generation Holdings SRL,
4.38%, 5/31/30 (a)		200		217
Sovereign (0.6%)
Aeropuerto Internacional de Tocumen SA,
5.63%, 5/18/36 (a)		200		233
				450
Paraguay (0.6%)
Sovereign (0.6%)
Paraguay Government International Bond,
4.95%, 4/28/31 (a)		200		243
Peru (1.6%)
Corporate Bond (0.6%)
Lima Metro Line 2 Finance Ltd.,
4.35%, 4/5/36 (a)		200		222
Sovereign (1.0%)
Peru Government Bond,
5.40%, 8/12/34	PEN	259		79
5.94%, 2/12/29		892		308
6.15%, 8/12/32		1		—	@
				387
				609
Poland (3.4%)
Sovereign (3.4%)
Republic of Poland Government Bond,
3.25%, 7/25/25	PLN	2,044		618
4.00%, 10/25/23		455		135
5.75%, 10/25/21 - 9/23/22		2,020		590
				1,343

	Face Amount (000)		Value (000)
Qatar (1.5%)
Sovereign (1.5%)
Qatar Government International Bond,
4.82%, 3/14/49 (a)	$	430	$	588
Romania (1.1%)
Sovereign (1.1%)
Romania Government Bond,
4.75%, 2/24/25	RON	1,545		420
Russia (5.2%)
Corporate Bond (0.8%)
Alfa Bank AO Via Alfa Bond Issuance PLC,
5.95%, 4/15/30	$	300		312
Sovereign (4.4%)
Russian Federal Bond — OFZ,
6.90%, 5/23/29	RUB	22,541		328
7.70%, 3/23/33		46,360		707
7.95%, 10/7/26		9,240		140
Russian Foreign Bond — Eurobond,
5.63%, 4/4/42	$	400		557
				1,732
				2,044
Saudi Arabia (1.7%)
Corporate Bond (0.5%)
Saudi Arabian Oil Co.,
3.50%, 11/24/70 (a)		210		213
Sovereign (1.2%)
Saudi Government International Bond,
5.25%, 1/16/50 (a)		340		465
				678
Senegal (1.0%)
Sovereign (1.0%)
Senegal Government International Bond,
6.25%, 5/23/33 (a)		350		394
Serbia (0.5%)
Sovereign (0.5%)
Serbia International Bond,
3.13%, 5/15/27 (a)	EUR	140		193
South Africa (4.9%)
Sovereign (4.9%)
Eskom Holdings SOC Ltd.,
7.13%, 2/11/25	$	200		205
8.45%, 8/10/28 (a)		200		221
Republic of South Africa Government Bond,
8.00%, 1/31/30	ZAR	19,061		1,239
8.25%, 3/31/32		2,437		150
8.75%, 1/31/44		820		46
9.00%, 1/31/40		1,500		87
				1,948

	Face Amount (000)		Value (000)
Supranational (1.0%)
Banque Ouest Africaine de Developpement,
4.70%, 10/22/31 (a)	$	370	$	402
Tanzania, United Republic of (0.5%)
Corporate Bond (0.5%)
HTA Group Ltd.,
7.00%, 12/18/25 (a)		200		216
Thailand (2.0%)
Sovereign (2.0%)
Thailand Government Bond,
3.63%, 6/16/23	THB	9,000		324
4.88%, 6/22/29		10,434		452
				776
Turkey (1.8%)
Sovereign (1.8%)
Turkey Government Bond,
8.00%, 3/12/25	TRY	1,443		165
10.50%, 8/11/27		455		56
11.00%, 2/24/27		586		74
Turkey Government International Bond,
6.38%, 10/14/25	$	200		216
7.25%, 12/23/23		200		219
				730
Ukraine (2.0%)
Sovereign (2.0%)
NAK Naftogaz Ukraine via Kondor Finance PLC,
7.13%, 7/19/24	EUR	200		255
Ukraine Government International Bond,
6.75%, 6/20/26 (a)	$	100		135
7.75%, 9/1/26		380		430
				820
United Arab Emirates (3.2%)
Corporate Bonds (1.9%)
DP World PLC,
5.63%, 9/25/48 (a)		200		256
Galaxy Pipeline Assets Bidco Ltd.,
3.25%, 9/30/40 (a)		230		244
MAF Global Securities Ltd.,
6.38%, 1/1/46 (f)		250		262
				762
Sovereign (1.3%)
Abu Dhabi Government International Bond,
3.13%, 4/16/30		200		226
DP World Crescent Ltd.,
4.85%, 9/26/28		220		256
				482
				1,244

	Face Amount (000)		Value (000)
Uzbekistan (0.5%)
Sovereign (0.5%)
Republic of Uzbekistan Bond,
3.70%, 11/25/30 (a)	$	200	$	211
Venezuela (0.2%)
Sovereign (0.2%)
Petroleos de Venezuela SA,
6.00%, 11/15/26 (b)(c)		1,582		63
Total Fixed Income Securities (Cost $35,685)				36,909
	No. of Warrants
Warrant (0.0%) (g)
Venezuela (0.0%) (g)
Venezuela Government International Bond, Oil-Linked Payment Obligation, 0.0% expires 4/15/20 (h) (Cost $—)		1,495		1
	Shares
Short-Term Investments (5.6%)
United States (4.5%)
Investment Company (4.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $1,781)		1,781,329		1,781
	Face Amount (000)
Egypt (1.0%)
Sovereign (1.0%)
Egypt Treasury Bills,
13.60%, 3/2/21	EGP	625		39
13.65%, 3/2/21		1,025		64
13.66%, 3/2/21		1,525		96
13.68%, 3/2/21		2,175		136
13.69%, 3/2/21		1,000		63
13.70%, 3/2/21		150		10
Total Sovereign (Cost $401)				408
United States (0.1%)
U.S. Treasury Security (0.1%)
U.S. Treasury Bill,
0.09%, 6/3/21 (i) (Cost $30)	$	30		30
Total Short-Term Investments (Cost $2,212)				2,219
Total Investments (98.6%) (Cost $37,897) (j)(k)				39,129
Other Assets in Excess of Liabilities (1.4%)				542
Net Assets (100.0%)			$	39,671

Foreign Currency Forward Exchange Contracts:

The Fund had the following foreign currency forward exchange contracts open at December 31, 2020:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
BNP Paribas SA	EUR	740	$	900	3/5/21	$	(5	)
BNP Paribas SA	$	656	CZK	14,240	3/5/21		7
BNP Paribas SA	$	285	HUF	84,000	3/5/21		(2	)
BNP Paribas SA	$	119	RUB	9,000	3/5/21		3
Citibank NA	PLN	1,120	$	304	3/5/21		4
JPMorgan Chase Bank NA	IDR	3,300,000	$	231	3/5/21		(3	)
JPMorgan Chase Bank NA	ZAR	4,870	$	316	3/5/21		(13	)
UBS AG	MXN	7,330	$	365	3/5/21		(1	)
UBS AG	$	442	CNH	2,910	3/5/21		3
						$	(7	)

BRL — Brazilian Real

CLP — Chilean Peso

CNH — Chinese Yuan Renminbi Offshore

CNY — Chinese Yuan Renminbi

COP — Colombian Peso

CZK — Czech Koruna

DOP — Dominican Peso

EGP — Egyptian Pound

EUR — Euro

HUF — Hungarian Forint

IDR — Indonesian Rupiah

MXN — Mexican Peso

MYR — Malaysian Ringgit

PEN — Peruvian Nuevo Sol

PLN — Polish Zloty

RON — Romanian New Leu

RUB — Russian Ruble

THB — Thai Baht

TRY — Turkish Lira

ZAR — South African Rand

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $36,116)	$	37,348
Investment in Security of Affiliated Issuer, at Value (Cost $1,781)		1,781
Total Investments in Securities, at Value (Cost $37,897)		39,129
Foreign Currency, at Value (Cost $24)		21
Interest Receivable		622
Tax Reclaim Receivable		25
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		17
Due from Adviser		3
Receivable from Affiliate		—	@
Receivable for Fund Shares Sold		—	@
Other Assets		33
Total Assets		39,850
Liabilities:
Deferred Capital Gain Country Tax		107
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		24
Payable for Professional Fees		15
Payable for Custodian Fees		9
Payable for Sub Transfer Agency Fees — Class I		3
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		3
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		15
Total Liabilities		179
Net Assets	$	39,671
Net Assets Consist of:
Paid-in-Capital	$	45,376
Total Accumulated Loss		(5,705	)
Net Assets	$	39,671

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	35,262
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,847,730
Net Asset Value, Offering and Redemption Price Per Share	$	9.16
CLASS A:
Net Assets	$	3,325
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		363,218
Net Asset Value, Redemption Price Per Share	$	9.15
Maximum Sales Load		3.25	%
Maximum Sales Charge	$	0.31
Maximum Offering Price Per Share	$	9.46
CLASS L:
Net Assets	$	589
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		64,407
Net Asset Value, Offering and Redemption Price Per Share	$	9.14
CLASS C:
Net Assets	$	475
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		52,081
Net Asset Value, Offering and Redemption Price Per Share	$	9.13
CLASS IS:
Net Assets	$	20
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,129
Net Asset Value, Offering and Redemption Price Per Share	$	9.17

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers (Net of $39 of Foreign Taxes Withheld)	$	2,698
Dividends from Security of Affiliated Issuer (Note G)		14
Total Investment Income		2,712
Expenses:
Advisory Fees (Note B)		345
Professional Fees		133
Registration Fees		75
Administration Fees (Note C)		37
Custodian Fees (Note F)		28
Sub Transfer Agency Fees — Class I		20
Sub Transfer Agency Fees — Class A		2
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		—	@
Shareholder Reporting Fees		19
Pricing Fees		16
Shareholder Services Fees — Class A (Note D)		8
Distribution and Shareholder Services Fees — Class L (Note D)		3
Distribution and Shareholder Services Fees — Class C (Note D)		4
Transfer Agency Fees — Class I (Note E)		3
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Directors' Fees and Expenses		5
Other Expenses		22
Total Expenses		729
Waiver of Advisory Fees (Note B)		(300	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(11	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(4	)
Net Expenses		408
Net Investment Income		2,304
Realized Gain (Loss):
Investments Sold (Net of $8 of Capital Gain Country Tax)		(2,280	)
Foreign Currency Forward Exchange Contracts		26
Foreign Currency Translation		(49	)
Net Realized Loss		(2,303	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $50)		(882	)
Foreign Currency Forward Exchange Contracts		39
Foreign Currency Translation		1
Net Change in Unrealized Appreciation (Depreciation)		(842	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(3,145	)
Net Decrease in Net Assets Resulting from Operations	$	(841	)

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	2,304		$	2,801
Net Realized Loss		(2,303	)		(980	)
Net Change in Unrealized Appreciation (Depreciation)		(842	)		4,411
Net Increase (Decrease) in Net Assets Resulting from Operations		(841	)		6,232
Dividends and Distributions to Shareholders:
Class I		(1,008	)		(2,260	)
Class A		(75	)		(82	)
Class L		(14	)		(30	)
Class C		(8	)		(18	)
Class IS		(1	)		(18	)
Paid-in-Capital:
Class I		(1,137	)		(275	)
Class A		(84	)		(10	)
Class L		(16	)		(4	)
Class C		(10	)		(2	)
Class IS		(1	)		(2	)
Total Dividends and Distributions to Shareholders		(2,354	)		(2,701	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		2,814			22,927
Distributions Reinvested		2,140			2,529
Redeemed		(24,914	)		(3,153	)
Class A:
Subscribed		2,384			1,620
Distributions Reinvested		159			92
Redeemed		(1,124	)		(1,006	)
Class L:
Distributions Reinvested		31			34
Redeemed		(188	)		(58	)
Class C:
Subscribed		127			453
Distributions Reinvested		18			20
Redeemed		(182	)		(13	)
Class IS:
Subscribed		—			725
Distributions Reinvested		1			1
Redeemed		—			(1,430	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(18,734	)		22,741
Redemption Fees		—	@		—	@
Total Increase (Decrease) in Net Assets		(21,929	)		26,272
Net Assets:
Beginning of Period		61,600			35,328
End of Period	$	39,671		$	61,600

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		318			2,527
Shares Issued on Distributions Reinvested		258			278
Shares Redeemed		(3,008	)		(349	)
Net Increase (Decrease) in Class I Shares Outstanding		(2,432	)		2,456
Class A:
Shares Subscribed		257			178
Shares Issued on Distributions Reinvested		19			10
Shares Redeemed		(144	)		(110	)
Net Increase in Class A Shares Outstanding		132			78
Class L:
Shares Issued on Distributions Reinvested		4			4
Shares Redeemed		(22	)		(7	)
Net Decrease in Class L Shares Outstanding		(18	)		(3	)
Class C:
Shares Subscribed		14			50
Shares Issued on Distributions Reinvested		2			2
Shares Redeemed		(21	)		(1	)
Net Increase (Decrease) in Class C Shares Outstanding		(5	)		51
Class IS:
Shares Subscribed		—			81
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		—			(158	)
Net Increase (Decrease) in Class IS Shares Outstanding		—	@@		(77	)

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	9.25		$	8.52		$	9.68		$	9.07		$	8.53
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.44			0.51			0.57			0.65			0.67
Net Realized and Unrealized Gain (Loss)		(0.06	)		0.70			(1.24	)		0.52			0.42
Total from Investment Operations		0.38			1.21			(0.67	)		1.17			1.09
Distributions from and/or in Excess of:
Net Investment Income		(0.22	)		(0.43	)		(0.49	)		(0.56	)		(0.55	)
Paid-in-Capital		(0.25	)		(0.05	)		—			—			—
Total Distributions		(0.47	)		(0.48	)		(0.49	)		(0.56	)		(0.55	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	9.16		$	9.25		$	8.52		$	9.68		$	9.07
Total Return⁽⁴⁾		4.69	%		14.41	%		(6.93	)%		12.94	%		12.80	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	35,262		$	58,152		$	32,575		$	22,219		$	20,332
Ratio of Expenses Before Expense Limitation		1.53	%		1.39	%		1.98	%		2.01	%		2.03	%
Ratio of Expenses After Expense Limitation		0.84	%⁽⁵⁾		0.83	%⁽⁵⁾		0.84	%⁽⁵⁾		0.83	%⁽⁵⁾		0.84	%⁽⁵⁾
Ratio of Net Investment Income		5.05	%⁽⁵⁾		5.65	%⁽⁵⁾		6.24	%⁽⁵⁾		6.73	%⁽⁵⁾		7.32	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.01	%		0.01	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		54	%		58	%		47	%		77	%		116	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	9.24		$	8.51		$	9.67		$	9.06		$	8.52
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.41			0.48			0.52			0.61			0.64
Net Realized and Unrealized Gain (Loss)		(0.06	)		0.70			(1.22	)		0.52			0.42
Total from Investment Operations		0.35			1.18			(0.70	)		1.13			1.06
Distributions from and/or in Excess of:
Net Investment Income		(0.19	)		(0.40	)		(0.46	)		(0.52	)		(0.52	)
Paid-in-Capital		(0.25	)		(0.05	)		—			—			—
Total Distributions		(0.44	)		(0.45	)		(0.46	)		(0.52	)		(0.52	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	9.15		$	9.24		$	8.51		$	9.67		$	9.06
Total Return⁽⁴⁾		4.33	%		14.03	%		(7.29	)%		12.54	%		12.53	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,325		$	2,141		$	1,306		$	1,150		$	972
Ratio of Expenses Before Expense Limitation		1.87	%		1.81	%		2.49	%		2.51	%		2.28	%
Ratio of Expenses After Expense Limitation		1.19	%⁽⁵⁾		1.18	%⁽⁵⁾		1.19	%⁽⁵⁾		1.19	%⁽⁵⁾		1.09	%⁽⁵⁾
Ratio of Net Investment Income		4.72	%⁽⁵⁾		5.31	%⁽⁵⁾		5.74	%⁽⁵⁾		6.37	%⁽⁵⁾		7.03	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.01	%		0.01	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		54	%		58	%		47	%		77	%		116	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Amount is less than 0.005%.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	9.23		$	8.50		$	9.65		$	9.05		$	8.51
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.39			0.46			0.50			0.59			0.62
Net Realized and Unrealized Gain (Loss)		(0.06	)		0.70			(1.22	)		0.51			0.41
Total from Investment Operations		0.33			1.16			(0.72	)		1.10			1.03
Distributions from and/or in Excess of:
Net Investment Income		(0.17	)		(0.38	)		(0.43	)		(0.50	)		(0.49	)
Paid-in-Capital		(0.25	)		(0.05	)		—			—			—
Total Distributions		(0.42	)		(0.43	)		(0.43	)		(0.50	)		(0.49	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	9.14		$	9.23		$	8.50		$	9.65		$	9.05
Total Return⁽⁴⁾		4.06	%		13.76	%		(7.52	)%		12.28	%		12.15	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	589		$	764		$	727		$	842		$	777
Ratio of Expenses Before Expense Limitation		2.35	%		2.16	%		2.78	%		2.77	%		2.78	%
Ratio of Expenses After Expense Limitation		1.44	%⁽⁵⁾		1.43	%⁽⁵⁾		1.44	%⁽⁵⁾		1.44	%⁽⁵⁾		1.45	%⁽⁵⁾
Ratio of Net Investment Income		4.48	%⁽⁵⁾		5.05	%⁽⁵⁾		5.51	%⁽⁵⁾		6.11	%⁽⁵⁾		6.70	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.01	%		0.01	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		54	%		58	%		47	%		77	%		116	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	9.21		$	8.50		$	9.65		$	9.05		$	8.52
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.34			0.41			0.46			0.50			0.54
Net Realized and Unrealized Gain (Loss)		(0.05	)		0.70			(1.22	)		0.55			0.43
Total from Investment Operations		0.29			1.11			(0.76	)		1.05			0.97
Distributions from and/or in Excess of:
Net Investment Income		(0.12	)		(0.35	)		(0.39	)		(0.45	)		(0.44	)
Paid-in-Capital		(0.25	)		(0.05	)		—			—			—
Total Distributions		(0.37	)		(0.40	)		(0.39	)		(0.45	)		(0.44	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	9.13		$	9.21		$	8.50		$	9.65		$	9.05
Total Return⁽⁴⁾		3.63	%		13.19	%		(7.98	)%		11.76	%		11.60	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	475		$	524		$	48		$	284		$	225
Ratio of Expenses Before Expense Limitation		3.05	%		2.92	%		3.79	%		3.84	%		3.97	%
Ratio of Expenses After Expense Limitation		1.94	%⁽⁵⁾		1.93	%⁽⁵⁾		1.94	%⁽⁵⁾		1.94	%⁽⁵⁾		1.95	%⁽⁵⁾
Ratio of Net Investment Income		3.98	%⁽⁵⁾		4.54	%⁽⁵⁾		5.09	%⁽⁵⁾		5.18	%⁽⁵⁾		5.87	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.01	%		0.01	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		54	%		58	%		47	%		77	%		116	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Amount is less than 0.005%.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	9.25		$	8.52		$	9.68		$	9.07		$	8.53
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.44			0.52			0.56			0.65			0.67
Net Realized and Unrealized Gain (Loss)		(0.05	)		0.69			(1.23	)		0.52			0.42
Total from Investment Operations		0.39			1.21			(0.67	)		1.17			1.09
Distributions from and/or in Excess of:
Net Investment Income		(0.22	)		(0.43	)		(0.49	)		(0.56	)		(0.55	)
Paid-in-Capital		(0.25	)		(0.05	)		—			—			—
Total Distributions		(0.47	)		(0.48	)		(0.49	)		(0.56	)		(0.55	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	9.17		$	9.25		$	8.52		$	9.68		$	9.07
Total Return⁽⁴⁾		4.84	%		14.44	%		(6.91	)%		12.95	%		12.81	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	20		$	19		$	672		$	763		$	716
Ratio of Expenses Before Expense Limitation		12.56	%		1.73	%		2.22	%		2.25	%		2.25	%
Ratio of Expenses After Expense Limitation		0.81	%⁽⁵⁾		0.80	%⁽⁵⁾		0.81	%⁽⁵⁾		0.81	%⁽⁵⁾		0.82	%⁽⁵⁾
Ratio of Net Investment Income		5.10	%⁽⁵⁾		5.72	%⁽⁵⁾		6.15	%⁽⁵⁾		6.74	%⁽⁵⁾		7.33	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.01	%		0.01	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		54	%		58	%		47	%		77	%		116	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

The accompanying financial statements relate to the Emerging Markets Fixed Income Opportunities Portfolio. The Fund seeks high total return.

1. Security Valuation: (1) Certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan

Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (2) an equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Fixed Income Securities
Corporate Bonds	$	—	$	10,500		$	—	$	10,500
Sovereign		—		26,007			—		26,007
Supranational		—		402			—		402
Total Fixed Income Securities		—		36,909			—		36,909
Warrant		—		1			—		1
Short-Term Investments
Investment Company		1,781		—			—		1,781
Sovereign		—		408			—		408
U.S. Treasury Security		—		30			—		30
Total Short-Term Investments		1,781		438			—		2,219
Foreign Currency Forward Exchange Contracts		—		17			—		17
Total Assets		1,781		37,365			—		39,146
Liabilities:
Foreign Currency Forward Exchange Contracts		—		(24	)		—		(24	)
Total	$	1,781	$	37,341		$	—	$	39,122

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

4. Structured Investments: The Fund invested a portion of its assets in structured investments. A structured investment is a derivative security designed to offer a return linked to a particular underlying security, currency, commodity or market. Structured investments may come in various forms including notes (such as exchange-traded notes), warrants and options to purchase securities. The Fund will typically use structured investments to gain exposure to a permitted underlying security, currency, commodity or market when direct access to a market is limited or inefficient from a tax or cost standpoint. There can be no assurance that structured investments will trade at the same price or have the same value as the underlying security, currency, commodity or market. Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Fund is relying on the creditworthiness of such issuer or counterparty and has no rights with respect to the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Fund's illiquidity to the extent that the Fund, at a particular time, may be unable to find qualified buyers for these securities.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of December 31, 2020:

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency Forward
Exchange Contracts

Unrealized Appreciation on
Foreign Currency Forward
Exchange Contracts

Currency Risk

Liability Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Foreign Currency Forward
Exchange Contracts

Unrealized Depreciation on
Foreign Currency Forward
Exchange Contracts

Currency Risk

(24

)

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	26
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	39

At December 31, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(a) (000)		Liabilities(a) (000)
Foreign Currency Forward Exchange Contracts	$	17	$	(24	)

(a) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Received (000)		Net Amount (not less than $0) (000)
BNP Paribas SA	$	10	$	(7	)	$	—	$	3
Citibank NA		4		—			—		4
UBS AG		3		(1	)		—		2
Total	$	17	$	(8	)	$	—	$	9
Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Pledged (000)		Net Amount (not less than $0) (000)
BNP Paribas SA	$	7	$	(7	)	$	—	$	0
JPMorgan Chase Bank NA		16		—			—		16
UBS AG		1		(1	)		—		0
Total	$	24	$	(8	)	$	—	$	16

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount				$	4,786,000

6. Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

8. Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment

income, if any, are declared and paid quarterly. Net realized capital gains, if any, are distributed at least annually.

9. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million				Next $500 million				Over $1 billion
	0.75	%			0.70	%			0.65	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.09% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.85% for Class I shares, 1.20% for Class A shares, 1.45% for Class L shares, 1.95% for Class C shares and 0.82% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $300,000 of advisory fees were waived and approximately $17,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser has entered into Sub-Advisory Agreements with the Sub-Advisers, each a wholly-owned subsidiary of Morgan Stanley. The Sub-Advisers provide the Fund with advisory services subject to the overall supervision of the Adviser and the Company's Officers and Directors. The Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	4,403			$	22,662			$	25,284			$	14

Affiliated Investment Company (cont'd)				Realized Gain Loss (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	1,781

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Paid-in- Capital (000)		Ordinary Income (000)		Paid-in- Capital (000)
$	1,106	$	1,248	$	2,408	$	293

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the Fund had no distributable earnings on a tax basis.

At December 31, 2020, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $1,713,000 and $4,504,000, respectively, that do not have an expiration date. These amounts include capital losses acquired from MSIF Emerging Markets Domestic Debt that may be subject to limitation under IRC Section 382 in future years.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Emerging Markets Fixed Income Opportunities Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Emerging Markets Fixed Income Opportunities Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Emerging Markets Fixed Income Opportunities Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds in
Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since
August
2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since
August
2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since
January
2015

Chairperson of the Equity Investment Committee (since January 2021); Director or Trustee of various Morgan Stanley Funds (since January 2021); Chief Executive Officer, Virginia Commonwealth University Investment Company (since November 2015); Owner, OBIR, LLC (institutional investment management consulting) (since June 2014); formerly, Managing Director, BlackRock, Inc. (February 2011-December 2013); and Chief Executive Officer, General Motors Asset Management (a/k/a Promark Global Advisors, Inc.) (June 2005-May 2010).

Independent Directors: (cont'd)

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds in
Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since
January
2015

Dr. Manuel H. Johnson
c/o Johnson Smick
International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since
July
1991

Senior Partner, Johnson Smick International, Inc. (consulting firm); Chairperson of the Fixed Income, Liquidity and Alternatives Investment Committee (January 2021), Chairperson of the Investment Committee (2006-2020) and Director or Trustee of various Morgan Stanley Funds (since July 1991); Co-Chairman and a founder of the Group of Seven Council (G7C) (international economic commission); formerly, Chairperson of the Audit Committee (July 1991-September 2006) Vice Chairman of the Board of Governors of the Federal Reserve System and Assistant Secretary of the U.S. Treasury.

Director of NVR, Inc. (home construction).

Independent Directors: (cont'd)

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds in
Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since
August
1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since
January
2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since
June
1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since
June
2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Leaders Portfolio Class I	$	1,000.00	$	1,497.00	$	1,019.36	$	7.22	$	5.84		1.15	%
Emerging Markets Leaders Portfolio Class A		1,000.00		1,495.00		1,017.65		9.34		7.56		1.49
Emerging Markets Leaders Portfolio Class C		1,000.00		1,489.00		1,013.62		14.33		11.59		2.29
Emerging Markets Leaders Portfolio Class IS		1,000.00		1,497.30		1,019.66		6.84		5.53		1.09

** Annualized.

The Fund seeks long-term capital appreciation.

Performance

For the fiscal year ended December 31, 2020, the Fund's Class I shares had a total return based on net asset value and reinvestment of distributions per share of 59.36%, net of fees. The Fund's Class I shares outperformed the Fund's benchmark, MSCI Emerging Markets Net Index (the "Index"), which returned 18.31%.

Factors Affecting Performance

• The emerging markets continued the momentum started in 2019 as the equity market shrugged off COVID-19 concerns, especially as many of index-heavyweight North Asian markets addressed the pandemic more decisively than other regions. The markets recorded strong return as Korea, Taiwan and China were the best performing markets within emerging markets.

• The Emerging Markets Leaders Portfolio benefit from bottom-up stock selection, top-down thematic selection. The adoption rate for our long-term themes gathered momentum during the pandemic.

• The Fund benefited from our China stock selection in the first half of the year and our stock selections in Latin America and Southeast Asian countries in the latter half. The only detractor from the Fund's overall performance in the past 12 months has been our zero weight in Korea as the country performed well in fighting the pandemic and benefited from the strong performance of its internet and hardware technology heavyweights.

• The top contributors to the Fund's performance over the year were our holdings in a platform delivery company in China, a Latin American e-commerce company, a Southeast Asian e-commerce company, a North Asian analog integrated circuit company and a Chinese sportswear brand company.

• The largest detractors from relative performance were our holdings in an Indian niche lender, a zero weight in a Korean electronics company that performed strongly, an Indian bank and a Latin American online travel company.

Management Strategies

• The Fund remains an all-cap growth strategy investing in structural growth opportunities in emerging market equities. We believe that growth-oriented companies offer the best return prospects in the emerging markets and that these can be found at many different market caps; however, given the inherent volatility and liquidity constraints in these markets, the Emerging Market Leaders (EML) Portfolio will generally look to invest in companies with market capitalizations larger than $1 billion. We give ourselves the maximum flexibility to invest by region, sector and size, preferring not to limit ourselves to a particular factor or market-cap band. The investment universe for the EML strategy is not limited to only those companies listed in the emerging markets but can be listed anywhere, as long as a significant portion of revenue or growth is derived from emerging markets.

• As the performance in 2020 highlighted, our focus on "high quality" businesses: those with what we believe to be a high predictability/near certainty of earnings, alongside sustainable or improving return on invested capital above the cost of capital, have allowed the Fund to achieve returns that historically have been higher than the market. We have continued to focus on companies with management integrity, a proven track record of great capital allocation and lean balance sheets. The businesses that we own in the portfolio are either industry leaders or emerging leaders, with dominant market share, pricing power and sustainable competitive advantages. A focus on quality and avoiding volatile business models helps us avoid downside risks in the portfolio.

• We believe our high conviction, thematic view of the emerging markets is, in our opinion, the best way to invest in emerging markets now. Our longer-term investment horizon and our unwavering focus on the quality of our invested companies has allowed us to deliver strong compounded returns over time by protecting our investors' capital during periods of significant market dislocation.

• While it is a concentrated portfolio, no one country or no one theme is so big that it will unduly impact the portfolio. An example of this portfolio construction played out well when the Indian market was significantly impacted earlier in 2020 during the nationwide COVID-related lockdown, and our positions in China and Southeast Asia

Performance Compared to the MSCI Emerging Markets Net Index⁽¹⁾ and the Lipper Emerging Markets Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years		Since Inception⁽⁶⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		59.36	%		17.62	%		—		9.18	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		58.81			17.15			—		8.91
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		50.52			15.90			—		8.30
Fund — Class C Shares w/o sales charges⁽⁵⁾		57.59			16.29			—		11.99
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁵⁾		56.59			16.29			—		11.99
Fund — Class IS Shares w/o sales charges⁽⁴⁾		59.39			17.67			—		9.21
MSCI Emerging Markets Net Index		18.31			12.81			—		3.73
Lipper Emerging Market Funds Index		20.52			13.43			—		4.41

	Shares		Value (000)
Common Stocks (97.7%)
Brazil (7.2%)
Pagseguro Digital Ltd., Class A (a)		70,605	$	4,016
StoneCo Ltd., Class A (a)		54,361		4,562
				8,578
China (33.1%)
Agora, Inc. ADR (a)		22,367		885
Alibaba Group Holding Ltd. (a)(b)		191,544		5,571
Bilibili, Inc. ADR (a)		3,672		315
Kingdee International Software Group Co., Ltd. (a)(b)		789,000		3,221
Li Ning Co., Ltd. (b)		747,500		5,144
Meituan Dianping, Class B (a)(b)		202,400		7,619
New Oriental Education & Technology Group, Inc. ADR (a)		9,101		1,691
Pinduoduo, Inc. ADR (a)		15,149		2,691
Ping An Healthcare and Technology Co., Ltd. (a)(b)		164,300		1,995
Tencent Holdings Ltd. (b)		103,900		7,476
Wuliangye Yibin Co., Ltd., Class A		61,700		2,756
				39,364
Germany (5.0%)
Delivery Hero SE (a)		28,957		4,529
Global Fashion Group SA (a)		118,546		1,422
				5,951
India (20.5%)
Aarti Industries Ltd.		189,803		3,213
Apollo Hospitals Enterprise Ltd.		131,847		4,351
AU Small Finance Bank Ltd. (a)		227,914		2,664
Bajaj Finance Ltd.		78,731		5,716
HDFC Life Insurance Co., Ltd. (a)		208,302		1,934
Kotak Mahindra Bank Ltd. (a)		161,985		4,427
PI Industries Ltd.		31,595		950
SRF Ltd.		15,680		1,198
				24,453
Poland (0.3%)
Allegro.eu SA (a)		17,231		390
Singapore (8.5%)
Sea Ltd. ADR (a)		50,716		10,095
Taiwan (11.2%)
Silergy Corp.		40,000		3,442
Taiwan Semiconductor Manufacturing Co., Ltd.		338,000		6,394
Voltronic Power Technology Corp.		88,334		3,530
				13,366
United States (11.9%)
Advanced Micro Devices, Inc. (a)		12,358		1,133
MercadoLibre, Inc. (a)		4,053		6,790
NIKE, Inc., Class B		26,794		3,791
NVIDIA Corp.		4,602		2,403
				14,117
Total Common Stocks (Cost $72,313)				116,314

	Shares		Value (000)
Short-Term Investment (4.6%)
Investment Company (4.6%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $5,488)		5,487,728	$	5,488
Total Investments (102.3%) (Cost $77,801) (c)(d)				121,802
Liabilities in Excess of Other Assets (–2.3%)				(2,787	)
Net Assets (100.0%)			$	119,015

(a) Non-income producing security.

(b) Security trades on the Hong Kong exchange.

(c) The approximate fair value and percentage of net assets, $77,552,000 and 65.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $78,528,000. The aggregate gross unrealized appreciation is approximately $44,316,000 and the aggregate gross unrealized depreciation is approximately $1,042,000, resulting in net unrealized appreciation of approximately $43,274,000.

ADR American Depositary Receipt.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		30.3	%
Internet & Direct Marketing Retail		23.8
Semiconductors & Semiconductor Equipment		11.0
Entertainment		8.6
Textiles, Apparel & Luxury Goods		7.3
Information Technology Services		7.1
Interactive Media & Services		6.1
Banks		5.8
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $72,313)	$	116,314
Investment in Security of Affiliated Issuer, at Value (Cost $5,488)		5,488
Total Investments in Securities, at Value (Cost $77,801)		121,802
Foreign Currency, at Value (Cost $1,293)		1,292
Receivable for Investments Sold		370
Receivable for Fund Shares Sold		335
Tax Reclaim Receivable		23
Dividends Receivable		21
Receivable from Affiliate		—	@
Other Assets		51
Total Assets		123,894
Liabilities:
Payable for Investments Purchased		3,496
Deferred Capital Gain Country Tax		806
Bank Overdraft		370
Payable for Advisory Fees		143
Payable for Professional Fees		22
Payable for Custodian Fees		15
Payable for Administration Fees		7
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class C		3
Payable for Sub Transfer Agency Fees — Class I		3
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		1
Payable to the Advisor		2
Other Liabilities		7
Total Liabilities		4,879
Net Assets	$	119,015
Net Assets Consist of:
Paid-in-Capital	$	76,374
Total Distributable Earnings		42,641
Net Assets	$	119,015

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	80,465
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,140,801
Net Asset Value, Offering and Redemption Price Per Share	$	19.43
CLASS A:
Net Assets	$	7,925
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		415,132
Net Asset Value, Redemption Price Per Share	$	19.09
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.06
Maximum Offering Price Per Share	$	20.15
CLASS C:
Net Assets	$	3,395
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		184,846
Net Asset Value, Offering and Redemption Price Per Share	$	18.37
CLASS IS:
Net Assets	$	27,230
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,399,662
Net Asset Value, Offering and Redemption Price Per Share	$	19.45

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $36 of Foreign Taxes Withheld)	$	262
Dividends from Security of Affiliated Issuer (Note G)		6
Total Investment Income		268
Expenses:
Advisory Fees (Note B)		566
Professional Fees		132
Registration Fees		58
Administration Fees (Note C)		50
Custodian Fees (Note F)		43
Sub Transfer Agency Fees — Class I		19
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class C		1
Shareholder Services Fees — Class A (Note D)		6
Shareholder Reporting Fees		16
Distribution and Shareholder Services Fees — Class C (Note D)		15
Transfer Agency Fees — Class I (Note E)		3
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class C (Note E)		3
Transfer Agency Fees — Class IS (Note E)		2
Directors' Fees and Expenses		5
Pricing Fees		2
Other Expenses		15
Total Expenses		939
Waiver of Advisory Fees (Note B)		(196	)
Rebate from Morgan Stanley Affiliate (Note G)		(3	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Net Expenses		738
Net Investment Loss		(470	)
Realized Gain (Loss):
Investments Sold (Net of $11 of Capital Gain Country Tax)		4,290
Foreign Currency Translation		(39	)
Net Realized Gain		4,251
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $617)		29,944
Foreign Currency Translation		(4	)
Net Change in Unrealized Appreciation (Depreciation)		29,940
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		34,191
Net Increase in Net Assets Resulting from Operations	$	33,721

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(470	)	$	(59	)
Net Realized Gain		4,251			2,214
Net Change in Unrealized Appreciation (Depreciation)		29,940			9,889
Net Increase in Net Assets Resulting from Operations		33,721			12,044
Dividends and Distributions to Shareholders:
Class I		(2,732	)		(1,093	)
Class A		(274	)		(40	)
Class C		(126	)		(33	)
Class IS		(1,054	)		(539	)
Total Dividends and Distributions to Shareholders		(4,186	)		(1,705	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		52,338			9,014
Distributions Reinvested		2,728			1,089
Redeemed		(25,342	)		(23,753	)
Class A:
Subscribed		7,127			76
Distributions Reinvested		274			40
Redeemed		(1,831	)		(155	)
Class C:
Subscribed		1,756			150
Distributions Reinvested		125			33
Redeemed		(143	)		(123	)
Class IS:
Subscribed		5			3,649
Distributions Reinvested		1,054			539
Redeemed		(3,300	)		—
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		34,791			(9,441	)
Redemption Fees		2			—	@
Total Increase in Net Assets		64,328			898
Net Assets:
Beginning of Period		54,687			53,789
End of Period	$	119,015		$	54,687

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		3,072			806
Shares Issued on Distributions Reinvested		145			87
Shares Redeemed		(1,647	)		(2,098	)
Net Increase (Decrease) in Class I Shares Outstanding		1,570			(1,205	)
Class A:
Shares Subscribed		422			7
Shares Issued on Distributions Reinvested		15			3
Shares Redeemed		(117	)		(14	)
Net Increase (Decrease) in Class A Shares Outstanding		320			(4	)
Class C:
Shares Subscribed		107			14
Shares Issued on Distributions Reinvested		7			3
Shares Redeemed		(12	)		(12	)
Net Increase in Class C Shares Outstanding		102			5
Class IS:
Shares Subscribed		—	@@		287
Shares Issued on Distributions Reinvested		56			43
Shares Redeemed		(217	)		—
Net Increase (Decrease) in Class IS Shares Outstanding		(161	)		330

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	12.70		$	10.38		$	12.14		$	9.73		$	9.45
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.11	)		(0.02	)		0.03			0.08			0.04
Net Realized and Unrealized Gain (Loss)		7.62			2.78			(1.74	)		2.45			0.25
Total from Investment Operations		7.51			2.76			(1.71	)		2.53			0.29
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.01	)		(0.08	)		(0.01	)
Net Realized Gain		(0.78	)		(0.44	)		(0.04	)		(0.04	)		—
Paid-in-Capital		—			—			—			—			(0.00	)⁽³⁾
Total Distributions		(0.78	)		(0.44	)		(0.05	)		(0.12	)		(0.01	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	19.43		$	12.70		$	10.38		$	12.14		$	9.73
Total Return⁽⁴⁾		59.36	%		26.63	%		(14.12	)%		26.01	%		3.08	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	80,465		$	32,651		$	39,206		$	73,273		$	25,374
Ratio of Expenses Before Expense Limitation		1.47	%		1.57	%		1.48	%		1.43	%		1.32	%
Ratio of Expenses After Expense Limitation		1.15	%⁽⁵⁾		1.17	%⁽⁵⁾		1.17	%⁽⁵⁾		1.11	%⁽⁵⁾		1.10	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.16	%⁽⁵⁾		1.16	%⁽⁵⁾		N/A			N/A
Ratio of Net Investment Income (Loss)		(0.73	)%⁽⁵⁾		(0.14	)%⁽⁵⁾		0.29	%⁽⁵⁾		0.67	%⁽⁵⁾		0.37	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.02	%
Portfolio Turnover Rate		57	%		58	%		47	%		79	%		45	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	12.53		$	10.29		$	12.06		$	9.67		$	9.43
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.17	)		(0.05	)		(0.00	)⁽³⁾		0.02			(0.03	)
Net Realized and Unrealized Gain (Loss)		7.51			2.73			(1.73	)		2.44			0.28
Total from Investment Operations		7.34			2.68			(1.73	)		2.46			0.25
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.03	)		(0.01	)
Net Realized Gain		(0.78	)		(0.44	)		(0.04	)		(0.04	)		—
Paid-in-Capital		—			—			—			—			(0.00	)⁽³⁾
Total Distributions		(0.78	)		(0.44	)		(0.04	)		(0.07	)		(0.01	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	19.09		$	12.53		$	10.29		$	12.06		$	9.67
Total Return⁽⁴⁾		58.81	%		26.08	%		(14.41	)%		25.46	%		2.63	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	7,925		$	1,191		$	1,024		$	1,102		$	821
Ratio of Expenses Before Expense Limitation		1.82	%		2.04	%		1.93	%		2.01	%		1.96	%
Ratio of Expenses After Expense Limitation		1.50	%⁽⁵⁾		1.55	%⁽⁵⁾		1.55	%⁽⁵⁾		1.54	%⁽⁵⁾		1.53	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.54	%⁽⁵⁾		1.54	%⁽⁵⁾		N/A			N/A
Ratio of Net Investment Income (Loss)		(1.13	)%⁽⁵⁾		(0.45	)%⁽⁵⁾		(0.04	)%⁽⁵⁾		0.18	%⁽⁵⁾		(0.33	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.02	%
Portfolio Turnover Rate		57	%		58	%		47	%		79	%		45	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	12.17		$	10.08		$	11.90		$	9.59		$	9.42
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.27	)		(0.13	)		(0.09	)		(0.06	)		(0.10	)
Net Realized and Unrealized Gain (Loss)		7.25			2.66			(1.69	)		2.41			0.28
Total from Investment Operations		6.98			2.53			(1.78	)		2.35			0.18
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.01	)
Net Realized Gain		(0.78	)		(0.44	)		(0.04	)		(0.04	)		—
Paid-in-Capital		—			—			—			—			(0.00	)⁽³⁾
Total Distributions		(0.78	)		(0.44	)		(0.04	)		(0.04	)		(0.01	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	18.37		$	12.17		$	10.08		$	11.90		$	9.59
Total Return⁽⁴⁾		57.59	%		25.14	%		(15.02	)%		24.53	%		1.89	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,395		$	1,007		$	780		$	926		$	587
Ratio of Expenses Before Expense Limitation		2.63	%		2.82	%		2.75	%		2.80	%		3.08	%
Ratio of Expenses After Expense Limitation		2.29	%⁽⁵⁾		2.30	%⁽⁵⁾		2.30	%⁽⁵⁾		2.29	%⁽⁵⁾		2.28	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			2.29	%⁽⁵⁾		2.29	%⁽⁵⁾		N/A			N/A
Ratio of Net Investment Loss		(1.88	)%⁽⁵⁾		(1.18	)%⁽⁵⁾		(0.83	)%⁽⁵⁾		(0.49	)%⁽⁵⁾		(0.99	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.02	%
Portfolio Turnover Rate		57	%		58	%		47	%		79	%		45	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	12.71		$	10.38		$	12.14		$	9.73		$	9.45
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.09	)		0.00	⁽³⁾		0.04			0.08			(0.00	)⁽³⁾
Net Realized and Unrealized Gain (Loss)		7.61			2.77			(1.74	)		2.45			0.29
Total from Investment Operations		7.52			2.77			(1.70	)		2.53			0.29
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.02	)		(0.08	)		(0.01	)
Net Realized Gain		(0.78	)		(0.44	)		(0.04	)		(0.04	)		—
Paid-in-Capital		—			—			—			—			(0.00	)⁽³⁾
Total Distributions		(0.78	)		(0.44	)		(0.06	)		(0.12	)		(0.01	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	19.45		$	12.71		$	10.38		$	12.14		$	9.73
Total Return⁽⁴⁾		59.39	%		26.73	%		(14.03	)%		26.02	%		3.09	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	27,230		$	19,838		$	12,779		$	14,868		$	88,880
Ratio of Expenses Before Expense Limitation		1.42	%		1.53	%		1.44	%		1.42	%		1.31	%
Ratio of Expenses After Expense Limitation		1.09	%⁽⁵⁾		1.10	%⁽⁵⁾		1.10	%⁽⁵⁾		1.09	%⁽⁵⁾		1.08	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.09	%⁽⁵⁾		1.09	%⁽⁵⁾		N/A			N/A
Ratio of Net Investment Income (Loss)		(0.65	)%⁽⁵⁾		0.00	%⁽⁶⁾		0.38	%⁽⁵⁾		0.72	%⁽⁵⁾		(0.00	)%⁽⁵⁾⁽⁶⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.02	%
Portfolio Turnover Rate		57	%		58	%		47	%		79	%		45	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

The accompanying financial statements relate to the Emerging Markets Leaders Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Company ("MSIM Company") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such

valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	—	$	7,091	$	—	$	7,091
Beverages		—		2,756		—		2,756
Chemicals		—		5,361		—		5,361
Consumer Finance		—		5,716		—		5,716
Diversified Consumer Services		1,691		—		—		1,691
Electrical Equipment		—		3,530		—		3,530
Entertainment		10,410		—		—		10,410
Health Care Providers & Services		—		4,351		—		4,351
Health Care Technology		—		1,995		—		1,995
Information Technology Services		8,578		—		—		8,578
Insurance		—		1,934		—		1,934

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Interactive Media & Services	$	—	$	7,476	$	—	$	7,476
Internet & Direct Marketing Retail		9,871		19,141		—		29,012
Semiconductors & Semiconductor Equipment		3,536		9,836		—		13,372
Software		885		3,221		—		4,106
Textiles, Apparel & Luxury Goods		3,791		5,144		—		8,935
Total Common Stocks		38,762		77,552		—		116,314
Short-Term Investment
Investment Company		5,488		—		—		5,488
Total Assets	$	44,250	$	77,552	$	—	$	121,802

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion				Over $1 billion
	0.90	%			0.85	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.58% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses,

excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.20% for Class I shares, 1.55% for Class A shares, 2.30% for Class C shares and 1.10% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $196,000 of advisory fees were waived and approximately $2,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley. The Sub-Adviser provides the Fund with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and

Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $65,009,000 and $35,700,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $3,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	2,729			$	51,505			$	48,746			$	6

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	5,488

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	1,256	$	2,930	$	—	$	1,705

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	205			$	122

To the Stockholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Emerging Markets Leaders Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Emerging Markets Leaders Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Emerging Markets Leaders Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019 by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Portfolio Class I	$	1,000.00	$	1,305.00	$	1,019.86	$	6.08	$	5.33		1.05	%
Emerging Markets Portfolio Class A		1,000.00		1,302.60		1,018.30		7.87		6.90		1.36
Emerging Markets Portfolio Class L		1,000.00		1,299.30		1,015.58		10.98		9.63		1.90
Emerging Markets Portfolio Class C		1,000.00		1,297.40		1,014.33		12.42		10.89		2.15
Emerging Markets Portfolio Class IS		1,000.00		1,305.50		1,020.36		5.51		4.82		0.95
Emerging Markets Portfolio Class IR		1,000.00		1,305.50		1,020.36		5.51		4.82		0.95

** Annualized.

The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of issuers in emerging market countries.

Performance

For the fiscal year ended December 31, 2020, the Fund's Class I shares had a total return based on net asset value and reinvestment of distributions per share of 14.58%, net of fees. The Fund's Class I shares underperformed the Fund's benchmark, the MSCI Emerging Markets Index (the "Index"), which returned 18.31%.

Factors Affecting Performance

• Our aggregate stock selection was the main driver of performance for the full year. Country allocation contributed positively in November and December of 2020 as country dispersion began to increase in recent months. Emerging market (EM) equities recovered in the second half of the year, following the COVID-related market volatility that marked the first quarter of 2020. In the six months ending December 31, 2020, the Index returned +31.14% with returns more broadly based. Our process of identifying and owning growth stocks in many different countries across the EM universe was starting to be rewarded, and we believe this dispersion can continue.

• The Fund underperformed the Index in the first quarter of 2020 as investors flocked to the perceived safety of what had worked in the past during the sell-off triggered by the COVID-19 crisis. Investors flooded back to those countries, sectors and stocks that were already outperforming — and relatively expensive — before the pandemic broke out (North Asia, technology, semiconductors and mega-cap stocks). This resulted in extreme clustering at the country and industry levels on relative performance and valuation metrics.

• Throughout 2020, developed countries along with China, Korea and Taiwan have had the greater fiscal resources to spend more heavily on stimulus than the majority of EM countries, and this was reflected in market performance. Korea, Taiwan and China were the best performing markets in EM in 2020, returning +45%, +42% and +30%, respectively, while the majority of remaining EM countries ended the year with negative returns. Our underweight allocation to North Asia and overweight allocations to the neglected parts of EM — select Latin America countries like Brazil

and Central and Eastern European (CEE) countries like Poland and Russia — detracted from returns.

• For the full year, stock selection in Taiwan and Russia were top contributors to returns. In Taiwan, overweight allocations to two semiconductor companies helped drive returns. Within technology in Taiwan, we are focused on companies with competitive technology expertise, strong pricing power and structural growth in the value chain, particularly those in the hardware space.

• In Russia, the portfolio benefited from a combination of long-held high quality growth names supported by secular trends and some recent additions in 2020 in companies that we believe can benefit from accelerated trends such as digitalization.

• Stock selection in and underweight allocation to China was the largest detractor from performance. Though long-standing holdings in secular growth stories such as a leading beer brand and a dairy products company contributed, zero allocations to a shopping platform, electric vehicle manufacturer and an e-commerce company detracted as these stocks saw sharp rallies in 2020.

• Our overweight allocation to and stock selection in Poland detracted, driven by an allocation to a game developer. The stock underperformed following a turbulent release of its latest game in the fourth quarter of 2020.

• Stock selection in Turkey and India, particularly in the financials sector, also detracted. In India, financials were particularly hard hit when the government announced a 21-day lockdown in the first quarter of 2020 in response to the COVID-19 pandemic. Our allocation to a large bank in Turkey detracted as the worsening currency outlook for the Turkish lira remained a headwind for the stock.

Management Strategies

• Looking ahead, we are very constructive on the broad outlook for emerging markets as an asset class over the next five to 10 years after the U.S. dominance of market returns in the past decade. Key among the catalysts to trigger robust returns for EM equities are the weakening of the U.S. dollar, the recovery of commodities prices, and the emerging reforms and digital innovations emanating from many EM countries. We believe EM valuations overall are at very compelling valuations relative to the U.S. equity market, which are likely to trigger asset

allocation shifts. We believe we are at an important inflection point as drivers of economic growth and equity market returns converge to help power the asset class after nearly a decade of underperforming the U.S.

• The portfolio is focused on the themes, stocks and countries that we believe can thrive even if growth levels are much lower than they were in the first decade of the 2000s when EM boomed. We continue to be overweight secular growth winners and are incrementally adding cyclical recovery plays, including select materials and energy companies. From a country allocation perspective, our overweights are primarily in those countries with healthy or improving domestic demand, low debt and resilience in the face of declining global trade as nationalism and protectionism continue to increase.

• We continue to overweight the CEE region through our exposure to stocks in Poland, Hungary and Czech Republic. CEE countries entered the pandemic with little or no economic imbalances and have ample room both on the monetary and fiscal sides to counter the economic impact of COVID-19, making it possible for these economies to recover faster than other developing countries. Recently, COVID-19 cases have increased in the region, but governments are taking measures to control the spread and limit the economic impact. That said, the companies we own have strong balance sheets that we believe can sustain another period of economic stress. We continue to invest in secular growth stories and strong franchises in CEE.

• We remain overweight Russia. Russia continues to follow a very orthodox macro policy framework, which has materially reduced the vulnerability of the Russian economy to external shocks. Further, we believe the monetary and fiscal policies of the Russian government have not only reduced inflation to post-Soviet lows, but also are materially reducing the sensitivity of the Russian economy to oil and leading to a less volatile domestic economy. Within this macro context and given other features of Russia — including strong software engineering talent, an underdeveloped regional economy and abundant low-cost resources — we like select domestic stocks given their secular earnings growth opportunities, as well as specific low-cost commodity producers with healthy balance sheets and strong free cash flow even at current commodity prices, and reinvestment/growth opportunities.

Performance Compared to the MSCI Emerging Markets Index⁽¹⁾ and the Lipper Emerging Markets Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽¹⁰⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		14.58	%		10.26	%		3.11	%		7.78	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		14.21			9.91			2.80			6.76
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		8.20			8.74			2.24			6.54
Fund — Class L Shares w/o sales charges⁽⁶⁾		13.65			9.31			—			3.73
Fund — Class C Shares w/o sales charges⁽⁸⁾		13.32			9.05			—			4.22
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁸⁾		12.32			9.05			—			4.22
Fund — Class IS Shares w/o sales charges⁽⁷⁾		14.73			10.37			—			5.04
Fund — Class IR Shares w/o sales charges⁽⁹⁾		14.73			—			—			7.75
MSCI Emerging Markets Index		18.31			12.81			3.63			7.81
Lipper Emerging Market Funds Index		20.52			13.43			4.23			N/A

⁽¹⁾ The MSCI Emerging Markets Index is a free float-adjusted market capitalization weighted index that is designed to measure equity market performance of emerging markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI Emerging Markets Index currently consists of 27 emerging market country indices. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Returns, including periods prior to January 1, 2001, are calculated using the return data of the MSCI Emerging Markets Index (gross dividends) through December 31, 2000 and the return data of the MSCI Emerging Markets Net Index (net dividends) after December 31, 2000. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

	Shares		Value (000)
Common Stocks (98.9%)
Argentina (1.1%)
Globant SA (a)		37,358	$	8,130
Brazil (7.2%)
Hapvida Participacoes e Investimentos SA		2,787,880		8,225
Localiza Rent a Car SA		531,163		7,079
Lojas Renner SA		1,084,116		9,116
Pagseguro Digital Ltd., Class A (a)		176,088		10,016
Petroleo Brasileiro SA		1,226,146		6,774
Petroleo Brasileiro SA (Preference)		1,390,921		7,551
Rumo SA (a)		1,590,508		5,882
				54,643
China (30.6%)
Alibaba Group Holding Ltd. (a)(b)		1,124,872		32,716
Alibaba Group Holding Ltd. ADR (a)		30,803		7,169
Anhui Conch Cement Co., Ltd., Class A		874,767		6,915
China Construction Bank Corp. H Shares (b)		13,435,120		10,134
China International Capital Corp., Ltd. H Shares (a)(b)		1,596,000		4,327
China Mengniu Dairy Co., Ltd. (a)(b)		2,406,000		14,506
China Resources Beer Holdings Co., Ltd. (b)		1,818,000		16,718
China Resources Land Ltd. (b)		760,000		3,132
Hua Hong Semiconductor Ltd. (a)(b)(c)		1,016,000		5,784
Jiangsu Hengrui Medicine Co., Ltd., Class A		249,916		4,258
Joincare Pharmaceutical Group Industry Co. Ltd.		1,067,000		2,269
Kweichow Moutai Co., Ltd., Class A		85,849		26,235
New Oriental Education & Technology Group, Inc. ADR (a)		56,307		10,463
Ping An Insurance Group Co. of China Ltd., Class A		416,674		5,544
Ping An Insurance Group Co. of China Ltd. H Shares (b)		274,500		3,341
Shandong Weigao Group Medical Polymer Co., Ltd. H Shares (b)		1,212,000		2,742
Shenzhou International Group Holdings Ltd. (b)		590,000		11,563
TAL Education Group ADR (a)		79,627		5,694
Tencent Holdings Ltd. (b)		723,000		52,023
Universal Scientific Industrial Shanghai Co., Ltd., Class A		1,368,653		4,055
Yihai International Holding Ltd. (a)(b)		255,000		3,787
				233,375
Hong Kong (1.0%)
Hong Kong Exchanges & Clearing Ltd.		139,400		7,646
Hungary (1.1%)
Richter Gedeon Nyrt		323,585		8,121
India (8.5%)
Bharti Airtel Ltd.		705,533		4,927
Eicher Motors Ltd.		82,273		2,854
HDFC Bank Ltd. ADR (a)		91,419		6,606
Housing Development Finance Corp., Ltd.		288,282		10,100
ICICI Bank Ltd. (a)		1,249,102		9,185
ICICI Prudential Life Insurance Co., Ltd. (a)		493,095		3,370
Infosys Ltd.		372,902		6,393
Infosys Ltd. ADR		135,891		2,303

	Shares		Value (000)
Mahindra & Mahindra Ltd.		408,467	$	4,039
Marico Ltd.		326,513		1,801
Reliance Industries Ltd.		203,662		5,541
Reliance Industries Partly Paid		281,990		4,332
Shree Cement Ltd.		9,326		3,067
				64,518
Indonesia (1.2%)
Bank Central Asia Tbk PT		3,974,700		9,581
Korea, Republic of (10.0%)
Kakao Corp.		20,482		7,349
LG Chem Ltd.		4,933		3,751
NCSoft Corp.		4,814		4,133
Samsung Biologics Co., Ltd. (a)		5,685		4,329
Samsung Electronics Co., Ltd.		613,913		45,844
Samsung SDI Co., Ltd.		7,240		4,196
SK Hynix, Inc.		58,061		6,342
				75,944
Mexico (1.2%)
Grupo Aeroportuario del Centro Norte SAB de CV (a)		1,449,113		9,348
Poland (2.4%)
Allegro.eu SA (a)		312,418		7,084
Jeronimo Martins SGPS SA		226,712		3,811
LPP SA (a)		3,175		7,068
				17,963
Russia (6.8%)
LUKOIL PJSC ADR		101,418		6,898
Novatek PJSC GDR (Registered)		55,914		9,105
Novolipetskiy Metallurgicheskiy Kombinat PAO GDR		303,810		8,406
TCS Group Holding PLC GDR		260,794		8,581
X5 Retail Group N.V. GDR		191,415		6,912
Yandex N.V., Class A (a)		169,204		11,773
				51,675
Singapore (1.3%)
Sea Ltd. ADR (a)		49,977		9,948
South Africa (5.0%)
Anglo American Platinum Ltd.		53,561		5,270
Anglo American PLC		428,108		14,209
Capitec Bank Holdings Ltd. (a)		104,605		10,230
Clicks Group Ltd.		482,317		8,284
				37,993
Taiwan (12.7%)
ASE Technology Holding Co., Ltd.		3,081,626		8,939
Delta Electronics, Inc.		1,012,000		9,490
MediaTek, Inc.		427,000		11,387
Taiwan Semiconductor Manufacturing Co., Ltd.		3,553,205		67,218
				97,034
United Kingdom (2.8%)
Avast PLC		1,493,278		10,965
Mondi PLC		440,379		10,331
				21,296

	Shares		Value (000)
United States (6.0%)
ASML Holding N.V.		37,667	$	18,371
EPAM Systems, Inc. (a)		20,763		7,440
MercadoLibre, Inc. (a)		6,366		10,664
NIKE, Inc., Class B		66,471		9,404
				45,879
Total Common Stocks (Cost $439,827)				753,094
Short-Term Investments (1.1%)
Securities held as Collateral on Loaned Securities (0.0%)
Investment Company (0.0%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $220)		219,594		220
Investment Company (1.1%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $8,721)8,721,349				8,721
Total Short-Term Investments (Cost $8,941)				8,941
Total Investments (100.0%) (Cost $448,768) Including $4,744 of Securities Loaned (d)(e)				762,035
Liabilities in Excess of Other Assets (0.0%) (f)				(191	)
Net Assets (100.0%)			$	761,844

(a) Non-income producing security.

(b) Security trades on the Hong Kong exchange.

(d) The approximate fair value and percentage of net assets, $618,681,000 and 81.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $459,295,000. The aggregate gross unrealized appreciation is approximately $303,872,000 and the aggregate gross unrealized depreciation is approximately $1,132,000, resulting in net unrealized appreciation of approximately $302,740,000.

(f) Amount is less than 0.05%.

ADR American Depositary Receipt.

GDR Global Depositary Receipt.

PJSC Public Joint Stock Company.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $439,827)	$	753,094
Investment in Security of Affiliated Issuer, at Value (Cost $8,941)		8,941
Total Investments in Securities, at Value (Cost $448,768)		762,035
Foreign Currency, at Value (Cost $3,213)		3,190
Dividends Receivable		1,128
Receivable for Investments Sold		830
Receivable for Fund Shares Sold		259
Tax Reclaim Receivable		163
Receivable from Securities Lending Income		6
Receivable from Affiliate		—	@
Other Assets		139
Total Assets		767,750
Liabilities:
Payable for Investments Purchased		2,404
Payable for Advisory Fees		1,490
Deferred Capital Gain Country Tax		1,179
Payable for Fund Shares Redeemed		239
Collateral on Securities Loaned, at Value		220
Payable for Custodian Fees		122
Payable for Sub Transfer Agency Fees — Class I		38
Payable for Sub Transfer Agency Fees — Class A		1
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		39
Payable for Professional Fees		31
Payable for Transfer Agency Fees — Class I		9
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		6
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Shareholder Services Fees — Class A		2
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		125
Total Liabilities		5,906
Net Assets	$	761,844
Net Assets Consist of:
Paid-in-Capital	$	489,646
Total Distributable Earnings		272,198
Net Assets	$	761,844

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	312,834
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		11,650,358
Net Asset Value, Offering and Redemption Price Per Share	$	26.85
CLASS A:
Net Assets	$	7,907
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		302,576
Net Asset Value, Redemption Price Per Share	$	26.13
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.45
Maximum Offering Price Per Share	$	27.58
CLASS L:
Net Assets	$	215
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		8,409
Net Asset Value, Offering and Redemption Price Per Share	$	25.51
CLASS C:
Net Assets	$	530
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		20,961
Net Asset Value, Offering and Redemption Price Per Share	$	25.29
CLASS IS:
Net Assets	$	440,346
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		16,402,672
Net Asset Value, Offering and Redemption Price Per Share	$	26.85
CLASS IR:
Net Assets	$	12
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		439
Net Asset Value, Offering and Redemption Price Per Share	$	26.85
⁽¹⁾ Including: Securities on Loan, at Value:	$	4,744

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $1,472 of Foreign Taxes Withheld)	$	10,743
Income from Securities Loaned — Net		113
Dividends from Security of Affiliated Issuer (Note G)		25
Total Investment Income		10,881
Expenses:
Advisory Fees (Note B)		5,516
Administration Fees (Note C)		535
Custodian Fees (Note F)		366
Sub Transfer Agency Fees — Class I		229
Sub Transfer Agency Fees — Class A		11
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		—	@
Professional Fees		234
Registration Fees		99
Transfer Agency Fees — Class I (Note E)		44
Transfer Agency Fees — Class A (Note E)		4
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		3
Transfer Agency Fees — Class IR (Note E)		2
Shareholder Reporting Fees		53
Shareholder Services Fees — Class A (Note D)		21
Distribution and Shareholder Services Fees — Class L (Note D)		1
Distribution and Shareholder Services Fees — Class C (Note D)		4
Pricing Fees		7
Interest Expenses		23
Reorganization Expenses		(189	)*
Other Expenses		44
Total Expenses		7,011
Waiver of Advisory Fees (Note B)		(310	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(5	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(3	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(13	)
Net Expenses		6,674
Net Investment Income		4,207
Realized Loss:
Investments Sold		(26,622	)
Foreign Currency Forward Exchange Contracts		(1,280	)
Foreign Currency Translation		(823	)
Net Realized Loss		(28,725	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $386)		127,676
Foreign Currency Forward Exchange Contracts		510
Foreign Currency Translation		55
Net Change in Unrealized Appreciation (Depreciation)		128,241
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		99,516
Net Increase in Net Assets Resulting from Operations	$	103,723

@ Amount is less than $500.

* Over accrual of reorganization expenses.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	4,207		$	13,422
Net Realized Gain (Loss)		(28,725	)		107,229
Net Change in Unrealized Appreciation (Depreciation)		128,241			37,183
Net Increase in Net Assets Resulting from Operations		103,723			157,834
Dividends and Distributions to Shareholders:
Class I		(3,316	)		(33,365	)
Class A		(58	)		(1,495	)
Class L		(1	)		(29	)
Class C		(3	)		(55	)
Class IS		(5,074	)		(62,373	)
Class IR		(—	@)		(1	)
Total Dividends and Distributions to Shareholders		(8,452	)		(97,318	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		61,286			28,345
Issued due to a tax-free reorganization		—			438,765
Distributions Reinvested		3,187			31,579
Redeemed		(73,298	)		(457,409	)
Class A:
Subscribed		1,609			3,722
Distributions Reinvested		58			1,482
Redeemed		(5,575	)		(8,421	)
Class L:
Exchanged		50			—
Distributions Reinvested		1			29
Redeemed		(54	)		(127	)
Class C:
Subscribed		42			108
Distributions Reinvested		3			55
Redeemed		(27	)		(28	)
Class IS:
Subscribed		27,884			100,062
Distributions Reinvested		5,074			52,608
Redeemed		(167,078	)		(478,275	)
Class IR:
Distributions Reinvested		—	@		1
Net Decrease in Net Assets Resulting from Capital Share Transactions		(146,838	)		(287,504	)
Redemption Fees		12			11
Total Decrease in Net Assets		(51,555	)		(226,977	)
Net Assets:
Beginning of Period		813,399			1,040,376
End of Period	$	761,844		$	813,399

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		3,098			1,180
Shares Issued due to a tax-free reorganization		—			17,868
Shares Issued on Distributions Reinvested		121			1,359
Shares Redeemed		(3,267	)		(18,880	)
Net Increase (Decrease) in Class I Shares Outstanding		(48	)		1,527
Class A:
Shares Subscribed		75			157
Shares Issued on Distributions Reinvested		2			66
Shares Redeemed		(260	)		(356	)
Net Decrease in Class A Shares Outstanding		(183	)		(133	)
Class L:
Shares Exchanged		2			—
Shares Issued on Distributions Reinvested		—	@@		1
Shares Redeemed		(3	)		(5	)
Net Decrease in Class L Shares Outstanding		(1	)		(4	)
Class C:
Shares Subscribed		2			5
Shares Issued on Distributions Reinvested		—	@@		2
Shares Redeemed		(1	)		(1	)
Net Increase in Class C Shares Outstanding		1			6
Class IS:
Shares Subscribed		1,282			4,177
Shares Issued on Distributions Reinvested		193			2,266
Shares Redeemed		(7,218	)		(19,685	)
Net Decrease in Class IS Shares Outstanding		(5,743	)		(13,242	)
Class IR:
Shares Issued on Distributions Reinvested		—	@@		—	@@

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	23.69		$	22.53		$	27.95		$	20.83		$	19.68
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.13			0.41			0.28			0.19			0.17
Net Realized and Unrealized Gain (Loss)		3.32			3.92			(5.15	)		7.10			1.15
Total from Investment Operations		3.45			4.33			(4.87	)		7.29			1.32
Distributions from and/or in Excess of:
Net Investment Income		(0.14	)		(0.18	)		(0.35	)		(0.17	)		(0.17	)
Net Realized Gain		(0.15	)		(2.99	)		(0.20	)		—			—
Total Distributions		(0.29	)		(3.17	)		(0.55	)		(0.17	)		(0.17	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	26.85		$	23.69		$	22.53		$	27.95		$	20.83
Total Return⁽⁴⁾		14.58	%		19.44	%		(17.32	)%		34.97	%		6.73	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	312,834		$	277,114		$	229,132		$	342,400		$	282,674
Ratio of Expenses Before Expense Limitation		1.10	%		1.16	%		N/A			1.07	%		1.16	%
Ratio of Expenses After Expense Limitation		1.05	%⁽⁵⁾		1.05	%⁽⁵⁾		1.03	%⁽⁵⁾		1.04	%⁽⁵⁾		1.11	%⁽⁵⁾⁽⁶⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.05	%⁽⁵⁾		1.05	%⁽⁵⁾		N/A			N/A			N/A
Ratio of Net Investment Income		0.58	%⁽⁵⁾		1.69	%⁽⁵⁾		1.08	%⁽⁵⁾		0.75	%⁽⁵⁾		0.83	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.01	%		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		57	%		58	%		56	%		35	%		33	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.05% for Class I shares. Prior to September 30, 2016, the maximum ratio was 1.20% for Class I shares.

(7) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	23.05		$	21.99		$	27.24		$	20.31		$	19.19
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.05			0.30			0.20			0.10			0.11
Net Realized and Unrealized Gain (Loss)		3.22			3.85			(5.01	)		6.92			1.11
Total from Investment Operations		3.27			4.15			(4.81	)		7.02			1.22
Distributions from and/or in Excess of:
Net Investment Income		(0.04	)		(0.10	)		(0.24	)		(0.09	)		(0.10	)
Net Realized Gain		(0.15	)		(2.99	)		(0.20	)		—			—
Total Distributions		(0.19	)		(3.09	)		(0.44	)		(0.09	)		(0.10	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	26.13		$	23.05		$	21.99		$	27.24		$	20.31
Total Return⁽⁴⁾		14.21	%		19.08	%		(17.58	)%		34.54	%		6.37	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	7,907		$	11,195		$	13,605		$	23,952		$	18,824
Ratio of Expenses Before Expense Limitation		1.43	%		1.43	%		N/A			1.40	%		1.48	%
Ratio of Expenses After Expense Limitation		1.38	%⁽⁵⁾		1.34	%⁽⁵⁾		1.34	%⁽⁵⁾		1.36	%⁽⁵⁾		1.45	%⁽⁵⁾⁽⁶⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.38	%⁽⁵⁾		1.34	%⁽⁵⁾		N/A			N/A			N/A
Ratio of Net Investment Income		0.24	%⁽⁵⁾		1.26	%⁽⁵⁾		0.78	%⁽⁵⁾		0.42	%⁽⁵⁾		0.55	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.01	%		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		57	%		58	%		56	%		35	%		33	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.40% for Class A shares. Prior to September 30, 2016, the maximum ratio was 1.55% for Class A shares.

(7) Amount is less than 0.005%.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	22.59		$	21.64		$	26.85		$	20.08		$	18.98
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.08	)		0.17			0.05			(0.01	)		0.00	⁽³⁾
Net Realized and Unrealized Gain (Loss)		3.15			3.77			(4.91	)		6.80			1.10
Total from Investment Operations		3.07			3.94			(4.86	)		6.79			1.10
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.15	)		(0.02	)		—
Net Realized Gain		(0.15	)		(2.99	)		(0.20	)		—			—
Total Distributions		(0.15	)		(2.99	)		(0.35	)		(0.02	)		—
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	25.51		$	22.59		$	21.64		$	26.85		$	20.08
Total Return⁽⁴⁾		13.65	%		18.37	%		(18.03	)%		33.80	%		5.80	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	215		$	210		$	292		$	253		$	239
Ratio of Expenses Before Expense Limitation		3.06	%		2.47	%		2.55	%		2.54	%		2.69	%
Ratio of Expenses After Expense Limitation		1.90	%⁽⁵⁾		1.90	%⁽⁵⁾		1.89	%⁽⁵⁾		1.90	%⁽⁵⁾		2.01	%⁽⁵⁾⁽⁶⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.90	%⁽⁵⁾		1.90	%⁽⁵⁾		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.40	)%⁽⁵⁾		0.73	%⁽⁵⁾		0.20	%⁽⁵⁾		(0.03	)%⁽⁵⁾		0.00	%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.01	%		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		57	%		58	%		56	%		35	%		33	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.90% for Class L shares. Prior to September 30, 2016, the maximum ratio was 2.05% for Class L shares.

(7) Amount is less than 0.005%.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	22.45		$	21.57		$	26.66		$	19.99		$	18.95
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.11	)		0.11			0.04			(0.09	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		3.10			3.76			(4.93	)		6.78			1.09
Total from Investment Operations		2.99			3.87			(4.89	)		6.69			1.05
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.00	)⁽³⁾		(0.02	)		(0.01	)
Net Realized Gain		(0.15	)		(2.99	)		(0.20	)		—			—
Total Distributions		(0.15	)		(2.99	)		(0.20	)		(0.02	)		(0.01	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	25.29		$	22.45		$	21.57		$	26.66		$	19.99
Total Return⁽⁴⁾		13.32	%		18.16	%		(18.26	)%		33.45	%		5.56	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	530		$	454		$	309		$	817		$	608
Ratio of Expenses Before Expense Limitation		2.60	%		2.58	%		2.37	%		2.30	%		2.58	%
Ratio of Expenses After Expense Limitation		2.15	%⁽⁵⁾		2.15	%⁽⁵⁾		2.14	%⁽⁵⁾		2.15	%⁽⁵⁾		2.24	%⁽⁵⁾⁽⁶⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		2.15	%⁽⁵⁾		2.15	%⁽⁵⁾		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.53	)%⁽⁵⁾		0.47	%⁽⁵⁾		0.17	%⁽⁵⁾		(0.36	)%⁽⁵⁾		(0.19	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.01	%		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		57	%		58	%		56	%		35	%		33	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.15% for Class C shares. Prior to September 30, 2016, the maximum ratio was 2.30% for Class C shares.

(7) Amount is less than 0.005%.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	23.68		$	22.52		$	27.96		$	20.83		$	19.68
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.15			0.36			0.31			0.21			0.21
Net Realized and Unrealized Gain (Loss)		3.33			4.00			(5.17	)		7.11			1.12
Total from Investment Operations		3.48			4.36			(4.86	)		7.32			1.33
Distributions from and/or in Excess of:
Net Investment Income		(0.16	)		(0.21	)		(0.38	)		(0.19	)		(0.18	)
Net Realized Gain		(0.15	)		(2.99	)		(0.20	)		—			—
Total Distributions		(0.31	)		(3.20	)		(0.58	)		(0.19	)		(0.18	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	26.85		$	23.68		$	22.52		$	27.96		$	20.83
Total Return⁽⁴⁾		14.73	%		19.58	%		(17.25	)%		35.09	%		6.79	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	440,346		$	524,416		$	797,029		$	1,034,348		$	657,106
Ratio of Expenses Before Expense Limitation		1.00	%		1.04	%		N/A			0.98	%		1.07	%
Ratio of Expenses After Expense Limitation		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		0.92	%⁽⁵⁾		0.95	%⁽⁵⁾		1.04	%⁽⁵⁾⁽⁶⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		N/A			N/A			N/A
Ratio of Net Investment Income		0.67	%⁽⁵⁾		1.47	%⁽⁵⁾		1.21	%⁽⁵⁾		0.82	%⁽⁵⁾		0.99	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.01	%		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		57	%		58	%		56	%		35	%		33	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.95% for Class IS shares. Prior to September 30, 2016, the maximum ratio was 1.10% for Class IS shares.

(7) Amount is less than 0.005%.

	Class IR
	Year Ended December 31,						Period from June 15, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	23.68		$	22.54		$	26.23
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.12			0.40			0.20
Net Realized and Unrealized Gain		3.36			3.94			(3.31	)
Total from Investment Operations		3.48			4.34			(3.11	)
Distributions from and/or in Excess of:
Net Investment Income		(0.16	)		(0.21	)		(0.38	)
Net Realized Gain		(0.15	)		(2.99	)		(0.20	)
Total Distributions		(0.31	)		(3.20	)		(0.58	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	26.85		$	23.68		$	22.54
Total Return⁽⁴⁾		14.73	%		19.53	%		(11.82	)%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	12		$	10		$	9
Ratio of Expenses Before Expense Limitation		21.21	%		21.52	%		19.46	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		0.93	%⁽⁵⁾⁽⁸⁾
Ratios of Expenses After Expense Limitation Excluding Interest Expenses		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		N/A
Ratio of Net Investment Income		0.55	%⁽⁵⁾		1.62	%⁽⁵⁾		1.56	%⁽⁵⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.01	%⁽⁸⁾
Portfolio Turnover Rate		57	%		58	%		56	%

(1) Commencement of Offering.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

The accompanying financial statements relate to the Emerging Markets Portfolio. The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of issuers in emerging market countries.

On February 22, 2019, the Fund acquired the net assets of Morgan Stanley Emerging Markets Fund, Inc. ("Emerging Markets Fund"), a closed-end management investment company, based on the respective valuations as of the close of business on February 22, 2019, pursuant to a Plan of Reorganization approved by the shareholders of Emerging Markets Fund on January 7, 2019 ("Reorganization A"). The purpose of the transaction was to combine two portfolios managed by Morgan Stanley Investment Management Inc., (the "Adviser") with comparable investment objectives and strategies. The acquisition was accomplished by a tax-free exchange of 9,264,009 Class I shares of the Fund at a net asset value ("NAV") of $24.31 for 13,428,781 shares of Emerging Markets Fund. The net assets of Emerging Markets Fund before Reorganization A were approximately $225,208,000, including unrealized appreciation (depreciation) of approximately $24,269,000 at February 22, 2019. The investment portfolio of Emerging Markets Fund, with a fair value of approximately $220,642,000 and identified cost of approximately $196,373,000, on February 22, 2019, was the principal asset acquired by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from Emerging Markets Fund was carried forward to align ongoing reporting of the Fund's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. Immediately prior to Reorganization A, the net assets of the

Fund were approximately $1,130,576,000. Immediately after Reorganization A, the net assets of the Fund were approximately $1,355,784,000.

Upon closing of Reorganization A, shareholders of Emerging Markets Fund received shares of the Fund as follows:

Emerging Markets Fund				Emerging Markets Portfolio
Common Shares				Class I

Assuming the acquisition had been completed on January 1, 2019, the beginning of the annual reporting period of the Fund, the Fund's pro-forma results of operations for the year ended December 31, 2019, are approximately as follows:

Net investment income⁽¹⁾	$	14,773,000
Net realized gain and unrealized gain⁽²⁾	$	189,147,000
Net increase in net assets resulting from operations	$	203,920,000

(1) Approximately $13,422,000 as reported, plus approximately $361,000 Emerging Markets Fund prior to Reorganization A, plus approximately $990,000 of estimated pro-forma eliminated expenses.

(2) Approximately $144,412,000 as reported, plus approximately $44,735,000 Emerging Markets Fund prior to Reorganization A.

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of Emerging Markets Fund that have been included in the Fund's Statement of Operations since February 22, 2019.

On April 5, 2019, the Fund acquired the net assets of Morgan Stanley Asia-Pacific Fund, Inc. ("Asia-Pacific Fund"), a closed-end management investment company, based on the respective valuations as of the close of business on April 5, 2019, pursuant to a Plan of Reorganization approved by the shareholders of Asia-Pacific Fund on March 8, 2019 ("Reorganization B"). The purpose of the transaction was to combine two portfolios managed by the Adviser with comparable investment objectives and strategies. The acquisition was accomplished by a tax-free exchange of 8,604,225 Class I shares of the Fund at a NAV of $24.82 for 12,679,878 shares of Asia-Pacific Fund. The net assets of Asia-Pacific Fund before Reorganization B were approximately $213,557,000, including unrealized appreciation (depreciation) of approximately $20,463,000 at April 5, 2019. The investment portfolio of Asia-Pacific Fund, with a fair value of approximately $209,696,000 and identified cost of approximately $189,233,000, on April 5, 2019, was the principal asset acquired by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from Asia-Pacific Fund was carried forward to

align ongoing reporting of the Fund's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. Immediately prior to Reorganization B, the net assets of the Fund were approximately $840,351,000. Immediately after Reorganization B, the net assets of the Fund were approximately $1,053,908,000.

Upon closing of Reorganization B, shareholders of Asia-Pacific Fund received shares of the Fund as follows:

Asia-Pacific Fund				Emerging Markets Portfolio
Common Shares				Class I

Net investment income⁽¹⁾	$	15,510,000
Net realized gain and unrealized gain⁽²⁾	$	190,531,000
Net increase in net assets resulting from operations	$	206,041,000

(1) Approximately $13,422,000 as reported, plus approximately $994,000 Asia-Pacific Fund prior to Reorganization B, plus approximately $1,094,000 of estimated pro-forma eliminated expenses.

(2) Approximately $144,412,000 as reported, plus approximately $46,119,000 Asia-Pacific Fund prior to Reorganization B.

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of Asia-Pacific Fund that have been included in the Fund's Statement of Operations since April 5, 2019.

bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If the Adviser or Morgan Stanley Investment Management Company ("MSIM Company") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are

not readily available, including circumstances under which the Adviser or the Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the NAV as of the close of each business day.

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Automobiles	$	—	$	6,893	$	—	$	6,893
Banks		6,606		47,711		—		54,317
Beverages		—		42,953		—		42,953
Capital Markets		—		11,973		—		11,973
Chemicals		—		3,751		—		3,751
Construction Materials		—		9,982		—		9,982
Diversified Consumer Services		16,157		—		—		16,157
Electronic Equipment, Instruments & Components		—		17,741		—		17,741
Entertainment		9,948		4,133		—		14,081
Food & Staples Retailing		—		19,007		—		19,007
Food Products		—		18,293		—		18,293
Health Care Equipment & Supplies		—		2,742		—		2,742
Health Care Providers & Services		—		8,225		—		8,225
Information Technology Services		27,889		6,393		—		34,282
Insurance		—		12,255		—		12,255
Interactive Media & Services		11,773		59,372		—		71,145
Internet & Direct Marketing Retail		24,917		32,716		—		57,633
Life Sciences Tools & Services		—		4,329		—		4,329
Metals & Mining		—		27,885		—		27,885
Multi-Line Retail		—		9,116		—		9,116
Oil, Gas & Consumable Fuels		—		40,201		—		40,201
Paper & Forest Products		—		10,331		—		10,331
Personal Products		—		1,801		—		1,801
Pharmaceuticals		—		14,648		—		14,648
Real Estate Management & Development		—		3,132		—		3,132
Road & Rail		—		12,961		—		12,961
Semiconductors & Semiconductor Equipment		18,371		99,670		—		118,041
Software		—		10,965		—		10,965
Tech Hardware, Storage & Peripherals		—		45,844		—		45,844
Textiles, Apparel & Luxury Goods		9,404		18,631		—		28,035
Thrifts & Mortgage Finance		—		10,100		—		10,100
Transportation Infrastructure		9,348		—		—		9,348
Wireless Telecommunication Services		—		4,927		—		4,927
Total Common Stocks		134,413		618,681		—		753,094
Short-Term Investments
Investment Company		8,941		—		—		8,941
Total Assets	$	143,354	$	618,681	$	—	$	762,035

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser and/or Sub-Adviser seek to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

As of December 31, 2020, the Fund did not have any open foreign currency forward exchange contracts.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(1,280	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	510

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount				$	45,495,000

during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	4,744	(a)	$	—	$	(4,744	)(b)(c)	$	0

(a) Represents market value of loaned securities at year end.

(b) The Fund received cash collateral of approximately $220,000, which was subsequently invested in Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $5,005,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

transactions and other similar transactions that are accounted for as secured borrowing.

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	220	$	—	$	—	$	—	$	220
Total Borrowings	$	220	$	—	$	—	$	—	$	220
Gross amount of recognized liabilities for securities lending transactions									$	220

6. Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares, Class IS shares and Class IR shares which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million				Next $500 million				Next $1.5 billion				Over $2.5 billion
	0.85	%			0.75	%			0.70	%			0.65	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.78% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.05% for Class I shares, 1.40% for Class A shares, 1.90% for Class L shares, 2.15% for Class C shares, 0.95% for Class IS shares and 0.95% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $310,000 of advisory fees were waived and approximately $14,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset

Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $374,884,000 and $532,697,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $13,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	9,572			$	207,274			$	207,905			$	25

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	8,941

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate

of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the year ended December 31, 2020, the Fund did not engage in any cross-trade transactions.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for

tax purposes. The tax character of distributions paid during fiscal years 2020 and 2019 was as follows:

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	4,274	$	4,178	$	6,000	$	91,318

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	6,770			$	—

At December 31, 2020, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $24,243,000 and $12,199,000, respectively, that do not have an expiration date.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Emerging Markets Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Emerging Markets Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Emerging Markets Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Small Cap Portfolio Class I	$	1,000.00	$	1,212.50	$	1,018.60	$	7.23	$	6.60		1.30	%
Emerging Markets Small Cap Portfolio Class A		1,000.00		1,209.80		1,016.84		9.17		8.36		1.65
Emerging Markets Small Cap Portfolio Class C		1,000.00		1,205.70		1,013.07		13.31		12.14		2.40
Emerging Markets Small Cap Portfolio Class IS		1,000.00		1,211.70		1,018.85		6.95		6.34		1.25

** Annualized.

Performance Compared to the MSCI Emerging Markets Small Cap Net Index⁽¹⁾ and the Lipper Emerging Markets Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years		Since Inception⁽⁵⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		5.80	%		5.54	%		—		6.07	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		5.43			5.14			—		5.67
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		–0.14			4.01			—		4.56
Fund — Class C Shares w/o sales charges⁽⁴⁾		4.72			4.37			—		4.90
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁴⁾		3.72			4.37			—		4.90
Fund — Class IS Shares w/o sales charges⁽⁴⁾		5.84			5.56			—		6.09
MSCI Emerging Markets Small Cap Net Index		19.29			8.19			—		9.07
Lipper Emerging Markets Funds Index		20.52			13.43			—		13.57

⁽¹⁾ The MSCI Emerging Markets Small Cap Net Index is a free float-adjusted market capitalization weighted index that is designed to measure small cap equity market performance of emerging markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

	Shares		Value (000)
Common Stocks (98.4%)
Brazil (8.5%)
Afya Ltd., Class A (a)		63,023	$	1,595
Ambipar Participacoes e Empreendimentos S/A (a)		211,327		1,076
Boa Vista Serviscos SA		463,139		1,129
Neogrid Participacoes SA (a)		302,496		416
Pet Center Comercio e Participacoes SA		239,392		878
Randon SA Implementos e Participacoes (Preference)		273,500		851
TOTVS SA		229,537		1,272
				7,217
China (12.4%)
360 DigiTech, Inc. (a)		72,778		858
A-Living Smart City Services Co., Ltd. H Shares (b)		207,250		920
Beijing Thunisoft Corp., Ltd., Class A		307,522		1,124
China Education Group Holdings Ltd. (b)		789,000		1,522
China New Higher Education Group Ltd. (b)		2,546,000		1,587
Jiangsu Nhwa Pharmaceutical Co. Ltd., Class A		310,008		756
Jinke Smart Services Group Co. Ltd. H Shares (a)(b)		139,200		1,120
New Frontier Health Corp. (a)		95,246		819
Sichuan Swellfun Co. Ltd., Class A		72,100		916
Zhou Hei Ya International Holdings Co., Ltd. (a)(b)		860,000		915
				10,537
Egypt (4.7%)
Cairo Investment & Real Estate Development Co. SAE		1,655,254		1,498
Edita Food Industries SAE		2,726,889		1,541
Fawry for Banking & Payment Technology Services SAE (a)		443,828		949
				3,988
Hong Kong (4.9%)
Archosaur Games, Inc. (a)		325,000		882
Baozun, Inc., Class A (a)		172,866		1,983
Yeahka Ltd. (a)(c)		264,400		1,285
				4,150
India (17.1%)
Blue Star Ltd.		84,347		927
Can Fin Homes Ltd.		264,800		1,810
Cholamandalam Investment and Finance Co., Ltd.		338,309		1,797
Dr Lal PathLabs Ltd.		26,120		825
Gulf Oil Lubricants India Ltd.		90,927		896
Happiest Minds Technologies Ltd. (a)		186,211		879
Indiamart Intermesh Ltd.		11,695		1,029
Info Edge India Ltd.		16,351		1,067
Spandana Sphoorty Financial Ltd. (a)		161,271		1,657
SpiceJet Ltd. (a)		583,794		761
Subros Ltd.		229,922		1,081

	Shares		Value (000)
TCI Express Ltd.		72,331	$	918
Varun Beverages Ltd.		68,035		854
				14,501
Indonesia (5.3%)
Bank BTPN Syariah Tbk PT		4,575,800		1,222
Map Aktif Adiperkasa PT (a)		5,706,300		988
Mitra Keluarga Karyasehat Tbk PT		6,768,300		1,316
Nippon Indosari Corpindo Tbk PT		9,845,300		953
				4,479
Kazakhstan (2.4%)
NAC Kazatomprom JSC GDR		112,940		2,035
Korea, Republic of (11.2%)
AfreecaTV Co., Ltd.		29,939		1,670
Douzone Bizon Co., Ltd.		8,268		792
Ezwel Co. Ltd.		123,928		1,240
KINX, Inc.		23,653		1,567
Nasmedia Co., Ltd.		32,232		909
Settle Bank, Inc./Korea		46,312		1,415
Studio Dragon Corp. (a)		12,859		1,098
Webcash Corp.		12,327		813
				9,504
Mexico (1.0%)
Grupo Aeroportuario del Centro Norte SAB de CV (a)		138,472		893
Pakistan (1.6%)
MCB Bank Ltd.		1,125,287		1,322
Philippines (2.7%)
Converge ICT Solutions, Inc. (a)		3,588,800		1,113
Shakey's Pizza Asia Ventures, Inc.		7,585,400		1,217
				2,330
Poland (2.4%)
11 bit studios SA (a)		9,342		1,188
LiveChat Software SA		30,835		868
				2,056
Russia (2.0%)
Detsky Mir PJSC		445,200		818
Ozon Holdings PLC ADR (a)		20,583		852
				1,670
South Africa (1.3%)
Transaction Capital Ltd.		663,240		1,129
Taiwan (14.6%)
Acer Cyber Security, Inc.		228,378		1,164
ASPEED Technology, Inc.		22,000		1,345
Chief Telecom, Inc.		131,000		1,656
eCloudvalley Digital Technology Co. Ltd.		190,058		1,152
Innodisk Corp.		210,300		1,245
Merida Industry Co., Ltd.		159,000		1,336
Poya International Co., Ltd.		77,492		1,590
Sunny Friend Environmental Technology Co., Ltd.		219,000		1,819
Voltronic Power Technology Corp.		26,250		1,049
				12,356

	Shares		Value (000)
Thailand (1.1%)
Srisawad Corp., PCL (Foreign Shares)		410,800	$	900
United Arab Emirates (1.9%)
Network International Holdings PLC (a)		351,208		1,583
United States (3.3%)
Arco Platform Ltd., Class A (a)(c)		33,795		1,199
Vasta Platform Ltd. (a)		112,798		1,636
				2,835
Total Common Stocks (Cost $69,871)				83,485
Short-Term Investment (2.2%)
Investment Company (2.2%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $1,893)		1,893,470		1,893
Total Investments (100.6%) (Cost $71,764) Including $991 of Securities Loaned (d)(e)				85,378
Liabilities in Excess of Other Assets (–0.6%)				(547	)
Net Assets (100.0%)			$	84,831

(a) Non-income producing security.

(b) Security trades on the Hong Kong exchange.

(d) The approximate fair value and percentage of net assets, $72,084,000 and 85.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $73,579,000. The aggregate gross unrealized appreciation is approximately $14,010,000 and the aggregate gross unrealized depreciation is approximately $2,211,000, resulting in net unrealized appreciation of approximately $11,799,000.

ADR American Depositary Receipt.

GDR Global Depositary Receipt.

PJSC Public Joint Stock Company.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $69,871)	$	83,485
Investment in Security of Affiliated Issuer, at Value (Cost $1,893)		1,893
Total Investments in Securities, at Value (Cost $71,764)		85,378
Foreign Currency, at Value (Cost $33)		33
Dividends Receivable		61
Receivable for Investments Sold		39
Receivable for Fund Shares Sold		29
Receivable from Securities Lending Income		7
Tax Reclaim Receivable		—	@
Receivable from Affiliate		—	@
Other Assets		45
Total Assets		85,592
Liabilities:
Deferred Capital Gain Country Tax		555
Payable for Advisory Fees		124
Payable for Custodian Fees		38
Payable for Professional Fees		23
Payable for Sub Transfer Agency Fees — Class I		4
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		6
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Fund Shares Redeemed		3
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		7
Total Liabilities		761
Net Assets	$	84,831
Net Assets Consist of:
Paid-in-Capital	$	80,215
Total Distributable Earnings		4,616
Net Assets	$	84,831

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	84,535
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		6,817,197
Net Asset Value, Offering and Redemption Price Per Share	$	12.40
CLASS A:
Net Assets	$	256
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		20,804
Net Asset Value, Redemption Price Per Share	$	12.29
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.68
Maximum Offering Price Per Share	$	12.97
CLASS C:
Net Assets	$	27
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,220
Net Asset Value, Offering and Redemption Price Per Share	$	12.04
CLASS IS:
Net Assets	$	13
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,024
Net Asset Value, Offering and Redemption Price Per Share	$	12.40
⁽¹⁾ Including: Securities on Loan, at Value:	$	991

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $127 of Foreign Taxes Withheld)	$	624
Income from Securities Loaned — Net		34
Dividends from Security of Affiliated Issuer (Note G)		8
Total Investment Income		666
Expenses:
Advisory Fees (Note B)		826
Professional Fees		138
Custodian Fees (Note F)		137
Registration Fees		56
Administration Fees (Note C)		53
Sub Transfer Agency Fees — Class I		40
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class C		—	@
Shareholder Reporting Fees		15
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Directors' Fees and Expenses		5
Pricing Fees		5
Shareholder Services Fees — Class A (Note D)		1
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Interest Expenses		3
Other Expenses		15
Total Expenses		1,302
Waiver of Advisory Fees (Note B)		(424	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(11	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(3	)
Net Expenses		858
Net Investment Loss		(192	)
Realized Loss:
Investments Sold		(4,745	)
Foreign Currency Forward Exchange Contracts		(39	)
Foreign Currency Translation		(170	)
Net Realized Loss		(4,954	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $534)		7,583
Foreign Currency Forward Exchange Contracts		22
Foreign Currency Translation		11
Net Change in Unrealized Appreciation (Depreciation)		7,616
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		2,662
Net Increase in Net Assets Resulting from Operations	$	2,470

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(192	)	$	475
Net Realized Loss		(4,954	)		(363	)
Net Change in Unrealized Appreciation (Depreciation)		7,616			7,401
Net Increase in Net Assets Resulting from Operations		2,470			7,513
Dividends and Distributions to Shareholders:
Class I		(1,482	)		(276	)
Class A		(4	)		(—	@)
Class C		(—	@)		—
Class IS		(—	@)		(42	)
Total Dividends and Distributions to Shareholders		(1,486	)		(318	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		32,697			7,917
Distributions Reinvested		897			192
Redeemed		(10,537	)		(3,998	)
Class A:
Subscribed		78			85
Distributions Reinvested		4			—	@
Redeemed		(67	)		(59	)
Class C:
Distributions Reinvested		—	@		—
Redeemed		(11	)		—
Class IS:
Distributions Reinvested		—	@		42
Redeemed		(7,045	)		—
Net Increase in Net Assets Resulting from Capital Share Transactions		16,016			4,179
Redemption Fees		1			—	@
Total Increase in Net Assets		17,001			11,374
Net Assets:
Beginning of Period		67,830			56,456
End of Period	$	84,831		$	67,830
(1) Capital Share Transactions:
Class I:
Shares Subscribed		2,922			693
Shares Issued on Distributions Reinvested		73			16
Shares Redeemed		(1,153	)		(349	)
Net Increase in Class I Shares Outstanding		1,842			360
Class A:
Shares Subscribed		8			8
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		(7	)		(5	)
Net Increase in Class A Shares Outstanding		1			3
Class C:
Shares Issued on Distributions Reinvested		—	@@		—
Shares Redeemed		(1	)		—
Net Decrease in Class C Shares Outstanding		(1	)		—
Class IS:
Shares Issued on Distributions Reinvested		—	@@		4
Shares Redeemed		(688	)		—
Net Increase (Decrease) in Class IS Shares Outstanding		(688	)		4

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016
Net Asset Value, Beginning of Period	$	11.93		$	10.61		$	12.77		$	9.85		$	10.28
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽¹⁾		(0.03	)		0.09			0.02			(0.01	)		0.02
Net Realized and Unrealized Gain (Loss)		0.72			1.29			(2.01	)		3.38			(0.35	)
Total from Investment Operations		0.69			1.38			(1.99	)		3.37			(0.33	)
Distributions from and/or in Excess of:
Net Investment Income		(0.22	)		(0.06	)		—			—			(0.10	)
Net Realized Gain		—			—			(0.17	)		(0.45	)		—
Total Distributions		(0.22	)		(0.06	)		(0.17	)		(0.45	)		(0.10	)
Redemption Fees		0.00	⁽²⁾		0.00	⁽²⁾		0.00	⁽²⁾		—			—
Net Asset Value, End of Period	$	12.40		$	11.93		$	10.61		$	12.77		$	9.85
Total Return⁽³⁾		5.80	%		12.98	%		(15.73	)%		34.29	%		(3.19	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	84,535		$	59,335		$	48,965		$	25,762		$	19,673
Ratio of Expenses Before Expense Limitation		1.96	%		1.83	%		2.18	%		2.58	%		2.63	%
Ratio of Expenses After Expense Limitation		1.30	%⁽⁴⁾		1.30	%⁽⁴⁾		1.41	%⁽⁴⁾⁽⁵⁾		1.57	%⁽⁴⁾		1.61	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.30	%⁽⁴⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.31	)%⁽⁴⁾		0.74	%⁽⁴⁾		0.14	%⁽⁴⁾		(0.09	)%⁽⁴⁾		0.16	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.01	%		0.04	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		140	%		69	%		70	%		71	%		69	%

(1) Per share amount is based on average shares outstanding.

(2) Amount is less than $0.005 per share.

(3) Calculated based on the net asset value as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5) Effective July 13, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.30% for Class I shares. Prior to July 13, 2018, the maximum ratio was 1.65% for Class I shares.

(6) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016
Net Asset Value, Beginning of Period	$	11.83		$	10.53		$	12.72		$	9.85		$	10.28
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽¹⁾		(0.07	)		0.05			(0.01	)		(0.06	)		(0.02	)
Net Realized and Unrealized Gain (Loss)		0.71			1.27			(2.01	)		3.38			(0.35	)
Total from Investment Operations		0.64			1.32			(2.02	)		3.32			(0.37	)
Distributions from and/or in Excess of:
Net Investment Income		(0.18	)		(0.02	)		—			—			(0.06	)
Net Realized Gain		—			—			(0.17	)		(0.45	)		—
Total Distributions		(0.18	)		(0.02	)		(0.17	)		(0.45	)		(0.06	)
Redemption Fees		0.00	⁽²⁾		0.00	⁽²⁾		0.00	⁽²⁾		—			—
Net Asset Value, End of Period	$	12.29		$	11.83		$	10.53		$	12.72		$	9.85
Total Return⁽³⁾		5.43	%		12.51	%		(16.03	)%		33.79	%		(3.58	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	256		$	233		$	179		$	188		$	10
Ratio of Expenses Before Expense Limitation		3.27	%		2.88	%		3.49	%		12.38	%		22.65	%
Ratio of Expenses After Expense Limitation		1.65	%⁽⁴⁾		1.65	%⁽⁴⁾		1.83	%⁽⁴⁾⁽⁵⁾		1.96	%⁽⁴⁾		2.00	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.65	%⁽⁴⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.61	)%⁽⁴⁾		0.42	%⁽⁴⁾		(0.11	)%⁽⁴⁾		(0.50	)%⁽⁴⁾		(0.22	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.01	%		0.04	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		140	%		69	%		70	%		71	%		69	%

(1) Per share amount is based on average shares outstanding.

(2) Amount is less than $0.005 per share.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5) Effective July 13, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.65% for Class A shares. Prior to July 13, 2018, the maximum ratio was 2.00% for Class A shares.

(6) Amount is less than 0.005%.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016
Net Asset Value, Beginning of Period	$	11.56		$	10.35		$	12.60		$	9.84		$	10.28
Income (Loss) from Investment Operations:
Net Investment Loss⁽¹⁾		(0.14	)		(0.04	)		(0.10	)		(0.15	)		(0.10	)
Net Realized and Unrealized Gain (Loss)		0.69			1.25			(1.98	)		3.36			(0.34	)
Total from Investment Operations		0.55			1.21			(2.08	)		3.21			(0.44	)
Distributions from and/or in Excess of:
Net Investment Income		(0.07	)		—			—			—			—
Net Realized Gain		—			—			(0.17	)		(0.45	)		—
Total Distributions		(0.07	)		—			(0.17	)		(0.45	)		—
Redemption Fees		0.00	⁽²⁾		0.00	⁽²⁾		0.00	⁽²⁾		—			—
Net Asset Value, End of Period	$	12.04		$	11.56		$	10.35		$	12.60		$	9.84
Total Return⁽³⁾		4.72	%		11.69	%		(16.66	)%		32.70	%		(4.28	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	27		$	37		$	33		$	24		$	10
Ratio of Expenses Before Expense Limitation		9.92	%		8.37	%		9.02	%		20.48	%		23.48	%
Ratio of Expenses After Expense Limitation		2.40	%⁽⁴⁾		2.40	%⁽⁴⁾		2.58	%⁽⁴⁾⁽⁵⁾		2.71	%⁽⁴⁾		2.75	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		2.40	%⁽⁴⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.30	)%⁽⁴⁾		(0.36	)%⁽⁴⁾		(0.84	)%⁽⁴⁾		(1.27	)%⁽⁴⁾		(0.99	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.01	%		0.04	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		140	%		69	%		70	%		71	%		69	%

(1) Per share amount is based on average shares outstanding.

(2) Amount is less than $0.005 per share.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective July 13, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.40% for Class C shares. Prior to July 13, 2018, the maximum ratio was 2.75% for Class C shares.

(6) Amount is less than 0.005%.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016
Net Asset Value, Beginning of Period	$	11.93		$	10.62		$	12.77		$	9.85		$	10.28
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽¹⁾		0.01			0.09			0.00	⁽²⁾		(0.01	)		0.02
Net Realized and Unrealized Gain (Loss)		0.68			1.28			(1.98	)		3.38			(0.35	)
Total from Investment Operations		0.69			1.37			(1.98	)		3.37			(0.33	)
Distributions from and/or in Excess of:
Net Investment Income		(0.22	)		(0.06	)		—			—			(0.10	)
Net Realized Gain		—			—			(0.17	)		(0.45	)		—
Total Distributions		(0.22	)		(0.06	)		(0.17	)		(0.45	)		(0.10	)
Redemption Fees		0.00	⁽²⁾		0.00	⁽²⁾		0.00	⁽²⁾		—			—
Net Asset Value, End of Period	$	12.40		$	11.93		$	10.62		$	12.77		$	9.85
Total Return⁽³⁾		5.84	%		12.93	%		(15.65	)%		34.29	%		(3.18	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	13		$	8,225		$	7,279		$	13		$	10
Ratio of Expenses Before Expense Limitation		1.96	%		1.78	%		2.10	%		19.47	%		21.37	%
Ratio of Expenses After Expense Limitation		1.25	%⁽⁴⁾		1.25	%⁽⁴⁾		1.26	%⁽⁴⁾⁽⁵⁾		1.55	%⁽⁴⁾		1.60	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.25	%⁽⁴⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		0.05	%⁽⁴⁾		0.79	%⁽⁴⁾		0.03	%⁽⁴⁾		(0.08	)%⁽⁴⁾		0.16	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.01	%		0.05	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		140	%		69	%		70	%		71	%		69	%

(1) Per share amount is based on average shares outstanding.

(2) Amount is less than $0.005 per share.

(3) Calculated based on the net asset value as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5) Effective July 13, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class IS shares. Prior to July 13, 2018, the maximum ratio was 1.60% for Class IS shares.

(6) Amount is less than 0.005%.

The accompanying financial statements relate to the Emerging Markets Small Cap Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined

in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	918	$	—	$	918
Airlines		—		761		—		761
Auto Components		—		1,081		—		1,081
Banks		—		2,544		—		2,544
Beverages		—		1,770		—		1,770
Building Products		—		927		—		927
Chemicals		—		896		—		896
Commercial Services & Supplies		—		3,815		—		3,815
Computers & Peripherals		—		1,245		—		1,245
Consumer Finance		858		5,483		—		6,341
Diversified Consumer Services		4,430		4,607		—		9,037

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Diversified Telecommunication Services	$	1,113	$	3,223	$	—	$	4,336
Electrical Equipment		—		1,049		—		1,049
Entertainment		—		3,168		—		3,168
Food Products		—		3,409		—		3,409
Health Care Providers & Services		819		2,141		—		2,960
Hotels, Restaurants & Leisure		—		1,217		—		1,217
Information Technology Services		—		8,427		—		8,427
Interactive Media & Services		—		2,737		—		2,737
Internet & Direct Marketing Retail		852		1,983		—		2,835
Leisure Products		—		1,336		—		1,336
Machinery		—		851		—		851
Media		—		909		—		909
Multi-Line Retail		—		1,590		—		1,590
Oil, Gas & Consumable Fuels		—		2,035		—		2,035
Pharmaceuticals		—		756		—		756
Professional Services		—		1,129		—		1,129
Real Estate Management & Development		1,120		—		—		1,120
Semiconductors & Semiconductor Equipment		—		1,345		—		1,345
Software		416		6,109		—		6,525
Specialty Retail		—		2,684		—		2,684
Thrifts & Mortgage Finance		—		1,810		—		1,810
Trading Companies & Distributors		—		1,029		—		1,029
Transportation Infrastructure		893		—		—		893
Total Common Stocks		10,501		72,984		—		83,485
Short-Term Investment
Investment Company		1,893		—		—		1,893
Total Assets	$	12,394	$	72,984	$	—	$	85,378

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

A significant portion of the Fund's net assets consist of securities of issuers located in emerging markets, which are denominated in foreign currencies. Such securities may be concentrated in a limited number of countries and regions and may vary throughout the year. Changes in currency exchange rates will affect the value of securities and investment income from foreign currency denominated securities. Emerging market securities are often subject to greater price volatility, limited capitalization and liquidity, and higher rates of inflation than securities of companies based in the U.S. In addition, emerging market issuers may be subject to substantial governmental involvement in the economy and greater social, economic and political uncertainty.

satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seek to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

As of December 31, 2020, the Fund did not have any open foreign currency forward exchange contracts.

The following tables set forth by primary risk exposure the Fund's change in unrealized appreciation (depreciation) by type of derivative contract for the year ended December 31, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(39	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	22

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount				$	1,580,000

5. Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	991	(a)	$	—	$	(991	)(b)(c)	$	0

(a) Represents market value of loaned securities at period end.

(b) The Fund received non-cash collateral of approximately $1,052,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

6. Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

or losses pursuant to these contracts and expects the risk of loss to be remote.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 1.25% of the average daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.30% for Class I shares, 1.65% for Class A shares, 2.40% for Class C shares and 1.25% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $424,000 of advisory fees were waived and

approximately $17,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $104,833,000 and $91,412,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $3,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	1,586			$	100,383			$	100,076			$	8

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	1,893

provisions of the Rule. For the year ended December 31, 2020, the Fund did not engage in any cross-trade transactions.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for

tax purposes. The tax character of distributions paid during fiscal years 2020 and 2019 was as follows:

2020 Distributions Paid From:		2019 Distributions Paid From:
Ordinary Income (000)		Ordinary Income (000)
$	1,486	$	318

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	1,924			$	—

At December 31, 2020, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $5,897,000 and $2,574,000, respectively, that do not have an expiration date.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Emerging Markets Small Cap Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Emerging Markets Small Cap Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Emerging Markets Small Cap Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Frontier Markets Portfolio Class I	$	1,000.00	$	1,248.20	$	1,015.58	$	10.74	$	9.63		1.90	%
Frontier Markets Portfolio Class A		1,000.00		1,246.10		1,013.83		12.70		11.39		2.25
Frontier Markets Portfolio Class L		1,000.00		1,243.40		1,011.31		15.51		13.90		2.75
Frontier Markets Portfolio Class C		1,000.00		1,241.60		1,010.05		16.90		15.16		3.00
Frontier Markets Portfolio Class IS		1,000.00		1,248.20		1,015.84		10.45		9.37		1.85

** Annualized.

Performance Compared to the MSCI Frontier Markets Net Index⁽¹⁾ and the Lipper Frontier Markets Funds Average⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁸⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		14.02	%		4.49	%		3.62	%		1.63	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		13.57			4.14			—			5.53
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		7.61			3.02			—			4.85
Fund — Class L Shares w/o sales charges⁽⁵⁾		13.01			3.55			—			4.92
Fund — Class C Shares w/o sales charges⁽⁷⁾		12.74			3.35			—			0.22
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁷⁾		11.74			3.35			—			0.22
Fund — Class IS Shares w/o sales charges⁽⁶⁾		14.02			4.52			—			1.77
MSCI Frontier Markets Net Index		1.43			6.25			3.26			–0.20
Lipper Frontier Markets Funds Average		6.79			4.82			1.97			1.09

⁽¹⁾The MSCI Frontier Markets Net Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of frontier markets. The MSCI Frontier Markets Net Index currently consists of 27 frontier market country indices. The performance of the Index is calculated in U.S. dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Frontier Markets Funds Average tracks the performance of all funds in the Lipper Frontier Markets Funds classification. The Average, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. As of the date of this report, the Fund was in the Lipper Frontier Markets Funds classification.

⁽³⁾Total returns for the Fund reflect fees waived and expenses reimbursed, if applicable, by the Adviser (as defined herein). Without such waivers and reimbursements, total returns would have been lower.

	Shares		Value (000)
Common Stocks (100.4%)
Argentina (4.4%)
Globant SA (a)		13,316	$	2,898
Bangladesh (2.3%)
Brac Bank Ltd.		2,919,340		1,527
Egypt (8.6%)
Cairo Investment & Real Estate Development Co. SAE		1,161,175		1,051
Commercial International Bank Egypt SAE		793,190		2,996
Edita Food Industries SAE		567,322		321
Fawry for Banking & Payment Technology Services SAE (a)		576,996		1,233
				5,601
Kazakhstan (5.6%)
Halyk Savings Bank of Kazakhstan JSC GDR		55,021		641
Kaspi.KZ JSC GDR (a)		15,453		1,037
NAC Kazatomprom JSC GDR		108,118		1,948
				3,626
Kenya (4.9%)
Safaricom PLC		10,234,055		3,200
Kuwait (1.2%)
National Bank of Kuwait		289,848		801
Morocco (3.0%)
Label Vie		3,674		1,321
Maroc Telecom		20,326		330
Societe d'Exploitation des Ports		14,287		336
				1,987
Nigeria (1.9%)
Nestle Nigeria PLC		405,894		1,256
Pakistan (2.1%)
MCB Bank Ltd.		1,177,878		1,384
Peru (2.3%)
Credicorp Ltd.		9,141		1,499
Poland (3.6%)
11 bit studios SA (a)		9,688		1,232
LiveChat Software SA		39,717		1,118
				2,350
Romania (4.6%)
Banca Transilvania SA		3,980,312		2,253
Societatea Nationala de Gaze Naturale Romgaz SA		109,265		771
				3,024
Russia (3.9%)
TCS Group Holding PLC GDR		76,901		2,530
Singapore (11.6%)
Sea Ltd. ADR (a)		37,971		7,558
Slovenia (3.7%)
Krka dd Novo mesto		21,787		2,435
United Arab Emirates (1.2%)
Network International Holdings PLC (a)		173,409		781

	Shares		Value (000)
United Kingdom (4.2%)
Avast PLC		369,815	$	2,715
United States (9.6%)
MercadoLibre, Inc. (a)		3,767		6,311
Vietnam (21.7%)
Bank for Foreign Trade of Vietnam JSC		777,710		3,305
FPT Corp.		528,436		1,477
Mobile World Investment Corp.		619,463		3,690
Sai Gon Cargo Service Corp.		265,470		1,473
Saigon Beer Alcohol Beverage Corp.		169,320		1,430
Vietnam Dairy Products JSC		605,592		2,857
				14,232
Total Common Stocks (Cost $42,901)				65,715
Short-Term Investment (0.5%)
Investment Company (0.5%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $356)		356,371		356
Total Investments (100.9%) (Cost $43,257) (b)(c)				66,071
Liabilities in Excess of Other Assets (–0.9%)				(563	)
Net Assets (100.0%)			$	65,508

(a) Non-income producing security.

(b) The approximate fair value and percentage of net assets, $39,297,000 and 60.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $44,329,000. The aggregate gross unrealized appreciation is approximately $23,446,000 and the aggregate gross unrealized depreciation is approximately $1,708,000, resulting in net unrealized appreciation of approximately $21,738,000.

ADR American Depositary Receipt.

GDR Global Depositary Receipt.

Portfolio Composition

Classification	Percentage of Total Investments
Banks		25.6	%
Other*		23.7
Entertainment		13.3
Information Technology Services		9.7
Internet & Direct Marketing Retail		9.6
Food Products		6.7
Software		5.8
Specialty Retail		5.6
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $42,901)	$	65,715
Investment in Security of Affiliated Issuer, at Value (Cost $356)		356
Total Investments in Securities, at Value (Cost $43,257)		66,071
Foreign Currency, at Value (Cost $25)		21
Cash		21
Dividends Receivable		35
Receivable for Fund Shares Sold		18
Tax Reclaim Receivable		—	@
Receivable from Affiliate		—	@
Other Assets		63
Total Assets		66,229
Liabilities:
Payable for Advisory Fees		289
Payable for Fund Shares Redeemed		269
Payable for Custodian Fees		79
Payable for Professional Fees		27
Payable for Sub Transfer Agency Fees — Class I		7
Payable for Sub Transfer Agency Fees — Class A		1
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		5
Payable for Transfer Agency Fees — Class I		2
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		1
Payable for Shareholder Services Fees — Class A		2
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		1
Other Liabilities		36
Total Liabilities		721
Net Assets	$	65,508
Net Assets Consist of:
Paid-in-Capital	$	129,642
Total Accumulated Loss		(64,134	)
Net Assets	$	65,508

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	55,533
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,849,082
Net Asset Value, Offering and Redemption Price Per Share	$	19.49
CLASS A:
Net Assets	$	8,436
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		433,157
Net Asset Value, Redemption Price Per Share	$	19.47
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.08
Maximum Offering Price Per Share	$	20.55
CLASS L:
Net Assets	$	378
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		19,548
Net Asset Value, Offering and Redemption Price Per Share	$	19.34
CLASS C:
Net Assets	$	843
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		44,382
Net Asset Value, Offering and Redemption Price Per Share	$	18.99
CLASS IS:
Net Assets	$	318
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		16,320
Net Asset Value, Offering and Redemption Price Per Share	$	19.49

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $109 of Foreign Taxes Withheld)	$	1,662
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		1,662
Expenses:
Advisory Fees (Note B)		956
Custodian Fees (Note F)		246
Sub Transfer Agency Fees — Class I		60
Sub Transfer Agency Fees — Class A		11
Sub Transfer Agency Fees — Class L		—-	@
Sub Transfer Agency Fees — Class C		1
Professional Fees		172
Registration Fees		70
Administration Fees (Note C)		61
Shareholder Services Fees — Class A (Note D)		21
Distribution and Shareholder Services Fees — Class L (Note D)		3
Distribution and Shareholder Services Fees — Class C (Note D)		7
Shareholder Reporting Fees		25
Transfer Agency Fees — Class I (Note E)		10
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Pricing Fees		2
Interest Expenses		41
Other Expenses		14
Total Expenses		1,709
Waiver of Advisory Fees (Note B)		(170	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(37	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		1,494
Net Investment Income		168
Realized Loss:
Investments Sold		(2,959	)
Foreign Currency Translation		(355	)
Net Realized Loss		(3,314	)
Change in Unrealized Appreciation (Depreciation):
Investments		(3,314	)
Foreign Currency Translation		(3	)
Net Change in Unrealized Appreciation (Depreciation)		(3,317	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(6,631	)
Net Decrease in Net Assets Resulting from Operations	$	(6,463	)

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	168		$	4,621
Net Realized Loss		(3,314	)		(477	)
Net Change in Unrealized Appreciation (Depreciation)		(3,317	)		23,772
Net Increase (Decrease) in Net Assets Resulting from Operations		(6,463	)		27,916
Dividends and Distributions to Shareholders:
Class I		(20	)		(3,717	)
Class A		(3	)		(261	)
Class L		(—	@)		(10	)
Class C		(—	@)		(21	)
Class IS		(—	@)		(46	)
Total Dividends and Distributions to Shareholders		(23	)		(4,055	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		8,168			18,572
Distributions Reinvested		19			3,144
Redeemed		(71,098	)		(145,539	)
Class A:
Subscribed		708			5,119
Distributions Reinvested		3			261
Redeemed		(4,888	)		(31,321	)
Class L:
Distributions Reinvested		—	@		10
Redeemed		(229	)		(780	)
Class C:
Subscribed		40			29
Distributions Reinvested		—	@		21
Redeemed		(153	)		(977	)
Class IS:
Subscribed		315			307
Distributions Reinvested		—	@		46
Redeemed		(1,743	)		(3,781	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(68,858	)		(154,889	)
Redemption Fees		1			6
Total Decrease in Net Assets		(75,343	)		(131,022	)
Net Assets:
Beginning of Period		140,851			271,873
End of Period	$	65,508		$	140,851

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		520			1,103
Shares Issued on Distributions Reinvested		1			184
Shares Redeemed		(5,028	)		(8,625	)
Net Decrease in Class I Shares Outstanding		(4,507	)		(7,338	)
Class A:
Shares Subscribed		45			299
Shares Issued on Distributions Reinvested		—	@@		15
Shares Redeemed		(314	)		(1,832	)
Net Decrease in Class A Shares Outstanding		(269	)		(1,518	)
Class L:
Shares Issued on Distributions Reinvested		—	@@		1
Shares Redeemed		(14	)		(47	)
Net Decrease in Class L Shares Outstanding		(14	)		(46	)
Class C:
Shares Subscribed		2			2
Shares Issued on Distributions Reinvested		—	@@		1
Shares Redeemed		(10	)		(59	)
Net Decrease in Class C Shares Outstanding		(8	)		(56	)
Class IS:
Shares Subscribed		20			18
Shares Issued on Distributions Reinvested		—	@@		3
Shares Redeemed		(96	)		(225	)
Net Decrease in Class IS Shares Outstanding		(76	)		(204	)

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	17.10		$	15.63		$	21.02		$	17.39		$	16.98
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.04			0.39			0.33			0.16			0.31
Net Realized and Unrealized Gain (Loss)		2.36			1.58			(5.07	)		3.47			0.33
Total from Investment Operations		2.40			1.97			(4.74	)		3.63			0.64
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.50	)		(0.65	)		—			(0.23	)
Paid-in-Capital		—			—			—			—			(0.00	)⁽³⁾
Total Distributions		(0.01	)		(0.50	)		(0.65	)		—			(0.23	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	19.49		$	17.10		$	15.63		$	21.02		$	17.39
Total Return⁽⁴⁾		14.02	%		12.53	%		(22.60	)%		20.82	%		3.83	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	55,533		$	125,780		$	229,688		$	632,435		$	525,664
Ratio of Expenses Before Expense Limitation		2.13	%		1.92	%		N/A			N/A			1.69	%
Ratio of Expenses After Expense Limitation		1.90	%⁽⁵⁾⁽⁶⁾		1.90	%⁽⁵⁾⁽⁶⁾		1.77	%⁽⁵⁾		1.73	%⁽⁵⁾		1.67	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.85	%⁽⁵⁾		1.85	%⁽⁵⁾		1.76	%⁽⁵⁾		1.73	%⁽⁵⁾		N/A
Ratio of Net Investment Income		0.24	%⁽⁵⁾		2.33	%⁽⁵⁾		1.68	%⁽⁵⁾		0.82	%⁽⁵⁾		1.82	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		56	%		68	%		61	%		52	%		30	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Ratio is above the expense limitation due to interest expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	17.15		$	15.61		$	20.86		$	17.31		$	16.90
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.01			0.42			0.34			0.11			0.24
Net Realized and Unrealized Gain (Loss)		2.32			1.48			(5.10	)		3.44			0.35
Total from Investment Operations		2.33			1.90			(4.76	)		3.55			0.59
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.36	)		(0.49	)		—			(0.18	)
Paid-in-Capital		—			—			—			—			(0.00	)⁽³⁾
Total Distributions		(0.01	)		(0.36	)		(0.49	)		—			(0.18	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	19.47		$	17.15		$	15.61		$	20.86		$	17.31
Total Return⁽⁴⁾		13.57	%		12.13	%		(22.80	)%		20.39	%		3.49	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8,436		$	12,044		$	34,654		$	86,324		$	90,817
Ratio of Expenses Before Expense Limitation		2.44	%		2.23	%		N/A			N/A			2.03	%
Ratio of Expenses After Expense Limitation		2.26	%⁽⁵⁾⁽⁶⁾		2.25	%⁽⁵⁾⁽⁶⁾		2.07	%⁽⁵⁾		2.05	%⁽⁵⁾		2.01	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		2.20	%⁽⁵⁾		2.20	%⁽⁵⁾		2.06	%⁽⁵⁾		2.05	%⁽⁵⁾		N/A
Ratio of Net Investment Income		0.07	%⁽⁵⁾		2.48	%⁽⁵⁾		1.71	%⁽⁵⁾		0.59	%⁽⁵⁾		1.40	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		56	%		68	%		61	%		52	%		30	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(7) Amount is less than 0.005%.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	17.11		$	15.59		$	20.65		$	17.25		$	16.79
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.06	)		0.25			0.17			(0.02	)		0.15
Net Realized and Unrealized Gain (Loss)		2.30			1.56			(4.98	)		3.42			0.32
Total from Investment Operations		2.24			1.81			(4.81	)		3.40			0.47
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.29	)		(0.25	)		—			(0.01	)
Paid-in-Capital		—			—			—			—			(0.00	)⁽³⁾
Total Distributions		(0.01	)		(0.29	)		(0.25	)		—			(0.01	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	19.34		$	17.11		$	15.59		$	20.65		$	17.25
Total Return⁽⁴⁾		13.01	%		11.58	%		(23.19	)%		19.59	%		2.77	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	378		$	570		$	1,241		$	2,570		$	2,630
Ratio of Expenses Before Expense Limitation		3.44	%		2.90	%		N/A			2.76	%		2.80	%
Ratio of Expenses After Expense Limitation		2.76	%⁽⁵⁾⁽⁶⁾		2.75	%⁽⁵⁾⁽⁶⁾		2.57	%⁽⁵⁾		2.70	%⁽⁵⁾		2.70	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		2.70	%⁽⁵⁾		2.70	%⁽⁵⁾		2.56	%⁽⁵⁾		2.70	%⁽⁵⁾		N/A
Ratio of Net Investment Income (Loss)		(0.39	)%⁽⁵⁾		1.47	%⁽⁵⁾		0.88	%⁽⁵⁾		(0.13	)%⁽⁵⁾		0.88	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		56	%		68	%		61	%		52	%		30	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(7) Amount is less than 0.005%.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	16.85		$	15.38		$	20.41		$	17.07		$	16.69
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.10	)		0.20			0.11			(0.05	)		0.10
Net Realized and Unrealized Gain (Loss)		2.25			1.56			(4.90	)		3.39			0.34
Total from Investment Operations		2.15			1.76			(4.79	)		3.34			0.44
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.29	)		(0.24	)		—			(0.06	)
Paid-in-Capital		—			—			—			—			(0.00	)⁽³⁾
Total Distributions		(0.01	)		(0.29	)		(0.24	)		—			(0.06	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	18.99		$	16.85		$	15.38		$	20.41		$	17.07
Total Return⁽⁴⁾		12.74	%		11.34	%		(23.42	)%		19.51	%		2.63	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	843		$	877		$	1,657		$	2,857		$	1,925
Ratio of Expenses Before Expense Limitation		3.42	%		3.07	%		N/A			N/A			2.89	%
Ratio of Expenses After Expense Limitation		3.00	%⁽⁵⁾⁽⁶⁾		2.99	%⁽⁵⁾⁽⁶⁾		2.83	%⁽⁵⁾		2.81	%⁽⁵⁾		2.88	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		2.95	%⁽⁵⁾		2.95	%⁽⁵⁾		2.82	%⁽⁵⁾		2.81	%⁽⁵⁾		N/A
Ratio of Net Investment Income (Loss)		(0.66	)%⁽⁵⁾		1.17	%⁽⁵⁾		0.56	%⁽⁵⁾		(0.26	)%⁽⁵⁾		0.57	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		56	%		68	%		61	%		52	%		30	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(7) Amount is less than 0.005%.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	17.09		$	15.63		$	21.02		$	17.39		$	16.97
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.09			0.33			0.58			0.13			0.30
Net Realized and Unrealized Gain (Loss)		2.32			1.64			(5.33	)		3.50			0.36
Total from Investment Operations		2.41			1.97			(4.75	)		3.63			0.66
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.51	)		(0.64	)		—			(0.24	)
Paid-in-Capital		—			—			—			—			(0.00	)⁽³⁾
Total Distributions		(0.01	)		(0.51	)		(0.64	)		—			(0.24	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	19.49		$	17.09		$	15.63		$	21.02		$	17.39
Total Return⁽⁴⁾		14.02	%		12.60	%		(22.61	)%		20.83	%		3.88	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	318		$	1,580		$	4,633		$	16,344		$	12,055
Ratio of Expenses Before Expense Limitation		2.20	%		1.91	%		N/A			N/A			1.64	%
Ratio of Expenses After Expense Limitation		1.86	%⁽⁵⁾⁽⁶⁾		1.85	%⁽⁵⁾⁽⁶⁾		1.74	%⁽⁵⁾		1.69	%⁽⁵⁾		1.62	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.80	%⁽⁵⁾		1.80	%⁽⁵⁾		1.73	%⁽⁵⁾		1.69	%⁽⁵⁾		N/A
Ratio of Net Investment Income		0.55	%⁽⁵⁾		1.95	%⁽⁵⁾		2.85	%⁽⁵⁾		0.65	%⁽⁵⁾		1.75	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		56	%		68	%		61	%		52	%		30	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(7) Amount is less than 0.005%.

The accompanying financial statements relate to the Frontier Markets Portfolio. The Fund seeks long-term capital appreciation.

day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such

securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	1,473	$	—	$	1,473
Banks		1,499		15,437		—		16,936
Beverages		—		1,430		—		1,430
Consumer Finance		1,037		—		—		1,037
Diversified Consumer Services		—		1,051		—		1,051
Diversified Telecommunication Services		—		330		—		330
Entertainment		7,558		1,232		—		8,790
Food & Staples Retailing		—		1,321		—		1,321
Food Products		—		4,434		—		4,434
Information Technology Services		2,898		3,491		—		6,389
Internet & Direct Marketing Retail		6,311		—		—		6,311

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Oil, Gas & Consumable Fuels	$	—	$	2,719	$	—	$	2,719
Pharmaceuticals		—		2,435		—		2,435
Software		—		3,833		—		3,833
Specialty Retail		—		3,690		—		3,690
Transportation Infrastructure		—		336		—		336
Wireless Telecommunication Services		—		3,200		—		3,200
Total Common Stocks		19,303		46,412		—		65,715
Short-Term Investment
Investment Company		356		—		—		356
Total Assets	$	19,659	$	46,412	$	—	$	66,071

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stock (000)
Beginning Balance	$	920
Purchases		—
Sales		(2,017	)
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		5,952
Realized gains (losses)		(4,855	)
Ending Balance	$	—
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2020	$	—

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

4. Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

tion is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 1.25% of the daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.85% for Class I shares, 2.20% for Class A shares, 2.70% for Class L shares, 2.95% for Class C shares and 1.80% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $170,000 of advisory fees were waived and approximately $45,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

utor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

ments were approximately $43,767,000 and $112,474,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	—			$	11,322			$	10,966			$	—	@

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	356

@ Amount is less than $500.

2020 Distributions Paid From: Ordinary Income (000)				2019 Distributions Paid From: Ordinary Income (000)
$	23			$	4,055

Permanent differences, primarily due to a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Accumulated Loss (000)				Paid-in Capital (000)
$	186			$	(186	)

At December 31, 2020, the Fund had no distributable earnings on a tax basis.

At December 31, 2020, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $85,847,000 that do not have an expiration date.

J. Other: At December 31, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 53.8%.

K. Market Risk: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Frontier Markets Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Frontier Markets Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Frontier Markets Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Advantage Portfolio Class I	$	1,000.00	$	1,414.30	$	1,019.66	$	6.61	$	5.53		1.09	%
Global Advantage Portfolio Class A		1,000.00		1,412.50		1,018.50		8.00		6.70		1.32
Global Advantage Portfolio Class L		1,000.00		1,408.10		1,015.33		11.80		9.88		1.95
Global Advantage Portfolio Class C		1,000.00		1,407.30		1,014.73		12.53		10.48		2.07

** Annualized.

Performance Compared to the MSCI All Country World Net Index⁽¹⁾ and the Lipper Global Multi-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁶⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		94.98	%		27.94	%		19.09	%		19.09	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		94.46			27.53			18.71			18.71
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		84.29			26.16			18.08			18.07
Fund — Class L Shares w/o sales charges⁽⁴⁾		93.38			26.85			18.10			18.10
Fund — Class C Shares w/o sales charges⁽⁵⁾		92.97			26.53			—			22.41
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁵⁾		91.97			26.53			—			22.41
MSCI All Country World Net Index		16.25			12.26			9.13			9.19
Lipper Global Multi-Cap Growth Funds Index		36.37			16.21			10.95			11.01

⁽⁴⁾ Commenced operations on December 28, 2010.

⁽⁵⁾ Commenced offering on April 30, 2015.

⁽⁶⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of Class I of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (87.7%)
Australia (5.2%)
Afterpay Ltd. (a)		79,369	$	7,215
Redbubble Ltd. (a)		1,014,540		4,320
Xero Ltd. (a)		99,124		11,250
				22,785
Canada (6.2%)
FirstService Corp.		48,055		6,577
Shopify, Inc., Class A (a)		18,291		20,705
				27,282
France (4.1%)
Christian Dior SE		12,605		7,000
Hermes International		10,451		11,238
				18,238
Germany (1.5%)
Zalando SE (a)		61,299		6,818
India (3.6%)
HDFC Bank Ltd. ADR (a)		216,033		15,611
Japan (2.6%)
BASE, Inc. (a)		74,600		7,061
Demae-Can Co., Ltd. (a)		138,800		4,235
				11,296
Netherlands (4.5%)
Adyen N.V. (a)		8,580		19,936
Singapore (5.2%)
Sea Ltd. ADR (a)		114,092		22,710
United Kingdom (2.4%)
Atlassian Corp., PLC, Class A (a)		45,577		10,659
United States (52.4%)
Activision Blizzard, Inc.		72,231		6,707
Costco Wholesale Corp.		11,218		4,227
Coupa Software, Inc. (a)		30,675		10,396
Ecolab, Inc.		27,774		6,009
Farfetch Ltd., Class A (a)		334,047		21,316
HEICO Corp., Class A		45,485		5,325
IAC/InterActiveCorp (a)		18,347		3,474
Intercontinental Exchange, Inc.		23,760		2,739
Intuitive Surgical, Inc. (a)		19,118		15,640
Martin Marietta Materials, Inc.		20,246		5,749
MercadoLibre, Inc. (a)		12,912		21,630
Okta, Inc. (a)		32,078		8,156
Palantir Technologies, Inc. (a)		4,864		109
Royal Gold, Inc.		4,870		518
Royalty Pharma PLC, Class A		397,839		19,912
S&P Global, Inc.		13,554		4,456
Snowflake, Inc., Class A (a)		18,723		5,269
Spotify Technology SA (a)		64,842		20,403
Square, Inc., Class A (a)		70,418		15,326
Texas Pacific Land Trust		1,255		912
Twilio, Inc., Class A (a)		30,749		10,409
Twitter, Inc. (a)		295,623		16,008

	Shares		Value (000)
Veeva Systems, Inc., Class A (a)		58,300	$	15,872
Zoom Video Communications, Inc., Class A (a)		28,567		9,636
				230,198
Total Common Stocks (Cost $246,431)				385,533
Preferred Stocks (0.1%)
United States (0.1%)
Airbnb, Inc. Series D (a)(b) (acquisition cost — $78; acquired 4/16/14)		3,834		518
Lookout, Inc. Series F (a)(b)(c) (acquisition cost — $73; acquired 6/17/14)		6,374		20
Total Preferred Stocks (Cost $151)				538
Short-Term Investment (12.2%)
Investment Company (12.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $53,463)		53,463,141		53,463
Total Investments Excluding Purchased Options (100.0%) (Cost $300,045)				439,534
Total Purchased Options Outstanding (0.1%) (Cost $1,195)				254
Total Investments (100.1%) (Cost $301,240) (d)(e)				439,788
Liabilities in Excess of Other Assets (–0.1%)				(644	)
Net Assets (100.0%)			$	439,144

(a) Non-income producing security.

(b) Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Fund has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at December 31, 2020 amounts to approximately $538,000 and represents 0.1% of net assets.

(c) At December 31, 2020, the Fund held fair valued securities valued at approximately $20,000, representing less than 0.05% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(d) The approximate fair value and percentage of net assets, $79,073,000 and 18.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $305,128,000. The aggregate gross unrealized appreciation is approximately $140,862,000 and the aggregate gross unrealized depreciation is approximately $6,202,000, resulting in net unrealized appreciation of approximately $134,660,000.

ADR American Depositary Receipt.

Call Options Purchased:

The Fund had the following call options purchased open at December 31, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.99	Sep-21		47,104,572		47,105	$	45		$	285	$	(240	)
BNP Paribas	USD/CNH	CNH	7.64	Nov-21		64,087,776		64,088		175			348		(173	)
JP Morgan Chase Bank NA	USD/CNH	CNH	8.10	Jul-21		53,186,867		53,187		30			249		(219	)
JP Morgan Chase Bank NA	USD/CNH	CNH	8.49	May-21		29,023,770		29,024		4			169		(165	)
Royal Bank of Scotland	USD/CNH	CNH	7.75	Jan-21		32,872,723		32,873		—	@		144		(144	)
									$	254		$	1,195	$	(941	)

@ Value is less than $500.

CNH — Chinese Yuan Renminbi Offshore

USD — United States Dollar

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $247,777)	$	386,325
Investment in Security of Affiliated Issuer, at Value (Cost $53,463)		53,463
Total Investments in Securities, at Value (Cost $301,240)		439,788
Foreign Currency, at Value (Cost $4)		4
Receivable for Investments Sold		10,565
Receivable for Fund Shares Sold		1,364
Tax Reclaim Receivable		48
Dividends Receivable		29
Receivable from Affiliate		—	@
Other Assets		68
Total Assets		451,866
Liabilities:
Payable for Investments Purchased		10,992
Payable for Advisory Fees		752
Due to Broker		560
Payable for Fund Shares Redeemed		266
Payable for Shareholder Services Fees — Class A		20
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		17
Payable for Sub Transfer Agency Fees — Class I		26
Payable for Sub Transfer Agency Fees — Class A		9
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		1
Payable for Administration Fees		29
Payable for Professional Fees		17
Payable for Transfer Agency Fees — Class I		7
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		2
Payable for Custodian Fees		9
Other Liabilities		13
Total Liabilities		12,722
Net Assets	$	439,144
Net Assets Consist of:
Paid-in-Capital	$	263,084
Total Distributable Earnings		176,060
Net Assets	$	439,144

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	314,038
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		9,282,171
Net Asset Value, Offering and Redemption Price Per Share	$	33.83
CLASS A:
Net Assets	$	103,550
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,139,322
Net Asset Value, Redemption Price Per Share	$	32.98
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.83
Maximum Offering Price Per Share	$	34.81
CLASS L:
Net Assets	$	923
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		29,443
Net Asset Value, Offering and Redemption Price Per Share	$	31.34
CLASS C:
Net Assets	$	20,633
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		671,347
Net Asset Value, Offering and Redemption Price Per Share	$	30.73

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $20 of Foreign Taxes Withheld)	$	347
Dividends from Security of Affiliated Issuer (Note G)		15
Income from Securities Loaned — Net		4
Total Investment Income		366
Expenses:
Advisory Fees (Note B)		1,904
Shareholder Services Fees — Class A (Note D)		145
Distribution and Shareholder Services Fees — Class L (Note D)		5
Distribution and Shareholder Services Fees — Class C (Note D)		132
Sub Transfer Agency Fees — Class I		137
Sub Transfer Agency Fees — Class A		61
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		6
Administration Fees (Note C)		190
Professional Fees		124
Registration Fees		65
Transfer Agency Fees — Class I (Note E)		34
Transfer Agency Fees — Class A (Note E)		4
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		10
Shareholder Reporting Fees		29
Custodian Fees (Note F)		28
Directors' Fees and Expenses		4
Pricing Fees		3
Other Expenses		26
Total Expenses		2,909
Rebate from Morgan Stanley Affiliate (Note G)		(18	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Net Expenses		2,890
Net Investment Loss		(2,524	)
Realized Gain:
Investments Sold		53,472
Foreign Currency Translation		6
Net Realized Gain		53,478
Change in Unrealized Appreciation (Depreciation):
Investments		116,073
Foreign Currency Translation		16
Net Change in Unrealized Appreciation (Depreciation)		116,089
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		169,567
Net Increase in Net Assets Resulting from Operations	$	167,043

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(2,524	)	$	(400	)
Net Realized Gain		53,478			8,401
Net Change in Unrealized Appreciation (Depreciation)		116,089			24,236
Net Increase in Net Assets Resulting from Operations		167,043			32,237
Dividends and Distributions to Shareholders:
Class I		(10,229	)		(1,881	)
Class A		(3,353	)		(956	)
Class L		(34	)		(13	)
Class C		(752	)		(250	)
Total Dividends and Distributions to Shareholders		(14,368	)		(3,100	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		178,652			29,609
Distributions Reinvested		10,225			1,880
Redeemed		(70,645	)		(21,827	)
Class A:
Subscribed		49,117			10,308
Distributions Reinvested		3,353			955
Redeemed		(28,326	)		(9,908	)
Class L:
Exchanged		6			—
Distributions Reinvested		34			13
Redeemed		(112	)		(28	)
Class C:
Subscribed		5,354			1,557
Distributions Reinvested		752			250
Redeemed		(4,669	)		(2,463	)
Net Increase in Net Assets Resulting from Capital Share Transactions		143,741			10,346
Total Increase in Net Assets		296,416			39,483
Net Assets:
Beginning of Period		142,728			103,245
End of Period	$	439,144		$	142,728
(1) Capital Share Transactions:
Class I:
Shares Subscribed		6,937			1,751
Shares Issued on Distributions Reinvested		305			106
Shares Redeemed		(2,837	)		(1,296	)
Net Increase in Class I Shares Outstanding		4,405			561
Class A:
Shares Subscribed		1,787			615
Shares Issued on Distributions Reinvested		102			55
Shares Redeemed		(1,229	)		(614	)
Net Increase in Class A Shares Outstanding		660			56
Class L:
Shares Exchanged		—	@@		—
Shares Issued on Distributions Reinvested		1			1
Shares Redeemed		(6	)		(2	)
Net Decrease in Class L Shares Outstanding		(5	)		(1	)
Class C:
Shares Subscribed		212			97
Shares Issued on Distributions Reinvested		25			15
Shares Redeemed		(230	)		(160	)
Net Increase (Decrease) in Class C Shares Outstanding		7			(48	)

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	17.96		$	13.96		$	15.43		$	12.12		$	12.36
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.24	)		(0.02	)		(0.03	)		(0.03	)		0.00	⁽³⁾
Net Realized and Unrealized Gain (Loss)		17.29			4.41			(0.80	)		5.07			0.02
Total from Investment Operations		17.05			4.39			(0.83	)		5.04			0.02
Distributions from and/or in Excess of:
Net Realized Gain		(1.18	)		(0.39	)		(0.64	)		(1.73	)		(0.26	)
Net Asset Value, End of Period	$	33.83		$	17.96		$	13.96		$	15.43		$	12.12
Total Return⁽⁴⁾		94.98	%		31.49	%		(5.75	)%		41.56	%		0.21	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	314,038		$	87,595		$	60,271		$	7,005		$	3,229
Ratio of Expenses Before Expense Limitation		N/A			1.21	%		1.82	%		3.67	%		3.82	%
Ratio of Expenses After Expense Limitation		1.09	%⁽⁵⁾		1.09	%⁽⁵⁾		1.09	%⁽⁵⁾		1.09	%⁽⁵⁾		1.09	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.09	%⁽⁵⁾		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.94	)%⁽⁵⁾		(0.11	)%⁽⁵⁾		(0.19	)%⁽⁵⁾		(0.19	)%⁽⁵⁾		0.04	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		85	%		95	%		130	%		103	%		90	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	17.57		$	13.71		$	15.21		$	12.01		$	12.29
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.29	)		(0.07	)		(0.08	)		(0.08	)		(0.05	)
Net Realized and Unrealized Gain (Loss)		16.88			4.32			(0.78	)		5.01			0.03
Total from Investment Operations		16.59			4.25			(0.86	)		4.93			(0.02	)
Distributions from and/or in Excess of:
Net Realized Gain		(1.18	)		(0.39	)		(0.64	)		(1.73	)		(0.26	)
Net Asset Value, End of Period	$	32.98		$	17.57		$	13.71		$	15.21		$	12.01
Total Return⁽³⁾		94.46	%		31.04	%		(6.03	)%		41.02	%		(0.11	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	103,550		$	43,576		$	33,240		$	4,577		$	2,640
Ratio of Expenses Before Expense Limitation		N/A			1.48	%		1.95	%		3.88	%		4.09	%
Ratio of Expenses After Expense Limitation		1.35	%⁽⁴⁾		1.41	%⁽⁴⁾		1.41	%⁽⁴⁾⁽⁵⁾		1.41	%⁽⁴⁾		1.44	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.41	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Loss		(1.20	)%⁽⁴⁾		(0.43	)%⁽⁴⁾		(0.54	)%⁽⁴⁾		(0.52	)%⁽⁴⁾		(0.38	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		85	%		95	%		130	%		103	%		90	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective November 19, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.42% for Class A shares. Prior to November 19, 2018, the maximum ratio was 1.45% for Class A shares.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	16.82		$	13.21		$	14.75		$	11.74		$	12.09
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.40	)		(0.16	)		(0.16	)		(0.15	)		(0.10	)
Net Realized and Unrealized Gain (Loss)		16.10			4.16			(0.74	)		4.89			0.01
Total from Investment Operations		15.70			4.00			(0.90	)		4.74			(0.09	)
Distributions from and/or in Excess of:
Net Realized Gain		(1.18	)		(0.39	)		(0.64	)		(1.73	)		(0.26	)
Net Asset Value, End of Period	$	31.34		$	16.82		$	13.21		$	14.75		$	11.74
Total Return⁽³⁾		93.38	%		30.32	%		(6.50	)%		40.34	%		(0.70	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	923		$	573		$	462		$	327		$	217
Ratio of Expenses Before Expense Limitation		2.09	%		2.16	%		3.29	%		5.07	%		5.12	%
Ratio of Expenses After Expense Limitation		1.94	%⁽⁴⁾		1.94	%⁽⁴⁾		1.94	%⁽⁴⁾		1.94	%⁽⁴⁾		1.94	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.94	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Loss		(1.79	)%⁽⁴⁾		(0.96	)%⁽⁴⁾		(1.03	)%⁽⁴⁾		(1.05	)%⁽⁴⁾		(0.86	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		85	%		95	%		130	%		103	%		90	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	16.54		$	13.03		$	14.60		$	11.66		$	12.04
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.43	)		(0.19	)		(0.18	)		(0.19	)		(0.13	)
Net Realized and Unrealized Gain (Loss)		15.80			4.09			(0.75	)		4.86			0.01
Total from Investment Operations		15.37			3.90			(0.93	)		4.67			(0.12	)
Distributions from and/or in Excess of:
Net Realized Gain		(1.18	)		(0.39	)		(0.64	)		(1.73	)		(0.26	)
Net Asset Value, End of Period	$	30.73		$	16.54		$	13.03		$	14.60		$	11.66
Total Return⁽³⁾		92.97	%		29.97	%		(6.77	)%		40.02	%		(0.95	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	20,633		$	10,984		$	9,272		$	549		$	180
Ratio of Expenses Before Expense Limitation		N/A			2.24	%		2.70	%		5.22	%		6.12	%
Ratio of Expenses After Expense Limitation		2.11	%⁽⁴⁾		2.19	%⁽⁴⁾		2.19	%⁽⁴⁾		2.19	%⁽⁴⁾		2.19	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			2.19	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Loss		(1.96	)%⁽⁴⁾		(1.21	)%⁽⁴⁾		(1.29	)%⁽⁴⁾		(1.30	)%⁽⁴⁾		(1.12	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		85	%		95	%		130	%		103	%		90	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

The accompanying financial statements relate to the Global Advantage Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class L and Class C. On April 30, 2015, the Fund suspended offering Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions. In addition, Class L shares of the Fund may be exchanged for Class L shares of any Morgan Stanley Multi-Class Fund, even though Class L shares are closed to investors.

market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between

the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	5,325	$	—	$	—	$	5,325
Banks		15,611		—		—		15,611
Capital Markets		7,195		—		—		7,195
Chemicals		6,009		—		—		6,009
Construction Materials		5,749		—		—		5,749
Entertainment		49,820		—		—		49,820
Food & Staples Retailing		4,227		—		—		4,227
Health Care Equipment & Supplies		15,640		—		—		15,640
Health Care Technology		15,872		—		—		15,872
Information Technology Services		59,865		34,212		—		94,077
Interactive Media & Services		19,482		—		—		19,482
Internet & Direct Marketing Retail		42,946		15,373		—		58,319
Metals & Mining		518		—		—		518
Oil, Gas & Consumable Fuels		912		—		—		912
Pharmaceuticals		19,912		—		—		19,912
Real Estate Management & Development		6,577		—		—		6,577
Software		30,691		11,359		—		42,050
Textiles, Apparel & Luxury Goods		—		18,238		—		18,238
Total Common Stocks		306,351		79,182		—		385,533
Preferred Stocks
Internet & Direct Marketing Retail		—		518		—		518
Software		—		—		20		20
Total Preferred Stocks		—		518		20		538
Call Options Purchased		—		254		—		254
Short-Term Investment
Investment Company		53,463		—		—		53,463
Total Assets	$	359,814	$	79,954	$	20	$	439,788

limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of December 31, 2020:

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Purchased Options

Investments, at Value
(Purchased Options)

Currency Risk

254

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(381	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(605	)(c)

At December 31, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	254	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities(a) (000)			Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
BNP Paribas	$	220		$	—	$	(220	)	$	0
JP Morgan Chase Bank NA		34			—		(34	)		0
Royal Bank of Scotland		—	@		—		(—	@)		0
Total	$	254		$	—	$	(254	)	$	0

@ Value is less than $500.

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) In some instances, the actual collateral received or pledged may be more than the amount shown here due to overcollateralization.

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount					133,168,000

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

At December 31, 2020, the Fund did not have any outstanding securities on loan.

assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

First $1 billion				Over $1 billion
	0.80	%			0.75	%

For the year ended December 31, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.79% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.10% for Class I shares, 1.42% for Class A shares, 1.95% for Class L shares and 2.20% for Class C shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $1,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $269,180,000 and $194,252,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities

Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $18,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	2,991			$	226,226			$	175,754			$	15

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	53,463

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly,

no provision for federal income taxes is required in the financial statements.

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	—	$	14,368	$	—	$	3,100

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Advantage Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Global Advantage Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Global Advantage Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, but makes the complete schedule of portfolio holdings for the fund's first and third fiscal quarters available on its public website. The holdings for each money market fund are also posted to the Morgan Stanley public website. You may obtain the Form N PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Concentrated Portfolio Class I	$	1,000.00	$	1,299.00	$	1,020.16	$	5.72	$	5.03		0.99	%
Global Concentrated Portfolio Class A		1,000.00		1,297.70		1,018.50		7.62		6.70		1.32
Global Concentrated Portfolio Class C		1,000.00		1,292.50		1,014.63		12.04		10.58		2.09
Global Concentrated Portfolio Class IS		1,000.00		1,300.50		1,020.36		5.49		4.82		0.95

** Annualized.

Performance Compared to the MSCI World Net Index⁽¹⁾, the Lipper Global Large-Cap Growth Funds Index⁽²⁾ and the Lipper Global Large-Cap Core Funds Index⁽³⁾

	Period Ended December 31, 2020 Total Returns⁽⁴⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁶⁾
Fund — Class I Shares w/o sales charges⁽⁵⁾		23.52	%		—		—		13.09	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		23.19			—		—		12.70
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		16.76			—		—		11.40
Fund — Class C Shares w/o sales charges⁽⁵⁾		22.23			—		—		11.87
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁵⁾		21.23			—		—		11.87
Fund — Class IS Shares w/o sales charges⁽⁵⁾		23.67			—		—		13.16
MSCI World Net Index		15.90			—		—		12.89
Lipper Global Large-Cap Growth Funds Index		27.24			—		—		16.84
Lipper Global Large-Cap Core Funds Index		13.84			—		—		12.11

⁽¹⁾ The MSCI World Net Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI World Index currently consists of 23 developed market country indices. The performance of the Index is listed in US dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

	Shares		Value (000)
Common Stocks (98.5%)
Canada (1.4%)
Franco-Nevada Corp.		6,305	$	790
China (12.8%)
Alibaba Group Holding Ltd. ADR (a)		16,284		3,790
Tencent Holdings Ltd. ADR		46,252		3,325
				7,115
France (6.7%)
LVMH Moet Hennessy Louis Vuitton SE ADR		29,971		3,738
India (7.2%)
HDFC Bank Ltd. ADR (a)		55,510		4,011
Italy (5.4%)
Ferrari N.V.		13,195		3,029
Taiwan (8.6%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		43,684		4,763
United States (56.4%)
Danaher Corp.		7,775		1,727
Domino's Pizza, Inc.		7,386		2,832
Estee Lauder Cos., Inc. (The), Class A		7,503		1,997
JPMorgan Chase & Co.		4,261		542
Lululemon Athletica, Inc. (a)		5,360		1,865
Mastercard, Inc., Class A		9,774		3,489
Microsoft Corp.		19,686		4,379
NextEra Energy, Inc.		25,650		1,979
Planet Fitness, Inc., Class A (a)		11,860		921
STORE Capital Corp. REIT		118,456		4,025
SVB Financial Group (a)		10,275		3,985
United Rentals, Inc. (a)		9,301		2,157
Waste Management, Inc.		12,643		1,491
				31,389
Total Common Stocks (Cost $44,816)				54,835
Short-Term Investment (1.6%)
Investment Company (1.6%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $863)		863,471		863
Total Investments (100.1%) (Cost $45,679) (b)				55,698
Liabilities in Excess of Other Assets (–0.1%)				(50	)
Net Assets (100.0%)			$	55,648

(a) Non-income producing security.

(b) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $45,916,000. The aggregate gross unrealized appreciation is approximately $10,261,000 and the aggregate gross unrealized depreciation is approximately $479,000, resulting in net unrealized appreciation of approximately $9,782,000.

ADR American Depositary Receipt.

REIT Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		19.8	%
Banks		15.3
Textiles, Apparel & Luxury Goods		10.1
Semiconductors & Semiconductor Equipment		8.5
Software		7.9
Equity Real Estate Investment Trusts (REITs)		7.2
Internet & Direct Marketing Retail		6.8
Hotels, Restaurants & Leisure		6.7
Information Technology Services		6.3
Interactive Media & Services		6.0
Automobiles		5.4
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $44,816)	$	54,835
Investment in Security of Affiliated Issuer, at Value (Cost $863)		863
Total Investments in Securities, at Value (Cost $45,679)		55,698
Receivable for Fund Shares Sold		390
Dividends Receivable		59
Tax Reclaim Receivable		1
Receivable from Affiliate		—	@
Other Assets		28
Total Assets		56,176
Liabilities:
Payable for Investments Purchased		470
Payable for Advisory Fees		23
Payable for Professional Fees		17
Payable for Administration Fees		4
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class C		3
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Sub Transfer Agency Fees — Class I		1
Payable for Sub Transfer Agency Fees — Class A		1
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Custodian Fees		2
Other Liabilities		3
Total Liabilities		528
Net Assets	$	55,648
Net Assets Consist of:
Paid-in-Capital	$	45,424
Total Distributable Earnings		10,224
Net Assets	$	55,648
CLASS I:
Net Assets	$	45,946
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,683,085
Net Asset Value, Offering and Redemption Price Per Share	$	17.12
CLASS A:
Net Assets	$	6,091
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		358,290
Net Asset Value, Redemption Price Per Share	$	17.00
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.94
Maximum Offering Price Per Share	$	17.94
CLASS C:
Net Assets	$	3,568
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		214,166
Net Asset Value, Offering and Redemption Price Per Share	$	16.66
CLASS IS:
Net Assets	$	43
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,489
Net Asset Value, Offering and Redemption Price Per Share	$	17.14

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $15 of Foreign Taxes Withheld)	$	318
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		319
Expenses:
Advisory Fees (Note B)		200
Professional Fees		125
Registration Fees		57
Shareholder Reporting Fees		44
Shareholder Services Fees — Class A (Note D)		11
Distribution and Shareholder Services Fees — Class C (Note D)		27
Administration Fees (Note C)		21
Sub Transfer Agency Fees — Class I		6
Sub Transfer Agency Fees — Class A		3
Sub Transfer Agency Fees — Class C		1
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Custodian Fees (Note F)		7
Directors' Fees and Expenses		5
Pricing Fees		1
Other Expenses		14
Total Expenses		530
Waiver of Advisory Fees (Note B)		(200	)
Expenses Reimbursed by Adviser (Note B)		(19	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		308
Net Investment Income		11
Realized Gain:
Investments Sold		394
Change in Unrealized Appreciation (Depreciation):
Investments		6,411
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		6,805
Net Increase in Net Assets Resulting from Operations	$	6,816

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	11		$	82
Net Realized Gain		394			559
Net Change in Unrealized Appreciation (Depreciation)		6,411			4,466
Net Increase in Net Assets Resulting from Operations		6,816			5,107
Dividends and Distributions to Shareholders:
Class I		(1	)		(164	)
Class A		(—	@)		(24	)
Class C		(—	@)		(2	)
Class IS		(—	@)		(—	@)
Total Dividends and Distributions to Shareholders		(1	)		(190	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		28,607			1,770
Distributions Reinvested		1			164
Redeemed		(2,846	)		(2,155	)
Class A:
Subscribed		2,087			2,061
Distributions Reinvested		—	@		24
Redeemed		(1,077	)		(1,014	)
Class C:
Subscribed		1,818			590
Distributions Reinvested		—	@		2
Redeemed		(1,387	)		(788	)
Class IS:
Subscribed		18			—
Distributions Reinvested		—	@		—	@
Net Increase in Net Assets Resulting from Capital Share Transactions		27,221			654
Total Increase in Net Assets		34,036			5,571
Net Assets:
Beginning of Period		21,612			16,041
End of Period	$	55,648		$	21,612
(1) Capital Share Transactions:
Class I:
Shares Subscribed		1,823			142
Shares Issued on Distributions Reinvested		—	@@		12
Shares Redeemed		(214	)		(177	)
Net Increase (Decrease) in Class I Shares Outstanding		1,609			(23	)
Class A:
Shares Subscribed		150			161
Shares Issued on Distributions Reinvested		—	@@		2
Shares Redeemed		(82	)		(84	)
Net Increase in Class A Shares Outstanding		68			79
Class C:
Shares Subscribed		133			46
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		(117	)		(66	)
Net Increase (Decrease) in Class C Shares Outstanding		16			(20	)
Class IS:
Shares Subscribed		1			—
Shares Issued on Distributions Reinvested		—	@@		—	@@
Net Increase in Class IS Shares Outstanding		1			—	@@

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,												Period from May 27, 2016⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.86		$	10.53		$	12.42		$	10.16		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.03			0.08			0.14			0.02			0.03
Net Realized and Unrealized Gain (Loss)		3.23			3.40			(1.95	)		2.28			0.19
Total from Investment Operations		3.26			3.48			(1.81	)		2.30			0.22
Distributions from and/or in Excess of:
Net Investment Income		(0.00	)⁽³⁾		(0.15	)		(0.08	)		(0.03	)		(0.06	)
Paid-in-Capital		—			—			—			(0.01	)		—
Total Distributions		(0.00	)⁽³⁾		(0.15	)		(0.08	)		(0.04	)		(0.06	)
Net Asset Value, End of Period	$	17.12		$	13.86		$	10.53		$	12.42		$	10.16
Total Return⁽⁴⁾		23.52	%		33.10	%		(14.61	)%		22.64	%		2.24	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	45,946		$	14,885		$	11,554		$	11,814		$	6,922
Ratio of Expenses Before Expense Limitation		1.81	%		1.96	%		1.90	%		3.13	%		3.57	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		0.99	%⁽⁵⁾		1.00	%⁽⁵⁾		1.00	%⁽⁵⁾		0.98	%⁽⁵⁾		0.97	%⁽⁵⁾⁽⁸⁾
Ratio of Net Investment Income		0.21	%⁽⁵⁾		0.64	%⁽⁵⁾		1.13	%⁽⁵⁾		0.15	%⁽⁵⁾		0.48	%⁽⁵⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾⁽⁸⁾
Portfolio Turnover Rate		54	%		123	%		94	%		68	%		44	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

	Class A
	Year Ended December 31,												Period from May 27, 2016⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.80		$	10.49		$	12.37		$	10.15		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.02	)		0.04			0.11			(0.03	)		0.01
Net Realized and Unrealized Gain (Loss)		3.22			3.38			(1.95	)		2.28			0.19
Total from Investment Operations		3.20			3.42			(1.84	)		2.25			0.20
Distributions from and/or in Excess of:
Net Investment Income		(0.00	)⁽³⁾		(0.11	)		(0.04	)		(0.03	)		(0.05	)
Net Asset Value, End of Period	$	17.00		$	13.80		$	10.49		$	12.37		$	10.15
Total Return⁽⁴⁾		23.19	%		32.64	%		(14.91	)%		22.17	%		2.02	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	6,091		$	4,009		$	2,213		$	1,666		$	782
Ratio of Expenses Before Expense Limitation		2.13	%		2.29	%		2.24	%		3.61	%		4.23	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		1.31	%⁽⁵⁾		1.34	%⁽⁵⁾		1.35	%⁽⁵⁾		1.35	%⁽⁵⁾		1.35	%⁽⁵⁾⁽⁸⁾
Ratio of Net Investment Income (Loss)		(0.14	)%⁽⁵⁾		0.32	%⁽⁵⁾		0.91	%⁽⁵⁾		(0.25	)%⁽⁵⁾		0.16	%⁽⁵⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾⁽⁸⁾
Portfolio Turnover Rate		54	%		123	%		94	%		68	%		44	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) The Ratio of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

	Class C
	Year Ended December 31,												Period from May 27, 2016⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.63		$	10.36		$	12.27		$	10.15		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.12	)		(0.06	)		0.02			(0.11	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		3.15			3.34			(1.93	)		2.26			0.21
Total from Investment Operations		3.03			3.28			(1.91	)		2.15			0.17
Distributions from and/or in Excess of:
Net Investment Income		(0.00	)⁽³⁾		(0.01	)		—			(0.03	)		(0.02	)
Net Asset Value, End of Period	$	16.66		$	13.63		$	10.36		$	12.27		$	10.15
Total Return⁽⁴⁾		22.23	%		31.69	%		(15.57	)%		21.18	%		1.69	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,568		$	2,704		$	2,263		$	1,728		$	877
Ratio of Expenses Before Expense Limitation		2.91	%		3.06	%		2.98	%		4.36	%		4.81	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		2.09	%⁽⁵⁾		2.10	%⁽⁵⁾		2.09	%⁽⁵⁾		2.10	%⁽⁵⁾		2.10	%⁽⁵⁾⁽⁸⁾
Ratio of Net Investment Income (Loss)		(0.91	)%⁽⁵⁾		(0.46	)%⁽⁵⁾		0.18	%⁽⁵⁾		(0.95	)%⁽⁵⁾		(0.69	)%⁽⁵⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾⁽⁸⁾
Portfolio Turnover Rate		54	%		123	%		94	%		68	%		44	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

	Class IS
	Year Ended December 31,												Period from May 27, 2016⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.86		$	10.53		$	12.42		$	10.16		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.03			0.09			0.16			0.02			0.03
Net Realized and Unrealized Gain (Loss)		3.25			3.40			(1.97	)		2.28			0.20
Total from Investment Operations		3.28			3.49			(1.81	)		2.30			0.23
Distributions from and/or in Excess of:
Net Investment Income		(0.00	)⁽³⁾		(0.16	)		(0.08	)		(0.03	)		(0.07	)
Paid-in-Capital		—			—			—			(0.01	)		—
Total Distributions		(0.00	)⁽³⁾		(0.16	)		(0.08	)		(0.04	)		(0.07	)
Net Asset Value, End of Period	$	17.14		$	13.86		$	10.53		$	12.42		$	10.16
Total Return⁽⁴⁾		23.67	%		33.16	%		(14.55	)%		22.67	%		2.25	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	43		$	14		$	11		$	12		$	10
Ratio of Expenses Before Expense Limitation		9.20	%		17.68	%		17.97	%		18.61	%		19.43	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾⁽⁸⁾
Ratio of Net Investment Income		0.22	%⁽⁵⁾		0.68	%⁽⁵⁾		1.27	%⁽⁵⁾		0.22	%⁽⁵⁾		0.56	%⁽⁵⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾⁽⁸⁾
Portfolio Turnover Rate		54	%		123	%		94	%		68	%		44	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

The accompanying financial statements relate to the Global Concentrated Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by

the Adviser using a pricing service and/or procedures approved by the Directors; and (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Automobiles	$	3,029	$	—	$	—	$	3,029
Banks		8,538		—		—		8,538
Commercial Services & Supplies		1,491		—		—		1,491
Electric Utilities		1,979		—		—		1,979
Equity Real Estate Investment Trusts (REITs)		4,025		—		—		4,025
Health Care Equipment & Supplies		1,727		—		—		1,727
Hotels, Restaurants & Leisure		3,753		—		—		3,753
Information Technology Services		3,489		—		—		3,489
Interactive Media & Services		3,325		—		—		3,325
Internet & Direct Marketing Retail		3,790		—		—		3,790
Metals & Mining		790		—		—		790
Personal Products		1,997		—		—		1,997

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Semiconductors & Semiconductor Equipment	$	4,763	$	—	$	—	$	4,763
Software		4,379		—		—		4,379
Textiles, Apparel & Luxury Goods		5,603		—		—		5,603
Trading Companies & Distributors		2,157		—		—		2,157
Total Common Stocks		54,835		—		—		54,835
Short-Term Investment
Investment Company		863		—		—		863
Total Assets	$	55,698	$	—	$	—	$	55,698

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

4. Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

5. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution

and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $750 million				Next $750 million				Over $1.5 billion
	0.75	%			0.70	%			0.65	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $200,000 of advisory fees were waived and approximately $21,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $41,239,000 and $14,449,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	359			$	27,433			$	26,929			$	1

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	863

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income

and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

2020 Distributions Paid From: Long-Term Capital Gain (000)				2019 Distributions Paid From: Ordinary Income (000)
$	1			$	190

Permanent differences, primarily due to a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Distributable Earnings (000)				Paid-in Capital (000)
$	14			$	(14	)

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Concentrated Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Global Concentrated Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the four years in the period then ended and the period from May 27, 2016 (commencement of operations) through December 31, 2016 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Global Concentrated Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the four years in the period then ended and the period from May 27, 2016 (commencement of operations) through December 31, 2016, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Concentrated Real Estate Portfolio Class I	$	1,000.00	$	1,164.40	$	1,020.36	$	5.17	$	4.82		0.95	%
Global Concentrated Real Estate Portfolio Class A		1,000.00		1,162.30		1,018.60		7.07		6.60		1.30
Global Concentrated Real Estate Portfolio Class C		1,000.00		1,156.30		1,014.83		11.11		10.38		2.05
Global Concentrated Real Estate Portfolio Class IS		1,000.00		1,164.90		1,020.61		4.90		4.57		0.90

** Annualized.

Performance Compared to the FTSE EPRA Nareit Developed Real Estate Net Total Return Index⁽¹⁾ and the Lipper Global Real Estate Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁵⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		–21.64	%		—		—		–8.23	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		–21.90			—		—		–8.55
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		–26.03			—		—		–10.46
Fund — Class C Shares w/o sales charges⁽⁴⁾		–22.55			—		—		–9.27
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁴⁾		–23.31			—		—		–9.27
Fund — Class IS Shares w/o sales charges⁽⁴⁾		–21.60			—		—		–8.19
FTSE EPRA Nareit Developed Real Estate Net Total Return Index		–9.04			—		—		2.07
Lipper Global Real Estate Funds Index		–5.16			—		—		3.83

⁽¹⁾ The FTSE EPRA Nareit Developed Real Estate Net Total Return Index is a market capitalization weighted index designed to reflect the stock performance of companies engaged in the North American, European and Asian real estate markets. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Global Real Estate Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Global Real Estate Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper Global Real Estate Funds classification.

⁽⁴⁾ Commenced operations on June 18, 2018.

⁽⁵⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (95.8%)
Australia (1.9%)
Dexus REIT		5,187	$	38
GPT Group (The) REIT		5,159		18
Scentre Group REIT		8,526		18
				74
Canada (0.3%)
RioCan Real Estate Investment Trust REIT		838		11
China (0.4%)
China Overseas Land & Investment Ltd. (a)		1,444		3
China Resources Land Ltd. (a)		3,282		14
China Resources Mixc Lifestyle Services Ltd. (a)(b)		25		—	@
				17
Finland (0.4%)
Citycon Oyj (c)		1,361		13
France (6.3%)
Gecina SA REIT		631		98
ICADE REIT		33		3
Klepierre SA REIT (c)		4,786		108
Mercialys SA REIT		3,915		34
				243
Germany (2.7%)
Deutsche Wohnen SE		1,971		105
Hong Kong (11.2%)
CK Asset Holdings Ltd.		1,935		10
Hongkong Land Holdings Ltd.		31,940		132
Link REIT		5,097		46
New World Development Co. Ltd.		2,511		12
Sino Land Co., Ltd.		10,338		13
Sun Hung Kai Properties Ltd.		7,182		92
Swire Properties Ltd.		25,456		74
Wharf Real Estate Investment Co., Ltd.		9,733		51
				430
Ireland (0.8%)
Hibernia REIT PLC		22,555		32
Japan (8.4%)
GLP J-REIT		1		2
Japan Hotel REIT Investment Corp.		81		42
Mitsubishi Estate Co., Ltd.		6,132		98
Mitsui Fudosan Co., Ltd.		4,313		90
Nippon Building Fund, Inc. REIT		10		58
Sumitomo Realty & Development Co., Ltd.		1,002		31
				321
Netherlands (1.3%)
Eurocommercial Properties N.V. CVA REIT (b)		2,567		48
Singapore (2.2%)
CapitaLand Ltd.		3,097		8
Mandarin Oriental International Ltd. (b)		42,176		72
UOL Group Ltd.		937		5
				85

	Shares		Value (000)
Spain (2.1%)
Inmobiliaria Colonial Socimi SA REIT		2,332	$	23
Merlin Properties Socimi SA REIT		6,160		59
				82
Sweden (0.5%)
Hufvudstaden AB, Class A		1,162		19
United Kingdom (9.7%)
British Land Co., PLC (The) REIT		12,163		81
Derwent London PLC REIT		1,221		52
Great Portland Estates PLC REIT		7,144		65
Hammerson PLC REIT		172,875		59
Land Securities Group PLC REIT		10,516		97
Segro PLC REIT		938		12
St. Modwen Properties PLC		1,003		6
				372
United States (47.6%)
Alexandria Real Estate Equities, Inc. REIT		12		2
American Campus Communities, Inc. REIT		210		9
Apartment Income Corp. REIT (b)		124		5
AvalonBay Communities, Inc. REIT		691		111
Boston Properties, Inc. REIT		1,689		160
Camden Property Trust REIT		303		30
CubeSmart REIT		240		8
DiamondRock Hospitality Co. REIT		156		1
Digital Realty Trust, Inc. REIT		164		23
Equity Residential REIT		1,933		115
Essex Property Trust, Inc. REIT		93		22
Federal Realty Investment Trust REIT		188		16
Healthcare Realty Trust, Inc. REIT		552		16
Healthpeak Properties, Inc. REIT		64		2
Host Hotels & Resorts, Inc. REIT		5,389		79
Hudson Pacific Properties, Inc. REIT		2,163		52
Invitation Homes, Inc. REIT		1,491		44
JBG SMITH Properties REIT		783		24
Kimco Realty Corp. REIT		1,280		19
Life Storage, Inc. REIT		242		29
Mack-Cali Realty Corp. REIT		2,943		37
Mid-America Apartment Communities, Inc. REIT		117		15
Paramount Group, Inc. REIT		1,826		16
ProLogis, Inc. REIT		2,319		231
Public Storage REIT		157		36
QTS Realty Trust, Inc., Class A REIT		64		4
Regency Centers Corp. REIT		1,239		56
RLJ Lodging Trust REIT		2,560		36
Simon Property Group, Inc. REIT		1,779		152
SITE Centers Corp. REIT		459		5
SL Green Realty Corp. REIT		3,454		206
Sunstone Hotel Investors, Inc. REIT		5,183		59
Ventas, Inc. REIT		1,084		53
Vornado Realty Trust REIT		2,779		104
Weingarten Realty Investors REIT		2,206		48
				1,825
Total Common Stocks (Cost $4,294)				3,677

	Shares		Value (000)
Short-Term Investments (9.4%)
Securities held as Collateral on Loaned Securities (3.0%)
Investment Company (2.6%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		97,306	$	97
	Face Amount		(000)
Repurchase Agreements (0.4%)
Barclays Capital, Inc. (0.05%, dated 12/31/20, due 1/4/21; proceeds $3; fully collateralized by a U.S. Government obligation; 1.63% due 11/15/22; valued at $3)	$	3		3
HSBC Securities USA, Inc. (0.05%, dated 12/31/20, due 1/4/21; proceeds $12; fully collateralized by a U.S. Government obligation; 0.15% due 10/31/22; valued at $12)		12		12
Merrill Lynch & Co., Inc. (0.06%, 12/31/20, due 1/4/21; proceeds $1; fully collateralized by a U.S. Government obligation; 2.50% due 5/15/46; valued at $1)		1		1
				16
Total Securities held as Collateral on Loaned Securities (Cost $113)				113
	Shares
Investment Company (6.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $245)		245,485		245
Total Short-Term Investments (Cost $358)				358
Total Investments (105.2%) (Cost $4,652) Including $118 of Securities Loaned (d)(e)				4,035
Liabilities in Excess of Other Assets (–5.2%)				(198	)
Net Assets (100.0%)			$	3,837

(a) Security trades on the Hong Kong exchange.

(b) Non-income producing security.

(d) The approximate fair value and percentage of net assets, $1,841,000 and 48.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $4,709,000. The aggregate gross unrealized appreciation is approximately $157,000 and the aggregate gross unrealized depreciation is approximately $831,000, resulting in net unrealized depreciation of approximately $674,000.

@ Value is less than $500.

CVA Certificaten Van Aandelen.

REIT Real Estate Investment Trust.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $4,310)	$	3,693
Investment in Security of Affiliated Issuer, at Value (Cost $342)		342
Total Investments in Securities, at Value (Cost $4,652)		4,035
Foreign Currency, at Value (Cost $7)		7
Due from Adviser		55
Dividends Receivable		19
Tax Reclaim Receivable		5
Receivable from Affiliate		—	@
Receivable from Securities Lending Income		—	@
Other Assets		24
Total Assets		4,145
Liabilities:
Payable for Investments Purchased		161
Collateral on Securities Loaned, at Value		113
Payable for Professional Fees		16
Payable for Custodian Fees		8
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Administration Fees		—	@
Other Liabilities		10
Total Liabilities		308
Net Assets	$	3,837
Net Assets Consist of:
Paid-in-Capital	$	5,133
Total Accumulated Loss		(1,296	)
Net Assets	$	3,837
CLASS I:
Net Assets	$	3,813
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		522,638
Net Asset Value, Offering and Redemption Price Per Share	$	7.30
CLASS A:
Net Assets	$	8
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,045
Net Asset Value, Redemption Price Per Share	$	7.30
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.40
Maximum Offering Price Per Share	$	7.70
CLASS C:
Net Assets	$	8
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,029
Net Asset Value, Offering and Redemption Price Per Share	$	7.29
CLASS IS:
Net Assets	$	8
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,052
Net Asset Value, Offering and Redemption Price Per Share	$	7.30
⁽¹⁾ Including: Securities on Loan, at Value:	$	118

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $4 of Foreign Taxes Withheld)	$	120
Dividends from Security of Affiliated Issuer (Note G)		1
Income from Securities Loaned — Net		—	@
Total Investment Income		121
Expenses:
Professional Fees		112
Registration Fees		50
Advisory Fees (Note B)		27
Custodian Fees (Note F)		27
Shareholder Reporting Fees		12
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Pricing Fees		5
Directors' Fees and Expenses		4
Administration Fees (Note C)		3
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		19
Total Expenses		267
Expenses Reimbursed by Adviser (Note B)		(200	)
Waiver of Advisory Fees (Note B)		(27	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		34
Net Investment Income		87
Realized Loss:
Investments Sold		(645	)
Foreign Currency Translation		(—	@)
Net Realized Loss		(645	)
Change in Unrealized Appreciation (Depreciation):
Investments		(502	)
Foreign Currency Translation		1
Net Change in Unrealized Appreciation (Depreciation)		(501	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(1,146	)
Net Decrease in Net Assets Resulting from Operations	$	(1,059	)

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	87		$	77
Net Realized Gain (Loss)		(645	)		53
Net Change in Unrealized Appreciation (Depreciation)		(501	)		443
Net Increase (Decrease) in Net Assets Resulting from Operations		(1,059	)		573
Dividends and Distributions to Shareholders:
Class I		(67	)		(154	)
Class A		(—	@)		(—	@)
Class C		(—	@)		(—	@)
Class IS		(—	@)		(—	@)
Total Dividends and Distributions to Shareholders		(67	)		(154	)
Capital Share Transactions:⁽¹⁾
Class I:
Distributions Reinvested		67			154
Class A:
Subscribed		1			1
Distributions Reinvested		—	@		—	@
Redeemed		(1	)		(—	@)
Class C:
Distributions Reinvested		—	@		—	@
Class IS:
Distributions Reinvested		—	@		—	@
Net Increase in Net Assets Resulting from Capital Share Transactions		67			155
Total Increase (Decrease) in Net Assets		(1,059	)		574
Net Assets:
Beginning of Period		4,896			4,322
End of Period	$	3,837		$	4,896
(1) Capital Share Transactions:
Class I:
Shares Issued on Distributions Reinvested		9			17
Class A:
Shares Subscribed		—	@@		—	@@
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		(—	@@)		(—	@@)
Net Increase in Class A Shares Outstanding		—	@@		—	@@
Class C:
Shares Issued on Distributions Reinvested		—	@@		—	@@
Class IS:
Shares Issued on Distributions Reinvested		—	@@		—	@@

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,						Period from June 18, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	9.48		$	8.64		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.17			0.16			0.23
Net Realized and Unrealized Gain (Loss)		(2.22	)		0.99			(1.16	)
Total from Investment Operations		(2.05	)		1.15			(0.93	)
Distributions from and/or in Excess of:
Net Investment Income		(0.13	)		(0.31	)		(0.29	)
Paid-in-Capital		—			—			(0.14	)
Total Distributions		(0.13	)		(0.31	)		(0.43	)
Net Asset Value, End of Period	$	7.30		$	9.48		$	8.64
Total Return⁽³⁾		(21.64	)%		13.38	%		(9.49	)%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,813		$	4,866		$	4,295
Ratio of Expenses Before Expense Limitation		7.26	%		6.15	%		8.58	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		0.95	%⁽⁴⁾		0.94	%⁽⁴⁾		0.94	%⁽⁴⁾⁽⁷⁾
Ratio of Net Investment Income		2.41	%⁽⁴⁾		1.67	%⁽⁴⁾		4.42	%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾⁽⁷⁾
Portfolio Turnover Rate		31	%		21	%		19	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

	Class A
	Year Ended December 31,						Period from June 18, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	9.48		$	8.65		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.14			0.12			0.21
Net Realized and Unrealized Gain (Loss)		(2.22	)		0.99			(1.15	)
Total from Investment Operations		(2.08	)		1.11			(0.94	)
Distributions from and/or in Excess of:
Net Investment Income		(0.10	)		(0.28	)		(0.27	)
Paid-in-Capital		—			—			(0.14	)
Total Distributions		(0.10	)		(0.28	)		(0.41	)
Net Asset Value, End of Period	$	7.30		$	9.48		$	8.65
Total Return⁽³⁾		(21.90	)%		12.85	%		(9.57	)%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8		$	10		$	9
Ratio of Expenses Before Expense Limitation		35.01	%		26.09	%		26.73	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		1.30	%⁽⁴⁾		1.30	%⁽⁴⁾		1.30	%⁽⁴⁾⁽⁷⁾
Ratio of Net Investment Income		2.08	%⁽⁴⁾		1.31	%⁽⁴⁾		4.06	%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾⁽⁷⁾
Portfolio Turnover Rate		31	%		21	%		19	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

	Class C
	Year Ended December 31,						Period from June 18, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	9.48		$	8.65		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.09			0.05			0.17
Net Realized and Unrealized Gain (Loss)		(2.23	)		0.98			(1.15	)
Total from Investment Operations		(2.14	)		1.03			(0.98	)
Distributions from and/or in Excess of:
Net Investment Income		(0.05	)		(0.20	)		(0.23	)
Paid-in-Capital		—			—			(0.14	)
Total Distributions		(0.05	)		(0.20	)		(0.37	)
Net Asset Value, End of Period	$	7.29		$	9.48		$	8.65
Total Return⁽³⁾		(22.55	)%		12.01	%		(9.94	)%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8		$	10		$	9
Ratio of Expenses Before Expense Limitation		36.87	%		26.91	%		27.50	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		2.05	%⁽⁴⁾		2.05	%⁽⁴⁾		2.05	%⁽⁴⁾⁽⁷⁾
Ratio of Net Investment Income		1.31	%⁽⁴⁾		0.55	%⁽⁴⁾		3.30	%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾⁽⁷⁾
Portfolio Turnover Rate		31	%		21	%		19	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

	Class IS
	Year Ended December 31,						Period from June 18, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	9.48		$	8.64		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.17			0.16			0.23
Net Realized and Unrealized Gain (Loss)		(2.22	)		0.99			(1.16	)
Total from Investment Operations		(2.05	)		1.15			(0.93	)
Distributions from and/or in Excess of:
Net Investment Income		(0.13	)		(0.31	)		(0.29	)
Paid-in-Capital		—			—			(0.14	)
Total Distributions		(0.13	)		(0.31	)		(0.43	)
Net Asset Value, End of Period	$	7.30		$	9.48		$	8.64
Total Return⁽³⁾		(21.60	)%		13.43	%		(9.47	)%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8		$	10		$	9
Ratio of Expenses Before Expense Limitation		34.53	%		25.85	%		26.46	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		0.90	%⁽⁴⁾		0.90	%⁽⁴⁾		0.90	%⁽⁴⁾⁽⁷⁾
Ratio of Net Investment Income		2.46	%⁽⁴⁾		1.71	%⁽⁴⁾		4.45	%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾⁽⁷⁾
Portfolio Turnover Rate		31	%		21	%		19	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

The accompanying financial statements relate to the Global Concentrated Real Estate Portfolio. The Fund seeks to provide current income and long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of

the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Fund invests a significant portion of its assets in securities of real estate investment trusts ("REITs"). The market's perception of prospective declines in private real estate values and other financial assets may result in increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Fund.

investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Diversified	$	192	$	846	$	—	$	1,038
Health Care		71		—		—		71
Industrial		231		14		—		245
Lodging/Resorts		175		114		—		289
Office		436		433		—		869
Residential		351		108		—		459
Retail		307		326		—		633
Self Storage		73		—		—		73
Total Common Stocks		1,836		1,841		—		3,677
Short-Term Investments
Investment Company		342		—		—		342
Repurchase Agreements		—		16		—		16
Total Short-Term Investments		342		16		—		358
Total Assets	$	2,178	$	1,857	$	—	$	4,035

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	118	(a)	$	—	$	(118	)(b)(c)	$	0

(a) Represents market value of loaned securities at year end.

(b) The Fund received cash collateral of approximately $113,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $14,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	113	$	—	$	—	$	—	$	113
Total Borrowings	$	113	$	—	$	—	$	—	$	113
Gross amount of recognized liabilities for securities lending transactions									$	113

6. Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7. Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

First $2 billion				Over $2 billion
	0.75	%			0.70	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.95% for Class I shares, 1.30% for Class A shares, 2.05% for Class C shares and 0.90% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time that the Directors act to discontinue all or a portion of such waivers or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $27,000 of advisory fees were waived and approximately $206,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $1,271,000 and $1,087,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	231			$	863			$	752			$	1

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	342

credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the three-year period ended December 31, 2020 remains subject to examination by taxing authorities.

2020 Distributions Paid From:					2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)			Ordinary Income (000)		Long-Term Capital Gain (000)
$	67	$	—	@	$	149	$	5

@ Amount is less that $500.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	30			$	—

At December 31, 2020, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $13,000 and $618,000, respectively, that do not have an expiration date.

J. Other: At December 31, 2020, the Fund did not have record owners of 10% or greater.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Concentrated Real Estate Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Global Concentrated Real Estate Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the two years in the period then ended and the period from June 18, 2018 (commencement of operations) through December 31, 2018 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Global Concentrated Real Estate Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the two years in the period then ended and the period from June 18, 2018 (commencement of operations) through December 31, 2018, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities law and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Core Portfolio Class I	$	1,000.00	$	1,278.20	$	1,020.21	$	5.61	$	4.98		0.98	%
Global Core Portfolio Class A		1,000.00		1,276.70		1,018.35		7.73		6.85		1.35
Global Core Portfolio Class C		1,000.00		1,271.50		1,014.58		11.99		10.63		2.10
Global Core Portfolio Class IS		1,000.00		1,279.00		1,020.36		5.44		4.82		0.95

** Annualized.

Performance Compared to the MSCI World Net Index⁽¹⁾, the Lipper Global Large-Cap Growth Funds Index⁽²⁾ and the Lipper Global Large-Cap Core Funds Index⁽³⁾

	Period Ended December 31, 2020 Total Returns⁽⁴⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁶⁾
Fund — Class I Shares w/o sales charges⁽⁵⁾		21.23	%		—		—		11.44	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		20.88			—		—		11.03
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		14.53			—		—		9.75
Fund — Class C Shares w/o sales charges⁽⁵⁾		19.89			—		—		10.20
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁵⁾		18.89			—		—		10.20
Fund — Class IS Shares w/o sales charges⁽⁵⁾		21.40			—		—		11.49
MSCI World Net Index		15.90			—		—		12.89
Lipper Global Large-Cap Growth Funds Index		27.24			—		—		16.84
Lipper Global Large-Cap Core Funds Index		13.84			—-		—-		12.11

⁽¹⁾ The MSCI World Net Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI World Net Index currently consists of 23 developed market country indices. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Global Large-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Global Large-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper Global Large-Cap Growth Funds classification. The Funds' Lipper category changed from Lipper Global Large-Cap Core Funds to Lipper Global Large-Cap Growth Funds.

⁽³⁾ The Lipper Global Large-Cap Core Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Global Large-Cap Core Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 10 funds represented in this Index.

⁽⁵⁾ Commenced operations on May 27, 2016.

⁽⁶⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (98.7%)
Canada (1.4%)
Franco-Nevada Corp.		1,579	$	198
China (12.1%)
Alibaba Group Holding Ltd. ADR (a)		2,903		676
NetEase, Inc. ADR		2,473		237
Tencent Holdings Ltd. ADR		10,419		749
				1,662
France (4.1%)
LVMH Moet Hennessy Louis Vuitton SE		898		562
India (3.4%)
HDFC Bank Ltd. ADR (a)		6,491		469
Ireland (1.6%)
CRH PLC ADR		5,153		219
Italy (3.8%)
Ferrari N.V.		2,298		528
Japan (1.5%)
Nippon Telegraph & Telephone Corp. ADR		8,262		212
Singapore (1.2%)
Sea Ltd. ADR (a)		821		163
Taiwan (4.7%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		5,929		647
United Kingdom (7.8%)
Diageo PLC ADR		2,218		352
Experian PLC ADR		5,495		209
London Stock Exchange Group PLC		2,704		334
Ryanair Holdings PLC ADR (a)		1,541		169
				1,064
United States (57.1%)
Adobe, Inc. (a)		332		166
Ameriprise Financial, Inc.		1,592		309
Apple, Inc.		7,180		953
Chevron Corp.		939		79
Cigna Corp.		847		176
Comcast Corp., Class A		2,194		115
Danaher Corp.		1,857		413
Estee Lauder Cos., Inc. (The), Class A		1,298		346
Euronet Worldwide, Inc. (a)		327		47
First Republic Bank		2,636		387
Fortune Brands Home & Security, Inc.		2,079		178
JPMorgan Chase & Co.		2,786		354
Lennar Corp., Class A		2,814		215
Lululemon Athletica, Inc. (a)		1,268		441
Mastercard, Inc., Class A		2,104		751
McDonald's Corp.		1,240		266
MGM Resorts International		6,247		197
Microsoft Corp.		3,492		777
NextEra Energy, Inc.		4,698		362
Planet Fitness, Inc., Class A (a)		530		41
STORE Capital Corp. REIT		13,642		464
SVB Financial Group (a)		925		359

	Shares		Value (000)
Target Corp.		742	$	131
United Rentals, Inc. (a)		660		153
Veeva Systems, Inc., Class A (a)		572		156
				7,836
Total Common Stocks (Cost $8,400)				13,560
Short-Term Investment (1.7%)
Investment Company (1.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $229)		229,380		229
Total Investments (100.4%) (Cost $8,629) (b)(c)				13,789
Liabilities in Excess of Other Assets (–0.4%)				(57	)
Net Assets (100.0%)			$	13,732

(a) Non-income producing security.

(b) The approximate fair value and percentage of net assets, $896,000 and 6.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $8,660,000. The aggregate gross unrealized appreciation is approximately $5,156,000 and the aggregate gross unrealized depreciation is approximately $27,000, resulting in net unrealized appreciation of approximately $5,129,000.

ADR American Depositary Receipt.

REIT Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		56.4	%
Banks		11.4
Textiles, Apparel & Luxury Goods		7.3
Tech Hardware, Storage & Peripherals		6.9
Software		6.8
Information Technology Services		5.8
Interactive Media & Services		5.4
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $8,400)	$	13,560
Investment in Security of Affiliated Issuer, at Value (Cost $229)		229
Total Investments in Securities, at Value (Cost $8,629)		13,789
Foreign Currency, at Value (Cost —@)		—	@
Receivable for Investments Sold		102
Due from Adviser		34
Dividends Receivable		7
Tax Reclaim Receivable		3
Receivable from Affiliate		—	@
Other Assets		24
Total Assets		13,959
Liabilities:
Payable for Investments Purchased		199
Payable for Professional Fees		14
Payable for Custodian Fees		2
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		2
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Fund Shares Redeemed		1
Payable for Administration Fees		1
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Other Liabilities		7
Total Liabilities		227
Net Assets	$	13,732
Net Assets Consist of:
Paid-in-Capital	$	8,804
Total Distributable Earnings		4,928
Net Assets	$	13,732
CLASS I:
Net Assets	$	9,849
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		615,870
Net Asset Value, Offering and Redemption Price Per Share	$	15.99
CLASS A:
Net Assets	$	1,869
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		117,446
Net Asset Value, Redemption Price Per Share	$	15.92
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.88
Maximum Offering Price Per Share	$	16.80
CLASS C:
Net Assets	$	1,998
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		128,482
Net Asset Value, Offering and Redemption Price Per Share	$	15.55
CLASS IS:
Net Assets	$	16
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,008
Net Asset Value, Offering and Redemption Price Per Share	$	15.99

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $4 of Foreign Taxes Withheld)	$	128
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		128
Expenses:
Professional Fees		114
Advisory Fees (Note B)		82
Registration Fees		55
Shareholder Reporting Fees		32
Shareholder Services Fees — Class A (Note D)		4
Distribution and Shareholder Services Fees — Class C (Note D)		15
Administration Fees (Note C)		9
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Custodian Fees (Note F)		6
Directors' Fees and Expenses		4
Pricing Fees		3
Sub Transfer Agency Fees — Class I		1
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class C		1
Other Expenses		13
Total Expenses		348
Expenses Reimbursed by Adviser (Note B)		(131	)
Waiver of Advisory Fees (Note B)		(82	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		131
Net Investment Loss		(3	)
Realized Gain:
Investments Sold		68
Foreign Currency Translation		—	@
Net Realized Gain		68
Change in Unrealized Appreciation (Depreciation):
Investments		2,053
Foreign Currency Translation		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		2,053
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		2,121
Net Increase in Net Assets Resulting from Operations	$	2,118

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(3	)	$	42
Net Realized Gain		68			54
Net Change in Unrealized Appreciation (Depreciation)		2,053			2,613
Net Increase in Net Assets Resulting from Operations		2,118			2,709
Dividends and Distributions to Shareholders:
Class I		—			(57	)
Class A		—			(9	)
Class IS		—			(—	@)
Paid-in-Capital:
Class I		—			(3	)
Class A		—			(1	)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(70	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		989			342
Distributions Reinvested		—			60
Redeemed		(793	)		(821	)
Class A:
Subscribed		277			1,100
Distributions Reinvested		—			10
Redeemed		(918	)		(688	)
Class C:
Subscribed		371			135
Redeemed		(116	)		(352	)
Class IS:
Distributions Reinvested		—			—	@
Net Decrease in Net Assets Resulting from Capital Share Transactions		(190	)		(214	)
Total Increase in Net Assets		1,928			2,425
Net Assets:
Beginning of Period		11,804			9,379
End of Period	$	13,732		$	11,804
(1) Capital Share Transactions:
Class I:
Shares Subscribed		66			27
Shares Issued on Distributions Reinvested		—			5
Shares Redeemed		(69	)		(77	)
Net Decrease in Class I Shares Outstanding		(3	)		(45	)
Class A:
Shares Subscribed		21			95
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(69	)		(60	)
Net Increase (Decrease) in Class A Shares Outstanding		(48	)		36
Class C:
Shares Subscribed		26			12
Shares Redeemed		(9	)		(31	)
Net Increase (Decrease) in Class C Shares Outstanding		17			(19	)
Class IS:
Shares Issued on Distributions Reinvested		—			—	@@

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,												Period from May 27, 2016⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.19		$	10.15		$	12.20		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.02			0.07			0.12			0.07			0.05
Net Realized and Unrealized Gain (Loss)		2.78			3.07			(2.09	)		2.16			0.06
Total from Investment Operations		2.80			3.14			(1.97	)		2.23			0.11
Distributions from and/or in Excess of:
Net Investment Income		—			(0.09	)		(0.08	)		(0.06	)		(0.08	)
Paid-in-Capital		—			(0.01	)		—			(0.00	)⁽³⁾		—
Total Distributions		—			(0.10	)		(0.08	)		(0.06	)		(0.08	)
Net Asset Value, End of Period	$	15.99		$	13.19		$	10.15		$	12.20		$	10.03
Total Return⁽⁴⁾		21.23	%		30.96	%		(16.15	)%		22.27	%		1.08	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9,849		$	8,157		$	6,738		$	10,398		$	6,517
Ratio of Expenses Before Expense Limitation		2.93	%		2.73	%		2.53	%		2.89	%		3.73	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		0.99	%⁽⁵⁾		0.98	%⁽⁵⁾		1.00	%⁽⁵⁾		0.97	%⁽⁵⁾		0.98	%⁽⁵⁾⁽⁸⁾
Ratio of Net Investment Income		0.18	%⁽⁵⁾		0.61	%⁽⁵⁾		0.97	%⁽⁵⁾		0.64	%⁽⁵⁾		0.82	%⁽⁵⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.01	%⁽⁸⁾
Portfolio Turnover Rate		30	%		61	%		50	%		41	%		22	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

	Class A
	Year Ended December 31,												Period from May 27, 2016⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.17		$	10.15		$	12.18		$	10.02		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.02	)		0.03			0.07			0.03			0.02
Net Realized and Unrealized Gain (Loss)		2.77			3.05			(2.07	)		2.15			0.06
Total from Investment Operations		2.75			3.08			(2.00	)		2.18			0.08
Distributions from and/or in Excess of:
Net Investment Income		—			(0.05	)		(0.03	)		(0.02	)		(0.06	)
Paid-in-Capital		—			(0.01	)		—			(0.00	)⁽³⁾		—
Total Distributions		—			(0.06	)		(0.03	)		(0.02	)		(0.06	)
Net Asset Value, End of Period	$	15.92		$	13.17		$	10.15		$	12.18		$	10.02
Total Return⁽⁴⁾		20.88	%		30.36	%		(16.41	)%		21.82	%		0.83	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,869		$	2,186		$	1,320		$	1,962		$	1,263
Ratio of Expenses Before Expense Limitation		3.32	%		3.12	%		2.89	%		3.36	%		4.16	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		1.35	%⁽⁵⁾		1.35	%⁽⁵⁾		1.35	%⁽⁵⁾		1.35	%⁽⁵⁾		1.35	%⁽⁵⁾⁽⁸⁾
Ratio of Net Investment Income (Loss)		(0.18	)%⁽⁵⁾		0.26	%⁽⁵⁾		0.62	%⁽⁵⁾		0.25	%⁽⁵⁾		0.39	%⁽⁵⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾⁽⁸⁾
Portfolio Turnover Rate		30	%		61	%		50	%		41	%		22	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

	Class C
	Year Ended December 31,												Period from May 27, 2016⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	12.97		$	10.02		$	12.08		$	10.00		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.12	)		(0.05	)		(0.01	)		(0.06	)		(0.02	)
Net Realized and Unrealized Gain (Loss)		2.70			3.00			(2.05	)		2.15			0.06
Total from Investment Operations		2.58			2.95			(2.06	)		2.09			0.04
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.01	)		(0.04	)
Net Asset Value, End of Period	$	15.55		$	12.97		$	10.02		$	12.08		$	10.00
Total Return⁽³⁾		19.89	%		29.44	%		(17.05	)%		20.92	%		0.41	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,998		$	1,448		$	1,311		$	1,246		$	901
Ratio of Expenses Before Expense Limitation		4.11	%		3.92	%		3.66	%		4.19	%		5.02	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		2.10	%⁽⁴⁾		2.10	%⁽⁴⁾		2.10	%⁽⁴⁾		2.10	%⁽⁴⁾		2.10	%⁽⁴⁾⁽⁷⁾
Ratio of Net Investment Loss		(0.94	)%⁽⁴⁾		(0.45	)%⁽⁴⁾		(0.05	)%⁽⁴⁾		(0.50	)%⁽⁴⁾		(0.36	)%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾⁽⁷⁾
Portfolio Turnover Rate		30	%		61	%		50	%		41	%		22	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

	Class IS
	Year Ended December 31,												Period from May 27, 2016⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.18		$	10.15		$	12.20		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.03			0.07			0.13			0.07			0.05
Net Realized and Unrealized Gain (Loss)		2.78			3.06			(2.09	)		2.17			0.06
Total from Investment Operations		2.81			3.13			(1.96	)		2.24			0.11
Distributions from and/or in Excess of:
Net Investment Income		—			(0.09	)		(0.09	)		(0.07	)		(0.08	)
Paid-in-Capital		—			(0.01	)		—			(0.00	)⁽³⁾		—
Total Distributions		—			(0.10	)		(0.09	)		(0.07	)		(0.08	)
Net Asset Value, End of Period	$	15.99		$	13.18		$	10.15		$	12.20		$	10.03
Total Return⁽⁴⁾		21.40	%		30.90	%		(16.10	)%		22.29	%		1.10	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	16		$	13		$	10		$	12		$	10
Ratio of Expenses Before Expense Limitation		18.19	%		18.98	%		19.09	%		18.67	%		19.70	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾⁽⁸⁾
Ratio of Net Investment Income		0.22	%⁽⁵⁾		0.63	%⁽⁵⁾		1.06	%⁽⁵⁾		0.66	%⁽⁵⁾		0.84	%⁽⁵⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾⁽⁸⁾
Portfolio Turnover Rate		30	%		61	%		50	%		41	%		22	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

The accompanying financial statements relate to the Global Core Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a

pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Airlines	$	169	$	—	$	—	$	169
Automobiles		528		—		—		528
Banks		1,569		—		—		1,569
Beverages		352		—		—		352
Building Products		178		—		—		178
Capital Markets		309		334		—		643
Construction Materials		219		—		—		219
Diversified Telecommunication Services		212		—		—		212
Electric Utilities		362		—		—		362
Entertainment		400		—		—		400

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Equity Real Estate Investment Trusts (REITs)	$	464	$	—	$	—	$	464
Health Care Equipment & Supplies		413		—		—		413
Health Care Providers & Services		176		—		—		176
Health Care Technology		156		—		—		156
Hotels, Restaurants & Leisure		504		—		—		504
Household Durables		215		—		—		215
Information Technology Services		798		—		—		798
Interactive Media & Services		749		—		—		749
Internet & Direct Marketing Retail		676		—		—		676
Media		115		—		—		115
Metals & Mining		198		—		—		198
Multi-Line Retail		131		—		—		131
Oil, Gas & Consumable Fuels		79		—		—		79
Personal Products		346		—		—		346
Professional Services		209		—		—		209
Semiconductors & Semiconductor Equipment		647		—		—		647
Software		943		—		—		943
Tech Hardware, Storage & Peripherals		953		—		—		953
Textiles, Apparel & Luxury Goods		441		562		—		1,003
Trading Companies & Distributors		153		—		—		153
Total Common Stocks		12,664		896		—		13,560
Short-Term Investment
Investment Company		229		—		—		229
Total Assets	$	12,893	$	896	$	—	$	13,789

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign security markets and the possibility of political or economic instability.

individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4. Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

5. Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

6. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid

quarterly, at the annual rate based on the daily net assets as follows:

First $750 million				Next $750 million				Over $1.5 billion
	0.75	%			0.70	%			0.65	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $82,000 of advisory fees were waived and approximately $135,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $3,307,000 and $3,565,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the

year ended December 31, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	80			$	1,791			$	1,642			$	—	@

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	229

@ Amount is less than $500.

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Paid-in- Capital (000)		Ordinary Income (000)		Paid-in- Capital (000)
$	—	$	—	$	66	$	4

Permanent differences, primarily due to a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Distributable Earnings (000)				Paid-in Capital (000)
$	4			$	(4	)

At December 31, 2020, the Fund had no distributable earnings on a tax basis.

At December 31, 2020, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $169,000 that do not have an expiration date.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Core Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Global Core Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the four years in the period then ended and the period from May 27, 2016 (commencement of operations) through December 31, 2016 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Global Core Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the four years in the period then ended and the period from May 27, 2016 (commencement of operations) through December 31, 2016, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Endurance Portfolio Class I	$	1,000.00	$	1,641.70	$	1,020.11	$	6.64	$	5.08		1.00	%
Global Endurance Portfolio Class A		1,000.00		1,637.20		1,018.35		8.95		6.85		1.35
Global Endurance Portfolio Class C		1,000.00		1,631.60		1,014.58		13.89		10.63		2.10
Global Endurance Portfolio Class IS		1,000.00		1,641.30		1,020.36		6.31		4.82		0.95

** Annualized.

Performance Compared to the MSCI All Country World Net Index⁽¹⁾ and the Lipper Global Small-/Mid-Cap Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁵⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		110.03	%		—		—		65.43	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		109.10			—		—		64.81
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		98.12			—		—		60.46
Fund — Class C Shares w/o sales charges⁽⁴⁾		107.59			—		—		63.58
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁴⁾		106.59			—		—		63.58
Fund — Class IS Shares w/o sales charges⁽⁴⁾		110.08			—		—		65.51
MSCI All Country World Net Index		16.25			—		—		21.32
Lipper Global Small-/Mid-Cap Funds Index		23.84			—		—		23.67

⁽²⁾ The Lipper Global Small-/Mid-Cap Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Global Small-/Mid-Cap Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper Global Small-/Mid-Cap Funds classification.

⁽⁴⁾ Commenced operations on December 31, 2018.

⁽⁵⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (97.8%)
Canada (6.1%)
Colliers International Group, Inc.		5,078	$	452
Constellation Software, Inc.		99		128
Score Media and Gaming, Inc. (a)		67,270		79
Topicus.com, Inc. (a)		184		1
				660
Finland (1.0%)
Revenio Group Oyj		1,679		103
Germany (1.3%)
CompuGroup Medical SE & Co. KGaA		1,476		142
Japan (3.0%)
BASE, Inc. (a)		900		85
Freee KK (a)		1,500		147
Mercari, Inc.		2,000		88
				320
New Zealand (3.2%)
Ryman Healthcare Ltd.		31,243		343
Poland (4.2%)
Dino Polska SA (a)		5,913		459
Sweden (4.0%)
AddLife AB		20,330		356
Cellavision AB (a)		1,951		73
				429
United Kingdom (7.9%)
Angle PLC (a)		53,184		35
ASOS PLC (a)		2,188		143
Blue Prism Group PLC (a)		4,063		95
Victoria PLC (a)		64,753		579
				852
United States (67.1%)
Appfolio, Inc., Class A (a)		1,308		236
Appian Corp. (a)		5,104		827
At Home Group, Inc. (a)		20,088		311
Cardlytics, Inc. (a)		4,511		644
Carvana Co. (a)		2,360		565
DraftKings, Inc., Class A (a)		3,447		160
Fastly, Inc., Class A (a)		5,453		476
Floor & Decor Holdings, Inc. (a)		5,266		489
GameStop Corp., Class A (a)(b)		10,489		198
Northern Star Acquisition Corp. (a)		4,025		63
Party City Holdco, Inc. (a)		82,951		510
Royalty Pharma PLC, Class A		9,184		460
Skillz, Inc. (a)		29,826		597
Smartsheet, Inc., Class A (a)		6,016		417
Snowflake, Inc., Class A (a)		640		180
Stitch Fix, Inc., Class A (a)		6,694		393
UTZ Brands, Inc.		5,170		114
Wayfair, Inc., Class A (a)		899		203

	Shares		Value (000)
Zoom Video Communications, Inc., Class A (a)		395	$	133
ZoomInfo Technologies, Inc., Class A (a)		5,465		264
				7,240
Total Common Stocks (Cost $6,060)				10,548
Short-Term Investments (2.4%)
Securities held as Collateral on Loaned Securities (2.0%)
Investment Company (1.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		178,341		178
	Face Amount (000)
Repurchase Agreements (0.3%)
Barclays Capital, Inc. (0.05%, dated 12/31/20, due 1/4/21; proceeds $6; fully collateralized by a U.S. Government obligation; 1.63% due 11/15/22; valued at $6)	$	6		6
HSBC Securities USA, Inc. (0.05%, dated 12/31/20, due 1/4/21; proceeds $21; fully collateralized by a U.S. Government obligation; 1.50% due 10/31/22; valued at $22)		21		21
Merrill Lynch & Co., Inc. (0.06%, 12/31/20, due 1/4/21; proceeds $2; fully collateralized by a U.S. Government obligation; 2.50% due 5/15/46; valued at $2)		2		2
				29
Total Securities held as Collateral on Loaned Securities (Cost $207)				207
	Shares
Investment Company (0.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $48)		47,617		48
Total Short-Term Investments (Cost $255)				255
Total Investments (100.2%) (Cost $6,315) Including $198 of Securities Loaned (c)(d)				10,803
Liabilities in Excess of Other Assets (–0.2%)				(20	)
Net Assets (100.0%)			$	10,783

(a) Non-income producing security.

(b) All or a portion of this security was on loan at December 31, 2020.

(c) The approximate fair value and percentage of net assets, $2,648,000 and 24.6%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $6,414,000. The aggregate gross unrealized appreciation is approximately $4,402,000 and the aggregate gross unrealized depreciation is approximately $13,000, resulting in net unrealized appreciation of approximately $4,389,000.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $6,089)	$	10,577
Investment in Security of Affiliated Issuer, at Value (Cost $226)		226
Total Investments in Securities, at Value (Cost $6,315)		10,803
Foreign Currency, at Value (Cost —@)		—	@
Receivable for Fund Shares Sold		166
Due from Adviser		36
Receivable from Securities Lending Income		2
Dividends Receivable		1
Receivable from Affiliate		—	@
Other Assets		41
Total Assets		11,049
Liabilities:
Collateral on Securities Loaned, at Value		207
Payable for Investments Purchased		32
Payable for Professional Fees		14
Payable for Custodian Fees		3
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Fees — Class IS		—	@
Payable for Administration Fees		1
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Other Liabilities		7
Total Liabilities		266
Net Assets	$	10,783
Net Assets Consist of:
Paid-in-Capital	$	6,231
Total Distributable Earnings		4,552
Net Assets	$	10,783
CLASS I:
Net Assets	$	7,854
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		296,318
Net Asset Value, Offering and Redemption Price Per Share	$	26.51
CLASS A:
Net Assets	$	2,462
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		93,492
Net Asset Value, Redemption Price Per Share	$	26.33
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.46
Maximum Offering Price Per Share	$	27.79
CLASS C:
Net Assets	$	439
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		16,940
Net Asset Value, Offering and Redemption Price Per Share	$	25.93
CLASS IS:
Net Assets	$	28
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,072
Net Asset Value, Offering and Redemption Price Per Share	$	26.53
⁽¹⁾ Including: Securities on Loan, at Value:	$	198

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Income from Securities Loaned — Net	$	12
Dividends from Securities of Unaffiliated Issuers (Net of $1 of Foreign Taxes Withheld)		11
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		23
Expenses:
Professional Fees		114
Registration Fees		52
Advisory Fees (Note B)		38
Shareholder Reporting Fees		12
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Custodian Fees (Note F)		8
Administration Fees (Note C)		4
Pricing Fees		2
Shareholder Services Fees — Class A (Note D)		2
Distribution and Shareholder Services Fees — Class C (Note D)		1
Directors' Fees and Expenses		3
Sub Transfer Agency Fees — Class I		—	@
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class C		—	@
Other Expenses		10
Total Expenses		255
Expenses Reimbursed by Adviser (Note B)		(159	)
Waiver of Advisory Fees (Note B)		(38	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		52
Net Investment Loss		(29	)
Realized Gain (Loss):
Investments Sold		430
Foreign Currency Translation		(—	@)
Net Realized Gain		430
Change in Unrealized Appreciation (Depreciation):
Investments		3,833
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		3,833
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		4,263
Net Increase in Net Assets Resulting from Operations	$	4,234

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(29	)	$	(11	)
Net Realized Gain (Loss)		430			(3	)
Net Change in Unrealized Appreciation (Depreciation)		3,833			658
Net Increase in Net Assets Resulting from Operations		4,234			644
Dividends and Distributions to Shareholders:
Class I		(235	)		—
Class A		(73	)		—
Class C		(14	)		—
Class IS		(1	)		—
Total Dividends and Distributions to Shareholders		(323	)		—
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		1,651			105
Distributions Reinvested		235			—
Redeemed		(7	)		—
Class A:
Subscribed		2,453			—
Distributions Reinvested		73			—
Redeemed		(630	)		—
Class C:
Subscribed		317			—
Distributions Reinvested		14			—
Redeemed		(32	)		—
Class IS:
Subscribed		1			—
Distributions Reinvested		1			—
Net Increase in Net Assets Resulting from Capital Share Transactions		4,076			105
Total Increase in Net Assets		7,987			749
Net Assets:
Beginning of Period		2,796			2,047
End of Period	$	10,783		$	2,796
(1) Capital Share Transactions:
Class I:
Shares Subscribed		76			9
Shares Issued on Distributions Reinvested		9			—
Shares Redeemed		(—	@@)		—
Net Increase in Class I Shares Outstanding		85			9
Class A:
Shares Subscribed		117			—
Shares Issued on Distributions Reinvested		3			—
Shares Redeemed		(28	)		—
Net Increase in Class A Shares Outstanding		92			—
Class C:
Shares Subscribed		17			—
Shares Issued on Distributions Reinvested		1			—
Shares Redeemed		(2	)		—
Net Increase in Class C Shares Outstanding		16			—
Class IS:
Shares Subscribed		—	@@		—
Shares Issued on Distributions Reinvested		—	@@		—
Net Increase in Class IS Shares Outstanding		—	@@		—

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,						Period Ended
Selected Per Share Data and Ratios	2020			2019			December 31, 2018⁽¹⁾
Net Asset Value, Beginning of Period	$	13.03		$	9.98		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.09	)		(0.05	)		(0.00	)⁽³⁾
Net Realized and Unrealized Gain (Loss)		14.41			3.10			(0.02	)
Total from Investment Operations		14.32			3.05			(0.02	)
Distributions from and/or in Excess of:
Net Investment Income		(0.03	)		—			—
Net Realized Gain		(0.81	)		—			—
Total Distributions		(0.84	)		—			—
Net Asset Value, End of Period	$	26.51		$	13.03		$	9.98
Total Return⁽⁴⁾		110.03	%		30.30	%		0.00	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	7,854		$	2,757		$	2,017
Ratio of Expenses Before Expense Limitation		5.12	%		14.17	%		913.94	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		1.00	%⁽⁵⁾		1.00	%⁽⁵⁾		1.00	%⁽⁸⁾
Ratio of Net Investment Loss		(0.52	)%⁽⁵⁾		(0.42	)%⁽⁵⁾		(1.00	)%⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		N/A
Portfolio Turnover Rate		46	%		74	%		0	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(5) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliate during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

	Class A
	Year Ended December 31,						Period Ended
Selected Per Share Data and Ratios	2020			2019			December 31, 2018⁽¹⁾
Net Asset Value, Beginning of Period	$	12.99		$	9.98		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.19	)		(0.09	)		(0.00	)⁽³⁾
Net Realized and Unrealized Gain (Loss)		14.34			3.10			(0.02	)
Total from Investment Operations		14.15			3.01			(0.02	)
Distributions from and/or in Excess of:
Net Investment Income		(0.00	)⁽³⁾		—			—
Net Realized Gain		(0.81	)		—			—
Total Distributions		(0.81	)		—			—
Net Asset Value, End of Period	$	26.33		$	12.99		$	9.98
Total Return⁽⁴⁾		109.10	%		29.90	%		0.00	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,462		$	13		$	10
Ratio of Expenses Before Expense Limitation		5.67	%		29.52	%		927.90	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		1.35	%⁽⁵⁾		1.35	%⁽⁵⁾		1.35	%⁽⁸⁾
Ratio of Net Investment Loss		(0.86	)%⁽⁵⁾		(0.77	)%⁽⁵⁾		(1.35	)%⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		N/A
Portfolio Turnover Rate		46	%		74	%		0	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

	Class C
	Year Ended December 31,						Period Ended
Selected Per Share Data and Ratios	2020			2019			December 31, 2018⁽¹⁾
Net Asset Value, Beginning of Period	$	12.89		$	9.98		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.33	)		(0.18	)		(0.00	)⁽³⁾
Net Realized and Unrealized Gain (Loss)		14.18			3.09			(0.02	)
Total from Investment Operations		13.85			2.91			(0.02	)
Distributions from and/or in Excess of:
Net Realized Gain		(0.81	)		—			—
Net Asset Value, End of Period	$	25.93		$	12.89		$	9.98
Total Return⁽⁴⁾		107.59	%		28.90	%		0.00	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	439		$	13		$	10
Ratio of Expenses Before Expense Limitation		7.61	%		30.23	%		928.63	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		2.10	%⁽⁵⁾		2.10	%⁽⁵⁾		2.10	%⁽⁸⁾
Ratio of Net Investment Loss		(1.62	)%⁽⁵⁾		(1.52	)%⁽⁵⁾		(2.10	)%⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		N/A
Portfolio Turnover Rate		46	%		74	%		0	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

	Class IS
	Year Ended December 31,						Period Ended
Selected Per Share Data and Ratios	2020			2019			December 31, 2018⁽¹⁾
Net Asset Value, Beginning of Period	$	13.04		$	9.98		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.08	)		(0.04	)		(0.00	)⁽³⁾
Net Realized and Unrealized Gain (Loss)		14.41			3.10			(0.02	)
Total from Investment Operations		14.33			3.06			(0.02	)
Distributions from and/or in Excess of:
Net Investment Income		(0.03	)		—			—
Net Realized Gain		(0.81	)		—			—
Total Distributions		(0.84	)		—			—
Net Asset Value, End of Period	$	26.53		$	13.04		$	9.98
Total Return⁽⁴⁾		110.08	%		30.40	%		0.00	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	28		$	13		$	10
Ratio of Expenses Before Expense Limitation		16.93	%		29.13	%		927.65	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		0.95	%⁽⁸⁾
Ratio of Net Investment Loss		(0.47	)%⁽⁵⁾		(0.37	)%⁽⁵⁾		(0.95	)%⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		N/A
Portfolio Turnover Rate		46	%		74	%		0	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(5) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliate during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

The accompanying financial statements relate to the Global Endurance Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined

investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Diversified Holding Companies	$	63	$	—	$	—	$	63
Entertainment		79		—		—		79
Food & Staples Retailing		—		459		—		459
Food Products		114		—		—		114
Health Care Equipment & Supplies		—		211		—		211
Health Care Providers & Services		—		343		—		343
Health Care Technology		—		142		—		142
Hotels, Restaurants & Leisure		160		—		—		160
Household Durables		—		579		—		579
Information Technology Services		656		85		—		741

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Interactive Media & Services	$	264	$	—	$	—	$	264
Internet & Direct Marketing Retail		596		231		—		827
Life Sciences Tools & Services		—		356		—		356
Media		644		—		—		644
Pharmaceuticals		460		—		—		460
Real Estate Management & Development		452		—		—		452
Software		2,338		243		—		2,581
Specialty Retail		2,073		—		—		2,073
Total Common Stocks		7,899		2,649		—		10,548
Short-Term Investments
Investment Company		226		—		—		226
Repurchase Agreements		—		29		—		29
Total Short-Term Investments		226		29		—		255
Total Assets	$	8,125	$	2,678	$	—	$	10,803

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	198	(a)	$	—	$	(198	)(b)(c)	$	0

(a) Represents market value of loaned securities at year end.

(b) The Fund received cash collateral of approximately $207,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments.

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	207	$	—	$	—	$	—	$	207
Total Borrowings	$	207	$	—	$	—	$	—	$	207
Gross amount of recognized liabilities for securities lending transactions									$	207

8. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the exdividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $1 billion				Over $1 billion
	0.80	%			0.75	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $38,000 of advisory fees were waived and approximately $165,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $5,674,000 and $2,217,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	62			$	4,886			$	4,722			$	—	@

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	226

@ Amount is less than $500.

For the year ended December 31, 2020, the Fund did not engage in any cross-trade transactions.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the three-year period ended December 31, 2020 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for

tax purposes. The tax character of distributions paid during fiscal years 2020 and 2019 was as follows:

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	31	$	292	$	—	$	—

Permanent differences, primarily due to a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Distributable Earnings (000)				Paid-in Capital (000)
$	—	@		$	(—	@)

@ Amount is less than $500.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	51			$	130

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Endurance Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Global Endurance Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the two years in the period then ended and the period from December 31, 2018 (commencement of operations) through December 31, 2018 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Global Endurance Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the two years then ended and the period from December 31, 2018 (commencement of operations) through December 31, 2018, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds in
Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since
August
2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since
August
2006

Chairperson of the Governance Committee (January 2021), Chairperson of the Liquidity and Alternatives Sub-Committee of the Investment Committee (2006-2020); and Director or Trustee of various Morgan Stanley Funds (since August 2006); President, Cedarwood Associates (mutual fund and investment management consulting)(since July 2006); formerly, Senior Managing Director of Victory Capital Management (1993-2006).

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since
January
2015

Independent Directors: (cont'd)

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds in
Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since
January
2015

Director or Trustee of various Morgan Stanley Funds (since January 2015); Chairman, Opus Capital Group (1996); formerly, Chief Executive Officer, Opus Capital Group (1996-2019); Director, Capvest Venture Fund, LP (May 2000-December 2011); Partner, Adena Ventures, LP (July 1999-December 2010); Director, The Victory Funds (February 2005-July 2008).

Dr. Manuel H. Johnson
c/o Johnson Smick
International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since
July
1991

Senior Partner, Johnson Smick International, Inc. (consulting firm); Chairperson of the Fixed Income, Liquidity and Alternatives Investment Committee (January 2021), Chairperson of the Investment Committee (2006-2020) and Director or Trustee of various Morgan Stanley Funds (since July 1991); Co-Chairman and a founder of the Group of Seven Council (G7C) (international economic commission); formerly, Chairperson of the Audit Committee (July 1991-September 2006) Vice Chairman of the Board of Governors of the Federal Reserve System and Assistant Secretary of the U.S. Treasury.

Director of NVR, Inc. (home construction).

Independent Directors: (cont'd)

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds in
Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since
August
1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since
August
2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since
January
2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since
June
1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since
June
2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Franchise Portfolio Class I	$	1,000.00	$	1,125.10	$	1,020.46	$	4.97	$	4.72		0.93	%
Global Franchise Portfolio Class A		1,000.00		1,124.20		1,019.25		6.25		5.94		1.17
Global Franchise Portfolio Class L		1,000.00		1,121.00		1,016.79		8.85		8.42		1.66
Global Franchise Portfolio Class C		1,000.00		1,119.60		1,015.48		10.23		9.73		1.92
Global Franchise Portfolio Class IS		1,000.00		1,125.80		1,020.96		4.44		4.22		0.83

** Annualized.

Performance Compared to the MSCI World Net Index⁽¹⁾ and the Lipper Global Large-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁸⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		13.22	%		13.95	%		12.48	%		11.78	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		12.95			13.66			12.18			11.48
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		7.03			12.44			11.57			11.17
Fund — Class L Shares w/o sales charges⁽⁵⁾		12.38			13.10			—			10.87
Fund — Class C Shares w/o sales charges⁽⁷⁾		12.09			12.81			—			13.23
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁷⁾		11.09			12.81			—			13.23
Fund — Class IS Shares w/o sales charges⁽⁶⁾		13.33			14.04			—			12.56
MSCI World Net Index		15.90			12.19			9.87			7.44
Lipper Global Large-Cap Growth Funds Index		27.24			15.47			11.34			7.95

⁽¹⁾ The MSCI World Net Index is a free float-adjusted market capitalization weighted index that is designed to measure the global equity market performance of developed markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI World Net Index currently consists of 23 developed market country indices. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

	Shares		Value (000)
Common Stocks (97.8%)
France (5.7%)
L'Oreal SA (BSRM)		205,223	$	78,303
LVMH Moet Hennessy Louis Vuitton SE		84,737		53,046
Pernod Ricard SA		252,189		48,432
				179,781
Germany (4.4%)
SAP SE		1,058,875		137,144
Italy (0.5%)
Davide Campari-Milano N.V.		1,376,714		15,780
Netherlands (2.4%)
Heineken N.V.		664,390		73,953
United Kingdom (16.0%)
British American Tobacco PLC		1,990,155		73,908
Experian PLC		756,530		28,740
Reckitt Benckiser Group PLC		2,790,837		249,094
RELX PLC (Euronext N.V.)		1,051,879		25,704
RELX PLC (LSE)		2,719,950		66,550
Unilever PLC		909,204		54,528
				498,524
United States (68.8%)
Abbott Laboratories		1,105,711		121,064
Accenture PLC, Class A		580,316		151,584
Automatic Data Processing, Inc.		696,991		122,810
Baxter International, Inc.		1,582,374		126,970
Becton Dickinson & Co.		460,723		115,282
Coca-Cola Co. (The)		1,116,218		61,213
Danaher Corp.		563,755		125,233
Factset Research Systems, Inc.		61,058		20,302
Fidelity National Information Services, Inc.		531,255		75,151
Fox Corp., Class A		642,980		18,724
Fox Corp., Class B (a)		485,819		14,030
Intercontinental Exchange, Inc.		760,949		87,730
Microsoft Corp.		1,205,309		268,085
Moody's Corp.		115,256		33,452
NIKE, Inc., Class B		372,710		52,727
Philip Morris International, Inc.		2,982,161		246,893
Procter & Gamble Co. (The)		1,047,010		145,681
Roper Technologies, Inc.		68,259		29,426
Thermo Fisher Scientific, Inc.		241,109		112,304
Visa, Inc., Class A		792,421		173,326
Zoetis, Inc.		276,290		45,726
				2,147,713
Total Common Stocks (Cost $2,279,896)				3,052,895

	Shares		Value (000)
Short-Term Investment (2.1%)
Investment Company (2.1%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $65,563)		65,562,747	$	65,563
Total Investments (99.9%) (Cost $2,345,459) (b)(c)				3,118,458
Other Assets in Excess of Liabilities (0.1%)				4,099
Net Assets (100.0%)			$	3,122,557

(a) Non-income producing security.

(b) The approximate fair value and percentage of net assets, $905,182,000 and 29.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $2,369,209,000. The aggregate gross unrealized appreciation is approximately $795,048,000 and the aggregate gross unrealized depreciation is approximately $45,799,000, resulting in net unrealized appreciation of approximately $749,249,000.

Euronext N.V. Euronext Amsterdam Stock Market.

LSE London Stock Exchange.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		25.2	%
Information Technology Services		16.8
Health Care Equipment & Supplies		15.7
Software		13.0
Household Products		12.6
Tobacco		10.3
Beverages		6.4
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $2,279,896)	$	3,052,895
Investment in Security of Affiliated Issuer, at Value (Cost $65,563)		65,563
Total Investments in Securities, at Value (Cost $2,345,459)		3,118,458
Cash		1
Dividends Receivable		6,052
Receivable for Fund Shares Sold		4,263
Tax Reclaim Receivable		736
Receivable from Affiliate		1
Other Assets		161
Total Assets		3,129,672
Liabilities:
Payable for Advisory Fees		5,297
Payable for Fund Shares Redeemed		972
Payable for Sub Transfer Agency Fees — Class I		268
Payable for Sub Transfer Agency Fees — Class A		36
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Sub Transfer Agency Fees — Class C		14
Payable for Shareholder Services Fees — Class A		66
Payable for Distribution and Shareholder Services Fees — Class L		5
Payable for Distribution and Shareholder Services Fees — Class C		105
Payable for Administration Fees		204
Payable for Custodian Fees		28
Payable for Transfer Agency Fees — Class I		4
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		2
Payable for Transfer Agency Fees — Class IS		1
Other Liabilities		111
Total Liabilities		7,115
Net Assets	$	3,122,557
Net Assets Consist of:
Paid-in-Capital	$	2,369,636
Total Distributable Earnings		752,921
Net Assets	$	3,122,557

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	2,300,448
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		73,724,139
Net Asset Value, Offering and Redemption Price Per Share	$	31.20
CLASS A:
Net Assets	$	317,673
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		10,436,972
Net Asset Value, Redemption Price Per Share	$	30.44
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.69
Maximum Offering Price Per Share	$	32.13
CLASS L:
Net Assets	$	8,390
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		275,898
Net Asset Value, Offering and Redemption Price Per Share	$	30.41
CLASS C:
Net Assets	$	125,919
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,229,151
Net Asset Value, Offering and Redemption Price Per Share	$	29.77
CLASS IS:
Net Assets	$	370,127
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		11,857,505
Net Asset Value, Offering and Redemption Price Per Share	$	31.21

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $704 of Foreign Taxes Withheld)	$	49,365
Dividends from Security of Affiliated Issuer (Note G)		202
Total Investment Income		49,567
Expenses:
Advisory Fees (Note B)		18,537
Administration Fees (Note C)		2,033
Sub Transfer Agency Fees — Class I		1,659
Sub Transfer Agency Fees — Class A		245
Sub Transfer Agency Fees — Class L		5
Sub Transfer Agency Fees — Class C		84
Shareholder Services Fees — Class A (Note D)		721
Distribution and Shareholder Services Fees — Class L (Note D)		59
Distribution and Shareholder Services Fees — Class C (Note D)		1,105
Registration Fees		199
Shareholder Reporting Fees		111
Professional Fees		94
Custodian Fees (Note F)		88
Transfer Agency Fees — Class I (Note E)		24
Transfer Agency Fees — Class A (Note E)		5
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		8
Transfer Agency Fees — Class IS (Note E)		4
Pricing Fees		2
Interest Expenses		17
Other Expenses		66
Total Expenses		25,068
Rebate from Morgan Stanley Affiliate (Note G)		(101	)
Net Expenses		24,967
Net Investment Income		24,600
Realized Gain (Loss):
Investments Sold		65,081
Foreign Currency Translation		(27	)
Net Realized Gain		65,054
Change in Unrealized Appreciation (Depreciation):
Investments		262,186
Foreign Currency Translation		47
Net Change in Unrealized Appreciation (Depreciation)		262,233
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		327,287
Net Increase in Net Assets Resulting from Operations	$	351,887

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	24,600		$	18,037
Net Realized Gain		65,054			75,417
Net Change in Unrealized Appreciation (Depreciation)		262,233			342,113
Net Increase in Net Assets Resulting from Operations		351,887			435,567
Dividends and Distributions to Shareholders:
Class I		(77,432	)		(69,422	)
Class A		(10,258	)		(12,386	)
Class L		(235	)		(324	)
Class C		(3,376	)		(3,695	)
Class IS		(10,185	)		(6,101	)
Total Dividends and Distributions to Shareholders		(101,486	)		(91,928	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		925,113			610,415
Distributions Reinvested		74,251			66,894
Redeemed		(495,524	)		(243,674	)
Class A:
Subscribed		94,968			129,760
Distributions Reinvested		9,770			11,893
Redeemed		(103,292	)		(42,410	)
Class L:
Exchanged		20			153
Distributions Reinvested		234			324
Redeemed		(881	)		(971	)
Class C:
Subscribed		40,555			39,565
Distributions Reinvested		3,270			3,620
Redeemed		(26,830	)		(13,421	)
Class IS:
Subscribed		323,345			27,633
Distributions Reinvested		9,909			6,101
Redeemed		(113,147	)		(145,085	)
Net Increase in Net Assets Resulting from Capital Share Transactions		741,761			450,797
Total Increase in Net Assets		992,162			794,436
Net Assets:
Beginning of Period		2,130,395			1,335,959
End of Period	$	3,122,557		$	2,130,395

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		33,099			22,755
Shares Issued on Distributions Reinvested		2,414			2,357
Shares Redeemed		(17,628	)		(9,143	)
Net Increase in Class I Shares Outstanding		17,885			15,969
Class A:
Shares Subscribed		3,390			4,988
Shares Issued on Distributions Reinvested		326			429
Shares Redeemed		(3,779	)		(1,617	)
Net Increase (Decrease) in Class A Shares Outstanding		(63	)		3,800
Class L:
Shares Exchanged		1			5
Shares Issued on Distributions Reinvested		8			12
Shares Redeemed		(34	)		(41	)
Net Decrease in Class L Shares Outstanding		(25	)		(24	)
Class C:
Shares Subscribed		1,471			1,520
Shares Issued on Distributions Reinvested		111			133
Shares Redeemed		(985	)		(519	)
Net Increase in Class C Shares Outstanding		597			1,134
Class IS:
Shares Subscribed		10,853			988
Shares Issued on Distributions Reinvested		322			215
Shares Redeemed		(4,129	)		(5,250	)
Net Increase (Decrease) in Class IS Shares Outstanding		7,046			(4,047	)

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	28.53		$	23.03		$	24.72		$	20.56		$	20.33
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.30			0.30			0.29			0.27			0.30
Net Realized and Unrealized Gain (Loss)		3.45			6.51			(0.63	)		5.05			0.84
Total from Investment Operations		3.75			6.81			(0.34	)		5.32			1.14
Distributions from and/or in Excess of:
Net Investment Income		(0.28	)		(0.27	)		(0.27	)		(0.24	)		(0.28	)
Net Realized Gain		(0.80	)		(1.04	)		(1.08	)		(0.92	)		(0.63	)
Total Distributions		(1.08	)		(1.31	)		(1.35	)		(1.16	)		(0.91	)
Net Asset Value, End of Period	$	31.20		$	28.53		$	23.03		$	24.72		$	20.56
Total Return⁽³⁾		13.22	%		29.60	%		(1.50	)%		25.85	%		5.64	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,300,448		$	1,593,092		$	918,409		$	753,107		$	601,340
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			N/A			0.98	%
Ratio of Expenses After Expense Limitation		0.92	%⁽⁴⁾		0.93	%⁽⁴⁾		0.94	%⁽⁴⁾		0.98	%⁽⁴⁾		0.97	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.92	%⁽⁴⁾		0.93	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income		1.04	%⁽⁴⁾		1.09	%⁽⁴⁾		1.14	%⁽⁴⁾		1.17	%⁽⁴⁾		1.40	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾
Portfolio Turnover Rate		19	%		16	%		27	%		28	%		30	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	27.86		$	22.53		$	24.21		$	20.16		$	19.96
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.22			0.23			0.21			0.22			0.23
Net Realized and Unrealized Gain (Loss)		3.37			6.35			(0.61	)		4.94			0.83
Total from Investment Operations		3.59			6.58			(0.40	)		5.16			1.06
Distributions from and/or in Excess of:
Net Investment Income		(0.21	)		(0.21	)		(0.20	)		(0.19	)		(0.23	)
Net Realized Gain		(0.80	)		(1.04	)		(1.08	)		(0.92	)		(0.63	)
Total Distributions		(1.01	)		(1.25	)		(1.28	)		(1.11	)		(0.86	)
Net Asset Value, End of Period	$	30.44		$	27.86		$	22.53		$	24.21		$	20.16
Total Return⁽³⁾		12.95	%		29.24	%		(1.77	)%		25.58	%		5.36	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	317,673		$	292,491		$	150,936		$	146,722		$	104,306
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			N/A			1.23	%
Ratio of Expenses After Expense Limitation		1.16	%⁽⁴⁾		1.19	%⁽⁴⁾		1.23	%⁽⁴⁾		1.21	%⁽⁴⁾		1.22	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.16	%⁽⁴⁾		1.19	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income		0.77	%⁽⁴⁾		0.83	%⁽⁴⁾		0.84	%⁽⁴⁾		0.94	%⁽⁴⁾		1.13	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾
Portfolio Turnover Rate		19	%		16	%		27	%		28	%		30	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Amount is less than 0.005%.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	27.84		$	22.51		$	24.18		$	20.13		$	19.91
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.07			0.09			0.09			0.10			0.13
Net Realized and Unrealized Gain (Loss)		3.36			6.35			(0.62	)		4.93			0.82
Total from Investment Operations		3.43			6.44			(0.53	)		5.03			0.95
Distributions from and/or in Excess of:
Net Investment Income		(0.06	)		(0.07	)		(0.06	)		(0.06	)		(0.10	)
Net Realized Gain		(0.80	)		(1.04	)		(1.08	)		(0.92	)		(0.63	)
Total Distributions		(0.86	)		(1.11	)		(1.14	)		(0.98	)		(0.73	)
Net Asset Value, End of Period	$	30.41		$	27.84		$	22.51		$	24.18		$	20.13
Total Return⁽³⁾		12.38	%		28.62	%		(2.29	)%		24.98	%		4.82	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8,390		$	8,388		$	7,312		$	7,993		$	7,449
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			N/A			1.72	%
Ratio of Expenses After Expense Limitation		1.66	%⁽⁴⁾		1.69	%⁽⁴⁾		1.73	%⁽⁴⁾		1.70	%⁽⁴⁾		1.71	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.66	%⁽⁴⁾		1.69	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income		0.26	%⁽⁴⁾		0.31	%⁽⁴⁾		0.36	%⁽⁴⁾		0.44	%⁽⁴⁾		0.65	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾
Portfolio Turnover Rate		19	%		16	%		27	%		28	%		30	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Amount is less than 0.005%.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	27.30		$	22.13		$	23.82		$	19.88		$	19.75
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.01			0.02			0.03			0.04			0.06
Net Realized and Unrealized Gain (Loss)		3.27			6.23			(0.60	)		4.86			0.84
Total from Investment Operations		3.28			6.25			(0.57	)		4.90			0.90
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.04	)		(0.04	)		(0.04	)		(0.14	)
Net Realized Gain		(0.80	)		(1.04	)		(1.08	)		(0.92	)		(0.63	)
Total Distributions		(0.81	)		(1.08	)		(1.12	)		(0.96	)		(0.77	)
Net Asset Value, End of Period	$	29.77		$	27.30		$	22.13		$	23.82		$	19.88
Total Return⁽³⁾		12.09	%		28.27	%		(2.51	)%		24.63	%		4.58	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	125,919		$	99,141		$	55,271		$	47,726		$	29,650
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			N/A			2.00	%
Ratio of Expenses After Expense Limitation		1.91	%⁽⁴⁾		1.95	%⁽⁴⁾		1.96	%⁽⁴⁾		1.98	%⁽⁴⁾		1.99	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.91	%⁽⁴⁾		1.95	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income		0.03	%⁽⁴⁾		0.07	%⁽⁴⁾		0.12	%⁽⁴⁾		0.16	%⁽⁴⁾		0.29	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾
Portfolio Turnover Rate		19	%		16	%		27	%		28	%		30	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Amount is less than 0.005%.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	28.53		$	23.03		$	24.72		$	20.55		$	20.33
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.33			0.32			0.32			0.29			0.21
Net Realized and Unrealized Gain (Loss)		3.45			6.51			(0.65	)		5.05			0.93
Total from Investment Operations		3.78			6.83			(0.33	)		5.34			1.14
Distributions from and/or in Excess of:
Net Investment Income		(0.30	)		(0.29	)		(0.28	)		(0.25	)		(0.29	)
Net Realized Gain		(0.80	)		(1.04	)		(1.08	)		(0.92	)		(0.63	)
Total Distributions		(1.10	)		(1.33	)		(1.36	)		(1.17	)		(0.92	)
Net Asset Value, End of Period	$	31.21		$	28.53		$	23.03		$	24.72		$	20.55
Total Return⁽³⁾		13.33	%		29.67	%		(1.45	)%		26.00	%		5.70	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	370,127		$	137,283		$	204,031		$	90,488		$	19,334
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			N/A			0.94	%
Ratio of Expenses After Expense Limitation		0.83	%⁽⁴⁾		0.86	%⁽⁴⁾		0.88	%⁽⁴⁾		0.91	%⁽⁴⁾		0.92	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.83	%⁽⁴⁾		0.86	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income		1.14	%⁽⁴⁾		1.21	%⁽⁴⁾		1.30	%⁽⁴⁾		1.23	%⁽⁴⁾		0.99	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾
Portfolio Turnover Rate		19	%		16	%		27	%		28	%		30	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Amount is less than 0.005%.

The accompanying financial statements relate to the Global Franchise Portfolio. The Fund seeks long-term capital appreciation.

closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the

foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Beverages	$	61,213	$	138,165	$	—	$	199,378
Capital Markets		141,484		—		—		141,484
Health Care Equipment & Supplies		488,549		—		—		488,549
Household Products		145,681		249,094		—		394,775
Industrial Conglomerates		29,426		—		—		29,426

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Information Technology Services	$	522,871	$	—	$	—	$	522,871
Life Sciences Tools & Services		112,304		—		—		112,304
Media		32,754		—		—		32,754
Personal Products		—		132,831		—		132,831
Pharmaceuticals		45,726		—		—		45,726
Professional Services		—		120,994		—		120,994
Software		268,085		137,144		—		405,229
Textiles, Apparel & Luxury Goods		52,727		53,046		—		105,773
Tobacco		246,893		73,908		—		320,801
Total Common Stocks		2,147,713		905,182		—		3,052,895
Short-Term Investment
Investment Company		65,563		—		—		65,563
Total Assets	$	2,213,276	$	905,182	$	—	$	3,118,458

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million				Next $500 million				Over $1 billion
	0.80	%			0.75	%			0.70	%

For the year ended December 31, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.73% of the Fund's average daily net assets.

Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. This arrangement had no effect for the year ended December 31, 2020.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to

Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $1,129,783,000 and $476,800,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $101,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	52,999			$	844,660			$	832,096			$	202

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	65,563

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	25,074	$	76,412	$	22,253	$	69,675

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	86			$	3,573

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Franchise Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Global Franchise Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Global Franchise Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020 by correspondence with the custodian and others. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Infrastructure Portfolio Class I	$	1,000.00	$	1,100.00	$	1,020.26	$	5.12	$	4.93		0.97	%
Global Infrastructure Portfolio Class A		1,000.00		1,098.40		1,019.05		6.38		6.14		1.21
Global Infrastructure Portfolio Class L		1,000.00		1,095.50		1,016.19		9.38		9.02		1.78
Global Infrastructure Portfolio Class C		1,000.00		1,093.70		1,014.73		10.89		10.48		2.07
Global Infrastructure Portfolio Class IS		1,000.00		1,100.00		1,020.41		4.96		4.77		0.94
Global Infrastructure Portfolio Class IR		1,000.00		1,100.30		1,020.41		4.96		4.77		0.94

** Annualized.

Performance Compared to the Dow Jones Brookfield Global Infrastructure Index^SM(1), the S&P Global BMI Index⁽²⁾, and the Lipper Global Infrastructure Funds Index⁽³⁾

	Period Ended December 31, 2020 Total Returns⁽⁴⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁹⁾
Fund — Class I Shares w/o sales charges⁽⁵⁾		–1.45	%		8.59	%		9.26	%		9.51	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		–1.69			8.33			8.98			9.23
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		–6.86			7.16			8.39			8.66
Fund — Class L Shares w/o sales charges⁽⁵⁾		–2.27			7.71			8.38			8.62
Fund — Class C Shares w/o sales charges⁽⁷⁾		–2.53			7.41			—			2.93
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁷⁾		–3.47			7.41			—			2.93
Fund — Class IS Shares w/o sales charges⁽⁶⁾		–1.37			8.54			—			7.01
Fund — Class IR Shares w/o sales charges⁽⁸⁾		–1.43			—			—			7.58
Dow Jones Brookfield Global Infrastructure Index^SM		–6.97			7.52			8.15			8.54
S&P Global BMI Index		16.78			12.66			9.60			10.43
Lipper Global Infrastructure Funds Index		–1.22			8.50			N/A			N/A

⁽¹⁾ The Dow Jones Brookfield Global Infrastructure Index^SM is a float-adjusted market capitalization weighted index that measures the stock performance of companies that exhibit strong infrastructure characteristics. The Index intends to measure all sectors of the infrastructure market. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Standard & Poor's Global BMI Index (S&P Global BMI Index) is a broad market index designed to capture exposure to equities in all countries in the world that meet minimum size and liquidity requirements. The index members represents developed and emerging market countries. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

	Shares		Value (000)
Common Stocks (97.3%)
Australia (4.8%)
Atlas Arteria Ltd. (Units) (a)		670,672	$	3,373
Sydney Airport (Units) (a)(b)		546,658		2,706
Transurban Group (Units) (a)		725,802		7,648
				13,727
Brazil (0.3%)
Energisa SA (Units) (a)		102,700		1,041
Canada (10.5%)
Canadian National Railway Co.		31,559		3,469
Enbridge, Inc.		227,508		7,276
Gibson Energy, Inc. (c)		576,020		9,304
Keyera Corp. (c)		81,191		1,443
Pembina Pipeline Corp. (c)		96,908		2,292
TC Energy Corp.		159,384		6,480
				30,264
China (7.6%)
China Everbright Environment Group Ltd. (d)		12,491,000		7,056
China Gas Holdings Ltd. (d)		2,202,800		8,729
China Merchants Port Holdings Co., Ltd. (d)		1,315,921		1,611
China Tower Corp. Ltd. H Shares (d)		8,210,000		1,208
Jiangsu Expressway Co., Ltd. H Shares (d)		2,104,000		2,353
Zhejiang Expressway Co., Ltd., Class H (d)		1,000,000		846
				21,803
Denmark (0.1%)
Orsted A/S		1,716		351
France (6.2%)
Aeroports de Paris (b)		8,382		1,085
Getlink SE (b)		176,170		3,048
Vinci SA		137,069		13,653
				17,786
Hong Kong (1.0%)
Power Assets Holdings Ltd.		522,000		2,827
India (2.2%)
Azure Power Global Ltd. (b)		153,843		6,272
Italy (3.3%)
Atlantia SpA (b)		89,364		1,614
Infrastrutture Wireless Italiane SpA		276,000		3,346
Snam SpA		293,940		1,660
Terna Rete Elettrica Nazionale SpA		361,687		2,779
				9,399
Japan (2.3%)
Central Japan Railway Co.		12,900		1,824
East Japan Railway Co.		70,600		4,710
				6,534
Mexico (4.5%)
Grupo Aeroportuario del Pacifico SAB de CV (b)		208,933		2,331
Grupo Aeroportuario del Sureste SAB de CV, Class B (b)		149,567		2,478
Promotora y Operadora de Infraestructura SAB de CV		922,895		8,183
				12,992

	Shares		Value (000)
New Zealand (0.9%)
Auckland International Airport Ltd. (b)		492,829	$	2,695
Spain (4.1%)
Aena SME SA (b)		21,427		3,725
Cellnex Telecom SA		65,911		3,958
Ferrovial SA		144,910		4,007
				11,690
Switzerland (1.0%)
Flughafen Zurich AG (Registered) (b)		15,998		2,823
United Kingdom (5.4%)
National Grid PLC		925,006		10,931
Pennon Group PLC		182,040		2,356
Severn Trent PLC		69,294		2,163
				15,450
United States (43.1%)
Ameren Corp.		39,370		3,073
American Electric Power Co., Inc.		49,140		4,092
American Tower Corp. REIT		92,071		20,666
American Water Works Co., Inc.		35,924		5,513
Atmos Energy Corp.		58,416		5,575
Avangrid, Inc.		58,638		2,665
Cheniere Energy, Inc. (b)		95,582		5,738
CMS Energy Corp.		35,967		2,194
Crown Castle International Corp. REIT		91,540		14,572
Edison International		89,235		5,606
Essential Utilities, Inc.		138,891		6,568
Eversource Energy		61,223		5,296
NiSource, Inc.		197,202		4,524
ONEOK, Inc.		185,333		7,113
Republic Services, Inc.		20,342		1,959
SBA Communications Corp. REIT		24,727		6,976
Sempra Energy		62,191		7,924
Targa Resources Corp.		150,670		3,975
Waste Management, Inc.		27,971		3,299
Williams Cos., Inc. (The)		204,730		4,105
Xcel Energy, Inc.		37,781		2,519
				123,952
Total Common Stocks (Cost $219,501)				279,606
Short-Term Investments (1.2%)
Securities held as Collateral on Loaned Securities (0.4%)
Investment Company (0.3%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		1,020,135		1,020
	Face Amount (000)
Repurchase Agreements (0.1%)
Barclays Capital, Inc., (0.05%, dated 12/31/20, due 1/4/21; proceeds $31; fully collateralized by a U.S. Government obligation; 1.63% due 11/15/22; valued at $32)	$	31		31

	Face Amount (000)		Value (000)
Repurchase Agreements (cont'd)
HSBC Securities USA, Inc., (0.05%, dated 12/31/20, due 1/4/21; proceeds $121; fully collateralized by a U.S. Government obligation; 0.15% due 10/31/22; valued at $124)	$	121	$	121
Merrill Lynch & Co., Inc., (0.06%, 12/31/20, due 1/4/21; proceeds $13; fully collateralized by a U.S. Government obligation; 2.50% due 5/15/46; valued at $13)		13		13
				165
Total Securities held as Collateral on Loaned Securities (Cost $1,185)				1,185
	Shares
Investment Company (0.8%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $2,329)		2,329,299		2,329
Total Short-Term Investments (Cost $3,514)				3,514
Total Investments (98.5%) (Cost $223,015) Including $4,509 of Securities Loaned (e)(f)				283,120
Other Assets in Excess of Liabilities (1.5%)				4,235
Net Assets (100.0%)			$	287,355

(a) Consists of one or more classes of securities traded together as a unit; stocks with attached warrants.

(b) Non-income producing security.

(d) Security trades on the Hong Kong exchange.

(e) The approximate fair value and percentage of net assets, $106,126,000 and 36.9%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(f) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $231,539,000. The aggregate gross unrealized appreciation is approximately $55,276,000 and the aggregate gross unrealized depreciation is approximately $3,695,000, resulting in net unrealized appreciation of approximately $51,581,000.

REIT Real Estate Investment Trust.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $219,666)	$	279,771
Investment in Security of Affiliated Issuer, at Value (Cost $3,349)		3,349
Total Investments in Securities, at Value (Cost $223,015)		283,120
Foreign Currency, at Value (Cost $189)		190
Receivable for Investments Sold		8,283
Dividends Receivable		777
Receivable for Fund Shares Sold		51
Tax Reclaim Receivable		14
Receivable from Securities Lending Income		1
Receivable from Affiliate		—	@
Other Assets		70
Total Assets		292,506
Liabilities:
Payable for Investments Purchased		2,844
Collateral on Securities Loaned, at Value		1,185
Payable for Advisory Fees		479
Payable for Fund Shares Redeemed		407
Payable for Sub Transfer Agency Fees — Class I		13
Payable for Sub Transfer Agency Fees — Class A		27
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Shareholder Services Fees — Class A		45
Payable for Distribution and Shareholder Services Fees — Class L		2
Payable for Distribution and Shareholder Services Fees — Class C		2
Payable for Directors' Fees and Expenses		41
Payable for Administration Fees		20
Payable for Custodian Fees		19
Payable for Professional Fees		16
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		10
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Transfer Agency Fees — Class IR		—	@
Other Liabilities		38
Total Liabilities		5,151
Net Assets	$	287,355
Net Assets Consist of:
Paid-in-Capital	$	228,707
Total Distributable Earnings		58,648
Net Assets	$	287,355

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	68,255
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,715,365
Net Asset Value, Offering and Redemption Price Per Share	$	14.47
CLASS A:
Net Assets	$	213,128
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		14,761,597
Net Asset Value, Redemption Price Per Share	$	14.44
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.80
Maximum Offering Price Per Share	$	15.24
CLASS L:
Net Assets	$	3,163
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		219,666
Net Asset Value, Offering and Redemption Price Per Share	$	14.40
CLASS C:
Net Assets	$	2,787
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		196,571
Net Asset Value, Offering and Redemption Price Per Share	$	14.18
CLASS IS:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		786
Net Asset Value, Offering and Redemption Price Per Share	$	14.40
CLASS IR:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		766
Net Asset Value, Offering and Redemption Price Per Share	$	14.47
⁽¹⁾ Including: Securities on Loan, at Value:	$	4,509

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $344 of Foreign Taxes Withheld)	$	5,500
Dividends from Security of Affiliated Issuer (Note G)		21
Income from Securities Loaned — Net		12
Total Investment Income		5,533
Expenses:
Advisory Fees (Note B)		2,423
Shareholder Services Fees — Class A (Note D)		528
Distribution and Shareholder Services Fees — Class L (Note D)		24
Distribution and Shareholder Services Fees — Class C (Note D)		26
Administration Fees (Note C)		228
Sub Transfer Agency Fees — Class I		90
Sub Transfer Agency Fees — Class A		141
Sub Transfer Agency Fees — Class L		2
Sub Transfer Agency Fees — Class C		2
Professional Fees		103
Registration Fees		82
Custodian Fees (Note F)		56
Transfer Agency Fees — Class I (Note E)		4
Transfer Agency Fees — Class A (Note E)		39
Transfer Agency Fees — Class L (Note E)		3
Transfer Agency Fees — Class C (Note E)		3
Transfer Agency Fees — Class IS (Note E)		2
Transfer Agency Fees — Class IR (Note E)		2
Shareholder Reporting Fees		50
Directors' Fees and Expenses		6
Pricing Fees		4
Interest Expenses		1
Other Expenses		21
Total Expenses		3,840
Waiver of Advisory Fees (Note B)		(294	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(74	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(137	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(8	)
Net Expenses		3,320
Net Investment Income		2,213
Realized Gain:
Investments Sold		11,287
Foreign Currency Translation		22
Net Realized Gain		11,309
Change in Unrealized Appreciation (Depreciation):
Investments		(20,248	)
Foreign Currency Translation		(3	)
Net Change in Unrealized Appreciation (Depreciation)		(20,251	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(8,942	)
Net Decrease in Net Assets Resulting from Operations	$	(6,729	)

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	2,213		$	7,490
Net Realized Gain		11,309			8,302
Net Change in Unrealized Appreciation (Depreciation)		(20,251	)		65,191
Net Increase (Decrease) in Net Assets Resulting from Operations		(6,729	)		80,983
Dividends and Distributions to Shareholders:
Class I		(3,110	)		(2,674	)
Class A		(9,011	)		(6,686	)
Class L		(116	)		(83	)
Class C		(101	)		(60	)
Class IS		(1	)		(—	@)
Class IR		(—	@)		(—	@)
Total Dividends and Distributions to Shareholders		(12,339	)		(9,503	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		13,904			16,736
Distributions Reinvested		3,105			2,669
Redeemed		(33,838	)		(11,724	)
Class A:
Subscribed		4,503			4,129
Distributions Reinvested		8,847			6,562
Redeemed		(26,201	)		(32,462	)
Class L:
Exchanged		39			2
Distributions Reinvested		113			81
Redeemed		(491	)		(985	)
Class C:
Subscribed		417			146
Distributions Reinvested		100			60
Redeemed		(438	)		(465	)
Class IS:
Subscribed		—			3,143
Distributions Reinvested		1			—	@
Redeemed		—			(32,096	)
Class IR:
Distributions Reinvested		—	@		—	@
Net Decrease in Net Assets Resulting from Capital Share Transactions		(29,939	)		(44,204	)
Total Increase (Decrease) in Net Assets		(49,007	)		27,276
Net Assets:
Beginning of Period		336,362			309,086
End of Period	$	287,355		$	336,362

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		963			1,194
Shares Issued on Distributions Reinvested		215			177
Shares Redeemed		(2,279	)		(826	)
Net Increase (Decrease) in Class I Shares Outstanding		(1,101	)		545
Class A:
Shares Subscribed		317			280
Shares Issued on Distributions Reinvested		614			435
Shares Redeemed		(1,850	)		(2,261	)
Net Decrease in Class A Shares Outstanding		(919	)		(1,546	)
Class L:
Shares Exchanged		2			—	@@
Shares Issued on Distributions Reinvested		8			5
Shares Redeemed		(34	)		(70	)
Net Decrease in Class L Shares Outstanding		(24	)		(65	)
Class C:
Shares Subscribed		30			10
Shares Issued on Distributions Reinvested		7			4
Shares Redeemed		(33	)		(34	)
Net Increase (Decrease) in Class C Shares Outstanding		4			(20	)
Class IS:
Shares Subscribed		—			224
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		—			(2,198	)
Net Increase (Decrease) in Class IS Shares Outstanding		—	@@		(1,974	)
Class IR:
Shares Issued on Distributions Reinvested		—	@@		—	@@

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	15.37		$	12.39		$	14.64		$	14.02		$	12.59
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.13			0.35			0.31			0.44			0.40
Net Realized and Unrealized Gain (Loss)		(0.36	)		3.11			(1.45	)		1.33			1.55
Total from Investment Operations		(0.23	)		3.46			(1.14	)		1.77			1.95
Distributions from and/or in Excess of:
Net Investment Income		(0.40	)		(0.36	)		(0.37	)		(0.42	)		(0.37	)
Net Realized Gain		(0.27	)		(0.12	)		(0.74	)		(0.73	)		(0.15	)
Total Distributions		(0.67	)		(0.48	)		(1.11	)		(1.15	)		(0.52	)
Net Asset Value, End of Period	$	14.47		$	15.37		$	12.39		$	14.64		$	14.02
Total Return⁽³⁾		(1.45	)%		27.94	%		(8.02	)%		12.70	%		15.55	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	68,255		$	89,371		$	65,311		$	95,219		$	58,794
Ratio of Expenses Before Expense Limitation		1.18	%		1.16	%		1.16	%		1.08	%		1.04	%
Ratio of Expenses After Expense Limitation		0.97	%⁽⁴⁾		0.97	%⁽⁴⁾		0.97	%⁽⁴⁾		0.91	%⁽⁴⁾⁽⁵⁾		0.85	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.97	%⁽⁴⁾		0.97	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income		0.94	%⁽⁴⁾		2.40	%⁽⁴⁾		2.21	%⁽⁴⁾		2.93	%⁽⁴⁾		2.85	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.01	%		0.01	%
Portfolio Turnover Rate		62	%		30	%		43	%		45	%		48	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.97% for Class I shares. Prior to July 1, 2017, the maximum ratio was 0.87% for Class I shares.

(6) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	15.33		$	12.36		$	14.60		$	13.99		$	12.56
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.11			0.31			0.28			0.39			0.36
Net Realized and Unrealized Gain (Loss)		(0.37	)		3.10			(1.45	)		1.33			1.55
Total from Investment Operations		(0.26	)		3.41			(1.17	)		1.72			1.91
Distributions from and/or in Excess of:
Net Investment Income		(0.36	)		(0.32	)		(0.33	)		(0.38	)		(0.33	)
Net Realized Gain		(0.27	)		(0.12	)		(0.74	)		(0.73	)		(0.15	)
Total Distributions		(0.63	)		(0.44	)		(1.07	)		(1.11	)		(0.48	)
Net Asset Value, End of Period	$	14.44		$	15.33		$	12.36		$	14.60		$	13.99
Total Return⁽³⁾		(1.69	)%		27.62	%		(8.22	)%		12.37	%		15.29	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	213,128		$	240,350		$	212,919		$	278,780		$	275,481
Ratio of Expenses Before Expense Limitation		1.38	%		1.37	%		1.37	%		1.38	%		1.37	%
Ratio of Expenses After Expense Limitation		1.21	%⁽⁴⁾		1.21	%⁽⁴⁾		1.21	%⁽⁴⁾		1.15	%⁽⁴⁾⁽⁵⁾		1.10	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.21	%⁽⁴⁾		1.21	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income		0.74	%⁽⁴⁾		2.16	%⁽⁴⁾		2.00	%⁽⁴⁾		2.63	%⁽⁴⁾		2.60	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.01	%		0.01	%
Portfolio Turnover Rate		62	%		30	%		43	%		45	%		48	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.21% for Class A shares. Prior to July 1, 2017, the maximum ratio was 1.11% for Class A shares.

(6) Amount is less than 0.005%.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	15.29		$	12.33		$	14.55		$	13.94		$	12.52
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.02			0.23			0.20			0.31			0.28
Net Realized and Unrealized Gain (Loss)		(0.36	)		3.08			(1.44	)		1.33			1.54
Total from Investment Operations		(0.34	)		3.31			(1.24	)		1.64			1.82
Distributions from and/or in Excess of:
Net Investment Income		(0.28	)		(0.23	)		(0.24	)		(0.30	)		(0.25	)
Net Realized Gain		(0.27	)		(0.12	)		(0.74	)		(0.73	)		(0.15	)
Total Distributions		(0.55	)		(0.35	)		(0.98	)		(1.03	)		(0.40	)
Net Asset Value, End of Period	$	14.40		$	15.29		$	12.33		$	14.55		$	13.94
Total Return⁽³⁾		(2.27	)%		26.87	%		(8.73	)%		11.80	%		14.57	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,163		$	3,718		$	3,805		$	5,634		$	5,534
Ratio of Expenses Before Expense Limitation		1.94	%		1.93	%		1.87	%		1.95	%		1.95	%
Ratio of Expenses After Expense Limitation		1.78	%⁽⁴⁾		1.78	%⁽⁴⁾		1.78	%⁽⁴⁾		1.72	%⁽⁴⁾⁽⁵⁾		1.67	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.78	%⁽⁴⁾		1.78	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income		0.17	%⁽⁴⁾		1.58	%⁽⁴⁾		1.41	%⁽⁴⁾		2.06	%⁽⁴⁾		2.03	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.01	%		0.01	%
Portfolio Turnover Rate		62	%		30	%		43	%		45	%		48	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.78% for Class L shares. Prior to July 1, 2017, the maximum ratio was 1.68% for Class L shares.

(6) Amount is less than 0.005%.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	15.08		$	12.17		$	14.36		$	13.81		$	12.47
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.02	)		0.18			0.16			0.29			0.26
Net Realized and Unrealized Gain (Loss)		(0.36	)		3.05			(1.42	)		1.28			1.52
Total from Investment Operations		(0.38	)		3.23			(1.26	)		1.57			1.78
Distributions from and/or in Excess of:
Net Investment Income		(0.25	)		(0.20	)		(0.19	)		(0.29	)		(0.29	)
Net Realized Gain		(0.27	)		(0.12	)		(0.74	)		(0.73	)		(0.15	)
Total Distributions		(0.52	)		(0.32	)		(0.93	)		(1.02	)		(0.44	)
Net Asset Value, End of Period	$	14.18		$	15.08		$	12.17		$	14.36		$	13.81
Total Return⁽³⁾		(2.53	)%		26.55	%		(9.02	)%		11.42	%		14.35	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,787		$	2,901		$	2,580		$	3,601		$	784
Ratio of Expenses Before Expense Limitation		2.22	%		2.20	%		2.20	%		2.23	%		2.69	%
Ratio of Expenses After Expense Limitation		2.07	%⁽⁴⁾		2.07	%⁽⁴⁾		2.07	%⁽⁴⁾		2.02	%⁽⁴⁾⁽⁵⁾		1.96	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		2.07	%⁽⁴⁾		2.07	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income		(0.12	)%⁽⁴⁾		1.30	%⁽⁴⁾		1.14	%⁽⁴⁾		1.96	%⁽⁴⁾		1.90	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.01	%		0.01	%
Portfolio Turnover Rate		62	%		30	%		43	%		45	%		48	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.07% for Class C shares. Prior to July 1, 2017, the maximum ratio was 1.97% for Class C shares.

(6) Amount is less than 0.005%.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	15.29		$	12.38		$	14.63		$	14.02		$	12.58
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.15			0.38			0.32			0.45			0.43
Net Realized and Unrealized Gain (Loss)		(0.37	)		3.01			(1.46	)		1.32			1.53
Total from Investment Operations		(0.22	)		3.39			(1.14	)		1.77			1.96
Distributions from and/or in Excess of:
Net Investment Income		(0.40	)		(0.36	)		(0.37	)		(0.43	)		(0.37	)
Net Realized Gain		(0.27	)		(0.12	)		(0.74	)		(0.73	)		(0.15	)
Total Distributions		(0.67	)		(0.48	)		(1.11	)		(1.16	)		(0.52	)
Net Asset Value, End of Period	$	14.40		$	15.29		$	12.38		$	14.63		$	14.02
Total Return⁽³⁾		(1.37	)%		27.31	%		(7.92	)%		12.65	%		15.66	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11		$	11		$	24,462		$	9,516		$	5,921
Ratio of Expenses Before Expense Limitation		20.65	%		1.05	%		1.05	%		1.06	%		1.08	%
Ratio of Expenses After Expense Limitation		0.94	%⁽⁴⁾		0.94	%⁽⁴⁾		0.94	%⁽⁴⁾		0.89	%⁽⁴⁾⁽⁵⁾		0.83	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.94	%⁽⁴⁾		0.94	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Income		1.03	%⁽⁴⁾		2.71	%⁽⁴⁾		2.26	%⁽⁴⁾		2.95	%⁽⁴⁾		3.02	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.01	%		0.01	%
Portfolio Turnover Rate		62	%		30	%		43	%		45	%		48	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.94% for Class IS shares. Prior to July 1, 2017, the maximum ratio was 0.84% for Class IS shares.

(6) Amount is less than 0.005%.

	Class IR
	Year Ended December 31,						Period from June 15, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	15.36		$	12.38		$	14.10
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.15			0.35			0.20
Net Realized and Unrealized Gain (Loss)		(0.37	)		3.11			(0.81	)
Total from Investment Operations		(0.22	)		3.46			(0.61	)
Distributions from and/or in Excess of:
Net Investment Income		(0.40	)		(0.36	)		(0.37	)
Net Realized Gain		(0.27	)		(0.12	)		(0.74	)
Total Distributions		(0.67	)		(0.48	)		(1.11	)
Net Asset Value, End of Period	$	14.47		$	15.36		$	12.38
Total Return⁽³⁾		(1.43	)%		27.99	%		(4.54	)%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	11		$	11		$	9
Ratio of Expenses Before Expense Limitation		19.68	%		19.62	%		18.47	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		0.94	%⁽⁴⁾		0.94	%⁽⁴⁾		0.94	%⁽⁴⁾⁽⁷⁾
Ratios of Expenses After Expense Limitation Excluding Interest Expenses		0.94	%⁽⁴⁾		0.94	%⁽⁴⁾		N/A
Ratio of Net Investment Income		1.03	%⁽⁴⁾		2.65	%⁽⁴⁾		2.67	%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾⁽⁷⁾
Portfolio Turnover Rate		62	%		30	%		43	%

(1) Commencement of Offering.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

The accompanying financial statements relate to the Global Infrastructure Portfolio. The Fund seeks to provide both capital appreciation and income.

market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of

business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Airports	$	4,809	$	13,034	$	—	$	17,843
Commercial Services & Supplies		3,299		—		—		3,299
Communications		42,214		8,512		—		50,726
Diversified		—		17,660		—		17,660
Electricity Transmission & Distribution		20,178		17,578		—		37,756
Oil & Gas Storage & Transportation		65,749		10,389		—		76,138
Ports		—		1,611		—		1,611
Railroads		3,469		6,534		—		10,003
Renewables		6,272		351		—		6,623

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Toll Roads	$	8,183	$	18,882	$	—	$	27,065
Utilities		7,226		—		—		7,226
Water		12,081		11,575		—		23,656
Total Common Stocks		173,480		106,126		—		279,606
Short-Term Investments
Investment Company		3,349		—		—		3,349
Repurchase Agreements		—		165		—		165
Total Short-Term Investments		3,349		165		—		3,514
Total Assets	$	176,829	$	106,291	$	—	$	283,120

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Governmental approval for foreign investments may be required in advance of making an investment under

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	4,509	(a)	$	—	$	(4,509	)(b)(c)	$	0

(a) Represents market value of loaned securities at year end.

(b) The Fund received cash collateral of approximately $1,185,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $3,553,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	1,185	$	—	$	—	$	—	$	1,185
Total Borrowings	$	1,185	$	—	$	—	$	—	$	1,185
Gross amount of recognized liabilities for securities lending transactions									$	1,185

8. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 0.85% of the average daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.97% for Class I shares, 1.21% for Class A shares, 1.78% for Class L shares, 2.07% for Class C shares, 0.94% for Class IS shares and 0.94% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $294,000 of advisory fees were waived and approximately $218,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer

Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $173,543,000 and $212,482,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $8,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	9,217			$	94,290			$	100,158			$	21

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	3,349

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for

tax purposes. The tax character of distributions paid during fiscal years 2020 and 2019 was as follows:

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	7,160	$	5,179	$	7,000	$	2,503

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	271			$	6,848

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Infrastructure Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Global Infrastructure Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Global Infrastructure Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Opportunity Portfolio Class I	$	1,000.00	$	1,337.50	$	1,020.46	$	5.46	$	4.72		0.93	%
Global Opportunity Portfolio Class A		1,000.00		1,335.50		1,019.10		7.04		6.09		1.20
Global Opportunity Portfolio Class L		1,000.00		1,335.50		1,018.90		7.28		6.29		1.24
Global Opportunity Portfolio Class C		1,000.00		1,330.70		1,015.48		11.25		9.73		1.92
Global Opportunity Portfolio Class IS		1,000.00		1,338.00		1,021.96		4.88		4.22		0.83
Global Opportunity Portfolio Class IR		1,000.00		1,338.20		1,021.96		4.88		4.22		0.83

** Annualized.

Performance Compared to the MSCI All Country World Net Index⁽¹⁾, the Lipper Global Large-Cap Growth Funds Index⁽²⁾ and the Lipper Global Multi-Cap Growth Funds Index⁽³⁾

	Period Ended December 31, 2020 Total Returns⁽⁴⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁹⁾
Fund — Class I Shares w/o sales charges⁽⁵⁾		55.47	%		24.57	%		18.97	%		16.18	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		55.03			24.17			18.60			20.72
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		46.88			22.84			17.96			20.11
Fund — Class L Shares w/o sales charges⁽⁵⁾		54.99			24.10			18.53			15.76
Fund — Class C Shares w/o sales charges⁽⁷⁾		53.99			23.32			—			21.33
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁷⁾		52.99			23.32			—			21.33
Fund — Class IS Shares w/o sales charges⁽⁶⁾		55.67			24.62			—			23.25
Fund — Class IR Shares w/o sales charges⁽⁸⁾		55.66			—			—			23.65
MSCI All Country World Net Index		16.25			12.26			9.13			6.31
Lipper Global Large-Cap Growth Funds Index		27.24			15.47			11.34			7.99
Lipper Global Multi-Cap Growth Funds Index		36.37			16.21			10.95			8.47

⁽²⁾ The Lipper Global Large-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Global Large-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper Global Large-Cap Growth Funds classification. The Funds' Lipper category changed from Lipper Global Multi-Cap Growth Funds to Lipper Global Large-Cap Growth Funds.

⁽³⁾ The Lipper Global Multi-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Global Multi-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index.

⁽⁵⁾ On May 21, 2010 Class C and Class I shares of Van Kampen Global Growth Fund (""the Predecessor Fund"") were reorganized into Class L and Class I shares of Morgan Stanley Global Growth Portfolio (""the Fund""), respectively. Class L and Class I shares' returns of the Fund will differ from the Predecessor Fund as they have different expenses. Performance shown for the Fund's Class I and Class L shares reflects the performance of the shares of the Predecessor Fund for periods prior to May 21, 2010. The Class C and I shares of the Predecessor Fund commenced operations on May 30, 2008. Class P shares, which were renamed Class A shares effective September 9, 2013, commenced operations on May 21, 2010. In October 2010, the Morgan Stanley Global Growth Portfolio changed its name to the Morgan Stanley Global Opportunity Portfolio.

⁽⁶⁾ Commenced offering on September 13, 2013.

⁽⁷⁾ Commenced offering on April 30, 2015.

⁽⁸⁾ Commenced offering on June 15, 2018.

⁽⁹⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of Class I of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (93.6%)
Argentina (0.4%)
Globant SA (a)		142,510	$	31,012
Canada (1.9%)
Shopify, Inc., Class A (a)		123,864		140,208
China (12.5%)
Alibaba Group Holding Ltd. ADR (a)		487,476		113,450
China Resources Beer Holdings Co., Ltd. (b)		3,649,333		33,559
Foshan Haitian Flavouring & Food Co., Ltd., Class A		2,496,254		76,648
Meituan Dianping, Class B (a)(b)		6,970,400		262,390
TAL Education Group ADR (a)		4,334,992		309,995
Trip.com Group Ltd. ADR (a)		2,940,740		99,191
				895,233
Denmark (3.9%)
DSV Panalpina A/S		1,657,659		278,589
France (2.6%)
Hermes International		174,276		187,395
India (5.7%)
HDFC Bank Ltd. (a)		15,972,630		314,604
ICICI Bank Ltd. ADR (a)		6,299,188		93,606
				408,210
Italy (2.5%)
Moncler SpA (a)		2,937,422		180,594
Japan (2.1%)
Keyence Corp.		266,900		150,136
Korea, Republic of (0.8%)
NAVER Corp.		205,780		55,472
United Kingdom (0.6%)
Fevertree Drinks PLC		1,189,944		41,166
United States (60.6%)
Adobe, Inc. (a)		428,143		214,123
Agilon Health Topco, Inc. (a)(c)(d) (acquisition cost — $11,376; acquired 11/7/18)		30,083		17,733
Alphabet, Inc., Class C (a)		119,844		209,952
Amazon.com, Inc. (a)		139,645		454,814
DoorDash, Inc., Class A (a)		391,158		55,838
EPAM Systems, Inc. (a)		542,816		194,518
Facebook, Inc., Class A (a)		762,177		208,196
Farfetch Ltd., Class A (a)		2,233,048		142,491
Intuitive Surgical, Inc. (a)		114,978		94,064
Martin Marietta Materials, Inc.		112,250		31,876
Mastercard, Inc., Class A		1,306,198		466,234
salesforce.com, Inc. (a)		757,242		168,509
ServiceNow, Inc. (a)		656,536		361,377
Spotify Technology SA (a)		619,807		195,028
Square, Inc., Class A (a)		890,487		193,806
Uber Technologies, Inc. (a)		8,219,922		419,216
Veeva Systems, Inc., Class A (a)		206,716		56,278
Visa, Inc., Class A		1,340,528		293,214
Walt Disney Co. (The) (a)		1,402,425		254,091

	Shares		Value (000)
Workday, Inc., Class A (a)		228,353	$	54,716
Zillow Group, Inc., Class A (a)		584,811		79,499
Zoom Video Communications, Inc., Class A (a)		526,232		177,509
				4,343,082
Total Common Stocks (Cost $3,226,459)				6,711,097
Preferred Stocks (0.1%)
United States (0.1%)
Airbnb, Inc. Series D (a)(c) (acquisition cost — $1,594; acquired 4/16/14)		78,306		10,576
Magic Leap Series C (a)(c)(d) (acquisition cost — $3,175; acquired 12/22/15)		137,829		—
Total Preferred Stocks (Cost $4,769)				10,576
Short-Term Investment (7.4%)
Investment Company (7.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $528,671)		528,670,724		528,671
Total Investments (101.1%) (Cost $3,759,899) (e)(f)				7,250,344
Liabilities in Excess of Other Assets (–1.1%)				(81,809	)
Net Assets (100.0%)			$	7,168,535

(a) Non-income producing security.

(b) Security trades on the Hong Kong exchange.

(c) Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Fund has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at December 31, 2020 amounts to approximately $28,309,000 and represents 0.4% of net assets.

(d) At December 31, 2020, the Fund held fair valued securities valued at approximately $17,733,000, representing 0.3% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(e) The approximate fair value and percentage of net assets, $1,580,553,000 and 22.1%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(f) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $3,772,915,000. The aggregate gross unrealized appreciation is approximately $3,500,594,000 and the aggregate gross unrealized depreciation is approximately $23,165,000, resulting in net unrealized appreciation of approximately $3,477,429,000.

ADR American Depositary Receipt.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $3,231,228)	$	6,721,673
Investment in Security of Affiliated Issuer, at Value (Cost $528,671)		528,671
Total Investments in Securities, at Value (Cost $3,759,899)		7,250,344
Receivable for Investments Sold		140,328
Receivable for Fund Shares Sold		11,054
Tax Reclaim Receivable		374
Receivable from Affiliate		4
Other Assets		330
Total Assets		7,402,434
Liabilities:
Payable for Investments Purchased		198,297
Payable for Advisory Fees		11,830
Deferred Capital Gain Country Tax		11,076
Bank Overdraft		7,455
Payable for Fund Shares Redeemed		2,997
Payable for Shareholder Services Fees — Class A		353
Payable for Distribution and Shareholder Services Fees — Class L		13
Payable for Distribution and Shareholder Services Fees — Class C		362
Payable for Sub Transfer Agency Fees — Class I		428
Payable for Sub Transfer Agency Fees — Class A		140
Payable for Sub Transfer Agency Fees — Class L		4
Payable for Sub Transfer Agency Fees — Class C		29
Payable for Administration Fees		474
Payable for Custodian Fees		121
Payable for Transfer Agency Fees — Class I		26
Payable for Transfer Agency Fees — Class A		44
Payable for Transfer Agency Fees — Class L		8
Payable for Transfer Agency Fees — Class C		6
Payable for Transfer Agency Fees — Class IS		2
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Professional Fees		30
Other Liabilities		204
Total Liabilities		233,899
Net Assets	$	7,168,535
Net Assets Consist of:
Paid-in-Capital	$	3,648,813
Total Distributable Earnings		3,519,722
Net Assets	$	7,168,535

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	4,498,617
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		100,519,329
Net Asset Value, Offering and Redemption Price Per Share	$	44.75
CLASS A:
Net Assets	$	1,697,016
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		39,425,251
Net Asset Value, Redemption Price Per Share	$	43.04
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	2.38
Maximum Offering Price Per Share	$	45.42
CLASS L:
Net Assets	$	53,675
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,264,845
Net Asset Value, Offering and Redemption Price Per Share	$	42.44
CLASS C:
Net Assets	$	436,790
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		10,679,226
Net Asset Value, Offering and Redemption Price Per Share	$	40.90
CLASS IS:
Net Assets	$	367,927
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		8,194,347
Net Asset Value, Offering and Redemption Price Per Share	$	44.90
CLASS IR:
Net Assets	$	114,510
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,547,062
Net Asset Value, Offering and Redemption Price Per Share	$	44.96

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $351 of Foreign Taxes Withheld)	$	5,685
Dividends from Security of Affiliated Issuer (Note G)		976
Total Investment Income		6,661
Expenses:
Advisory Fees (Note B)		36,698
Shareholder Services Fees — Class A (Note D)		3,219
Distribution and Shareholder Services Fees — Class L (Note D)		340
Distribution and Shareholder Services Fees — Class C (Note D)		3,213
Sub Transfer Agency Fees — Class I		2,889
Sub Transfer Agency Fees — Class A		1,426
Sub Transfer Agency Fees — Class L		23
Sub Transfer Agency Fees — Class C		245
Administration Fees (Note C)		4,065
Custodian Fees (Note F)		490
Transfer Agency Fees — Class I (Note E)		112
Transfer Agency Fees — Class A (Note E)		188
Transfer Agency Fees — Class L (Note E)		34
Transfer Agency Fees — Class C (Note E)		30
Transfer Agency Fees — Class IS (Note E)		8
Transfer Agency Fees — Class IR (Note E)		2
Shareholder Reporting Fees		339
Registration Fees		338
Professional Fees		130
Directors' Fees and Expenses		73
Pricing Fees		3
Other Expenses		126
Total Expenses		53,991
Rebate from Morgan Stanley Affiliate (Note G)		(569	)
Distribution Fees — Class L Shares Waived (Note D)		(204	)
Net Expenses		53,218
Net Investment Loss		(46,557	)
Realized Gain (Loss):
Investments Sold		235,638
Foreign Currency Translation		(390	)
Net Realized Gain		235,248
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $8,210)		2,220,462
Foreign Currency Translation		37
Net Change in Unrealized Appreciation (Depreciation)		2,220,499
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		2,455,747
Net Increase in Net Assets Resulting from Operations	$	2,409,190

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(46,557	)	$	(19,027	)
Net Realized Gain (Loss)		235,248			(32,839	)
Net Change in Unrealized Appreciation (Depreciation)		2,220,499			951,506
Net Increase in Net Assets Resulting from Operations		2,409,190			899,640
Dividends and Distributions to Shareholders:
Class I		(51,005	)		—
Class A		(20,135	)		—
Class L		(649	)		—
Class C		(5,418	)		—
Class IS		(3,763	)		—
Class IR		(1,303	)		—
Total Dividends and Distributions to Shareholders		(82,273	)		—
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		1,813,374			904,534
Distributions Reinvested		47,584			—
Redeemed		(1,035,480	)		(546,491	)
Class A:
Subscribed		401,046			219,604
Distributions Reinvested		19,788			—
Redeemed		(362,101	)		(216,191	)
Class L:
Exchanged		58			46
Distributions Reinvested		592			—
Redeemed		(7,686	)		(4,481	)
Class C:
Subscribed		97,594			70,635
Distributions Reinvested		5,330			—
Redeemed		(58,835	)		(36,622	)
Class IS:
Subscribed		232,725			115,916
Distributions Reinvested		3,729			—
Redeemed		(97,484	)		(4,208	)
Class IR:
Distributions Reinvested		1,303			—
Net Increase in Net Assets Resulting from Capital Share Transactions		1,061,537			502,742
Total Increase in Net Assets		3,388,454			1,402,382
Net Assets:
Beginning of Period		3,780,081			2,377,699
End of Period	$	7,168,535		$	3,780,081

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		54,601			34,981
Shares Issued on Distributions Reinvested		1,076			—
Shares Redeemed		(31,412	)		(20,909	)
Net Increase in Class I Shares Outstanding		24,265			14,072
Class A:
Shares Subscribed		12,366			8,760
Shares Issued on Distributions Reinvested		465			—
Shares Redeemed		(11,494	)		(8,663	)
Net Increase in Class A Shares Outstanding		1,337			97
Class L:
Shares Exchanged		3			2
Shares Issued on Distributions Reinvested		14			—
Shares Redeemed		(225	)		(180	)
Net Decrease in Class L Shares Outstanding		(208	)		(178	)
Class C:
Shares Subscribed		3,145			2,895
Shares Issued on Distributions Reinvested		132			—
Shares Redeemed		(1,933	)		(1,514	)
Net Increase in Class C Shares Outstanding		1,344			1,381
Class IS:
Shares Subscribed		6,357			4,310
Shares Issued on Distributions Reinvested		84			—
Shares Redeemed		(2,501	)		(155	)
Net Increase in Class IS Shares Outstanding		3,940			4,155
Class IR:
Shares Issued on Distributions Reinvested		29			—

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	29.12		$	21.50		$	22.94		$	15.41		$	16.36
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.28	)		(0.12	)		(0.07	)		(0.06	)		(0.05	)
Net Realized and Unrealized Gain (Loss)		16.43			7.74			(1.20	)		7.68			0.18
Total from Investment Operations		16.15			7.62			(1.27	)		7.62			0.13
Distributions from and/or in Excess of:
Net Realized Gain		(0.52	)		—			(0.17	)		(0.09	)		(1.08	)
Net Asset Value, End of Period	$	44.75		$	29.12		$	21.50		$	22.94		$	15.41
Total Return⁽³⁾		55.47	%		35.44	%		(5.66	)%		49.44	%		1.05	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,498,617		$	2,220,219		$	1,337,133		$	898,008		$	255,187
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			0.99	%		1.07	%
Ratio of Expenses After Expense Limitation		0.92	%⁽⁴⁾		0.94	%⁽⁴⁾		0.94	%⁽⁴⁾⁽⁵⁾		0.79	%⁽⁴⁾		0.80	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			0.94	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Loss		(0.79	)%⁽⁴⁾		(0.44	)%⁽⁴⁾		(0.30	)%⁽⁴⁾		(0.31	)%⁽⁴⁾		(0.34	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		22	%		15	%		28	%		30	%		37	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% for Class I shares. Prior to January 1, 2018, the maximum ratio was 0.81% for Class I shares.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	28.10		$	20.81		$	22.28		$	15.01		$	16.03
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.35	)		(0.18	)		(0.14	)		(0.12	)		(0.11	)
Net Realized and Unrealized Gain (Loss)		15.81			7.47			(1.16	)		7.48			0.17
Total from Investment Operations		15.46			7.29			(1.30	)		7.36			0.06
Distributions from and/or in Excess of:
Net Realized Gain		(0.52	)		—			(0.17	)		(0.09	)		(1.08	)
Net Asset Value, End of Period	$	43.04		$	28.10		$	20.81		$	22.28		$	15.01
Total Return⁽³⁾		55.03	%		35.03	%		(5.96	)%		49.03	%		0.62	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,697,016		$	1,070,124		$	790,571		$	780,705		$	340,092
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			1.32	%		1.41	%
Ratio of Expenses After Expense Limitation		1.20	%⁽⁴⁾		1.22	%⁽⁴⁾		1.26	%⁽⁴⁾⁽⁵⁾		1.12	%⁽⁴⁾		1.17	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.22	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Loss		(1.06	)%⁽⁴⁾		(0.72	)%⁽⁴⁾		(0.59	)%⁽⁴⁾		(0.63	)%⁽⁴⁾		(0.70	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		22	%		15	%		28	%		30	%		37	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to January 1, 2018, the maximum ratio was 1.23% for Class A shares.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	27.72		$	20.54		$	22.01		$	14.84		$	15.87
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.36	)		(0.19	)		(0.15	)		(0.13	)		(0.12	)
Net Realized and Unrealized Gain (Loss)		15.60			7.37			(1.15	)		7.39			0.17
Total from Investment Operations		15.24			7.18			(1.30	)		7.26			0.05
Distributions from and/or in Excess of:
Net Realized Gain		(0.52	)		—			(0.17	)		(0.09	)		(1.08	)
Net Asset Value, End of Period	$	42.44		$	27.72		$	20.54		$	22.01		$	14.84
Total Return⁽³⁾		54.99	%		34.96	%		(6.04	)%		48.91	%		0.56	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	53,675		$	40,836		$	33,913		$	39,979		$	30,133
Ratio of Expenses Before Expense Limitation		1.71	%		1.74	%		1.78	%		1.86	%		1.93	%
Ratio of Expenses After Expense Limitation		1.25	%⁽⁴⁾		1.28	%⁽⁴⁾		1.32	%⁽⁴⁾⁽⁵⁾		1.20	%⁽⁴⁾		1.25	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.28	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Loss		(1.10	)%⁽⁴⁾		(0.78	)%⁽⁴⁾		(0.65	)%⁽⁴⁾		(0.67	)%⁽⁴⁾		(0.79	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		22	%		15	%		28	%		30	%		37	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.40% for Class L shares. Prior to January 1, 2018, the maximum ratio was 1.50% for Class L shares.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	26.90		$	20.07		$	21.64		$	14.69		$	15.80
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.57	)		(0.35	)		(0.30	)		(0.26	)		(0.21	)
Net Realized and Unrealized Gain (Loss)		15.09			7.18			(1.10	)		7.30			0.18
Total from Investment Operations		14.52			6.83			(1.40	)		7.04			(0.03	)
Distributions from and/or in Excess of:
Net Realized Gain		(0.52	)		—			(0.17	)		(0.09	)		(1.08	)
Net Asset Value, End of Period	$	40.90		$	26.90		$	20.07		$	21.64		$	14.69
Total Return⁽³⁾		53.99	%		34.03	%		(6.61	)%		47.92	%		0.05	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	436,790		$	251,160		$	159,642		$	104,364		$	33,801
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			2.01	%		2.08	%
Ratio of Expenses After Expense Limitation		1.91	%⁽⁴⁾		1.94	%⁽⁴⁾		1.95	%⁽⁴⁾⁽⁵⁾		1.81	%⁽⁴⁾		1.84	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.94	%⁽⁴⁾		N/A			N/A			N/A
Ratio of Net Investment Loss		(1.77	)%⁽⁴⁾		(1.45	)%⁽⁴⁾		(1.30	)%⁽⁴⁾		(1.33	)%⁽⁴⁾		(1.38	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		22	%		15	%		28	%		30	%		37	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.10% for Class C shares. Prior to January 1, 2018, the maximum ratio was 2.20% for Class C shares.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	29.18		$	21.53		$	23.00		$	15.44		$	16.38
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.25	)		(0.14	)		(0.00	)⁽³⁾		(0.05	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		16.49			7.79			(1.30	)		7.70			0.20
Total from Investment Operations		16.24			7.65			(1.30	)		7.65			0.14
Distributions from and/or in Excess of:
Net Realized Gain		(0.52	)		—			(0.17	)		(0.09	)		(1.08	)
Net Asset Value, End of Period	$	44.90		$	29.18		$	21.53		$	23.00		$	15.44
Total Return⁽⁴⁾		55.67	%		35.53	%		(5.78	)%		49.54	%		1.11	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	367,927		$	124,173		$	2,156		$	1,650		$	23
Ratio of Expenses Before Expense Limitation		N/A			0.86	%		N/A			1.24	%		3.82	%
Ratio of Expenses After Expense Limitation		0.82	%⁽⁵⁾		0.84	%⁽⁵⁾		0.88	%⁽⁵⁾⁽⁶⁾		0.71	%⁽⁵⁾		0.71	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			0.84	%⁽⁵⁾		N/A			N/A			N/A
Ratio of Net Investment Loss		(0.70	)%⁽⁵⁾		(0.51	)%⁽⁵⁾		(0.02	)%⁽⁵⁾		(0.23	)%⁽⁵⁾		(0.41	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		22	%		15	%		28	%		30	%		37	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.95% for Class IS shares. Prior to January 1, 2018, the maximum ratio was 0.72% for Class IS shares.

	Class IR
	Year Ended December 31,						Period from June 15, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	29.22		$	21.56		$	26.67
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.24	)		(0.09	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		16.50			7.75			(4.88	)
Total from Investment Operations		16.26			7.66			(4.94	)
Distributions from and/or in Excess of:
Net Realized Gain		(0.52	)		—			(0.17	)
Net Asset Value, End of Period	$	44.96		$	29.22		$	21.56
Total Return⁽³⁾		55.66	%		35.53	%		(18.63	)%⁽⁵⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	114,510		$	73,569		$	54,284
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A
Ratio of Expenses After Expense Limitation		0.82	%⁽⁴⁾		0.84	%⁽⁴⁾		0.88	%⁽⁴⁾⁽⁶⁾
Ratios of Expenses After Expense Limitation Excluding Interest Expenses		N/A			0.84	%⁽⁴⁾		N/A
Ratio of Net Investment Loss		(0.69	)%⁽⁴⁾		(0.35	)%⁽⁴⁾		(0.46	)%⁽⁴⁾⁽⁶⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%⁽⁶⁾
Portfolio Turnover Rate		22	%		15	%		28	%

(1) Commencement of Offering.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Not annualized

(6) Annualized.

The accompanying financial statements relate to the Global Opportunity Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions. Effective December 31, 2020, the Fund suspended offering of Class I, Class A, Class C, Class IR and Class IS shares to new investors. In addition, Class L shares of the Fund may be exchanged for Class L shares of any Morgan Stanley Multi-Class Fund, even though Class L shares are closed to investors.

valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask

prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	278,589	$	—	$	278,589
Banks		93,606		314,604		—		408,210
Beverages		—		74,725		—		74,725
Construction Materials		31,876		—		—		31,876
Diversified Consumer Services		309,995		—		—		309,995
Electronic Equipment, Instruments & Components		—		150,136		—		150,136
Entertainment		449,119		—		—		449,119
Food Products		—		76,648		—		76,648
Health Care Equipment & Supplies		94,064		—		—		94,064
Health Care Technology		56,278		—		17,733		74,011
Information Technology Services		1,318,992		—		—		1,318,992
Interactive Media & Services		497,647		55,472		—		553,119
Internet & Direct Marketing Retail		865,784		262,390		—		1,128,174
Road & Rail		419,216		—		—		419,216
Software		976,234		—		—		976,234
Textiles, Apparel & Luxury Goods		—		367,989		—		367,989
Total Common Stocks		5,112,811		1,580,553		17,733		6,711,097

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Preferred Stocks
Electronic Equipment, Instruments & Components	$	—	$	—	$	—	†	$	—	†
Internet & Direct Marketing Retail		—		10,576		—			10,576
Total Preferred Stocks		—		10,576		—	†		10,576	†
Short-Term Investment
Investment Company		528,671		—		—			528,671
Total Assets	$	5,641,482	$	1,591,129	$	17,733	†	$	7,250,344	†

† Includes a security valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stock (000)		Preferred Stocks (000)
Beginning Balance	$	13,521	$	8,503
Purchases		—		—
Sales		—		—
Amortization of discount		—		—
Transfers in		—		—
Transfers out		—		(5,144	)††
Corporate actions		—		—
Change in unrealized appreciation (depreciation)		4,212		(3,359	)
Realized gains (losses)		—		—
Ending Balance	$	17,733	$	—	†
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2020	$	4,212	$	(3,359	)

† Includes a security valued at zero.

†† A security transferred out of level 3 due to an Initial Public Offering.

the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

As of December 31, 2020, the Fund did not have any outstanding purchased options.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)		$(9,109)(a)

(a) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)		$8,009(b)

(b) Amounts are included in Investments in the Statement of Operations.

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount					674,495,000

5. Restricted Securities: The Fund invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the

result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

7. Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

8. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $750 million				Next $750 million				Over $1.5 billion
	0.80	%			0.75	%			0.70	%

For the year ended December 31, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.71% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.40% for Class L shares, 2.10% for Class C shares, 0.95% for Class IS shares and 0.95% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. This arrangement had no effect for the year ended December 31, 2020.

monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares. The Distributor has agreed to waive for at least one year from the date of the Fund's prospectus or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate, the 12b-1 fees on Class L shares of the Fund to the extent it exceeds 0.30% of the average daily net assets of such shares on an annualized basis. For the year ended December 31, 2020, this waiver amounted to approximately $204,000.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $1,822,624,000 and $1,058,786,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $569,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	295,110			$	1,406,504			$	1,172,943			$	976

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	528,671

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly,

no provision for federal income taxes is required in the financial statements.

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	1,952	$	80,321	$	—	$	—

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Opportunity Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Global Opportunity Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Global Opportunity Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Permanence Portfolio Class I	$	1,000.00	$	1,215.70	$	1,020.11	$	5.57	$	5.08		1.00	%
Global Permanence Portfolio Class A		1,000.00		1,214.20		1,018.35		7.51		6.85		1.35
Global Permanence Portfolio Class C		1,000.00		1,209.00		1,014.58		11.66		10.63		2.10
Global Permanence Portfolio Class IS		1,000.00		1,217.10		1,020.36		5.29		4.82		0.95

** Annualized.

Performance Compared to the MSCI All Country World Net Index⁽¹⁾ and the Lipper Global Multi-Cap Core Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁵⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		27.06	%		—		—		19.70	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		26.57			—		—		19.30
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		19.91			—		—		15.54
Fund — Class C Shares w/o sales charges⁽⁴⁾		25.60			—		—		18.41
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁴⁾		24.60			—		—		18.41
Fund — Class IS Shares w/o sales charges⁽⁴⁾		27.09			—		—		19.79
MSCI All Country World Net Index		16.25			—		—		15.35
Lipper Global Multi-Cap Core Funds Index		15.25			—		—		13.97

⁽²⁾ The Lipper Global Multi-Cap Core Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Global Multi-Cap Core Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper Global Multi-Cap Core Funds classification.

⁽⁴⁾ Commenced operations on April 30, 2019.

⁽⁵⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (95.3%)
Canada (11.0%)
Canadian National Railway Co.		434	$	48
Constellation Software, Inc.		118		153
FirstService Corp.		1,147		157
Topicus.com, Inc. (a)		219		1
				359
Denmark (1.5%)
Chr Hansen Holding A/S (a)		463		48
France (15.8%)
Christian Dior SE		239		133
EssilorLuxottica SA		219		34
Getlink SE (a)		4,512		78
Hermes International		142		153
L'Oreal SA (BSRM)		138		52
Remy Cointreau SA		333		62
				512
India (3.5%)
HDFC Bank Ltd. ADR (a)		1,584		114
Italy (1.0%)
Brunello Cucinelli SpA (a)		714		31
Mexico (2.4%)
Grupo Aeroportuario del Sureste SAB de CV, Class B (a)		4,815		80
Netherlands (1.6%)
JDE Peet's N.V. (a)		1,120		51
Spain (2.4%)
Aena SME SA (a)		452		79
United Kingdom (3.4%)
Abcam PLC		2,342		49
Intertek Group PLC		403		31
Rentokil Initial PLC (a)		4,106		29
				109
United States (52.7%)
Amazon.com, Inc. (a)		34		111
Appfolio, Inc., Class A (a)		436		78
ASML Holding NV		326		159
Ball Corp.		319		30
Costco Wholesale Corp.		302		114
Ecolab, Inc.		478		103
HEICO Corp., Class A		944		111
Intercontinental Exchange, Inc.		661		76
Intuitive Surgical, Inc. (a)		137		112
Linde PLC		123		32
Martin Marietta Materials, Inc.		264		75
Roper Technologies, Inc.		78		34
Royal Gold, Inc.		238		25
Royalty Pharma PLC, Class A		3,386		169
S&P Global, Inc.		248		82
Sherwin-Williams Co. (The)		43		32
Texas Pacific Land Trust		94		68
Tyler Technologies, Inc. (a)		69		30

	Shares		Value (000)
Veeva Systems, Inc., Class A (a)		417	$	114
Walt Disney Co. (The) (a)		635		115
Waste Connections, Inc.		426		44
				1,714
Total Common Stocks (Cost $2,384)				3,097
Short-Term Investment (1.9%)
Investment Company (1.9%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $62)		61,819		62
Total Investments Excluding Purchased Options (97.2%) (Cost $2,446)				3,159
Total Purchased Options Outstanding (0.1%) (Cost $13)				2
Total Investments (97.3%) (Cost $2,459) (b)(c)				3,161
Other Assets in Excess of Liabilities (2.7%)				87
Net Assets (100.0%)			$	3,248

(a) Non-income producing security.

(b) The approximate fair value and percentage of net assets, $831,000 and 25.6%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $2,538,000. The aggregate gross unrealized appreciation is approximately $718,000 and the aggregate gross unrealized depreciation is approximately $95,000, resulting in net unrealized appreciation of approximately $623,000.

ADR American Depositary Receipt.

Call Options Purchased:

The Fund had the following call options purchased open at December 31, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
Royal Bank of Scotland	CNH/USD	$	8.48	May-21		402,840		403	$	—	@	$	2	$	(2	)
BNP Paribas	USD/CNH	CNH	7.99	Sep-21		472,545		473		—	@		2		(2	)
BNP Paribas	USD/CNH	CNH	7.64	Nov-21		556,269		556		2			3		(1	)
Royal Bank of Scotland	USD/CNH	CNH	7.75	Jan-21		584,065		584		—	@		3		(3	)
Royal Bank of Scotland	USD/CNH	CNH	8.06	Jul-21		534,767		535		—	@		3		(3	)
									$	2		$	13	$	(11	)

@ Value is less than $500.

CNH — Chinese Yuan Renminbi Offshore

USD — United States Dollar

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $2,397)	$	3,099
Investment in Security of Affiliated Issuer, at Value (Cost $62)		62
Total Investments in Securities, at Value (Cost $2,459)		3,161
Foreign Currency, at Value (Cost $3)		3
Receivable for Investments Sold		69
Due from Adviser		58
Dividends Receivable		—	@
Tax Reclaim Receivable		—	@
Receivable from Affiliate		—	@
Other Assets		21
Total Assets		3,312
Liabilities:
Payable for Investments Purchased		36
Payable for Professional Fees		17
Payable for Custodian Fees		3
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Administration Fees		—	@
Other Liabilities		7
Total Liabilities		64
Net Assets	$	3,248
Net Assets Consist of:
Paid-in-Capital	$	2,434
Total Distributable Earnings		814
Net Assets	$	3,248
CLASS I:
Net Assets	$	3,202
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		238,684
Net Asset Value, Offering and Redemption Price Per Share	$	13.41
CLASS A:
Net Assets	$	19
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,451
Net Asset Value, Redemption Price Per Share	$	13.37
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.74
Maximum Offering Price Per Share	$	14.11
CLASS C:
Net Assets	$	13
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,002
Net Asset Value, Offering and Redemption Price Per Share	$	13.24
CLASS IS:
Net Assets	$	14
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,008
Net Asset Value, Offering and Redemption Price Per Share	$	13.42

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $1 of Foreign Taxes Withheld)	$	18
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		18
Expenses:
Professional Fees		113
Registration Fees		40
Advisory Fees (Note B)		21
Shareholder Reporting Fees		12
Custodian Fees (Note F)		10
Transfer Agency Fees — Class I (Note E)		3
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Directors' Fees and Expenses		3
Pricing Fees		3
Administration Fees (Note C)		2
Offering Costs		2
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Sub Transfer Agency Fees — Class A		—	@
Other Expenses		20
Total Expenses		235
Expenses Reimbursed by Adviser (Note B)		(181	)
Waiver of Advisory Fees (Note B)		(21	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		26
Net Investment Loss		(8	)
Realized Gain:
Investments Sold		130
Foreign Currency Translation		—	@
Net Realized Gain		130
Change in Unrealized Appreciation (Depreciation):
Investments		576
Foreign Currency Translation		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		576
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		706
Net Increase in Net Assets Resulting from Operations	$	698

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Period from April 30, 2019^ to December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(8	)	$	8
Net Realized Gain		130			3
Net Change in Unrealized Appreciation (Depreciation)		576			126
Net Increase in Net Assets Resulting from Operations		698			137
Dividends and Distributions to Shareholders:
Class I		(22	)		—
Class A		(—	@)		—
Class C		(—	@)		—
Class IS		(—	@)		—
Total Dividends and Distributions to Shareholders		(22	)		—
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		43			2,337
Distributions Reinvested		19			—
Class A:
Subscribed		6			11
Distributions Reinvested		—	@		—
Redeemed		(—	@)		(1	)
Class C:
Subscribed		—			10
Distributions Reinvested		—	@		—
Class IS:
Subscribed		—			10
Distributions Reinvested		—	@		—
Net Increase in Net Assets Resulting from Capital Share Transactions		68			2,367
Total Increase in Net Assets		744			2,504
Net Assets:
Beginning of Period		2,504			—
End of Period	$	3,248		$	2,504
(1) Capital Share Transactions:
Class I:
Shares Subscribed		5			232
Shares Issued on Distributions Reinvested		1			—
Net Increase in Class I Shares Outstanding		6			232
Class A:
Shares Subscribed		—	@@		1
Shares Issued on Distributions Reinvested		—	@@		—
Shares Redeemed		(—	@@)		(—	@@)
Net Increase in Class A Shares Outstanding		—	@@		1
Class C:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—	@@		—
Net Increase in Class C Shares Outstanding		—	@@		1
Class IS:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—	@@		—
Net Increase in Class IS Shares Outstanding		—	@@		1

^ Commencement of Operations.

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
Selected Per Share Data and Ratios	Year Ended December 31, 2020			Period from April 30, 2019⁽¹⁾ to December 31, 2019
Net Asset Value, Beginning of Period	$	10.63		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.03	)		0.04
Net Realized and Unrealized Gain		2.90			0.59
Total from Investment Operations		2.87			0.63
Distributions from and/or in Excess of:
Net Investment Income		(0.07	)		—
Net Realized Gain		(0.02	)		—
Total Distributions		(0.09	)		—
Net Asset Value, End of Period	$	13.41		$	10.63
Total Return⁽³⁾		27.06	%		6.30	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,202		$	2,471
Ratio of Expenses Before Expense Limitation		8.62	%		12.79	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		1.00	%⁽⁴⁾		0.99	%⁽⁴⁾⁽⁷⁾
Ratio of Net Investment Income (Loss)		(0.30	)%⁽⁴⁾		0.53	%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.01	%⁽⁷⁾
Portfolio Turnover Rate		113	%		35	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from MorganStanley Affiliates."

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

	Class A
Selected Per Share Data and Ratios	Year Ended December 31, 2020			Period from April 30, 2019⁽¹⁾ to December 31, 2019
Net Asset Value, Beginning of Period	$	10.61		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.07	)		0.01
Net Realized and Unrealized Gain		2.89			0.60
Total from Investment Operations		2.82			0.61
Distributions from and/or in Excess of:
Net Investment Income		(0.04	)		—
Net Realized Gain		(0.02	)		—
Total Distributions		(0.06	)		—
Net Asset Value, End of Period	$	13.37		$	10.61
Total Return⁽³⁾		26.57	%		6.10	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	19		$	11
Ratio of Expenses Before Expense Limitation		26.08	%		30.61	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		1.35	%⁽⁴⁾		1.34	%⁽⁴⁾⁽⁷⁾
Ratio of Net Investment Income (Loss)		(0.65	)%⁽⁴⁾		0.17	%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.01	%⁽⁷⁾
Portfolio Turnover Rate		113	%		35	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

	Class C
Selected Per Share Data and Ratios	Year Ended December 31, 2020			Period from April 30, 2019⁽¹⁾ to December 31, 2019
Net Asset Value, Beginning of Period	$	10.56		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.15	)		(0.04	)
Net Realized and Unrealized Gain		2.85			0.60
Total from Investment Operations		2.70			0.56
Distributions from and/or in Excess of:
Net Realized Gain		(0.02	)		—
Net Asset Value, End of Period	$	13.24		$	10.56
Total Return⁽³⁾		25.60	%		5.60	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	13		$	11
Ratio of Expenses Before Expense Limitation		28.45	%		31.59	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		2.10	%⁽⁴⁾		2.09	%⁽⁴⁾⁽⁷⁾
Ratio of Net Investment Loss		(1.40	)%⁽⁴⁾		(0.57	)%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.01	%⁽⁷⁾
Portfolio Turnover Rate		113	%		35	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

	Class IS
Selected Per Share Data and Ratios	Year Ended December 31, 2020			Period from April 30, 2019⁽¹⁾ to December 31, 2019
Net Asset Value, Beginning of Period	$	10.64		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.03	)		0.04
Net Realized and Unrealized Gain		2.91			0.60
Total from Investment Operations		2.88			0.64
Distributions from and/or in Excess of:
Net Investment Income		(0.08	)		—
Net Realized Gain		(0.02	)		—
Total Distributions		(0.10	)		—
Net Asset Value, End of Period	$	13.42		$	10.64
Total Return⁽³⁾		27.09	%		6.40	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	14		$	11
Ratio of Expenses Before Expense Limitation		26.62	%		30.53	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		0.95	%⁽⁴⁾		0.94	%⁽⁴⁾⁽⁷⁾
Ratio of Net Investment Income (Loss)		(0.24	)%⁽⁴⁾		0.59	%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.01	%⁽⁷⁾
Portfolio Turnover Rate		113	%		35	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

The accompanying financial statements relate to the Global Permanence Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	111	$	—	$	—	$	111
Banks		114		—		—		114
Beverages		—		62		—		62
Biotechnology		—		49		—		49
Capital Markets		158		—		—		158
Chemicals		167		48		—		215
Commercial Services & Supplies		44		29		—		73
Construction Materials		75		—		—		75
Containers & Packaging		30		—		—		30
Entertainment		115		—		—		115
Food & Staples Retailing		114		—		—		114
Food Products		—		51		—		51
Health Care Equipment & Supplies		112		—		—		112
Health Care Technology		114		—		—		114
Industrial Conglomerates		34		—		—		34
Internet & Direct Marketing Retail		111		—		—		111
Metals & Mining		25		—		—		25
Oil, Gas & Consumable Fuels		68		—		—		68
Personal Products		—		52		—		52
Pharmaceuticals		169		—		—		169
Professional Services		—		31		—		31
Real Estate Management & Development		157		—		—		157
Road & Rail		48		—		—		48
Semiconductors & Semiconductor Equipment		159		—		—		159
Software		261		1		—		262
Textiles, Apparel & Luxury Goods		—		351		—		351
Transportation Infrastructure		80		157		—		237
Total Common Stocks		2,266		831		—		3,097
Short-Term Investment
Investment Company		62		—		—		62
Call Options Purchased		—		2		—		2
Total Assets	$	2,328	$	833	$	—	$	3,161

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its

obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of December 31, 2020:

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Purchased Options

Investments, at Value
(Purchased Options)

Currency Risk

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

	Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(5	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(7	)(c)

At December 31, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	2	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities(a) (000)			Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
BNP Paribas	$	2		$	—	$	—	$	2
Royal Bank of Scotland		—	@		—		—		—	@
Total	$	2		$	—	$	—	$	2

@ Value is less than $500.

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount					1,840,000

relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $1 billion				Over $1 billion
	0.80	%			0.75	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $21,000 of advisory fees were waived and approximately $188,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect

subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $2,978,000 and $3,091,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities

Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	51			$	1,300			$	1,289			$	—	@

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	62

@ Amount is less than $500.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the two-year period ended December 31, 2020 remains subject to examination by taxing authorities.

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	22	$	—	$	—	$	—

Permanent differences, primarily due to a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Distributable Earnings (000)				Paid-in Capital (000)
$	1			$	(1	)

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Permanence Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Global Permanence Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended and the statements of changes in net assets and the financial highlights for the year ended December 31, 2020 and the period from April 30, 2019 (commencement of operations) through December 31, 2019 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Global Permanence Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended and the changes in its net assets and its financial highlights for the year ended December 31, 2020 and the period from April 30, 2019 (commencement of operations) through December 31, 2019, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Real Estate Portfolio Class I	$	1,000.00	$	1,167.90	$	1,020.11	$	5.45	$	5.08		1.00	%
Global Real Estate Portfolio Class A		1,000.00		1,166.00		1,018.35		7.35		6.85		1.35
Global Real Estate Portfolio Class L		1,000.00		1,161.70		1,015.84		10.05		9.37		1.85
Global Real Estate Portfolio Class C		1,000.00		1,162.20		1,014.58		11.41		10.63		2.10
Global Real Estate Portfolio Class IS		1,000.00		1,167.50		1,020.41		5.12		4.77		0.94
Global Real Estate Portfolio Class IR		1,000.00		1,167.50		1,020.41		5.12		4.77		0.94

** Annualized.

Performance Compared to the FTSE EPRA Nareit Developed Real Estate Index — Net Total Return to U.S. Investors⁽¹⁾, the MSCI World Net Index⁽²⁾ and the Lipper Global Real Estate Funds Index⁽³⁾

	Period Ended December 31, 2020 Total Returns⁽⁴⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽¹⁰⁾
Fund — Class I Shares w/o sales charges⁽⁵⁾		–14.33	%		1.16	%		3.84	%		2.72	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		–14.65			0.84			3.54			2.42
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		–19.17			–0.25			2.99			2.04
Fund — Class L Shares w/o sales charges⁽⁶⁾		–15.17			0.31			3.02			2.07
Fund — Class C Shares w/o sales charges⁽⁸⁾		–15.26			0.05			—			–0.80
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁸⁾		–16.10			0.05			—			–0.80
Fund — Class IS Shares w/o sales charges⁽⁷⁾		–14.36			1.21			—			2.72
Fund — Class IR Shares w/o sales charges⁽⁹⁾		–14.36			—			—			–2.47
FTSE EPRA Nareit Developed Real Estate Index — Net Total Return to U.S. Investors		–8.45			4.40			6.05			3.69
MSCI World Net Index		15.90			12.19			9.87			7.00
Lipper Global Real Estate Funds Index		–5.16			5.16			6.10			N/A

⁽¹⁾The FTSE EPRA Nareit Developed Real Estate Index — Net Total Return to U.S. Investors is a market capitalization weighted index designed to reflect the stock performance of companies engaged in the North American, European and Asian real estate markets. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. "Net Total Return to U.S. investors" reflects a reduction in total returns after taking into account the withholding tax on dividends by certain foreign countries represented in the Index for periods after 1/31/05 (gross returns used prior to 1/31/05). The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

	Shares		Value (000)
Common Stocks (98.5%)
Australia (3.1%)
Dexus REIT		332,655	$	2,413
Goodman Group REIT		59,111		864
GPT Group (The) REIT		253,502		882
Mirvac Group REIT		480,660		976
Scentre Group REIT		713,005		1,531
Stockland REIT		576,988		1,863
Vicinity Centres REIT		754,674		933
				9,462
Austria (0.1%)
CA Immobilien Anlagen AG		12,214		465
Canada (1.7%)
First Capital Real Estate Investment Trust		29,280		312
Granite Real Estate Investment Trust REIT		48,263		2,954
RioCan Real Estate Investment Trust REIT		154,136		2,028
				5,294
China (1.9%)
China Resources Land Ltd. (a)		278,000		1,146
China Resources Mixc Lifestyle Services Ltd. (a)(b)		187,292		868
KWG Group Holdings Ltd. (a)		348,191		476
KWG Living Group Holdings Ltd. (a)(b)		83,871		68
Longfor Group Holdings Ltd. (a)		447,000		2,615
Shimao Group Holdings Ltd. (a)		208,500		664
				5,837
Finland (0.4%)
Kojamo Oyj		58,540		1,299
France (3.4%)
Carmila SA REIT		14,784		213
Gecina SA REIT		24,262		3,773
ICADE REIT		5,866		451
Klepierre SA REIT (c)		187,739		4,234
Mercialys SA REIT		197,166		1,733
				10,404
Germany (4.9%)
ADLER Group SA (b)		8,548		303
Alstria Office AG REIT		96,580		1,757
Deutsche Wohnen SE		76,405		4,077
LEG Immobilien AG		12,426		1,928
Vonovia SE		94,744		6,919
				14,984
Hong Kong (7.3%)
CK Asset Holdings Ltd.		202,500		1,036
ESR Cayman Ltd. (b)		369,600		1,327
Hang Lung Properties Ltd.		426,000		1,123
Hongkong Land Holdings Ltd.		562,100		2,322
Link REIT		466,270		4,235
New World Development Co. Ltd.		373,439		1,737

	Shares		Value (000)
Sun Hung Kai Properties Ltd.		431,867	$	5,523
Swire Properties Ltd.		1,028,500		2,990
Wharf Real Estate Investment Co., Ltd.		445,075		2,313
				22,606
Ireland (0.7%)
Hibernia REIT PLC		1,529,464		2,150
Japan (10.0%)
Activia Properties, Inc. REIT		118		499
Advance Residence Investment Corp. REIT		335		1,005
Daiwa Office Investment Corp. REIT (c)		92		585
GLP J-REIT		1,129		1,782
Hulic Co., Ltd. (c)		29,900		329
Japan Hotel REIT Investment Corp.		747		384
Japan Prime Realty Investment Corp. REIT (c)		89		295
Japan Real Estate Investment Corp. REIT		391		2,259
Japan Retail Fund Investment Corp. REIT		520		946
Kenedix Office Investment Corp. REIT		50		339
LaSalle Logiport REIT		365		589
Mitsubishi Estate Co., Ltd.		279,400		4,491
Mitsubishi Estate Logistics REIT Investment Corp. REIT		153		638
Mitsui Fudosan Co., Ltd.		218,500		4,575
Mitsui Fudosan Logistics Park, Inc. REIT		290		1,471
Mori Trust Sogo Reit, Inc.		241		311
Nippon Building Fund, Inc. REIT		497		2,882
Nippon Prologis, Inc. REIT		546		1,706
Nomura Real Estate Master Fund, Inc. REIT		890		1,274
Orix, Inc. J-REIT		199		329
Sumitomo Realty & Development Co., Ltd.		105,200		3,248
United Urban Investment Corp. REIT		592		733
				30,670
Malta (0.0%)
BGP Holdings PLC (b)(d)		12,867,024		19
Netherlands (0.9%)
Eurocommercial Properties N.V. CVA REIT (b)		85,486		1,600
NSI N.V. REIT		28,255		1,128
				2,728
Norway (0.2%)
Entra ASA (c)		15,128		343
Norwegian Property ASA		103,261		159
				502
Singapore (1.7%)
Ascendas Real Estate Investment Trust REIT		236,946		535
CapitaLand Integrated Commercial Trust REIT		400,428		655
Frasers Logistics & Commercial Trust REIT		271,200		290
Keppel DC REIT		713,400		1,519
Mapletree Commercial Trust REIT		477,546		770
Mapletree Industrial Trust REIT		407,200		891
Mapletree Logistics Trust REIT		305,965		466
				5,126

	Shares		Value (000)
Spain (1.2%)
Inmobiliaria Colonial Socimi SA REIT		120,697	$	1,192
Merlin Properties Socimi SA REIT		255,715		2,438
				3,630
Sweden (1.3%)
Atrium Ljungberg AB, Class B		26,221		556
Castellum AB		16,354		417
Fabege AB		96,888		1,530
Hufvudstaden AB, Class A		72,042		1,192
Kungsleden AB		24,363		267
				3,962
Switzerland (0.4%)
PSP Swiss Property AG (Registered)		10,293		1,371
United Kingdom (5.6%)
British Land Co., PLC (The) REIT		603,557		4,042
Capital & Counties Properties PLC		57,142		114
Derwent London PLC REIT		43,674		1,856
Grainger PLC		115,652		450
Great Portland Estates PLC REIT		191,611		1,753
Hammerson PLC REIT (c)		3,997,628		1,353
Helical PLC		566		3
Land Securities Group PLC REIT		435,353		4,021
Segro PLC REIT		121,206		1,573
St. Modwen Properties PLC		124,954		686
Tritax Big Box PLC REIT		324,998		747
Urban & Civic PLC		117,152		552
Workspace Group PLC REIT		11,016		116
				17,266
United States (53.7%)
Alexandria Real Estate Equities, Inc. REIT		6,288		1,121
American Campus Communities, Inc. REIT		44,354		1,897
AvalonBay Communities, Inc. REIT		53,531		8,588
Boston Properties, Inc. REIT		54,381		5,141
Brixmor Property Group, Inc. REIT		209,197		3,462
Camden Property Trust REIT		51,662		5,162
Cousins Properties, Inc. REIT		76,133		2,550
CubeSmart REIT		113,860		3,827
Digital Realty Trust, Inc. REIT		64,407		8,985
Duke Realty Corp. REIT		85,820		3,430
Equity Lifestyle Properties, Inc. REIT		55,061		3,489
Equity Residential REIT		115,220		6,830
Essex Property Trust, Inc. REIT		18,014		4,277
Exeter Industrial Value Fund, LP (b)(d)(e)		1,860,000		125
First Industrial Realty Trust, Inc. REIT		10,539		444
Gaming and Leisure Properties, Inc. REIT		81,232		3,444
Healthcare Realty Trust, Inc. REIT		133,403		3,949
Healthpeak Properties, Inc. REIT		229,250		6,930
Host Hotels & Resorts, Inc. REIT		233,668		3,419
Hudson Pacific Properties, Inc. REIT		61,598		1,480
Invitation Homes, Inc. REIT		244,884		7,273
JBG SMITH Properties REIT		110,971		3,470
Kilroy Realty Corp. REIT		57,154		3,281

	Shares		Value (000)
Mack-Cali Realty Corp. REIT		58,609	$	730
Medical Properties Trust, Inc. REIT		156,855		3,418
NETSTREIT Corp.		128,115		2,497
ProLogis, Inc. REIT		160,424		15,988
Public Storage REIT		52,342		12,087
QTS Realty Trust, Inc., Class A REIT		27,870		1,725
Regency Centers Corp. REIT		56,250		2,564
RLJ Lodging Trust REIT		224,831		3,181
Sabra Health Care, Inc. REIT		72,904		1,266
Simon Property Group, Inc. REIT		101,706		8,674
SL Green Realty Corp. REIT		60,159		3,584
Sunstone Hotel Investors, Inc. REIT		314,050		3,558
Ventas, Inc. REIT		103,154		5,059
VEREIT, Inc. REIT		135,782		5,131
Weingarten Realty Investors REIT		163,483		3,543
				165,579
Total Common Stocks (Cost $226,105)				303,354
Short-Term Investments (1.9%)
Securities held as Collateral on Loaned Securities (1.4%)
Investment Companies (1.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G)		3,900,458		3,900
	Face Amount (000)
Repurchase Agreements (0.2%)
Barclays Capital, Inc. (0.05%, dated 12/31/20, due 1/4/21; proceeds $119; fully collateralized by a U.S. Government obligation; 1.63% due 11/15/22; valued at $121)	$	119		119
HSBC Securities USA, Inc. (0.05%, dated 12/31/20, due 1/4/21; proceeds $464; fully collateralized by a U.S. Government obligation; 0.15% due 10/31/22; valued at $473)		464		464
Merrill Lynch & Co., Inc. (0.06%, 12/31/20, due 1/4/21; proceeds $48; fully collateralized by a U.S. Government obligation; 2.50% due 5/15/46; valued at $49)		48		48
				631
Total Securities held as Collateral on Loaned Securities (Cost $4,531)				4,531

	Shares		Value (000)
Investment Company (0.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $1,425)		1,425,349	$	1,425
Total Short-Term Investments (Cost $5,956)				5,956
Total Investments (100.4%) (Cost $232,061) Including $5,663 of Securities Loaned (f)(g)				309,310
Liabilities in Excess of Other Assets (–0.4%)				(1,265	)
Net Assets (100.0%)			$	308,045

(a) Security trades on the Hong Kong exchange.

(b) Non-income producing security.

(d) At December 31, 2020, the Fund held fair valued securities valued at approximately $144,000, representing 0.1% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(e) Restricted security valued at fair value and not registered under the Securities Act of 1933. Exeter Industrial Value Fund, LP was acquired between 11/07 - 4/11 and has a current cost basis of $0. At December 31, 2020, this security had an aggregate market value of approximately $125,000, representing less than 0.05% of net assets.

(f) The approximate fair value and percentage of net assets, $131,387,000 and 42.7%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(g) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $260,912,000. The aggregate gross unrealized appreciation is approximately $51,420,000 and the aggregate gross unrealized depreciation is approximately $3,022,000, resulting in net unrealized appreciation of approximately $48,398,000.

CVA Certificaten Van Aandelen.

REIT Real Estate Investment Trust.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $226,736)	$	303,985
Investment in Security of Affiliated Issuer, at Value (Cost $5,325)		5,325
Total Investments in Securities, at Value (Cost $232,061)		309,310
Foreign Currency, at Value (Cost $1,295)		1,296
Receivable for Fund Shares Sold		5,623
Receivable for Investments Sold		2,801
Dividends Receivable		1,532
Tax Reclaim Receivable		142
Receivable from Securities Lending Income		4
Receivable from Affiliate		—	@
Other Assets		116
Total Assets		320,824
Liabilities:
Payable for Investments Purchased		4,573
Collateral on Securities Loaned, at Value		4,531
Payable for Fund Shares Redeemed		2,621
Payable for Advisory Fees		497
Deferred Capital Gain Country Tax		234
Payable for Sub Transfer Agency Fees — Class I		104
Payable for Sub Transfer Agency Fees — Class A		3
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Custodian Fees		46
Payable for Professional Fees		34
Payable for Administration Fees		21
Payable for Transfer Agency Fees — Class I		4
Payable for Transfer Agency Fees — Class A		5
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		2
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		102
Total Liabilities		12,779
Net Assets	$	308,045
Net Assets Consist of:
Paid-in-Capital	$	275,222
Total Distributable Earnings		32,823
Net Assets	$	308,045

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	84,874
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		10,279,089
Net Asset Value, Offering and Redemption Price Per Share	$	8.26
CLASS A:
Net Assets	$	4,316
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		523,392
Net Asset Value, Redemption Price Per Share	$	8.25
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.46
Maximum Offering Price Per Share	$	8.71
CLASS L:
Net Assets	$	522
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		63,770
Net Asset Value, Offering and Redemption Price Per Share	$	8.18
CLASS C:
Net Assets	$	225
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		28,088
Net Asset Value, Offering and Redemption Price Per Share	$	8.01
CLASS IS:
Net Assets	$	218,100
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		26,435,148
Net Asset Value, Offering and Redemption Price Per Share	$	8.25
CLASS IR:
Net Assets	$	8
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,019
Net Asset Value, Offering and Redemption Price Per Share	$	8.25
⁽¹⁾ Including:
Securities on Loan, at Value:	$	5,663

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $535 of Foreign Taxes Withheld)	$	11,427
Dividends from Security of Affiliated Issuer (Note G)		10
Income from Securities Loaned — Net		5
Total Investment Income		11,442
Expenses:
Advisory Fees (Note B)		2,988
Administration Fees (Note C)		299
Sub Transfer Agency Fees — Class I		212
Sub Transfer Agency Fees — Class A		9
Sub Transfer Agency Fees — Class L		1
Sub Transfer Agency Fees — Class C		—	@
Professional Fees		154
Custodian Fees (Note F)		139
Registration Fees		93
Shareholder Reporting Fees		60
Transfer Agency Fees — Class I (Note E)		11
Transfer Agency Fees — Class A (Note E)		29
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		4
Transfer Agency Fees — Class IR (Note E)		2
Shareholder Services Fees — Class A (Note D)		15
Distribution and Shareholder Services Fees — Class L (Note D)		7
Distribution and Shareholder Services Fees — Class C (Note D)		3
Pricing Fees		11
Directors' Fees and Expenses		10
Interest Expenses		52
Other Expenses		29
Total Expenses		4,132
Waiver of Advisory Fees (Note B)		(270	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(151	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(29	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(4	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(4	)
Net Expenses		3,669
Net Investment Income		7,773
Realized Loss:
Investments Sold (Net of $159 of Capital Gain Country Tax)		(9,919	)
Foreign Currency Translation		(16	)
Net Realized Loss		(9,935	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of $35)		(97,663	)
Foreign Currency Translation		(15	)
Net Change in Unrealized Appreciation (Depreciation)		(97,678	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(107,613	)
Net Decrease in Net Assets Resulting from Operations	$	(99,840	)

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	7,773		$	19,731
Net Realized Gain (Loss)		(9,935	)		51,608
Net Change in Unrealized Appreciation (Depreciation)		(97,678	)		74,806
Net Increase (Decrease) in Net Assets Resulting from Operations		(99,840	)		146,145
Dividends and Distributions to Shareholders:
Class I		(2,017	)		(30,795	)
Class A		(84	)		(992	)
Class L		(7	)		(121	)
Class C		(2	)		(33	)
Class IS		(5,319	)		(31,992	)
Class IR		(—	@)		(1	)
Total Dividends and Distributions to Shareholders		(7,429	)		(63,934	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		32,011			52,386
Distributions Reinvested		1,893			21,514
Redeemed		(227,702	)		(143,648	)
Class A:
Subscribed		340			1,398
Distributions Reinvested		84			985
Redeemed		(4,343	)		(5,586	)
Class L:
Exchanged		101			25
Distributions Reinvested		7			121
Redeemed		(723	)		(39	)
Class C:
Subscribed		—			110
Distributions Reinvested		2			33
Redeemed		(99	)		(208	)
Class IS:
Subscribed		44,467			44,869
Distributions Reinvested		5,311			30,673
Redeemed		(122,338	)		(292,311	)
Class IR:
Distributions Reinvested		—	@		1
Net Decrease in Net Assets Resulting from Capital Share Transactions		(270,989	)		(289,677	)
Total Decrease in Net Assets		(378,258	)		(207,466	)
Net Assets:
Beginning of Period		686,303			893,769
End of Period	$	308,045		$	686,303

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		4,347			5,134
Shares Issued on Distributions Reinvested		229			2,227
Shares Redeemed		(27,050	)		(13,954	)
Net Decrease in Class I Shares Outstanding		(22,474	)		(6,593	)
Class A:
Shares Subscribed		43			136
Shares Issued on Distributions Reinvested		10			102
Shares Redeemed		(619	)		(543	)
Net Decrease in Class A Shares Outstanding		(566	)		(305	)
Class L:
Shares Exchanged		15			3
Shares Issued on Distributions Reinvested		1			13
Shares Redeemed		(98	)		(4	)
Net Increase (Decrease) in Class L Shares Outstanding		(82	)		12
Class C:
Shares Subscribed		—			11
Shares Issued on Distributions Reinvested		—	@@		4
Shares Redeemed		(13	)		(21	)
Net Decrease in Class C Shares Outstanding		(13	)		(6	)
Class IS:
Shares Subscribed		6,252			4,341
Shares Issued on Distributions Reinvested		643			3,175
Shares Redeemed		(15,958	)		(28,336	)
Net Decrease in Class IS Shares Outstanding		(9,063	)		(20,820	)
Class IR:
Shares Issued on Distributions Reinvested		—	@@		—	@@

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	9.87		$	9.19		$	11.13		$	10.76		$	10.80
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.15			0.24			0.27			0.25			0.21
Net Realized and Unrealized Gain (Loss)		(1.57	)		1.43			(1.11	)		0.80			0.15
Total from Investment Operations		(1.42	)		1.67			(0.84	)		1.05			0.36
Distributions from and/or in Excess of:
Net Investment Income		(0.11	)		(0.54	)		(0.51	)		(0.15	)		(0.34	)
Net Realized Gain		(0.08	)		(0.45	)		(0.59	)		(0.53	)		(0.04	)
Paid-in-Capital		—			—			—			—			(0.02	)
Total Distributions		(0.19	)		(0.99	)		(1.10	)		(0.68	)		(0.40	)
Net Asset Value, End of Period	$	8.26		$	9.87		$	9.19		$	11.13		$	10.76
Total Return⁽³⁾		(14.33	)%		18.35	%		(7.92	)%		9.73	%		3.42	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	84,874		$	323,386		$	361,680		$	553,319		$	471,790
Ratio of Expenses Before Expense Limitation		1.20	%		1.05	%		1.10	%		1.07	%		1.04	%
Ratio of Expenses After Expense Limitation		1.01	%⁽⁴⁾⁽⁶⁾		1.00	%⁽⁴⁾		1.03	%⁽⁴⁾⁽⁵⁾		1.05	%⁽⁴⁾		1.04	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.00	%⁽⁴⁾		1.00	%⁽⁴⁾		1.03	%⁽⁴⁾		1.05	%⁽⁴⁾		N/A
Ratio of Net Investment Income		1.86	%⁽⁴⁾		2.36	%⁽⁴⁾		2.54	%⁽⁴⁾		2.20	%⁽⁴⁾		1.88	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		51	%		24	%		38	%		39	%		26	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% for Class I shares. Prior to July 1, 2018, the maximum ratio was 1.05% for Class I shares.

(7) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	9.85		$	9.17		$	11.10		$	10.71		$	10.74
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.13			0.21			0.23			0.17			0.17
Net Realized and Unrealized Gain (Loss)		(1.58	)		1.41			(1.10	)		0.84			0.16
Total from Investment Operations		(1.45	)		1.62			(0.87	)		1.01			0.33
Distributions from and/or in Excess of:
Net Investment Income		(0.07	)		(0.49	)		(0.47	)		(0.09	)		(0.30	)
Net Realized Gain		(0.08	)		(0.45	)		(0.59	)		(0.53	)		(0.04	)
Paid-in-Capital		—			—			—			—			(0.02	)
Total Distributions		(0.15	)		(0.94	)		(1.06	)		(0.62	)		(0.36	)
Net Asset Value, End of Period	$	8.25		$	9.85		$	9.17		$	11.10		$	10.71
Total Return⁽³⁾		(14.65	)%		17.90	%		(8.19	)%		9.44	%		3.12	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,316		$	10,728		$	12,775		$	17,701		$	92,730
Ratio of Expenses Before Expense Limitation		1.90	%		1.37	%		1.39	%		N/A			1.36	%
Ratio of Expenses After Expense Limitation		1.36	%⁽⁴⁾⁽⁶⁾		1.35	%⁽⁴⁾		1.38	%⁽⁴⁾⁽⁵⁾		1.35	%⁽⁴⁾		1.35	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.35	%⁽⁴⁾		1.35	%⁽⁴⁾		1.38	%⁽⁴⁾		1.35	%⁽⁴⁾		N/A
Ratio of Net Investment Income		1.63	%⁽⁴⁾		2.00	%⁽⁴⁾		2.18	%⁽⁴⁾		1.55	%⁽⁴⁾		1.51	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		51	%		24	%		38	%		39	%		26	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to July 1, 2018, the maximum ratio was 1.40% for Class A shares.

(7) Amount is less than 0.005%.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	9.75		$	9.09		$	11.01		$	10.64		$	10.61
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.08			0.16			0.17			0.14			0.12
Net Realized and Unrealized Gain (Loss)		(1.56	)		1.40			(1.09	)		0.81			0.16
Total from Investment Operations		(1.48	)		1.56			(0.92	)		0.95			0.28
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.45	)		(0.41	)		(0.05	)		(0.19	)
Net Realized Gain		(0.08	)		(0.45	)		(0.59	)		(0.53	)		(0.04	)
Paid-in-Capital		—			—			—			—			(0.02	)
Total Distributions		(0.09	)		(0.90	)		(1.00	)		(0.58	)		(0.25	)
Net Asset Value, End of Period	$	8.18		$	9.75		$	9.09		$	11.01		$	10.64
Total Return⁽³⁾		(15.17	)%		17.37	%		(8.74	)%		8.89	%		2.65	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	522		$	1,419		$	1,220		$	1,344		$	1,483
Ratio of Expenses Before Expense Limitation		2.08	%		1.91	%		2.02	%		1.93	%		1.82	%
Ratio of Expenses After Expense Limitation		1.86	%⁽⁴⁾⁽⁶⁾		1.85	%⁽⁴⁾		1.88	%⁽⁴⁾⁽⁵⁾		1.90	%⁽⁴⁾		1.82	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.85	%⁽⁴⁾		1.85	%⁽⁴⁾		1.88	%⁽⁴⁾		1.90	%⁽⁴⁾		N/A
Ratio of Net Investment Income		1.07	%⁽⁴⁾		1.54	%⁽⁴⁾		1.64	%⁽⁴⁾		1.32	%⁽⁴⁾		1.07	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		51	%		24	%		38	%		39	%		26	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.85% for Class L shares. Prior to July 1, 2018, the maximum ratio was 1.90% for Class L shares.

(7) Amount is less than 0.005%.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	9.56		$	8.92		$	10.83		$	10.49		$	10.56
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.08			0.13			0.16			0.12			0.08
Net Realized and Unrealized Gain (Loss)		(1.54	)		1.37			(1.09	)		0.78			0.16
Total from Investment Operations		(1.46	)		1.50			(0.93	)		0.90			0.24
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.41	)		(0.39	)		(0.03	)		(0.25	)
Net Realized Gain		(0.08	)		(0.45	)		(0.59	)		(0.53	)		(0.04	)
Paid-in-Capital		—			—			—			—			(0.02	)
Total Distributions		(0.09	)		(0.86	)		(0.98	)		(0.56	)		(0.31	)
Net Asset Value, End of Period	$	8.01		$	9.56		$	8.92		$	10.83		$	10.49
Total Return⁽³⁾		(15.26	)%		16.98	%		(8.93	)%		8.54	%		2.31	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	225		$	397		$	428		$	327		$	305
Ratio of Expenses Before Expense Limitation		2.96	%		2.51	%		2.47	%		2.69	%		2.86	%
Ratio of Expenses After Expense Limitation		2.11	%⁽⁴⁾⁽⁶⁾		2.10	%⁽⁴⁾		2.12	%⁽⁴⁾⁽⁵⁾		2.15	%⁽⁴⁾		2.15	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		2.10	%⁽⁴⁾		2.10	%⁽⁴⁾		2.12	%⁽⁴⁾		2.15	%⁽⁴⁾		N/A
Ratio of Net Investment Income		1.00	%⁽⁴⁾		1.26	%⁽⁴⁾		1.53	%⁽⁴⁾		1.11	%⁽⁴⁾		0.75	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		51	%		24	%		38	%		39	%		26	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.10% for Class C shares. Prior to July 1, 2018, the maximum ratio was 2.15% for Class C shares.

(7) Amount is less than 0.005%.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	9.87		$	9.19		$	11.13		$	10.76		$	10.81
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.17			0.25			0.28			0.25			0.22
Net Realized and Unrealized Gain (Loss)		(1.59	)		1.43			(1.11	)		0.81			0.15
Total from Investment Operations		(1.42	)		1.68			(0.83	)		1.06			0.37
Distributions from and/or in Excess of:
Net Investment Income		(0.12	)		(0.55	)		(0.52	)		(0.16	)		(0.36	)
Net Realized Gain		(0.08	)		(0.45	)		(0.59	)		(0.53	)		(0.04	)
Paid-in-Capital		—			—			—			—			(0.02	)
Total Distributions		(0.20	)		(1.00	)		(1.11	)		(0.69	)		(0.42	)
Net Asset Value, End of Period	$	8.25		$	9.87		$	9.19		$	11.13		$	10.76
Total Return⁽³⁾		(14.36	)%		18.43	%		(7.83	)%		9.80	%		3.45	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	218,100		$	350,363		$	517,658		$	1,049,646		$	1,255,498
Ratio of Expenses Before Expense Limitation		1.01	%		0.94	%		N/A			N/A			0.97	%
Ratio of Expenses After Expense Limitation		0.95	%⁽⁴⁾⁽⁶⁾		0.94	%⁽⁴⁾		0.95	%⁽⁴⁾⁽⁵⁾		0.97	%⁽⁴⁾		0.96	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.94	%⁽⁴⁾		0.94	%⁽⁴⁾		0.95	%⁽⁴⁾		0.97	%⁽⁴⁾		N/A
Ratio of Net Investment Income		2.21	%⁽⁴⁾		2.41	%⁽⁴⁾		2.58	%⁽⁴⁾		2.26	%⁽⁴⁾		2.01	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Portfolio Turnover Rate		51	%		24	%		38	%		39	%		26	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.94% for Class IS shares. Prior to July 1, 2018, the maximum ratio was 0.99% for Class IS shares.

(7) Amount is less than 0.005%.

	Class IR
	Year Ended December 31,						Period from June 15, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	9.87		$	9.19		$	11.09
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.18			0.25			0.23
Net Realized and Unrealized Gain (Loss)		(1.60	)		1.43			(1.02	)
Total from Investment Operations		(1.42	)		1.68			(0.79	)
Distributions from and/or in Excess of:
Net Investment Income		(0.12	)		(0.55	)		(0.52	)
Net Realized Gain		(0.08	)		(0.45	)		(0.59	)
Total Distributions		(0.20	)		(1.00	)		(1.11	)
Net Asset Value, End of Period	$	8.25		$	9.87		$	9.19
Total Return⁽³⁾		(14.36	)%		18.44	%		(7.49	)%⁽⁸⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	8		$	10		$	8
Ratio of Expenses Before Expense Limitation		26.07	%		21.38	%		18.72	%⁽⁹⁾
Ratio of Expenses After Expense Limitation		0.95	%⁽⁴⁾⁽⁶⁾		0.94	%⁽⁴⁾		0.94	%^(4)(5)(9)
Ratios of Expenses After Expense Limitation Excluding Interest Expenses		0.94	%⁽⁴⁾		0.94	%⁽⁴⁾		N/A
Ratio of Net Investment Income		2.37	%⁽⁴⁾		2.45	%⁽⁴⁾		3.94	%⁽⁴⁾⁽⁹⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾⁽⁹⁾
Portfolio Turnover Rate		51	%		24	%		38	%

(1) Commencement of Offering.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.94% for Class IR shares. Prior to July 1, 2018, the maximum ratio was 0.99% for Class IR shares.

(7) Amount is less than 0.005%.

(8) Not annualized.

(9) Annualized.

The accompanying financial statements relate to the Global Real Estate Portfolio. The Fund seeks to provide current income and capital appreciation. The Fund has capital subscription commitments to an investee company for this same purpose, the details of which are disclosed in the Unfunded Commitments note.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS, and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions. In addition, Class L shares of the Fund may be exchanged for Class L shares of any Morgan Stanley Multi-Class Fund, even though Class L shares are closed to investors.

(2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at

their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

2. Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement"

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Diversified	$	20,977	$	58,598	$	—	$	79,575
Health Care		20,622		—		—		20,622
Industrial		22,816		11,453		125		34,394
Industrial/Office Mixed		—		2,110		—		2,110
Lodging/Resorts		10,158		384		—		10,542
Office		17,157		25,567		—		42,724
Residential		37,516		15,981		19		53,516
Retail		23,080		17,433		—		40,513
Self Storage		15,914		—		—		15,914
Specialty		3,444		—		—		3,444
Total Common Stocks		171,684		131,526		144		303,354
Short-Term Investments
Investment Company		5,325		—		—		5,325
Repurchase Agreements		—		631		—		631
Total Short-Term Investments		5,325		631		—		5,956
Total Assets	$	177,009	$	132,157	$	144	$	309,310

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

4. Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	5,663	(a)	$	—	$	(5,663	)(b)(c)	$	0

(a) Represents market value of loaned securities at year end.

(b) The Fund received cash collateral of approximately $4,531,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $1,552,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	4,531	$	—	$	—	$	—	$	4,531
Total Borrowings	$	4,531	$	—	$	—	$	—	$	4,531
Gross amount of recognized liabilities for securities lending transactions									$	4,531

5. Unfunded Commitments: Subject to the terms of a Subscription Agreement between the Fund and Exeter Industrial Value Fund LP, the Fund has made a subscription commitment of $2,000,000 for which it will receive

2,000,000 shares of common stock. As of December 31, 2020, Exeter Industrial Value Fund LP has drawn down approximately $1,860,000, which represents 93.0% of the commitment.

6. Restricted Securities: The Fund invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $2 billion				Over $2 billion
	0.80	%			0.75	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.73% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares, 0.94% for Class IS shares and 0.94% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time that the Directors act to discontinue all or a portion of such waivers or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $270,000 of advisory fees were waived and approximately $189,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

the Company's Officers and Directors. The Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $190,776,000 and $454,708,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $4,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	287			$	141,200			$	136,162			$	10

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	5,325

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	4,300	$	3,129	$	37,385	$	26,549

Permanent differences, primarily due to an adjustment to prior period equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Distributable Earnings (000)				Paid-in Capital (000)
$	2			$	(2	)

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	9,196			$	—

At December 31, 2020, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $3,772,000 and $22,797,000, respectively, that do not have an expiration date.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Real Estate Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Global Real Estate Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Global Real Estate Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Sustain Portfolio Class I	$	1,000.00	$	1,143.20	$	1,020.61	$	4.85	$	4.57		0.90	%
Global Sustain Portfolio Class A		1,000.00		1,141.30		1,018.90		6.67		6.29		1.24
Global Sustain Portfolio Class L		1,000.00		1,137.90		1,016.34		9.40		8.87		1.75
Global Sustain Portfolio Class C		1,000.00		1,137.20		1,015.13		10.69		10.08		1.99
Global Sustain Portfolio Class IS		1,000.00		1,143.60		1,020.86		4.58		4.32		0.85

** Annualized.

Performance Compared to the MSCI World Net Index⁽¹⁾ and the Lipper Global Large-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years		Since Inception⁽⁷⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		15.96	%		14.19	%		—		12.46	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		15.53			13.79			—		12.08
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		9.47			12.57			—		11.26
Fund — Class L Shares w/o sales charges⁽⁴⁾		14.97			13.21			—		11.51
Fund — Class C Shares w/o sales charges⁽⁶⁾		14.68			12.94			—		11.30
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁶⁾		13.68			12.94			—		11.30
Fund — Class IS Shares w/o sales charges⁽⁵⁾		16.00			14.23			—		12.15
MSCI World Net Index		15.90			12.19			—		10.62
Lipper Global Large-Cap Growth Funds Index		27.24			15.47			—		13.02

⁽¹⁾ The MSCI World Net Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI World Net Index currently consists of 23 developed market country indices. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽⁴⁾ Commenced operations on August 30, 2013.

⁽⁵⁾ Commenced offering on September 13, 2013.

⁽⁶⁾ Commenced offering on April 30, 2015.

⁽⁷⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of Class I of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (97.5%)
Canada (3.0%)
Constellation Software, Inc.		1,222	$	1,587
Topicus.com, Inc. (a)		2,260		8
				1,595
France (1.9%)
L'Oreal SA (BSRM)		2,299		877
Sanofi		1,318		128
				1,005
Germany (9.8%)
Henkel AG & Co., KGaA (Preference)		22,946		2,587
SAP SE		20,368		2,638
				5,225
Hong Kong (1.8%)
AIA Group Ltd.		78,000		950
Taiwan (2.5%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		12,393		1,351
United Kingdom (11.6%)
Experian PLC		3,944		150
GlaxoSmithKline PLC		9,630		176
Prudential PLC		42,318		778
Reckitt Benckiser Group PLC		35,800		3,195
RELX PLC (Euronext N.V.)		12,587		308
RELX PLC (LSE)		39,661		971
Unilever PLC		9,506		570
				6,148
United States (66.9%)
Abbott Laboratories		16,635		1,821
Accenture PLC, Class A		9,345		2,441
Alphabet, Inc., Class A (a)		936		1,641
Amphenol Corp., Class A		8,524		1,115
Automatic Data Processing, Inc.		10,533		1,856
Baxter International, Inc.		25,801		2,070
Becton Dickinson & Co.		8,242		2,062
Cerner Corp.		12,723		999
Coca-Cola Co. (The)		10,115		555
Danaher Corp.		7,943		1,764
Factset Research Systems, Inc.		781		260
Fidelity National Information Services, Inc.		7,003		991
Fox Corp., Class A		6,846		199
Fox Corp., Class B (a)		9,512		275
Intercontinental Exchange, Inc.		11,279		1,300
Medtronic PLC		17,104		2,004
Microsoft Corp.		15,818		3,518
Moody's Corp.		978		284
NIKE, Inc., Class B		5,415		766
Procter & Gamble Co. (The)		15,831		2,203
Roper Technologies, Inc.		1,214		523
Stanley Black & Decker, Inc.		4,863		868
Texas Instruments, Inc.		5,273		865
Thermo Fisher Scientific, Inc.		3,280		1,528

	Shares		Value (000)
Visa, Inc., Class A		13,470	$	2,946
Zoetis, Inc.		4,650		770
				35,624
Total Common Stocks (Cost $40,579)				51,898
Short-Term Investment (2.7%)
Investment Company (2.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $1,423)		1,422,546		1,423
Total Investments (100.2%) (Cost $42,002) (b)(c)				53,321
Liabilities in Excess of Other Assets (–0.2%)				(88	)
Net Assets (100.0%)			$	53,233

(a) Non-income producing security.

(b) The approximate fair value and percentage of net assets, $13,328,000 and 25.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $42,260,000. The aggregate gross unrealized appreciation is approximately $11,411,000 and the aggregate gross unrealized depreciation is approximately $350,000, resulting in net unrealized appreciation of approximately $11,061,000.

ADR American Depositary Receipt.

Euronext N.V. Euronext Amsterdam Stock Market.

LSE London Stock Exchange.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		36.8	%
Health Care Equipment & Supplies		18.2
Information Technology Services		15.5
Household Products		15.0
Software		14.5
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $40,579)	$	51,898
Investment in Security of Affiliated Issuer, at Value (Cost $1,423)		1,423
Total Investments in Securities, at Value (Cost $42,002)		53,321
Foreign Currency, at Value (Cost —@)		—	@
Receivable for Fund Shares Sold		426
Dividends Receivable		45
Tax Reclaim Receivable		21
Other Assets		37
Total Assets		53,850
Liabilities:
Payable for Fund Shares Redeemed		294
Payable for Investments Purchased		247
Payable for Advisory Fees		28
Payable for Professional Fees		24
Payable for Custodian Fees		6
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		3
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		1
Payable for Administration Fees		3
Payable for Sub Transfer Agency Fees — Class I		1
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Other Liabilities		5
Total Liabilities		617
Net Assets	$	53,233
Net Assets Consist of:
Paid-in-Capital	$	42,023
Total Distributable Earnings		11,210
Net Assets	$	53,233

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	34,042
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,054,311
Net Asset Value, Offering and Redemption Price Per Share	$	16.57
CLASS A:
Net Assets	$	4,839
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		293,039
Net Asset Value, Redemption Price Per Share	$	16.51
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.91
Maximum Offering Price Per Share	$	17.42
CLASS L:
Net Assets	$	1,441
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		88,510
Net Asset Value, Offering and Redemption Price Per Share	$	16.28
CLASS C:
Net Assets	$	3,594
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		225,443
Net Asset Value, Offering and Redemption Price Per Share	$	15.94
CLASS IS:
Net Assets	$	9,317
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		562,294
Net Asset Value, Offering and Redemption Price Per Share	$	16.57

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $17 of Foreign Taxes Withheld)	$	559
Dividends from Security of Affiliated Issuer (Note G)		3
Total Investment Income		562
Expenses:
Advisory Fees (Note B)		277
Professional Fees		108
Registration Fees		67
Shareholder Services Fees — Class A (Note D)		9
Distribution and Shareholder Services Fees — Class L (Note D)		10
Distribution and Shareholder Services Fees — Class C (Note D)		32
Administration Fees (Note C)		32
Custodian Fees (Note F)		24
Sub Transfer Agency Fees — Class I		17
Sub Transfer Agency Fees — Class A		2
Sub Transfer Agency Fees — Class L		1
Sub Transfer Agency Fees — Class C		2
Shareholder Reporting Fees		15
Transfer Agency Fees — Class I (Note E)		3
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		3
Transfer Agency Fees — Class IS (Note E)		3
Directors' Fees and Expenses		3
Pricing Fees		3
Other Expenses		12
Total Expenses		628
Waiver of Advisory Fees (Note B)		(205	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(8	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(3	)
Rebate from Morgan Stanley Affiliate (Note G)		(2	)
Net Expenses		409
Net Investment Income		153
Realized Gain (Loss):
Investments Sold		1,121
Foreign Currency Translation		(—	@)
Net Realized Gain		1,121
Change in Unrealized Appreciation (Depreciation):
Investments		5,684
Foreign Currency Translation		2
Net Change in Unrealized Appreciation (Depreciation)		5,686
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		6,807
Net Increase in Net Assets Resulting from Operations	$	6,960

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	153		$	118
Net Realized Gain		1,121			553
Net Change in Unrealized Appreciation (Depreciation)		5,686			4,945
Net Increase in Net Assets Resulting from Operations		6,960			5,616
Dividends and Distributions to Shareholders:
Class I		(849	)		(382	)
Class A		(94	)		(66	)
Class L		(32	)		(31	)
Class C		(81	)		(62	)
Class IS		(234	)		(198	)
Total Dividends and Distributions to Shareholders		(1,290	)		(739	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		22,492			7,782
Distributions Reinvested		849			383
Redeemed		(7,634	)		(1,403	)
Class A:
Subscribed		2,257			1,369
Distributions Reinvested		94			66
Redeemed		(857	)		(871	)
Class L:
Exchanged		34			—
Distributions Reinvested		32			31
Redeemed		(220	)		(303	)
Class C:
Subscribed		776			715
Distributions Reinvested		81			62
Redeemed		(540	)		(264	)
Class IS:
Subscribed		501			1,000
Distributions Reinvested		234			199
Redeemed		—	@		—	@
Net Increase in Net Assets Resulting from Capital Share Transactions		18,099			8,766
Total Increase in Net Assets		23,769			13,643
Net Assets:
Beginning of Period		29,464			15,821
End of Period	$	53,233		$	29,464

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		1,528			573
Shares Issued on Distributions Reinvested		52			26
Shares Redeemed		(532	)		(102	)
Net Increase in Class I Shares Outstanding		1,048			497
Class A:
Shares Subscribed		148			101
Shares Issued on Distributions Reinvested		6			5
Shares Redeemed		(63	)		(65	)
Net Increase in Class A Shares Outstanding		91			41
Class L:
Shares Exchanged		2			—
Shares Issued on Distributions Reinvested		2			2
Shares Redeemed		(15	)		(22	)
Net Decrease in Class L Shares Outstanding		(11	)		(20	)
Class C:
Shares Subscribed		54			55
Shares Issued on Distributions Reinvested		5			4
Shares Redeemed		(36	)		(20	)
Net Increase in Class C Shares Outstanding		23			39
Class IS:
Shares Subscribed		40			75
Shares Issued on Distributions Reinvested		14			14
Shares Redeemed		—	@@		(—	@@)
Net Increase in Class IS Shares Outstanding		54			89

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.66		$	11.58		$	12.47		$	10.81		$	11.43
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.08			0.09			0.12			0.13			0.17
Net Realized and Unrealized Gain (Loss)		2.25			3.38			(0.04	)		2.35			0.29
Total from Investment Operations		2.33			3.47			0.08			2.48			0.46
Distributions from and/or in Excess of:
Net Investment Income		(0.06	)		(0.08	)		(0.07	)		(0.13	)		(0.20	)
Net Realized Gain		(0.36	)		(0.31	)		(0.90	)		(0.69	)		(0.88	)
Total Distributions		(0.42	)		(0.39	)		(0.97	)		(0.82	)		(1.08	)
Net Asset Value, End of Period	$	16.57		$	14.66		$	11.58		$	12.47		$	10.81
Total Return⁽³⁾		15.96	%		30.03	%		0.60	%		22.86	%		4.20	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	34,042		$	14,756		$	5,891		$	5,334		$	3,993
Ratio of Expenses Before Expense Limitation		1.45	%		1.92	%		2.86	%		3.54	%		2.45	%
Ratio of Expenses After Expense Limitation		0.90	%⁽⁴⁾		0.90	%⁽⁴⁾		0.93	%⁽⁴⁾⁽⁵⁾		1.00	%⁽⁴⁾		0.99	%⁽⁴⁾
Ratio of Net Investment Income		0.52	%⁽⁴⁾		0.68	%⁽⁴⁾		0.97	%⁽⁴⁾		1.10	%⁽⁴⁾		1.46	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		20	%		14	%		76	%		39	%		35	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.90% for Class I shares. Prior to April 30, 2018, the maximum ratio was 1.00% for Class I shares.

(6) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.62		$	11.56		$	12.44		$	10.79		$	11.40
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.03			0.05			0.07			0.08			0.11
Net Realized and Unrealized Gain (Loss)		2.23			3.36			(0.03	)		2.35			0.32
Total from Investment Operations		2.26			3.41			0.04			2.43			0.43
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.04	)		(0.02	)		(0.09	)		(0.16	)
Net Realized Gain		(0.36	)		(0.31	)		(0.90	)		(0.69	)		(0.88	)
Total Distributions		(0.37	)		(0.35	)		(0.92	)		(0.78	)		(1.04	)
Net Asset Value, End of Period	$	16.51		$	14.62		$	11.56		$	12.44		$	10.79
Total Return⁽³⁾		15.53	%		29.53	%		0.26	%		22.45	%		3.83	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,839		$	2,949		$	1,872		$	2,243		$	2,182
Ratio of Expenses Before Expense Limitation		1.76	%		2.25	%		3.21	%		3.90	%		2.85	%
Ratio of Expenses After Expense Limitation		1.24	%⁽⁴⁾		1.25	%⁽⁴⁾		1.28	%⁽⁴⁾⁽⁵⁾		1.35	%⁽⁴⁾		1.33	%⁽⁴⁾
Ratio of Net Investment Income		0.17	%⁽⁴⁾		0.35	%⁽⁴⁾		0.57	%⁽⁴⁾		0.66	%⁽⁴⁾		0.98	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		20	%		14	%		76	%		39	%		35	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class A shares. Prior to April 30, 2018, the maximum ratio was 1.35% for Class A shares.

(6) Amount is less than 0.005%.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.48		$	11.47		$	12.41		$	10.76		$	11.37
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.05	)		(0.01	)		0.01			0.03			0.06
Net Realized and Unrealized Gain (Loss)		2.21			3.33			(0.04	)		2.32			0.31
Total from Investment Operations		2.16			3.32			(0.03	)		2.35			0.37
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.01	)		(0.01	)		(0.10	)
Net Realized Gain		(0.36	)		(0.31	)		(0.90	)		(0.69	)		(0.88	)
Total Distributions		(0.36	)		(0.31	)		(0.91	)		(0.70	)		(0.98	)
Net Asset Value, End of Period	$	16.28		$	14.48		$	11.47		$	12.41		$	10.76
Total Return⁽³⁾		14.97	%		28.87	%		(0.25	)%		21.80	%		3.31	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,441		$	1,437		$	1,365		$	1,611		$	2,194
Ratio of Expenses Before Expense Limitation		2.32	%		2.77	%		3.73	%		4.39	%		3.35	%
Ratio of Expenses After Expense Limitation		1.75	%⁽⁴⁾		1.75	%⁽⁴⁾		1.78	%⁽⁴⁾⁽⁵⁾		1.85	%⁽⁴⁾		1.81	%⁽⁴⁾
Ratio of Net Investment Income (Loss)		(0.33	)%⁽⁴⁾		(0.09	)%⁽⁴⁾		0.04	%⁽⁴⁾		0.24	%⁽⁴⁾		0.52	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		20	%		14	%		76	%		39	%		35	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.75% for Class L shares. Prior to April 30, 2018, the maximum ratio was 1.85% for Class L shares.

(6) Amount is less than 0.005%.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.22		$	11.30		$	12.26		$	10.67		$	11.30
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.08	)		(0.05	)		(0.03	)		(0.01	)		0.02
Net Realized and Unrealized Gain (Loss)		2.16			3.28			(0.02	)		2.30			0.32
Total from Investment Operations		2.08			3.23			(0.05	)		2.29			0.34
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.01	)		(0.01	)		(0.09	)
Net Realized Gain		(0.36	)		(0.31	)		(0.90	)		(0.69	)		(0.88	)
Total Distributions		(0.36	)		(0.31	)		(0.91	)		(0.70	)		(0.97	)
Net Asset Value, End of Period	$	15.94		$	14.22		$	11.30		$	12.26		$	10.67
Total Return⁽³⁾		14.68	%		28.63	%		(0.50	)%		21.46	%		3.06	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,594		$	2,872		$	1,846		$	1,430		$	819
Ratio of Expenses Before Expense Limitation		2.51	%		2.97	%		4.00	%		4.71	%		3.83	%
Ratio of Expenses After Expense Limitation		1.99	%⁽⁴⁾		1.98	%⁽⁴⁾		2.02	%⁽⁴⁾⁽⁵⁾		2.10	%⁽⁴⁾		2.10	%⁽⁴⁾
Ratio of Net Investment Income (Loss)		(0.56	)%⁽⁴⁾		(0.38	)%⁽⁴⁾		(0.24	)%⁽⁴⁾		(0.06	)%⁽⁴⁾		0.17	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		20	%		14	%		76	%		39	%		35	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4) The Ratio of Expense After Expenses Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5) Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.00% for Class C shares. Prior to April 30, 2018, the maximum ratio was 2.10% for Class C shares.

(6) Amount is less than 0.005%.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.66		$	11.58		$	12.47		$	10.81		$	11.43
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.09			0.11			0.05			0.14			0.16
Net Realized and Unrealized Gain		2.25			3.37			0.04			2.34			0.31
Total from Investment Operations		2.34			3.48			0.09			2.48			0.47
Distributions from and/or in Excess of:
Net Investment Income		(0.07	)		(0.09	)		(0.08	)		(0.13	)		(0.21	)
Net Realized Gain		(0.36	)		(0.31	)		(0.90	)		(0.69	)		(0.88	)
Total Distributions		(0.43	)		(0.40	)		(0.98	)		(0.82	)		(1.09	)
Net Asset Value, End of Period	$	16.57		$	14.66		$	11.58		$	12.47		$	10.81
Total Return⁽³⁾		16.00	%		30.08	%		0.66	%		22.91	%		4.17	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9,317		$	7,450		$	4,847		$	12		$	11
Ratio of Expenses Before Expense Limitation		1.41	%		1.88	%		3.12	%		19.10	%		19.36	%
Ratio of Expenses After Expense Limitation		0.85	%⁽⁴⁾		0.85	%⁽⁴⁾		0.85	%⁽⁴⁾⁽⁵⁾		0.95	%⁽⁴⁾		0.95	%⁽⁴⁾
Ratio of Net Investment Income		0.58	%⁽⁴⁾		0.79	%⁽⁴⁾		0.41	%⁽⁴⁾		1.15	%⁽⁴⁾		1.35	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		20	%		14	%		76	%		39	%		35	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.85% for Class IS shares. Prior to April 30, 2018, the maximum ratio was 0.95% for Class IS shares.

(6) Amount is less than 0.005%.

The accompanying financial statements relate to the Global Sustain Portfolio. The Fund seeks long-term capital appreciation.

closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/ vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the

on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Beverages	$	555	$	—	$	—	$	555
Capital Markets		1,844		—		—		1,844
Electronic Equipment, Instruments & Components		1,115		—		—		1,115
Health Care Equipment & Supplies		9,721		—		—		9,721
Health Care Technology		999		—		—		999
Household Products		2,203		5,782		—		7,985
Industrial Conglomerates		523		—		—		523

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Information Technology Services	$	8,234	$	—	$	—	$	8,234
Insurance		—		1,728		—		1,728
Interactive Media & Services		1,641		—		—		1,641
Life Sciences Tools & Services		1,528		—		—		1,528
Machinery		868		—		—		868
Media		474		—		—		474
Personal Products		—		1,447		—		1,447
Pharmaceuticals		770		304		—		1,074
Professional Services		—		1,429		—		1,429
Semiconductors & Semiconductor Equipment		2,216		—		—		2,216
Software		5,105		2,646		—		7,751
Textiles, Apparel & Luxury Goods		766		—		—		766
Total Common Stocks		38,562		13,336		—		51,898
Short-Term Investment
Investment Company		1,423		—		—		1,423
Total Assets	$	39,985	$	13,336	$	—	$	53,321

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

4. Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is

unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million				Over $500 million
	0.70	%			0.65	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.18% of the Fund's average daily net assets.

for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $205,000 of advisory fees were waived and approximately $12,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $24,295,000 and $7,778,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $2,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	848			$	21,364			$	20,789			$	3

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	1,423

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	161	$	1,129	$	294	$	445

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	—			$	147

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Global Sustain Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Global Sustain Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Global Sustain Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Growth Portfolio Class I	$	1,000.00	$	1,416.10	$	1,022.42	$	3.28	$	2.75		0.54	%
Growth Portfolio Class A		1,000.00		1,414.40		1,021.22		4.73		3.96		0.78
Growth Portfolio Class L		1,000.00		1,410.70		1,018.75		7.70		6.44		1.27
Growth Portfolio Class C		1,000.00		1,409.00		1,017.50		9.20		7.71		1.52
Growth Portfolio Class IS		1,000.00		1,416.50		1,022.82		2.79		2.34		0.46
Growth Portfolio Class IR		1,000.00		1,416.60		1,022.82		2.79		2.34		0.46

** Annualized.

Performance Compared to the Russell 1000^® Growth Index⁽¹⁾ and the Lipper Multi-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽¹⁰⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		115.57	%		32.17	%		23.12	%		13.81	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		115.09			31.82			22.80			13.40
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		103.82			30.40			22.14			13.16
Fund — Class L Shares w/o sales charges⁽⁶⁾		114.01			31.16			—			23.91
Fund — Class C Shares w/o sales charges⁽⁸⁾		113.48			30.84			—			27.34
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁸⁾		112.48			30.84			—			27.34
Fund — Class IS Shares w/o sales charges⁽⁷⁾		115.76			32.28			—			26.67
Fund — Class IR Shares w/o sales charges⁽⁹⁾		115.74			—			—			38.74
Russell 1000^® Growth Index		38.49			21.00			17.21			10.63
Lipper Multi-Cap Growth Funds Index		43.16			19.56			15.56			10.55

⁽⁴⁾ Commenced operations on April 2, 1991.

⁽⁵⁾ Commenced offering on January 2, 1996.

⁽⁶⁾ Commenced offering on April 27, 2012.

⁽⁷⁾ Commenced offering on September 13, 2013.

⁽⁸⁾ Commenced offering on April 30, 2015.

⁽⁹⁾ Commenced offering on June 15, 2018.

⁽¹⁰⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of Class I of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (90.9%)
Biotechnology (0.8%)
Alnylam Pharmaceuticals, Inc. (a)		417,835	$	54,306
Moderna, Inc. (a)		789,321		82,460
				136,766
Entertainment (5.9%)
Netflix, Inc. (a)		338,247		182,900
Spotify Technology SA (a)		2,606,380		820,124
				1,003,024
Food & Staples Retailing (1.0%)
Costco Wholesale Corp.		468,129		176,382
Health Care Equipment & Supplies (5.4%)
DexCom, Inc. (a)		734,192		271,445
Intuitive Surgical, Inc. (a)		797,331		652,297
				923,742
Health Care Providers & Services (1.0%)
Guardant Health, Inc. (a)		1,356,837		174,869
Health Care Technology (4.0%)
Agilon Health Topco, Inc. (a)(b)(c) (acquisition cost — $25,030; acquired 11/7/18)		66,188		39,017
Veeva Systems, Inc., Class A (a)		2,331,726		634,812
				673,829
Hotels, Restaurants & Leisure (0.6%)
Airbnb, Inc., Class A (a)		668,925		98,198
Information Technology Services (22.2%)
Adyen N.V. (Netherlands) (a)		107,749		250,359
Fastly, Inc., Class A (a)		1,776,664		155,227
MongoDB, Inc. (a)		464,650		166,828
Okta, Inc. (a)		1,610,656		409,526
Shopify, Inc., Class A (Canada) (a)		743,921		842,081
Snowflake, Inc., Class A (a)		1,830,709		515,162
Square, Inc., Class A (a)		3,975,042		865,128
Twilio, Inc., Class A (a)		1,740,213		589,062
				3,793,373
Interactive Media & Services (15.0%)
Facebook, Inc., Class A (a)		2,193,688		599,228
Pinterest, Inc., Class A (a)		3,874,637		255,338
Snap, Inc., Class A (a)		12,866,390		644,220
Twitter, Inc. (a)		12,043,526		652,157
Zillow Group, Inc., Class C (a)		3,185,498		413,478
				2,564,421
Internet & Direct Marketing Retail (10.7%)
Amazon.com, Inc. (a)		391,539		1,275,215
Chewy, Inc., Class A (a)		1,874,687		168,516
DoorDash, Inc., Class A (a)		1,045,221		149,205
Wayfair, Inc., Class A (a)		1,072,360		242,150
				1,835,086

	Shares		Value (000)
Life Sciences Tools & Services (2.8%)
10X Genomics, Inc., Class A (a)		1,430,420	$	202,547
Illumina, Inc. (a)		756,073		279,747
				482,294
Metals & Mining (0.1%)
Royal Gold, Inc.		163,583		17,399
Oil, Gas & Consumable Fuels (0.2%)
Texas Pacific Land Trust (d)		42,484		30,886
Pharmaceuticals (0.9%)
Royalty Pharma PLC, Class A		2,983,504		149,324
Road & Rail (4.8%)
Uber Technologies, Inc. (a)		16,036,353		817,854
Semiconductors & Semiconductor Equipment (1.5%)
NVIDIA Corp.		505,659		264,055
Software (11.2%)
Cloudflare, Inc., Class A (a)		2,236,690		169,966
Coupa Software, Inc. (a)		1,262,290		427,802
Trade Desk, Inc. (The), Class A (a)		584,181		467,929
Unity Software, Inc. (a)(d)		1,020,571		156,627
Zoom Video Communications, Inc., Class A (a)		2,066,755		697,158
				1,919,482
Specialty Retail (2.8%)
Carvana Co. (a)		2,007,037		480,766
Total Common Stocks (Cost $7,592,896)				15,541,750
Preferred Stocks (0.8%)
Electronic Equipment, Instruments & Components (0.0%)
Magic Leap Series C (a)(b)(c) (acquisition cost — $18,812; acquired 12/22/15)		816,725		—
Internet & Direct Marketing Retail (0.8%)
Airbnb, Inc. Series D (a)(b) (acquisition cost — $20,638; acquired 4/16/14)		1,013,856		136,927
Total Preferred Stocks (Cost $39,450)				136,927
Short-Term Investments (8.1%)
Securities held as Collateral on Loaned Securities (0.3%)
Investment Company (0.3%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		43,631,380		43,631
	Face Amount (000)
Repurchase Agreements (0.0%)
Barclays Capital, Inc., (0.05%, dated 12/31/20, due 1/4/21; proceeds $1,331; fully collateralized by a U.S. Government Obligation; 1.63% due 11/15/22; valued at $1,357)	$	1,331		1,331

Call Options Purchased:

The Fund had the following call options purchased open at December 31, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.99	Sep-21		2,209,996,914		2,209,997	$	2,102	$	13,383	$	(11,281	)
BNP Paribas	USD/CNH	CNH	7.64	Nov-21		2,625,404,928		2,625,405		7,170		14,258		(7,088	)
Royal Bank of Scotland	USD/CNH	CNH	7.75	Jan-21		1,640,578,609		1,640,579		2		7,164		(7,162	)
Royal Bank of Scotland	USD/CNH	CNH	8.06	Jul-21		2,411,798,894		2,411,799		1,440		12,792		(11,352	)
Royal Bank of Scotland	USD/CNH	CNH	8.48	May-21		1,570,361,464		1,570,361		207		9,804		(9,597	)
									$	10,921	$	57,401	$	(46,480	)

CNH — Chinese Yuan Renminbi Offshore

USD — United States Dollar

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $7,696,798)	$	15,696,649
Investment in Security of Affiliated Issuer, at Value (Cost $1,375,449)		1,375,449
Total Investments in Securities, at Value (Cost $9,072,247)		17,072,098
Foreign Currency, at Value (Cost —@)		—	@
Receivable for Investments Sold		179,734
Receivable for Fund Shares Sold		26,851
Dividends Receivable		85
Receivable from Securities Lending Income		21
Receivable from Affiliate		13
Other Assets		738
Total Assets		17,279,540
Liabilities:
Payable for Investments Purchased		79,275
Collateral on Securities Loaned, at Value		50,682
Payable for Fund Shares Redeemed		15,924
Payable for Advisory Fees		14,369
Due to Broker		11,792
Payable for Shareholder Services Fees — Class A		1,164
Payable for Distribution and Shareholder Services Fees — Class L		114
Payable for Distribution and Shareholder Services Fees — Class C		438
Payable for Administration Fees		1,176
Payable for Sub Transfer Agency Fees — Class I		184
Payable for Sub Transfer Agency Fees — Class A		64
Payable for Sub Transfer Agency Fees — Class L		13
Payable for Custodian Fees		91
Payable for Professional Fees		72
Payable for Transfer Agency Fees — Class I		19
Payable for Transfer Agency Fees — Class A		36
Payable for Transfer Agency Fees — Class L		3
Payable for Transfer Agency Fees — Class C		3
Payable for Transfer Agency Fees — Class IS		2
Payable for Transfer Agency Fees — Class IR		1
Payable for Directors' Fees and Expenses		41
Bank Overdraft		—	@
Other Liabilities		404
Total Liabilities		175,867
Net Assets	$	17,103,673
Net Assets Consist of:
Paid-in-Capital	$	8,095,581
Total Distributable Earnings		9,008,092
Net Assets	$	17,103,673

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	6,816,690
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		74,520,261
Net Asset Value, Offering and Redemption Price Per Share	$	91.47
CLASS A:
Net Assets	$	5,465,808
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		64,069,689
Net Asset Value, Redemption Price Per Share	$	85.31
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	4.73
Maximum Offering Price Per Share	$	90.04
CLASS L:
Net Assets	$	173,317
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,197,930
Net Asset Value, Offering and Redemption Price Per Share	$	78.85
CLASS C:
Net Assets	$	514,190
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		6,635,719
Net Asset Value, Offering and Redemption Price Per Share	$	77.49
CLASS IS:
Net Assets	$	3,743,697
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		40,507,828
Net Asset Value, Offering and Redemption Price Per Share	$	92.42
CLASS IR:
Net Assets	$	389,971
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,219,939
Net Asset Value, Offering and Redemption Price Per Share	$	92.41
⁽¹⁾ Including: Securities on Loan, at Value:	$	49,234

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers	$	836
Dividends from Security of Affiliated Issuer (Note G)		799
Income from Securities Loaned — Net		233
Total Investment Income		1,868
Expenses:
Advisory Fees (Note B)		42,776
Shareholder Services Fees — Class A (Note D)		9,051
Distribution and Shareholder Services Fees — Class L (Note D)		976
Distribution and Shareholder Services Fees — Class C (Note D)		3,104
Administration Fees (Note C)		9,092
Sub Transfer Agency Fees — Class I		3,435
Sub Transfer Agency Fees — Class A		2,486
Sub Transfer Agency Fees — Class L		74
Sub Transfer Agency Fees — Class C		167
Shareholder Reporting Fees		521
Registration Fees		485
Transfer Agency Fees — Class I (Note E)		104
Transfer Agency Fees — Class A (Note E)		194
Transfer Agency Fees — Class L (Note E)		16
Transfer Agency Fees — Class C (Note E)		26
Transfer Agency Fees — Class IS (Note E)		9
Transfer Agency Fees — Class IR (Note E)		3
Professional Fees		279
Custodian Fees (Note F)		226
Directors' Fees and Expenses		149
Pricing Fees		3
Other Expenses		234
Total Expenses		73,410
Rebate from Morgan Stanley Affiliate (Note G)		(840	)
Net Expenses		72,570
Net Investment Loss		(70,702	)
Realized Gain:
Investments Sold		2,508,125
Foreign Currency Translation		16
Net Realized Gain		2,508,141
Change in Unrealized Appreciation (Depreciation):
Investments		6,284,984
Foreign Currency Translation		1
Net Change in Unrealized Appreciation (Depreciation)		6,284,985
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		8,793,126
Net Increase in Net Assets Resulting from Operations	$	8,722,424

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(70,702	)	$	(33,430	)
Net Realized Gain		2,508,141			905,247
Net Change in Unrealized Appreciation (Depreciation)		6,284,985			374,645
Net Increase in Net Assets Resulting from Operations		8,722,424			1,246,462
Dividends and Distributions to Shareholders:
Class I		(587,891	)		(250,375	)
Class A		(492,476	)		(249,460	)
Class L		(17,295	)		(10,223	)
Class C		(50,352	)		(18,689	)
Class IS		(318,382	)		(141,597	)
Class IR		(33,066	)		(25,723	)
Total Dividends and Distributions to Shareholders		(1,499,462	)		(696,067	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		3,068,441			1,270,157
Distributions Reinvested		494,117			224,217
Redeemed		(2,048,941	)		(1,016,032	)
Class A:
Subscribed		1,320,428			531,381
Distributions Reinvested		474,626			241,503
Redeemed		(987,191	)		(629,164	)
Class L:
Exchanged		149			74
Distributions Reinvested		16,955			10,041
Redeemed		(18,219	)		(9,094	)
Class C:
Subscribed		192,797			91,888
Distributions Reinvested		44,778			16,680
Redeemed		(71,959	)		(36,785	)
Class IS:
Subscribed		701,960			304,283
Distributions Reinvested		315,802			140,426
Redeemed		(456,386	)		(226,568	)
Class IR:
Subscribed		27,158			93,649
Distributions Reinvested		33,066			25,723
Redeemed		(155,705	)		(12,024	)
Net Increase in Net Assets Resulting from Capital Share Transactions		2,951,876			1,020,355
Total Increase in Net Assets		10,174,838			1,570,750
Net Assets:
Beginning of Period		6,928,835			5,358,085
End of Period	$	17,103,673		$	6,928,835

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		45,741			25,589
Shares Issued on Distributions Reinvested		5,306			4,970
Shares Redeemed		(29,210	)		(20,652	)
Net Increase in Class I Shares Outstanding		21,837			9,907
Class A:
Shares Subscribed		18,846			11,250
Shares Issued on Distributions Reinvested		5,465			5,690
Shares Redeemed		(15,307	)		(13,463	)
Net Increase in Class A Shares Outstanding		9,004			3,477
Class L:
Shares Exchanged		2			2
Shares Issued on Distributions Reinvested		211			253
Shares Redeemed		(297	)		(207	)
Net Increase (Decrease) in Class L Shares Outstanding		(84	)		48
Class C:
Shares Subscribed		3,122			2,072
Shares Issued on Distributions Reinvested		567			426
Shares Redeemed		(1,187	)		(851	)
Net Increase in Class C Shares Outstanding		2,502			1,647
Class IS:
Shares Subscribed		10,266			6,239
Shares Issued on Distributions Reinvested		3,357			3,086
Shares Redeemed		(6,504	)		(4,547	)
Net Increase in Class IS Shares Outstanding		7,119			4,778
Class IR:
Shares Subscribed		502			1,883
Shares Issued on Distributions Reinvested		352			565
Shares Redeemed		(2,396	)		(244	)
Net Increase (Decrease) in Class IR Shares Outstanding		(1,542	)		2,204

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	46.33		$	41.75		$	41.65		$	35.19		$	40.44
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.38	)		(0.19	)		(0.08	)		(0.11	)		0.01
Net Realized and Unrealized Gain (Loss)		54.08			9.73			3.50			15.39			(0.79	)
Total from Investment Operations		53.70			9.54			3.42			15.28			(0.78	)
Distributions from and/or in Excess of:
Net Realized Gain		(8.56	)		(4.96	)		(3.32	)		(8.82	)		(4.47	)
Net Asset Value, End of Period	$	91.47		$	46.33		$	41.75		$	41.65		$	35.19
Total Return⁽³⁾		115.57	%		23.16	%		7.66	%		43.83	%		(1.91	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	6,816,690		$	2,440,640		$	1,785,893		$	991,362		$	726,787
Ratio of Expenses Before Expense Limitation		N/A			0.59	%		N/A			N/A			0.63	%
Ratio of Expenses After Expense Limitation		0.54	%⁽⁴⁾		0.58	%⁽⁴⁾		0.58	%⁽⁴⁾		0.61	%⁽⁴⁾		0.63	%⁽⁴⁾⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			0.58	%⁽⁴⁾		N/A			0.61	%⁽⁴⁾		N/A
Ratio of Net Investment Income (Loss)		(0.53	)%⁽⁴⁾		(0.38	)%⁽⁴⁾		(0.17	)%⁽⁴⁾		(0.25	)%⁽⁴⁾		0.02	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		60	%		87	%		41	%		55	%		39	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5) Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.80% for Class I shares. Prior to April 7, 2016, the maximum ratio was 0.70% for Class I shares.

(6) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	43.57		$	39.61		$	39.77		$	33.97		$	39.31
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.51	)		(0.30	)		(0.19	)		(0.22	)		(0.10	)
Net Realized and Unrealized Gain (Loss)		50.81			9.22			3.35			14.84			(0.77	)
Total from Investment Operations		50.30			8.92			3.16			14.62			(0.87	)
Distributions from and/or in Excess of:
Net Realized Gain		(8.56	)		(4.96	)		(3.32	)		(8.82	)		(4.47	)
Net Asset Value, End of Period	$	85.31		$	43.57		$	39.61		$	39.77		$	33.97
Total Return⁽³⁾		115.09	%		22.81	%		7.39	%		43.45	%		(2.21	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	5,465,808		$	2,399,450		$	2,043,706		$	1,827,833		$	1,376,836
Ratio of Expenses Before Expense Limitation		N/A			0.84	%		N/A			N/A			0.92	%
Ratio of Expenses After Expense Limitation		0.79	%⁽⁴⁾		0.83	%⁽⁴⁾		0.84	%⁽⁴⁾		0.88	%⁽⁴⁾		0.92	%⁽⁴⁾⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			0.83	%⁽⁴⁾		N/A			0.88	%⁽⁴⁾		N/A
Ratio of Net Investment Loss		(0.77	)%⁽⁴⁾		(0.64	)%⁽⁴⁾		(0.43	)%⁽⁴⁾		(0.52	)%⁽⁴⁾		(0.26	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		60	%		87	%		41	%		55	%		39	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.005% higher and the Ratio of Net Investment Loss would have been 0.005% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.15% for Class A shares. Prior to April 7, 2016, the maximum ratio was 1.05% for Class A shares.

(6) Amount is less than 0.005%.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	40.77		$	37.51		$	37.99		$	32.90		$	38.41
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.76	)		(0.50	)		(0.39	)		(0.43	)		(0.29	)
Net Realized and Unrealized Gain (Loss)		47.40			8.72			3.23			14.34			(0.75	)
Total from Investment Operations		46.64			8.22			2.84			13.91			(1.04	)
Distributions from and/or in Excess of:
Net Realized Gain		(8.56	)		(4.96	)		(3.32	)		(8.82	)		(4.47	)
Net Asset Value, End of Period	$	78.85		$	40.77		$	37.51		$	37.99		$	32.90
Total Return⁽³⁾		114.01	%		22.22	%		6.89	%		42.69	%		(2.72	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	173,317		$	93,053		$	83,818		$	90,177		$	74,324
Ratio of Expenses Before Expense Limitation		N/A			1.33	%		N/A			N/A			1.45	%
Ratio of Expenses After Expense Limitation		1.29	%⁽⁴⁾		1.32	%⁽⁴⁾		1.31	%⁽⁴⁾		1.42	%⁽⁴⁾		1.45	%⁽⁴⁾⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.32	%⁽⁴⁾		N/A			1.42	%⁽⁴⁾		N/A
Ratio of Net Investment Loss		(1.27	)%⁽⁴⁾		(1.12	)%⁽⁴⁾		(0.90	)%⁽⁴⁾		(1.05	)%⁽⁴⁾		(0.79	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		60	%		87	%		41	%		55	%		39	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Loss would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.65% for Class L shares. Prior to April 7, 2016, the maximum ratio was 1.55% for Class L shares.

(6) Amount is less than 0.005%.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	40.23		$	37.17		$	37.76		$	32.81		$	38.40
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.93	)		(0.61	)		(0.51	)		(0.51	)		(0.38	)
Net Realized and Unrealized Gain (Loss)		46.75			8.63			3.24			14.28			(0.74	)
Total from Investment Operations		45.82			8.02			2.73			13.77			(1.12	)
Distributions from and/or in Excess of:
Net Realized Gain		(8.56	)		(4.96	)		(3.32	)		(8.82	)		(4.47	)
Net Asset Value, End of Period	$	77.49		$	40.23		$	37.17		$	37.76		$	32.81
Total Return⁽³⁾		113.48	%		21.91	%		6.61	%		42.37	%		(2.93	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	514,190		$	166,303		$	92,431		$	37,524		$	16,613
Ratio of Expenses Before Expense Limitation		N/A			1.59	%		N/A			N/A			1.70	%
Ratio of Expenses After Expense Limitation		1.53	%⁽⁴⁾		1.58	%⁽⁴⁾		1.57	%⁽⁴⁾		1.63	%⁽⁴⁾		1.70	%⁽⁴⁾⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.58	%⁽⁴⁾		N/A			1.63	%		N/A
Ratio of Net Investment Loss		(1.51	)%⁽⁴⁾		(1.38	)%⁽⁴⁾		(1.17	)%⁽⁴⁾		(1.26	)%⁽⁴⁾		(1.04	)%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		60	%		87	%		41	%		55	%		39	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Loss would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.90% for Class C shares. Prior to April 7, 2016, the maximum ratio was 1.80% for Class C shares.

(6) Amount is less than 0.005%.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	46.73		$	42.04		$	41.89		$	35.32		$	40.54
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.32	)		(0.15	)		(0.04	)		(0.07	)		0.05
Net Realized and Unrealized Gain (Loss)		54.57			9.80			3.51			15.46			(0.80	)
Total from Investment Operations		54.25			9.65			3.47			15.39			(0.75	)
Distributions from and/or in Excess of:
Net Realized Gain		(8.56	)		(4.96	)		(3.32	)		(8.82	)		(4.47	)
Net Asset Value, End of Period	$	92.42		$	46.73		$	42.04		$	41.89		$	35.32
Total Return⁽³⁾		115.76	%		23.26	%		7.74	%		43.98	%		(1.83	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,743,697		$	1,560,148		$	1,202,659		$	1,131,543		$	875,021
Ratio of Expenses Before Expense Limitation		N/A			0.50	%		N/A			N/A			0.54	%
Ratio of Expenses After Expense Limitation		0.47	%⁽⁴⁾		0.49	%⁽⁴⁾		0.50	%⁽⁴⁾		0.53	%⁽⁴⁾		0.54	%⁽⁴⁾⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			0.49	%⁽⁴⁾		N/A			0.53	%⁽⁴⁾		N/A
Ratio of Net Investment Income (Loss)		(0.45	)%⁽⁴⁾		(0.29	)%⁽⁴⁾		(0.09	)%⁽⁴⁾		(0.16	)%⁽⁴⁾		0.12	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		60	%		87	%		41	%		55	%		39	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(4) The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5) Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.73% for Class IS shares. Prior to April 7, 2016, the maximum ratio was 0.67% for Class IS shares.

(6) Amount is less than 0.005%.

	Class IR
	Year Ended December 31,						Period from June 15, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	46.73		$	42.04		$	52.16
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.31	)		(0.15	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		54.55			9.80			(6.76	)
Total from Investment Operations		54.24			9.65			(6.80	)
Distributions from and/or in Excess of:
Net Realized Gain		(8.56	)		(4.96	)		(3.32	)
Net Asset Value, End of Period	$	92.41		$	46.73		$	42.04
Total Return⁽³⁾		115.74	%		23.26	%		(13.48	)%⁽⁵⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	389,971		$	269,241		$	149,578
Ratio of Expenses Before Expense Limitation		N/A			0.50	%		N/A
Ratio of Expenses After Expense Limitation		0.47	%⁽⁴⁾		0.49	%⁽⁴⁾		0.49	%⁽⁴⁾⁽⁶⁾
Ratios of Expenses After Expense Limitation Excluding Interest Expenses		N/A			0.49	%⁽⁴⁾		N/A
Ratio of Net Investment Loss		(0.45	)%⁽⁴⁾		(0.30	)%⁽⁴⁾		(0.14	)%⁽⁴⁾⁽⁶⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%⁽⁶⁾
Portfolio Turnover Rate		60	%		87	%		41	%

(1) Commencement of Offering.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Not annualized.

(6) Annualized.

The accompanying financial statements relate to the Growth Portfolio. The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of large capitalization companies.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions. In addition, Class L shares of the Fund may be exchanged for class L Shares of any Morgan Stanley Multi-Class Fund, even though Class L shares are closed to investors.

are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances under which the Adviser determines

that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Common Stocks
Biotechnology	$	136,766	$	—	$	—		$	136,766
Entertainment		1,003,024		—		—			1,003,024
Food & Staples Retailing		176,382		—		—			176,382
Health Care Equipment & Supplies		923,742		—		—			923,742
Health Care Providers & Services		174,869		—		—			174,869
Health Care Technology		634,812		—		39,017			673,829
Hotels, Restaurants & Leisure		98,198		—		—			98,198
Information Technology Services		3,543,014		250,359		—			3,793,373
Interactive Media & Services		2,564,421		—		—			2,564,421
Internet & Direct Marketing Retail		1,835,086		—		—			1,835,086
Life Sciences Tools & Services		482,294		—		—			482,294
Metals & Mining		17,399		—		—			17,399
Oil, Gas & Consumable Fuels		30,886		—		—			30,886
Pharmaceuticals		149,324		—		—			149,324
Road & Rail		817,854		—		—			817,854
Semiconductors & Semiconductor Equipment		264,055		—		—			264,055
Software		1,919,482		—		—			1,919,482
Specialty Retail		480,766		—		—			480,766
Total Common Stocks		15,252,374		250,359		39,017			15,541,750
Preferred Stocks
Electronic Equipment, Instruments & Components		—		—		—	†		—	†
Internet & Direct Marketing Retail		—		136,927		—			136,927
Total Preferred Stocks		—		136,927		—	†		136,927	†

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Call Options Purchased	$	—	$	10,921	$	—		$	10,921
Short-Term Investments
Investment Company		1,375,449		—		—			1,375,449
Repurchase Agreements		—		7,051		—			7,051
Total Short-Term Investments		1,375,449		7,051		—			1,382,500
Total Assets	$	16,627,823	$	405,258	$	39,017	†	$	17,072,098	†

† Includes a security valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stock (000)		Preferred Stocks (000)
Beginning Balance	$	29,749	$	86,499
Purchases		—		—
Sales		—		—
Amortization of discount		—		—
Transfers in		—		—
Transfers out		—		(66,595	)††
Corporate actions		—		—
Change in unrealized appreciation (depreciation)		9,268		(19,904	)†
Realized gains (losses)		—		—
Ending Balance	$	39,017	$	—	†
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2020	$	9,268	$	(19,904	)†

† Includes a security valued at zero.

†† A security transferred out of level 3 due to an Initial Public Offering.

transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of December 31, 2020:

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Purchased Options

Investments, at Value
(Purchased Options)

Currency Risk

10,921

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(20,463	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(28,452	)(c)

At December 31, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	10,921	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities(a) (000)		Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
BNP Paribas	$	9,272	$	—	$	(9,272	)	$	0
Royal Bank of Scotland		1,649		—		(1,649	)		0
Total	$	10,921	$	—	$	(10,921	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount					6,561,135,000

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	49,234	(f)	$	—	$	(49,234	)(g)(h)	$	0

(f) Represents market value of loaned securities at year end.

(g) The Fund received cash collateral of approximately $50,682,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments.

(h) The actual collateral received is greater than the amount shown here due to overcollateralization.

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	50,682	$	—	$	—	$	—	$	50,682
Total Borrowings	$	50,682	$	—	$	—	$	—	$	50,682
Gross amount of recognized liabilities for securities lending transactions									$	50,682

7. Restricted Securities: The Fund invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

First $1 billion				Next $1 billion				Next $1 billion				Over $3 billion
	0.50	%			0.45	%			0.40	%			0.35	%

For the year ended December 31, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.37% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.80% for Class I shares, 1.15% for Class A shares, 1.65% for Class L shares, 1.90% for Class C shares, 0.73% for Class IS shares and 0.73% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. This arrangement had no effect for the year ended December 31, 2020.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset

Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $6,569,260,000 and $6,508,463,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	81,979			$	4,579,796			$	3,286,326			$	799

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	1,375,449

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an

affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the year ended December 31, 2020, the Fund engaged in cross-trade purchases of approximately $9,714,000.

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	345,276	$	1,154,186	$	32,348	$	663,719

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	524,779			$	522,718

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. — Growth Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Growth Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Growth Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Inception Portfolio Class I	$	1,000.00	$	1,744.20	$	1,020.16	$	6.83	$	5.03		0.99	%
Inception Portfolio Class A		1,000.00		1,741.50		1,018.85		8.61		6.34		1.25
Inception Portfolio Class L		1,000.00		1,736.70		1,015.89		12.66		9.32		1.84
Inception Portfolio Class C		1,000.00		1,734.50		1,014.73		14.23		10.48		2.07
Inception Portfolio Class IS		1,000.00		1,744.60		1,020.51		6.35		4.67		0.92

** Annualized.

The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of small capitalization companies.

Performance

For the fiscal year ended December 31, 2020, the Fund's Class I shares had a total return based on net asset value and reinvestment of distributions per share of 150.57%, net of fees. The Fund's Class I shares outperformed the Fund's benchmark, the Russell 2000® Growth Index (the "Index"), which returned 34.63%.

Please keep in mind that high triple-digit returns are highly unusual and cannot be sustained. Investors should also be aware that these returns were primarily achieved during favorable market conditions.

Factors Affecting Performance

• Within the Index of small-cap growth stocks, health care, information technology and industrials were the best performing sectors, while energy (the only sector with a negative return), materials and real estate were the weakest performers.

Performance Compared to the Russell 2000^® Growth Index⁽¹⁾ and the Lipper Small-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁹⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		150.57	%		33.14	%		19.42	%		13.92	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		149.86			32.76			19.08			13.75
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		136.79			31.33			18.44			13.51
Fund — Class L Shares w/o sales charges⁽⁶⁾		148.49			32.04			—			21.25
Fund — Class C Shares w/o sales charges⁽⁸⁾		147.97			—			—			41.57
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁸⁾		146.97			—			—			41.57
Fund — Class IS Shares w/o sales charges⁽⁷⁾		150.79			33.25			—			20.92
Russell 2000^® Growth Index		34.63			16.36			13.48			8.94
Lipper Small-Cap Growth Funds Index		37.36			18.41			13.89			10.48

⁽¹⁾ The Russell 2000^® Growth Index measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000^® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000^® Index is a subset of the Russell 3000^® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2,000 of the smallest securities based on a combination of their market capitalization and current index membership. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Small-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Small-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper Small-Cap Growth Funds classification.

⁽⁴⁾ Commenced operations on November 1, 1989.

⁽⁵⁾ Commenced offering on January 2, 1996.

⁽⁶⁾ Commenced offering on November 11, 2011.

⁽⁷⁾ Commenced offering on September 13, 2013.

⁽⁸⁾ Commenced offering on May 31, 2017.

⁽⁹⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of Class I of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (84.2%)
Biotechnology (3.5%)
4D Molecular Therapeutics, Inc. (a)		112,271	$	4,654
Abcam PLC ADR (United Kingdom) (a)		595,130		12,825
Editas Medicine, Inc. (a)		45,507		3,190
Intellia Therapeutics, Inc. (a)		60,041		3,266
Passage Bio, Inc. (a)		172,359		4,407
Relay Therapeutics, Inc. (a)		45,854		1,906
				30,248
Diversified Holding Companies (2.4%)
Dragoneer Growth Opportunities Corp. (a)		464,554		6,499
Northern Star Acquisition Corp. (a)		464,757		7,297
Ribbit LEAP Ltd. (a)		457,477		6,848
				20,644
Diversified Telecommunication Services (2.4%)
Anterix, Inc. (a)		560,111		21,060
Food Products (4.9%)
UTZ Brands, Inc.		1,927,572		42,522
Health Care Equipment & Supplies (1.3%)
Angle PLC (United Kingdom) (a)		4,673,674		3,060
Outset Medical, Inc. (a)		81,595		4,638
Quotient Ltd. (a)		738,863		3,850
				11,548
Health Care Providers & Services (5.2%)
Covetrus, Inc. (a)		1,401,508		40,279
HealthEquity, Inc. (a)		65,952		4,598
				44,877
Health Care Technology (2.5%)
Inspire Medical Systems, Inc. (a)		69,752		13,119
Schrodinger, Inc. (a)		108,131		8,562
				21,681
Household Durables (3.0%)
Victoria PLC (United Kingdom) (a)		2,945,363		26,333
Information Technology Services (5.0%)
BigCommerce Holdings, Inc. (a)(b)		122,223		7,841
Fastly, Inc., Class A (a)		400,499		34,991
				42,832
Internet & Direct Marketing Retail (7.2%)
Overstock.com, Inc. (a)		516,800		24,791
Stitch Fix, Inc., Class A (a)(b)		632,355		37,132
				61,923
Life Sciences Tools & Services (7.4%)
Adaptive Biotechnologies Corp. (a)		52,254		3,090
Berkeley Lights, Inc. (a)		37,516		3,354
NanoString Technologies, Inc. (a)		566,504		37,888
Seer, Inc. (a)		347,226		19,493
				63,825
Media (4.8%)
Cardlytics, Inc. (a)		291,282		41,586

	Shares		Value (000)
Metals & Mining (0.1%)
Royal Gold, Inc.		9,680	$	1,030
Oil, Gas & Consumable Fuels (0.2%)
Texas Pacific Land Trust (b)		1,862		1,354
Real Estate Management & Development (5.8%)
FirstService Corp. (Canada)		91,001		12,455
Redfin Corp. (a)		547,436		37,571
				50,026
Software (20.4%)
Appfolio, Inc., Class A (a)		241,170		43,421
Appian Corp. (a)		254,928		41,321
Bill.Com Holdings, Inc. (a)		29,938		4,087
C3.ai, Inc., Class A (a)(b)		23,246		3,226
MicroStrategy, Inc., Class A (a)		100,351		38,991
Skillz, Inc. (a)(b)		2,267,993		45,360
				176,406
Specialty Retail (7.5%)
GameStop Corp., Class A (a)(b)		1,415,967		26,677
Party City Holdco, Inc. (a)		4,031,568		24,794
Vroom, Inc. (a)		315,439		12,924
				64,395
Trading Companies & Distributors (0.6%)
EVI Industries, Inc. (a)(b)		161,294		4,826
Total Common Stocks (Cost $490,868)				727,116
Preferred Stocks (1.6%)
Health Care Technology (1.1%)
Grand Rounds, Inc. Series B (a)(c)(d) (acquisition cost — $3,362; acquired 7/3/14)		3,269,139		8,990
Internet & Direct Marketing Retail (0.1%)
Overstock.com, Inc. Series A-1		14,625		647
Software (0.4%)
Lookout, Inc. Series F (a)(c)(d) (acquisition cost — $13,476; acquired 6/17/14)		1,179,743		3,657
Total Preferred Stocks (Cost $16,933)				13,294
Short-Term Investments (19.9%)
Securities held as Collateral on Loaned Securities (5.0%)
Investment Company (4.3%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		36,894,249		36,894

	Face Amount (000)		Value (000)
Repurchase Agreements (0.7%)
Barclays Capital, Inc., (0.05%, dated 12/31/20, due 1/4/21; proceeds $1,125; fully collateralized by a U.S. Government obligation; 1.63% due 11/15/22; valued at $1,147)	$	1,125	$	1,125
HSBC Securities USA, Inc., (0.05%, dated 12/31/20, due 1/4/21; proceeds $4,387; fully collateralized by a U.S. Government obligation; 0.15% due 10/31/22; valued at $4,475)		4,387		4,387
Merrill Lynch & Co., Inc., (0.06%, 12/31/20, due 1/4/21; proceeds $450; fully collateralized by a U.S. Government obligation; 2.50% due 5/15/46; valued at $459)		450		450
				5,962
Total Securities held as Collateral on Loaned Securities (Cost $42,856)				42,856
	Shares
Investment Company (14.9%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $128,800)		128,800,004		128,800
Total Short-Term Investments (Cost $171,656)				171,656
Total Investments Excluding Purchased Options (105.7%) (Cost $679,457)				912,066
Total Purchased Options Outstanding (0.0%) (Cost $1,515)				335
Total Investments (105.7%) (Cost $680,972) Including $43,648 of Securities Loaned (e)(f)				912,401
Liabilities in Excess of Other Assets (–5.7%)				(49,061	)
Net Assets (100.0%)			$	863,340

Call Options Purchased:

The Fund had the following call options purchased open at December 31, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.99	Sep-21		60,263,882		60,264	$	57		$	364	$	(307	)
BNP Paribas	USD/CNH	CNH	7.64	Nov-21		88,360,621		88,361		241			480		(239	)
Royal Bank of Scotland	USD/CNH	CNH	7.75	Jan-21		39,285,388		39,285		—	@		172		(172	)
Royal Bank of Scotland	USD/CNH	CNH	8.06	Jul-21		53,965,809		53,966		32			286		(254	)
Royal Bank of Scotland	USD/CNH	CNH	8.48	May-21		34,162,018		34,162		5			213		(208	)
									$	335		$	1,515	$	(1,180	)

@ — Value is less than $500.

CNH — Chinese Yuan Renminbi Offshore

USD — United States Dollar

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $515,278)	$	746,707
Investment in Security of Affiliated Issuer, at Value (Cost $165,694)		165,694
Total Investments in Securities, at Value (Cost $680,972)		912,401
Foreign Currency, at Value (Cost $1)		1
Receivable for Fund Shares Sold		7,840
Receivable from Securities Lending Income		211
Registration Fees		104
Dividends Receivable		99
Receivable for Investments Sold		31
Receivable from Affiliate		1
Other Assets		38
Total Assets		920,726
Liabilities:
Collateral on Securities Loaned, at Value		42,856
Payable for Investments Purchased		11,588
Payable for Advisory Fees		1,087
Payable for Fund Shares Redeemed		1,045
Due to Broker		610
Payable for Administration Fees		51
Payable for Shareholder Services Fees — Class A		40
Payable for Distribution and Shareholder Services Fees — Class L		2
Payable for Distribution and Shareholder Services Fees — Class C		8
Payable for Professional Fees		39
Payable for Custodian Fees		8
Payable for Transfer Agency Fees — Class I		2
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		1
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Other Liabilities		45
Total Liabilities		57,386
Net Assets	$	863,340
Net Assets Consist of:
Paid-in-Capital	$	565,276
Total Distributable Earnings		298,064
Net Assets	$	863,340

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	464,639
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		18,232,061
Net Asset Value, Offering and Redemption Price Per Share	$	25.48
CLASS A:
Net Assets	$	229,641
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		12,290,227
Net Asset Value, Redemption Price Per Share	$	18.68
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.04
Maximum Offering Price Per Share	$	19.72
CLASS L:
Net Assets	$	2,543
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		154,612
Net Asset Value, Offering and Redemption Price Per Share	$	16.45
CLASS C:
Net Assets	$	12,494
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		699,848
Net Asset Value, Offering and Redemption Price Per Share	$	17.85
CLASS IS:
Net Assets	$	154,023
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		5,985,483
Net Asset Value, Offering and Redemption Price Per Share	$	25.73
⁽¹⁾ Including: Securities on Loan, at Value:	$	43,648

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Income from Securities Loaned — Net	$	1,191
Dividends from Securities of Unaffiliated Issuers (Net of $5 of Foreign Taxes Withheld)		195
Dividends from Security of Affiliated Issuer (Note G)		33
Total Investment Income		1,419
Expenses:
Advisory Fees (Note B)		2,937
Administration Fees (Note C)		255
Shareholder Services Fees — Class A (Note D)		197
Distribution and Shareholder Services Fees — Class L (Note D)		12
Distribution and Shareholder Services Fees — Class C (Note D)		28
Professional Fees		152
Sub Transfer Agency Fees — Class I		91
Sub Transfer Agency Fees — Class A		54
Sub Transfer Agency Fees — Class L		1
Sub Transfer Agency Fees — Class C		2
Registration Fees		85
Shareholder Reporting Fees		46
Transfer Agency Fees — Class I (Note E)		8
Transfer Agency Fees — Class A (Note E)		7
Transfer Agency Fees — Class L (Note E)		3
Transfer Agency Fees — Class C (Note E)		3
Transfer Agency Fees — Class IS (Note E)		3
Custodian Fees (Note F)		23
Directors' Fees and Expenses		6
Pricing Fees		4
Interest Expenses		1
Other Expenses		33
Total Expenses		3,951
Waiver of Advisory Fees (Note B)		(570	)
Rebate from Morgan Stanley Affiliate (Note G)		(38	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(3	)
Net Expenses		3,339
Net Investment Loss		(1,920	)
Realized Gain (Loss):
Investments Sold		143,315
Foreign Currency Translation		(27	)
Net Realized Gain		143,288
Change in Unrealized Appreciation (Depreciation):
Investments		211,935
Foreign Currency Translation		(1	)
Net Change in Unrealized Appreciation (Depreciation)		211,934
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		355,222
Net Increase in Net Assets Resulting from Operations	$	353,302

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(1,920	)	$	67
Net Realized Gain		143,288			39,847
Net Change in Unrealized Appreciation (Depreciation)		211,934			33,285
Net Increase in Net Assets Resulting from Operations		353,302			73,199
Dividends and Distributions to Shareholders:
Class I		(35,772	)		(11,439	)
Class A		(21,928	)		(8,493	)
Class L		(330	)		(248	)
Class C		(1,096	)		(123	)
Class IS		(13,192	)		(10,309	)
Total Dividends and Distributions to Shareholders		(72,318	)		(30,612	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		305,320			32,246
Distributions Reinvested		35,721			11,410
Redeemed		(67,974	)		(55,438	)
Class A:
Subscribed		132,778			16,436
Distributions Reinvested		21,743			8,337
Redeemed		(32,925	)		(17,154	)
Class L:
Distributions Reinvested		329			248
Redeemed		(250	)		(355	)
Class C:
Subscribed		8,725			528
Distributions Reinvested		1,085			123
Redeemed		(330	)		(6	)
Class IS:
Subscribed		23,748			27,521
Distributions Reinvested		13,192			10,309
Redeemed		(29,678	)		(113,142	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		411,484			(78,937	)
Redemption Fees		65			22
Total Increase (Decrease) in Net Assets		692,533			(36,328	)
Net Assets:
Beginning of Period		170,807			207,135
End of Period	$	863,340		$	170,807

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		15,383			2,532
Shares Issued on Distributions Reinvested		1,480			1,045
Shares Redeemed		(3,910	)		(4,613	)
Net Increase (Decrease) in Class I Shares Outstanding		12,953			(1,036	)
Class A:
Shares Subscribed		8,307			1,626
Shares Issued on Distributions Reinvested		1,228			1,005
Shares Redeemed		(2,547	)		(1,777	)
Net Increase in Class A Shares Outstanding		6,988			854
Class L:
Shares Issued on Distributions Reinvested		21			33
Shares Redeemed		(26	)		(37	)
Net Decrease in Class L Shares Outstanding		(5	)		(4	)
Class C:
Shares Subscribed		578			54
Shares Issued on Distributions Reinvested		64			15
Shares Redeemed		(26	)		(1	)
Net Increase in Class C Shares Outstanding		616			68
Class IS:
Shares Subscribed		1,580			2,199
Shares Issued on Distributions Reinvested		541			936
Shares Redeemed		(1,869	)		(8,850	)
Net Increase (Decrease) in Class IS Shares Outstanding		252			(5,715	)

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	11.19		$	9.62		$	10.90		$	13.26		$	13.75
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.10	)		0.01			(0.05	)		(0.11	)		0.00	⁽³⁾
Net Realized and Unrealized Gain (Loss)		16.84			3.50			0.16			2.91			(0.05	)
Total from Investment Operations		16.74			3.51			0.11			2.80			(0.05	)
Distributions from and/or in Excess of:
Net Realized Gain		(2.45	)		(1.94	)		(1.39	)		(5.16	)		(0.44	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	25.48		$	11.19		$	9.62		$	10.90		$	13.26
Total Return⁽⁴⁾		150.57	%		37.11	%		0.29	%		21.87	%		(0.35	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	464,639		$	59,092		$	60,777		$	141,954		$	305,945
Ratio of Expenses Before Expense Limitation		1.18	%		1.21	%		1.17	%		1.20	%		1.17	%
Ratio of Expenses After Expense Limitation		0.99	%⁽⁵⁾		0.99	%⁽⁵⁾		0.98	%⁽⁵⁾		0.99	%⁽⁵⁾		1.02	%⁽⁵⁾⁽⁶⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.99	%⁽⁵⁾		N/A			0.98	%⁽⁵⁾		0.99	%⁽⁵⁾		N/A
Ratio of Net Investment Income (Loss)		(0.54	)%⁽⁵⁾		0.09	%⁽⁵⁾		(0.41	)%⁽⁵⁾		(0.77	)%⁽⁵⁾		0.02	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%⁽⁷⁾
Portfolio Turnover Rate		132	%		99	%		79	%		97	%		51	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% for Class I shares. Prior to July 1, 2016, the maximum ratio was 1.05% for Class I shares.

(7) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	8.51		$	7.68		$	8.99		$	11.72		$	12.25
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.10	)		(0.02	)		(0.07	)		(0.14	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		12.72			2.79			0.15			2.57			(0.05	)
Total from Investment Operations		12.62			2.77			0.08			2.43			(0.09	)
Distributions from and/or in Excess of:
Net Realized Gain		(2.45	)		(1.94	)		(1.39	)		(5.16	)		(0.44	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	18.68		$	8.51		$	7.68		$	8.99		$	11.72
Total Return⁽⁴⁾		149.86	%		36.71	%		0.02	%		21.57	%		(0.73	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	229,641		$	45,097		$	34,166		$	40,531		$	87,864
Ratio of Expenses Before Expense Limitation		1.44	%		1.52	%		1.44	%		1.51	%		1.45	%
Ratio of Expenses After Expense Limitation		1.25	%⁽⁵⁾		1.29	%⁽⁵⁾		1.25	%⁽⁵⁾		1.34	%⁽⁵⁾		1.37	%⁽⁵⁾⁽⁶⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.25	%⁽⁵⁾		N/A			1.25	%⁽⁵⁾		1.34	%⁽⁵⁾		N/A
Ratio of Net Investment Loss		(0.80	)%⁽⁵⁾		(0.23	)%⁽⁵⁾		(0.69	)%⁽⁵⁾		(1.12	)%⁽⁵⁾		(0.35	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%⁽⁷⁾
Portfolio Turnover Rate		132	%		99	%		79	%		97	%		51	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to July 1, 2016, the maximum ratio was 1.40% for Class A shares.

(7) Amount is less than 0.005%.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	7.65		$	7.10		$	8.46		$	11.34		$	11.92
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.16	)		(0.07	)		(0.11	)		(0.19	)		(0.10	)
Net Realized and Unrealized Gain (Loss)		11.41			2.56			0.14			2.47			(0.04	)
Total from Investment Operations		11.25			2.49			0.03			2.28			(0.14	)
Distributions from and/or in Excess of:
Net Realized Gain		(2.45	)		(1.94	)		(1.39	)		(5.16	)		(0.44	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	16.45		$	7.65		$	7.10		$	8.46		$	11.34
Total Return		148.82	%⁽⁸⁾		35.91	%⁽⁴⁾		(0.58	)%⁽⁴⁾		20.95	%⁽⁴⁾		(1.17	)%⁽⁴⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,543		$	1,218		$	1,157		$	1,310		$	1,524
Ratio of Expenses Before Expense Limitation		2.10	%		2.15	%		2.07	%		2.27	%		2.21	%
Ratio of Expenses After Expense Limitation		1.84	%⁽⁵⁾		1.84	%⁽⁵⁾		1.84	%⁽⁵⁾		1.84	%⁽⁵⁾		1.87	%⁽⁵⁾⁽⁶⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.84	%⁽⁵⁾		N/A			1.84	%⁽⁵⁾		1.84	%⁽⁵⁾		N/A
Ratio of Net Investment Loss		(1.43	)%⁽⁵⁾		(0.78	)%⁽⁵⁾		(1.28	)%⁽⁵⁾		(1.61	)%⁽⁵⁾		(0.88	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%⁽⁷⁾
Portfolio Turnover Rate		132	%		99	%		79	%		97	%		51	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.85% for Class L shares. Prior to July 1, 2016, the maximum ratio was 1.90% for Class L shares.

(7) Amount is less than 0.005%.

(8) Calculated using the NAV for US GAAP financial reporting purposes and as such differs from the total return presented in the Investment Overview.

	Class C
	Year Ended December 31,									Period from May 31, 2017⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			December 31, 2017
Net Asset Value, Beginning of Period	$	8.24		$	7.55		$	8.93		$	13.59
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.22	)		(0.10	)		(0.03	)		(0.13	)
Net Realized and Unrealized Gain		12.28			2.73			0.04			0.63
Total from Investment Operations		12.06			2.63			0.01			0.50
Distributions from and/or in Excess of:
Net Realized Gain		(2.45	)		(1.94	)		(1.39	)		(5.16	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	17.85		$	8.24		$	7.55		$	8.93
Total Return⁽⁴⁾		147.97	%		35.48	%		(0.78	)%		4.36	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	12,494		$	688		$	116		$	30
Ratio of Expenses Before Expense Limitation		2.26	%		2.75	%		4.73	%		21.29	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		2.07	%⁽⁵⁾		2.09	%⁽⁵⁾		2.09	%⁽⁵⁾		2.10	%⁽⁵⁾⁽⁸⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		2.07	%⁽⁵⁾		N/A			2.09	%⁽⁵⁾		2.10	%⁽⁵⁾⁽⁸⁾
Ratio of Net Investment Loss		(1.61	)%⁽⁵⁾		(0.99	)%⁽⁵⁾		(1.50	)%⁽⁵⁾		(1.82	)%⁽⁵⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.00	%⁽⁶⁾⁽⁸⁾
Portfolio Turnover Rate		132	%		99	%		79	%		97	%

(1) Commencement of Offering.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	11.29		$	9.69		$	10.96		$	13.29		$	13.77
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.08	)		0.01			(0.04	)		(0.10	)		0.01
Net Realized and Unrealized Gain (Loss)		16.97			3.53			0.16			2.93			(0.05	)
Total from Investment Operations		16.89			3.54			0.12			2.83			(0.04	)
Distributions from and/or in Excess of:
Net Realized Gain		(2.45	)		(1.94	)		(1.39	)		(5.16	)		(0.44	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	25.73		$	11.29		$	9.69		$	10.96		$	13.29
Total Return⁽⁴⁾		150.79	%		37.04	%		0.38	%		22.08	%		(0.28	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	154,023		$	64,712		$	110,919		$	129,126		$	361,586
Ratio of Expenses Before Expense Limitation		1.11	%		1.15	%		1.11	%		1.09	%		1.03	%
Ratio of Expenses After Expense Limitation		0.92	%⁽⁵⁾		0.92	%⁽⁵⁾		0.92	%⁽⁵⁾		0.92	%⁽⁵⁾		0.95	%⁽⁵⁾⁽⁶⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.92	%⁽⁵⁾		N/A			0.92	%⁽⁵⁾		0.92	%⁽⁵⁾		N/A
Ratio of Net Investment Income (Loss)		(0.49	)%⁽⁵⁾		0.12	%⁽⁵⁾		(0.36	)%⁽⁵⁾		(0.71	)%⁽⁵⁾		0.08	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%⁽⁷⁾
Portfolio Turnover Rate		132	%		99	%		79	%		97	%		51	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.93% for Class IS shares. Prior to July 1, 2016, the maximum ratio was 0.98% for Class IS shares.

(7) Amount is less than 0.005%.

The accompanying financial statements relate to the Inception Portfolio. The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of small capitalization companies.

market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Biotechnology	$	30,248	$	—	$	—	$	30,248
Diversified Holding Companies		20,644		—		—		20,644
Diversified Telecommunication Services		21,060		—		—		21,060
Food Products		42,522		—		—		42,522
Health Care Equipment & Supplies		8,488		3,060		—		11,548
Health Care Providers & Services		44,877		—		—		44,877
Health Care Technology		21,681		—		—		21,681
Household Durables		—		26,333		—		26,333
Information Technology Services		42,832		—		—		42,832
Internet & Direct Marketing Retail		61,923		—		—		61,923
Life Sciences Tools & Services		63,825		—		—		63,825
Media		41,586		—		—		41,586
Metals & Mining		1,030		—		—		1,030
Oil, Gas & Consumable Fuels		1,354		—		—		1,354
Real Estate Management & Development		50,026		—		—		50,026
Software		176,406		—		—		176,406
Specialty Retail		64,395		—		—		64,395
Trading Companies & Distributors		4,826		—		—		4,826
Total Common Stocks		697,723		29,393		—		727,116
Preferred Stocks
Health Care Technology		—		—		8,990		8,990
Internet & Direct Marketing Retail		647		—		—		647
Software		—		—		3,657		3,657
Total Preferred Stocks		647		—		12,647		13,294

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Call Options Purchased	$	—	$	335	$	—	$	335
Short-Term Investments
Investment Company		165,694		—		—		165,694
Repurchase Agreements		—		5,962		—		5,962
Total Short-Term Investments		165,694		5,962		—		171,656
Total Assets	$	864,064	$	35,690	$	12,647	$	912,401

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Preferred Stocks (000)
Beginning Balance	$	9,440
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		3,207
Realized gains (losses)		—
Ending Balance	$	12,647
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2020	$	3,207

value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of December 31, 2020:

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Purchased Options

Investments, at Value
(Purchased Options)

Currency Risk

335

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(664	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(589	)(c)

At December 31, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	335	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities(a) (000)		Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
BNP Paribas	$	298	$	—	$	(298	)	$	0
Royal Bank of Scotland		37		—		(37	)		0
Total	$	335	$	—	$	(335	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount					168,754,000

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	43,648	(f)	$	—	$	(43,648	)(g)(h)	$	0

(f) Represents market value of loaned securities at year end.

(g) The Fund received cash collateral of approximately $42,856,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $2,209,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(h) The actual collateral received is greater than the amount shown here due to overcollateralization.

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	42,856	$	—	$	—	$	—	$	42,856
Total Borrowings	$	42,856	$	—	$	—	$	—	$	42,856
Gross amount of recognized liabilities for securities lending transactions									$	42,856

8. Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its

remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

9. Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

10. Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

11. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion				Next $500 million				Next $500 million				Over $2 billion
	0.92	%			0.85	%			0.80	%			0.75	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.73% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares and 0.93% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $570,000 of advisory fees were waived and approximately $4,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $615,386,000 and $398,454,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

fees paid were reduced by approximately $38,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	12,044			$	473,241			$	319,591			$	33

Affiliated Investment Company (cont'd)				Realized Gain Loss (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	165,694

earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	40,292	$	32,026	$	4,250	$	26,362

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	36,022			$	34,239

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Inception Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Inception Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Inception Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Advantage Portfolio Class I	$	1,000.00	$	1,289.30	$	1,020.21	$	5.64	$	4.98		0.98	%
International Advantage Portfolio Class A		1,000.00		1,287.70		1,018.75		7.30		6.44		1.27
International Advantage Portfolio Class L		1,000.00		1,283.90		1,015.89		10.56		9.32		1.84
International Advantage Portfolio Class C		1,000.00		1,283.00		1,015.28		11.25		9.93		1.96
International Advantage Portfolio Class IS		1,000.00		1,289.90		1,020.71		5.07		4.47		0.88

** Annualized.

Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

The Fund seeks long-term capital appreciation.

Performance

For the fiscal year ended December 31, 2020, the Fund's Class I shares had a total return based on net asset value and reinvestment of distributions per share of 32.33%, net of fees. The Fund's Class I shares outperformed the Fund's benchmark, the MSCI All Country World ex USA Net Index (the "Index"), which returned 10.65%.

Factors Affecting Performance

• International equity markets advanced by 10.65% for the 12-month period ended December 31, 2020, as measured by the Index. Our team remained focused on assessing company prospects over a longer-term period of three to five years, and owning a portfolio of high quality companies with diverse business drivers not tied to a particular market environment.

• The Fund's relative performance was primarily driven by our strong stock selection in the information technology, consumer staples and industrials sectors.

• Detracting from relative gains were our sector underweight positions in health care and materials,

Performance Compared to the MSCI All Country World ex USA Net Index⁽¹⁾ and the Lipper International Multi-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁷⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		32.33	%		19.34	%		13.96	%		13.93	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		31.90			18.95			13.61			13.59
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		24.96			17.68			13.00			12.98
Fund — Class L Shares w/o sales charges⁽⁴⁾		31.14			18.32			13.02			13.00
Fund — Class C Shares w/o sales charges⁽⁵⁾		31.03			18.09			—			15.25
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁵⁾		30.03			18.09			—			15.25
Fund — Class IS Shares w/o sales charges⁽⁶⁾		32.46			—			—			16.08
MSCI All Country World ex USA Net Index		10.65			8.93			4.92			5.03
Lipper International Multi-Cap Growth Funds Index		15.49			9.70			6.14			6.25

⁽¹⁾ The MSCI All Country World ex USA Net Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed and emerging markets, excluding the United States. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper International Multi-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper International Multi-Cap Growth Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper International Multi-Cap Growth Funds classification.

	Shares		Value (000)
Common Stocks (92.3%)
Australia (2.9%)
Brookfield Infrastructure Partners LP		2,671,232	$	131,959
Canada (6.0%)
Brookfield Asset Management, Inc., Class A		3,127,578		129,075
Canada Goose Holdings, Inc. (See Note G) (a)		4,799,021		142,867
				271,942
China (9.6%)
Alibaba Group Holding Ltd. ADR (a)		350,407		81,550
Foshan Haitian Flavouring & Food Co., Ltd., Class A		5,676,787		174,307
TAL Education Group ADR (a)		2,504,007		179,062
				434,919
Denmark (10.2%)
Chr Hansen Holding A/S (a)		1,008,681		104,219
DSV Panalpina A/S		2,156,256		362,384
				466,603
France (9.5%)
Dassault Systemes SE		370,289		75,102
Hermes International		261,206		280,869
Pernod Ricard SA		390,765		75,045
				431,016
Germany (1.7%)
Adidas AG (a)		210,769		76,679
Hong Kong (3.2%)
AIA Group Ltd.		12,001,300		146,249
India (7.2%)
HDFC Bank Ltd. (a)		12,203,926		240,374
Kotak Mahindra Bank Ltd. (a)		3,132,546		85,615
				325,989
Italy (6.9%)
Davide Campari-Milano N.V.		7,135,756		81,792
Moncler SpA (a)		3,789,346		232,971
				314,763
Japan (8.4%)
Keyence Corp.		404,100		227,313
Pigeon Corp.		3,740,900		154,397
				381,710
Netherlands (8.4%)
Adyen N.V. (a)		65,581		152,380
ASML Holding N.V.		472,556		228,801
				381,181
Sweden (1.3%)
Vitrolife AB (a)		2,338,681		61,232
Switzerland (5.3%)
Chocoladefabriken Lindt & Spruengli AG (Registered)		774		77,741
Kuehne & Nagel International AG (Registered)		325,132		73,779
Straumann Holding AG (Registered)		77,390		90,656
				242,176

	Shares		Value (000)
Taiwan (4.0%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		1,671,648	$	182,276
United Kingdom (4.0%)
Diageo PLC		1,381,319		54,657
Rightmove PLC (a)		14,380,393		127,767
				182,424
United States (3.7%)
EPAM Systems, Inc. (a)		475,348		170,341
Total Common Stocks (Cost $2,834,204)				4,201,459
Short-Term Investment (8.2%)
Investment Company (8.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $374,199)		374,198,908		374,199
Total Investments (100.5%) (Cost $3,208,403) (b)(c)				4,575,658
Liabilities in Excess of Other Assets (–0.5%)				(21,761	)
Net Assets (100.0%)			$	4,553,897

(a) Non-income producing security.

(b) The approximate fair value and percentage of net assets, $3,184,329,000 and 69.9%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $3,212,409,000. The aggregate gross unrealized appreciation is approximately $1,365,042,000 and the aggregate gross unrealized depreciation is approximately $1,793,000, resulting in net unrealized appreciation of approximately $1,363,249,000.

ADR American Depositary Receipt.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		34.2	%
Textiles, Apparel & Luxury Goods		16.0
Semiconductors & Semiconductor Equipment		9.0
Short-Term Investments		8.2
Air Freight & Logistics		7.9
Banks		7.1
Information Technology Services		7.1
Food Products		5.5
Electronic Equipment, Instruments & Components		5.0
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $2,704,564)	$	4,058,592
Investment in Security of Affiliated Issuer, at Value (Cost $503,839)		517,066
Total Investments in Securities, at Value (Cost $3,208,403)		4,575,658
Foreign Currency, at Value (Cost $1,560)		1,567
Cash		1,516
Receivable for Investments Sold		14,351
Receivable for Fund Shares Sold		7,287
Dividends Receivable		1,739
Tax Reclaim Receivable		1,442
Receivable from Affiliate		3
Receivable from Securities Lending Income		1
Other Assets		199
Total Assets		4,603,763
Liabilities:
Payable for Investments Purchased		25,709
Deferred Capital Gain Country Tax		11,255
Payable for Advisory Fees		7,749
Payable for Fund Shares Redeemed		4,032
Payable for Sub Transfer Agency Fees — Class I		341
Payable for Sub Transfer Agency Fees — Class A		44
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		1
Payable for Administration Fees		296
Payable for Custodian Fees		149
Payable for Shareholder Services Fees — Class A		120
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		20
Payable for Transfer Agency Fees		—	@
Payable for Transfer Agency Fees — Class I		32
Payable for Transfer Agency Fees — Class A		4
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		1
Payable for Professional Fees		30
Other Liabilities		82
Total Liabilities		49,866
Net Assets	$	4,553,897
Net Assets Consist of:
Paid-in-Capital	$	3,195,347
Total Distributable Earnings		1,358,550
Net Assets	$	4,553,897

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	3,841,122
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		142,022,427
Net Asset Value, Offering and Redemption Price Per Share	$	27.05
CLASS A:
Net Assets	$	589,317
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		22,171,988
Net Asset Value, Redemption Price Per Share	$	26.58
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.47
Maximum Offering Price Per Share	$	28.05
CLASS L:
Net Assets	$	350
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		13,669
Net Asset Value, Offering and Redemption Price Per Share	$	25.64
CLASS C:
Net Assets	$	24,926
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		985,789
Net Asset Value, Offering and Redemption Price Per Share	$	25.29
CLASS IS:
Net Assets	$	98,182
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,624,620
Net Asset Value, Offering and Redemption Price Per Share	$	27.09

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $2,117 of Foreign Taxes Withheld)	$	19,627
Dividends from Security of Affiliated Issuer (Note G)		787
Income from Securities Loaned — Net		217
Total Investment Income		20,631
Expenses:
Advisory Fees (Note B)		23,654
Sub Transfer Agency Fees — Class I		2,514
Sub Transfer Agency Fees — Class A		595
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		13
Administration Fees (Note C)		2,470
Shareholder Services Fees — Class A (Note D)		1,096
Distribution and Shareholder Services Fees — Class L (Note D)		2
Distribution and Shareholder Services Fees — Class C (Note D)		190
Custodian Fees (Note F)		460
Registration Fees		282
Shareholder Reporting Fees		221
Transfer Agency Fees — Class I (Note E)		162
Transfer Agency Fees — Class A (Note E)		17
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		4
Transfer Agency Fees — Class IS (Note E)		3
Professional Fees		131
Directors' Fees and Expenses		44
Pricing Fees		2
Interest Expenses		1
Other Expenses		160
Total Expenses		32,023
Rebate from Morgan Stanley Affiliate (Note G)		(427	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Net Expenses		31,594
Net Investment Loss		(10,963	)
Realized Gain (Loss):
Investments Sold		8,665
Foreign Currency Translation		(147	)
Net Realized Gain		8,518
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $8,929)		1,009,813
Investments in Affiliates		13,227
Foreign Currency Translation		159
Net Change in Unrealized Appreciation (Depreciation)		1,023,199
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		1,031,717
Net Increase in Net Assets Resulting from Operations	$	1,020,754

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(10,963	)	$	3,976
Net Realized Gain (Loss)		8,518			(6,448	)
Net Change in Unrealized Appreciation (Depreciation)		1,023,199			360,936
Net Increase in Net Assets Resulting from Operations		1,020,754			358,464
Dividends and Distributions to Shareholders:
Class I		(1,584	)		(2,413	)
Class A		(247	)		(439	)
Class L		(—	@)		(—	@)
Class C		(11	)		(23	)
Class IS		(36	)		(2	)
Total Dividends and Distributions to Shareholders		(1,878	)		(2,877	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		1,715,375			1,253,603
Distributions Reinvested		1,565			2,396
Redeemed		(634,403	)		(210,412	)
Class A:
Subscribed		230,781			233,415
Distributions Reinvested		247			439
Redeemed		(154,359	)		(124,341	)
Class L:
Exchanged		50			53
Distributions Reinvested		—	@		—	@
Redeemed		(5	)		(42	)
Class C:
Subscribed		6,350			9,422
Distributions Reinvested		11			23
Redeemed		(4,795	)		(5,722	)
Class IS:
Subscribed		98,784			750
Distributions Reinvested		9			1
Redeemed		(23,225	)		(—	@)
Net Increase in Net Assets Resulting from Capital Share Transactions		1,236,385			1,159,585
Redemption Fees		—			68
Total Increase in Net Assets		2,255,261			1,515,240
Net Assets:
Beginning of Period		2,298,636			783,396
End of Period	$	4,553,897		$	2,298,636

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		79,907			67,897
Shares Issued on Distributions Reinvested		59			117
Shares Redeemed		(30,862	)		(11,270	)
Net Increase in Class I Shares Outstanding		49,104			56,744
Class A:
Shares Subscribed		10,972			12,831
Shares Issued on Distributions Reinvested		9			22
Shares Redeemed		(7,624	)		(7,067	)
Net Increase in Class A Shares Outstanding		3,357			5,786
Class L:
Shares Exchanged		2			3
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		(—	@@)		(2	)
Net Increase in Class L Shares Outstanding		2			1
Class C:
Shares Subscribed		300			530
Shares Issued on Distributions Reinvested		—	@@		1
Shares Redeemed		(256	)		(328	)
Net Increase in Class C Shares Outstanding		44			203
Class IS:
Shares Subscribed		4,622			37
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		(1,035	)		(—	@@)
Net Increase in Class IS Shares Outstanding		3,587			37

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	20.45		$	15.74		$	16.89		$	11.91		$	11.80
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.07	)		0.06			0.04			0.00	⁽³⁾		0.02
Net Realized and Unrealized Gain (Loss)		6.68			4.67			(0.91	)		5.32			0.29
Total from Investment Operations		6.61			4.73			(0.87	)		5.32			0.31
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.00	)⁽³⁾		—			—			—
Net Realized Gain		—			(0.02	)		(0.28	)		(0.34	)		(0.20	)
Total Distributions		(0.01	)		(0.02	)		(0.28	)		(0.34	)		(0.20	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	27.05		$	20.45		$	15.74		$	16.89		$	11.91
Total Return⁽⁴⁾		32.33	%		30.09	%		(5.19	)%		44.75	%		2.47	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,841,122		$	1,900,219		$	569,408		$	166,189		$	29,781
Ratio of Expenses Before Expense Limitation		N/A			1.03	%		1.11	%		1.21	%		2.26	%
Ratio of Expenses After Expense Limitation		0.98	%⁽⁵⁾		0.98	%⁽⁵⁾		0.98	%⁽⁵⁾		0.98	%⁽⁵⁾		0.99	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.98	%⁽⁵⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.31	)%⁽⁵⁾		0.32	%⁽⁵⁾		0.21	%⁽⁵⁾		0.02	%⁽⁵⁾		0.20	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.02	%		0.02	%		0.01	%
Portfolio Turnover Rate		18	%		15	%		29	%		30	%		23	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	20.16		$	15.56		$	16.75		$	11.86		$	11.79
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.13	)		0.01			(0.02	)		(0.07	)		(0.00	)⁽³⁾
Net Realized and Unrealized Gain (Loss)		6.56			4.61			(0.89	)		5.30			0.27
Total from Investment Operations		6.43			4.62			(0.91	)		5.23			0.27
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		—			—			—			—
Net Realized Gain		—			(0.02	)		(0.28	)		(0.34	)		(0.20	)
Total Distributions		(0.01	)		(0.02	)		(0.28	)		(0.34	)		(0.20	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	26.58		$	20.16		$	15.56		$	16.75		$	11.86
Total Return⁽⁴⁾		31.90	%		29.72	%		(5.48	)%		44.18	%		2.13	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	589,317		$	379,237		$	202,732		$	144,112		$	10,822
Ratio of Expenses Before Expense Limitation		N/A			1.30	%		1.37	%		1.42	%		2.55	%
Ratio of Expenses After Expense Limitation		1.27	%⁽⁵⁾		1.28	%⁽⁵⁾		1.33	%⁽⁵⁾		1.31	%⁽⁵⁾		1.34	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.27	%⁽⁵⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.60	)%⁽⁵⁾		0.04	%⁽⁵⁾		(0.10	)%⁽⁵⁾		(0.46	)%⁽⁵⁾		(0.04	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.02	%		0.02	%		0.01	%
Portfolio Turnover Rate		18	%		15	%		29	%		30	%		23	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	19.56		$	15.18		$	16.43		$	11.70		$	11.69
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.24	)		(0.09	)		(0.09	)		(0.11	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		6.33			4.49			(0.88	)		5.18			0.27
Total from Investment Operations		6.09			4.40			(0.97	)		5.07			0.21
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		—			—			—			—
Net Realized Gain		—			(0.02	)		(0.28	)		(0.34	)		(0.20	)
Total Distributions		(0.01	)		(0.02	)		(0.28	)		(0.34	)		(0.20	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	25.64		$	19.56		$	15.18		$	16.43		$	11.70
Total Return⁽⁴⁾		31.14	%		29.01	%		(5.95	)%		43.41	%		1.64	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	350		$	226		$	161		$	135		$	75
Ratio of Expenses Before Expense Limitation		2.48	%		2.59	%		2.82	%		3.82	%		3.96	%
Ratio of Expenses After Expense Limitation		1.84	%⁽⁵⁾		1.83	%⁽⁵⁾		1.83	%⁽⁵⁾		1.84	%⁽⁵⁾		1.84	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.84	%⁽⁵⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.17	)%⁽⁵⁾		(0.48	)%⁽⁵⁾		(0.55	)%⁽⁵⁾		(0.77	)%⁽⁵⁾		(0.52	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.02	%		0.01	%		0.01	%
Portfolio Turnover Rate		18	%		15	%		29	%		30	%		23	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	19.31		$	15.02		$	16.30		$	11.63		$	11.66
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.26	)		(0.12	)		(0.15	)		(0.17	)		(0.11	)
Net Realized and Unrealized Gain (Loss)		6.25			4.43			(0.85	)		5.18			0.28
Total from Investment Operations		5.99			4.31			(1.00	)		5.01			0.17
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		—			—			—			—
Net Realized Gain		—			(0.02	)		(0.28	)		(0.34	)		(0.20	)
Total Distributions		(0.01	)		(0.02	)		(0.28	)		(0.34	)		(0.20	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	25.29		$	19.31		$	15.02		$	16.30		$	11.63
Total Return⁽⁴⁾		31.03	%		28.72	%		(6.18	)%		43.16	%		1.38	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	24,926		$	18,180		$	11,087		$	6,760		$	1,067
Ratio of Expenses Before Expense Limitation		N/A			2.03	%		2.10	%		2.25	%		3.60	%
Ratio of Expenses After Expense Limitation		1.97	%⁽⁵⁾		2.01	%⁽⁵⁾		2.07	%⁽⁵⁾		2.08	%⁽⁵⁾		2.09	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.97	%⁽⁵⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.29	)%⁽⁵⁾		(0.69	)%⁽⁵⁾		(0.88	)%⁽⁵⁾		(1.12	)%⁽⁵⁾		(0.91	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.02	%		0.02	%		0.01	%
Portfolio Turnover Rate		18	%		15	%		29	%		30	%		23	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

	Class IS
	Year Ended December 31,						Period from June 15, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	20.46		$	15.75		$	18.90
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.06	)		0.05			(0.00	)⁽³⁾
Net Realized and Unrealized Gain (Loss)		6.70			4.69			(2.87	)
Total from Investment Operations		6.64			4.74			(2.87	)
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.01	)		—
Net Realized Gain		—			(0.02	)		(0.28	)
Total Distributions		(0.01	)		(0.03	)		(0.28	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	27.09		$	20.46		$	15.75
Total Return⁽⁴⁾		32.46	%		30.14	%		(15.22	)%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	98,182		$	774		$	8
Ratio of Expenses Before Expense Limitation		N/A			3.28	%		19.51	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		0.89	%⁽⁵⁾		0.93	%⁽⁵⁾		0.93	%⁽⁵⁾⁽⁷⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.89	%⁽⁵⁾		N/A			N/A
Ratio of Net Investment Income (Loss)		(0.26	)%⁽⁵⁾		0.24	%⁽⁵⁾		(0.04	)%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.02	%		0.02	%⁽⁷⁾
Portfolio Turnover Rate		18	%		15	%		29	%

(1) Commencement of Offering.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Not annualized.

(7) Annualized.

The accompanying financial statements relate to the International Advantage Portfolio. The Fund seeks long-term capital appreciation.

market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

2. Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	362,384	$	—	$	362,384
Banks		—		325,989		—		325,989
Beverages		—		211,494		—		211,494
Biotechnology		—		61,232		—		61,232
Capital Markets		129,075		—		—		129,075
Chemicals		—		104,219		—		104,219
Diversified Consumer Services		179,062		—		—		179,062
Electronic Equipment, Instruments & Components		—		227,313		—		227,313
Food Products		—		252,048		—		252,048
Health Care Equipment & Supplies		—		90,656		—		90,656
Household Products		—		154,397		—		154,397
Information Technology Services		170,341		152,380		—		322,721
Insurance		—		146,249		—		146,249
Interactive Media & Services		—		127,767		—		127,767
Internet & Direct Marketing Retail		81,550		—		—		81,550
Marine		—		73,779		—		73,779
Multi-Utilities		131,959		—		—		131,959
Semiconductors & Semiconductor Equipment		182,276		228,801		—		411,077
Software		—		75,102		—		75,102
Textiles, Apparel & Luxury Goods		142,867		590,519		—		733,386
Total Common Stocks		1,017,130		3,184,329		—		4,201,459
Short-Term Investment
Investment Company		374,199		—		—		374,199
Total Assets	$	1,391,329	$	3,184,329	$	—	$	4,575,658

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

contract for the year ended December 31, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)		$(4,209)(a)

(a) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)		$3,633(b)

(b) Amounts are included in Investments in the Statement of Operations.

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount					352,602,000

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

At December 31, 2020, the Fund did not have any outstanding securities on loan.

7. Redemption Fees: The Fund will assess a 2% redemption fee, on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets. Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $1 billion				Over $1 billion
	0.80	%			0.75	%

For the year ended December 31, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.75% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $2,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company/Issuer	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	215,987	$	1,109,474	$	951,262	$	787
Canada Goose Holdings, Inc.		—		129,640		—		—
	$	215,987	$	1,239,114	$	951,262	$	787

Affiliated Investment Company/Issuer	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value December 31, 2020 (000)
Liquidity Funds	$	—	$	—	$	374,199
Canada Goose Holdings, Inc.		—		13,227		142,867
	$	—	$	13,227	$	517,066

of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	1,866	$	12	$	701	$	2,176

Permanent differences, primarily due to a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Distributable Earnings (000)				Paid-in Capital (000)
$	14,881			$	(14,881	)

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	—			$	6,448

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
International Advantage Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of International Advantage Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of International Advantage Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Equity Portfolio Class I	$	1,000.00	$	1,183.20	$	1,020.36	$	5.21	$	4.82		0.95	%
International Equity Portfolio Class A		1,000.00		1,180.80		1,018.60		7.13		6.60		1.30
International Equity Portfolio Class L		1,000.00		1,177.90		1,016.09		9.85		9.12		1.80
International Equity Portfolio Class C		1,000.00		1,176.80		1,014.83		11.22		10.38		2.05
International Equity Portfolio Class IS		1,000.00		1,182.90		1,020.56		4.99		4.62		0.91

** Annualized.

Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

Performance Compared to the MSCI EAFE Index⁽¹⁾ and the Lipper International Large-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁹⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		11.42	%		7.24	%		5.92	%		8.25	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		11.00			6.89			5.60			7.29
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		5.19			5.74			5.03			7.06
Fund — Class L Shares w/o sales charges⁽⁶⁾		10.40			6.34			—			6.79
Fund — Class C Shares w/o sales charges⁽⁸⁾		10.17			6.07			—			3.51
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁸⁾		9.17			6.07			—			3.51
Fund — Class IS Shares w/o sales charges⁽⁷⁾		11.39			7.27			—			5.11
MSCI EAFE Index		7.82			7.45			5.51			4.78
Lipper International Large-Cap Growth Funds Index		19.39			10.90			7.11			N/A

⁽¹⁾ The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the international equity market performance of developed markets, excluding the U.S. & Canada. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI EAFE Index currently consists of 21 developed market country indices. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

	Shares		Value (000)
Common Stocks (97.9%)
Australia (0.6%)
Aristocrat Leisure Ltd.		529,471	$	12,713
Canada (6.3%)
Barrick Gold Corp.		2,334,753		53,192
Cameco Corp. (a)		1,802,923		24,150
Constellation Software, Inc.		46,878		60,873
Topicus.com, Inc. (b)		87,185		329
				138,544
China (3.3%)
Minth Group Ltd. (c)		3,864,000		20,443
Tencent Holdings Ltd. (c)		736,600		53,001
				73,444
Finland (1.6%)
Neste Oyj		495,314		35,962
France (13.2%)
AXA SA		1,929,527		46,275
L'Oreal SA		41,227		15,730
LVMH Moet Hennessy Louis Vuitton SE		70,146		43,911
Pernod Ricard SA		199,057		38,228
Safran SA (b)		348,649		49,415
Sanofi		640,412		62,071
Thales SA		361,283		33,055
				288,685
Germany (15.3%)
Adidas AG (b)		39,008		14,191
Bayer AG (Registered)		584,255		34,419
Deutsche Post AG (Registered)		1,112,496		55,108
Fresenius SE & Co., KGaA		1,294,356		59,854
Henkel AG & Co., KGaA (Preference)		755,745		85,214
Infineon Technologies AG		401,644		15,338
SAP SE		544,683		70,547
				334,671
Hong Kong (2.7%)
AIA Group Ltd.		4,792,000		58,396
Italy (2.3%)
Moncler SpA (b)		819,652		50,393
Japan (10.4%)
FANUC Corp.		165,100		40,755
Hoya Corp.		219,400		30,386
Keyence Corp.		61,300		34,482
Kirin Holdings Co., Ltd. (a)		1,578,700		37,278
Lion Corp.		1,530,800		37,083
Shiseido Co., Ltd.		222,800		15,423
Sumitomo Mitsui Financial Group, Inc.		1,023,851		31,738
				227,145
Korea, Republic of (3.6%)
LG Household & Health Care Ltd.		22,655		33,813
Samsung Electronics Co., Ltd.		591,517		44,172
				77,985

	Shares		Value (000)
Netherlands (1.4%)
Heineken N.V.		285,567	$	31,786
Norway (1.0%)
Mowi ASA		995,009		22,216
Singapore (1.3%)
United Overseas Bank Ltd.		1,689,300		28,793
Spain (0.9%)
Bankinter SA		826,309		4,482
Grifols SA (a)		549,020		16,029
				20,511
Sweden (2.8%)
Boliden AB		137,915		4,893
Epiroc AB, Class A		929,607		16,895
Hexagon AB, Class B		431,849		39,593
				61,381
Switzerland (5.3%)
Alcon, Inc. (b)		137,325		9,118
Novartis AG (Registered)		644,754		60,708
Roche Holding AG (Genusschein)		131,418		45,773
				115,599
Taiwan (2.1%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		419,501		45,742
United Kingdom (23.8%)
Anglo American PLC		588,947		19,448
Associated British Foods PLC (b)		1,393,929		43,037
BHP Group PLC (a)		990,413		26,151
British American Tobacco PLC		1,478,886		54,921
Experian PLC		242,011		9,194
GlaxoSmithKline PLC		2,699,688		49,399
Imperial Brands PLC		1,778,663		37,307
Legal & General Group PLC		7,382,108		26,903
M&G PLC		4,491,592		12,124
Man Group PLC		7,160,869		13,521
Prudential PLC		3,046,904		56,026
Reckitt Benckiser Group PLC		916,410		81,794
RELX PLC (Euronext N.V.)		1,354,190		33,092
RELX PLC (LSE)		1,130,882		27,670
Unilever PLC		524,405		31,753
				522,340
Total Common Stocks (Cost $1,408,080)				2,146,306
Short-Term Investment (1.8%)
Investment Company (1.8%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $39,382)		39,381,891		39,382
Total Investments (99.7%) (Cost $1,447,462) Including $77,330 of Securities Loaned (d)(e)				2,185,688
Other Assets in Excess of Liabilities (0.3%)				7,563
Net Assets (100.0%)			$	2,193,251

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $1,408,080)	$	2,146,306
Investment in Security of Affiliated Issuer, at Value (Cost $39,382)		39,382
Total Investments in Securities, at Value (Cost $1,447,462)		2,185,688
Foreign Currency, at Value (Cost $1,339)		1,345
Tax Reclaim Receivable		7,699
Dividends Receivable		2,622
Receivable for Fund Shares Sold		778
Receivable from Securities Lending Income		11
Receivable from Affiliate		—	@
Other Assets		257
Total Assets		2,198,400
Liabilities:
Payable for Advisory Fees		3,925
Payable for Fund Shares Redeemed		471
Payable for Sub Transfer Agency Fees — Class I		125
Payable for Sub Transfer Agency Fees — Class A		131
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		146
Payable for Custodian Fees		77
Payable for Professional Fees		22
Payable for Shareholder Services Fees — Class A		13
Payable for Distribution and Shareholder Services Fees — Class H		3
Payable for Distribution and Shareholder Services Fees — Class L		3
Payable for Distribution and Shareholder Services Fees — Class C		1
Payable for Transfer Agency Fees — Class I		4
Payable for Transfer Agency Fees — Class A		3
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		1
Other Liabilities		221
Total Liabilities		5,149
Net Assets	$	2,193,251
Net Assets Consist of:
Paid-in-Capital	$	1,464,909
Total Distributable Earnings		728,342
Net Assets	$	2,193,251

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	1,658,464
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		102,352,535
Net Asset Value, Offering and Redemption Price Per Share	$	16.20
CLASS A:
Net Assets	$	60,346
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,735,880
Net Asset Value, Redemption Price Per Share	$	16.15
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.89
Maximum Offering Price Per Share	$	17.04
CLASS L:
Net Assets	$	5,513
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		346,416
Net Asset Value, Offering and Redemption Price Per Share	$	15.91
CLASS C:
Net Assets	$	776
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		49,654
Net Asset Value, Offering and Redemption Price Per Share	$	15.64
CLASS IS:
Net Assets	$	468,152
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		28,909,203
Net Asset Value, Offering and Redemption Price Per Share	$	16.19
⁽¹⁾ Including: Securities on Loan, at Value:	$	77,330

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $3,850 of Foreign Taxes Withheld)	$	44,074
Dividends from Security of Affiliated Issuer (Note G)		121
Income from Securities Loaned — Net		100
Total Investment Income		44,295
Expenses:
Advisory Fees (Note B)		15,950
Administration Fees (Note C)		1,595
Sub Transfer Agency Fees — Class I		1,273
Sub Transfer Agency Fees — Class A		228
Sub Transfer Agency Fees — Class L		5
Sub Transfer Agency Fees — Class C		1
Shareholder Services Fees — Class A (Note D)		224
Distribution and Shareholder Services Fees — Class L (Note D)		38
Distribution and Shareholder Services Fees — Class C (Note D)		7
Custodian Fees (Note F)		234
Professional Fees		136
Registration Fees		109
Shareholder Reporting Fees		71
Transfer Agency Fees — Class I (Note E)		17
Transfer Agency Fees — Class A (Note E)		10
Transfer Agency Fees — Class L (Note E)		4
Transfer Agency Fees — Class C (Note E)		3
Transfer Agency Fees — Class IS (Note E)		3
Directors' Fees and Expenses		35
Pricing Fees		4
Other Expenses		66
Total Expenses		20,013
Reimbursement of Class Specific Expenses — Class I (Note B)		(698	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(113	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(3	)
Waiver of Advisory Fees (Note B)		(58	)
Rebate from Morgan Stanley Affiliate (Note G)		(53	)
Net Expenses		19,085
Net Investment Income		25,210
Realized Gain (Loss):
Investments Sold		29,799
Foreign Currency Translation		(13	)
Net Realized Gain		29,786
Change in Unrealized Appreciation (Depreciation):
Investments		161,675
Foreign Currency Translation		623
Net Change in Unrealized Appreciation (Depreciation)		162,298
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		192,084
Net Increase in Net Assets Resulting from Operations	$	217,294

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	25,210		$	43,378
Net Realized Gain		29,786			158,994
Net Change in Unrealized Appreciation (Depreciation)		162,298			245,605
Net Increase in Net Assets Resulting from Operations		217,294			447,977
Dividends and Distributions to Shareholders:
Class I		(22,399	)		(143,434	)
Class A		(490	)		(20,667	)
Class L		(34	)		(514	)
Class C		(3	)		(58	)
Class IS		(6,466	)		(43,082	)
Total Dividends and Distributions to Shareholders		(29,392	)		(207,755	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		237,301			107,722
Distributions Reinvested		21,904			138,564
Redeemed		(308,283	)		(600,557	)
Class A:
Subscribed		39,120			15,796
Distributions Reinvested		476			20,480
Redeemed		(171,574	)		(92,281	)
Class L:
Exchanged		241			24
Distributions Reinvested		33			509
Redeemed		(1,044	)		(1,210	)
Class C:
Subscribed		294			41
Distributions Reinvested		3			58
Redeemed		(261	)		(280	)
Class IS:
Subscribed		25,414			15,435
Distributions Reinvested		5,225			37,186
Redeemed		(58,967	)		(105,825	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(210,118	)		(464,338	)
Redemption Fees		—			8
Total Decrease in Net Assets		(22,216	)		(224,108	)
Net Assets:
Beginning of Period		2,215,467			2,439,575
End of Period	$	2,193,251		$	2,215,467

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		18,766			7,357
Shares Issued on Distributions Reinvested		1,370			9,420
Shares Redeemed		(22,218	)		(40,279	)
Net Decrease in Class I Shares Outstanding		(2,082	)		(23,502	)
Class A:
Shares Subscribed		3,333			1,090
Shares Issued on Distributions Reinvested		30			1,400
Shares Redeemed		(14,121	)		(6,224	)
Net Decrease in Class A Shares Outstanding		(10,758	)		(3,734	)
Class L:
Shares Exchanged		20			2
Shares Issued on Distributions Reinvested		2			35
Shares Redeemed		(82	)		(84	)
Net Decrease in Class L Shares Outstanding		(60	)		(47	)
Class C:
Shares Subscribed		21			3
Shares Issued on Distributions Reinvested		—	@@		4
Shares Redeemed		(19	)		(20	)
Net Increase (Decrease) in Class C Shares Outstanding		2			(13	)
Class IS:
Shares Subscribed		1,798			1,046
Shares Issued on Distributions Reinvested		327			2,528
Shares Redeemed		(4,190	)		(6,916	)
Net Decrease in Class IS Shares Outstanding		(2,065	)		(3,342	)

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.74		$	13.49		$	17.97		$	14.64		$	15.10
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.18			0.28			0.31			0.26			0.27
Net Realized and Unrealized Gain (Loss)		1.50			2.47			(2.78	)		3.41			(0.57	)
Total from Investment Operations		1.68			2.75			(2.47	)		3.67			(0.30	)
Distributions from and/or in Excess of:
Net Investment Income		(0.22	)		(0.32	)		(0.39	)		(0.34	)		(0.16	)
Net Realized Gain		—			(1.18	)		(1.62	)		—			—
Total Distributions		(0.22	)		(1.50	)		(2.01	)		(0.34	)		(0.16	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	16.20		$	14.74		$	13.49		$	17.97		$	14.64
Total Return⁽⁴⁾		11.42	%		20.37	%		(13.80	)%		25.17	%		(2.00	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,658,464		$	1,539,709		$	1,725,392		$	1,691,807		$	1,719,699
Ratio of Expenses Before Expense Limitation		1.00	%		1.00	%		0.99	%		0.99	%		0.98	%
Ratio of Expenses After Expense Limitation		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾		0.95	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			0.95	%⁽⁵⁾		N/A			N/A			0.95	%⁽⁵⁾
Ratio of Net Investment Income		1.28	%⁽⁵⁾		1.86	%⁽⁵⁾		1.82	%⁽⁵⁾		1.54	%⁽⁵⁾		1.86	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		20	%		20	%		34	%		18	%		33	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.67		$	13.42		$	17.75		$	14.46		$	14.91
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.11			0.24			0.32			0.19			0.23
Net Realized and Unrealized Gain (Loss)		1.50			2.46			(2.82	)		3.38			(0.58	)
Total from Investment Operations		1.61			2.70			(2.50	)		3.57			(0.35	)
Distributions from and/or in Excess of:
Net Investment Income		(0.13	)		(0.27	)		(0.21	)		(0.28	)		(0.10	)
Net Realized Gain		—			(1.18	)		(1.62	)		—			—
Total Distributions		(0.13	)		(1.45	)		(1.83	)		(0.28	)		(0.10	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	16.15		$	14.67		$	13.42		$	17.75		$	14.46
Total Return⁽⁴⁾		11.00	%		20.11	%		(14.13	)%		24.77	%		(2.33	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	60,346		$	212,578		$	244,622		$	1,231,279		$	1,176,835
Ratio of Expenses Before Expense Limitation		1.43	%		1.25	%		1.31	%		1.31	%		1.30	%
Ratio of Expenses After Expense Limitation		1.30	%⁽⁵⁾		1.25	%⁽⁵⁾		1.30	%⁽⁵⁾		1.30	%⁽⁵⁾		1.29	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.25	%⁽⁵⁾		N/A			N/A			1.29	%⁽⁵⁾
Ratio of Net Investment Income		0.80	%⁽⁵⁾		1.62	%⁽⁵⁾		1.83	%		1.16	%		1.60	%
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.01	%
Portfolio Turnover Rate		20	%		20	%		34	%		18	%		33	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Amount is less than 0.005%.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.50		$	13.28		$	17.70		$	14.43		$	14.87
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.06			0.15			0.10			0.11			0.16
Net Realized and Unrealized Gain (Loss)		1.45			2.44			(2.66	)		3.35			(0.58	)
Total from Investment Operations		1.51			2.59			(2.56	)		3.46			(0.42	)
Distributions from and/or in Excess of:
Net Investment Income		(0.10	)		(0.19	)		(0.24	)		(0.19	)		(0.02	)
Net Realized Gain		—			(1.18	)		(1.62	)		—			—
Total Distributions		(0.10	)		(1.37	)		(1.86	)		(0.19	)		(0.02	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	15.91		$	14.50		$	13.28		$	17.70		$	14.43
Total Return⁽⁴⁾		10.40	%		19.48	%		(14.49	)%		24.06	%		(2.82	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	5,513		$	5,888		$	6,022		$	7,099		$	7,008
Ratio of Expenses Before Expense Limitation		1.83	%		1.79	%		N/A			1.90	%		1.93	%
Ratio of Expenses After Expense Limitation		1.80	%⁽⁵⁾		1.78	%⁽⁵⁾		1.72	%⁽⁵⁾		1.80	%⁽⁵⁾		1.80	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			1.78	%⁽⁵⁾		N/A			N/A			1.80	%⁽⁵⁾
Ratio of Net Investment Income		0.41	%⁽⁵⁾		1.06	%⁽⁵⁾		1.17	%⁽⁵⁾		0.69	%⁽⁵⁾		1.09	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		20	%		20	%		34	%		18	%		33	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.26		$	13.08		$	17.51		$	14.31		$	14.77
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.02			0.10			0.05			0.04			0.14
Net Realized and Unrealized Gain (Loss)		1.43			2.41			(2.64	)		3.35			(0.58	)
Total from Investment Operations		1.45			2.51			(2.59	)		3.39			(0.44	)
Distributions from and/or in Excess of:
Net Investment Income		(0.07	)		(0.15	)		(0.22	)		(0.19	)		(0.02	)
Net Realized Gain		—			(1.18	)		(1.62	)		—			—
Total Distributions		(0.07	)		(1.33	)		(1.84	)		(0.19	)		(0.02	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	15.64		$	14.26		$	13.08		$	17.51		$	14.31
Total Return⁽⁴⁾		10.17	%		19.18	%		(14.82	)%		23.78	%		(3.01	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	776		$	674		$	787		$	677		$	476
Ratio of Expenses Before Expense Limitation		2.41	%		2.35	%		2.27	%		2.41	%		2.40	%
Ratio of Expenses After Expense Limitation		2.05	%⁽⁵⁾		2.05	%⁽⁵⁾		2.05	%⁽⁵⁾		2.05	%⁽⁵⁾		2.05	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			2.05	%⁽⁵⁾		N/A			N/A			2.05	%⁽⁵⁾
Ratio of Net Investment Income		0.15	%⁽⁵⁾		0.73	%⁽⁵⁾		0.83	%⁽⁵⁾		0.22	%⁽⁵⁾		0.95	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		20	%		20	%		34	%		18	%		33	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Amount is less than 0.005%.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	14.74		$	13.48		$	17.97		$	14.64		$	15.10
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.18			0.29			0.38			0.26			0.29
Net Realized and Unrealized Gain (Loss)		1.50			2.48			(2.86	)		3.42			(0.59	)
Total from Investment Operations		1.68			2.77			(2.48	)		3.68			(0.30	)
Distributions from and/or in Excess of:
Net Investment Income		(0.23	)		(0.33	)		(0.39	)		(0.35	)		(0.16	)
Net Realized Gain		—			(1.18	)		(1.62	)		—			—
Total Distributions		(0.23	)		(1.51	)		(2.01	)		(0.35	)		(0.16	)
Redemption Fees		—			0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	16.19		$	14.74		$	13.48		$	17.97		$	14.64
Total Return⁽⁴⁾		11.39	%		20.42	%		(13.76	)%		25.22	%		(1.95	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	468,152		$	456,618		$	462,752		$	1,230,104		$	1,058,165
Ratio of Expenses Before Expense Limitation		0.91	%		0.91	%		N/A			0.91	%		0.91	%
Ratio of Expenses After Expense Limitation		0.91	%⁽⁵⁾		0.91	%⁽⁵⁾		0.90	%⁽⁵⁾		0.91	%⁽⁵⁾		0.91	%⁽⁵⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		N/A			0.91	%⁽⁵⁾		N/A			N/A			0.91	%⁽⁵⁾
Ratio of Net Investment Income		1.31	%⁽⁵⁾		1.94	%⁽⁵⁾		2.19	%⁽⁵⁾		1.52	%⁽⁵⁾		1.96	%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		20	%		20	%		34	%		18	%		33	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

The accompanying financial statements relate to the International Equity Portfolio. The Fund seeks long-term capital appreciation by investing primarily in equity securities of non-U.S. issuers.

are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and

other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	—	$	82,470	$	—	$	82,470
Air Freight & Logistics		—		55,108		—		55,108
Auto Components		—		20,443		—		20,443

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Banks	$	—	$	65,013	$	—	$	65,013
Beverages		—		107,292		—		107,292
Biotechnology		—		16,029		—		16,029
Capital Markets		—		13,521		—		13,521
Diversified Financial Services		—		12,124		—		12,124
Electronic Equipment, Instruments & Components		—		74,075		—		74,075
Food Products		—		65,253		—		65,253
Health Care Equipment & Supplies		—		39,504		—		39,504
Health Care Providers & Services		—		59,854		—		59,854
Hotels, Restaurants & Leisure		—		12,713		—		12,713
Household Products		—		204,091		—		204,091
Insurance		—		187,600		—		187,600
Interactive Media & Services		—		53,001		—		53,001
Machinery		—		57,650		—		57,650
Metals & Mining		53,192		50,492		—		103,684
Oil, Gas & Consumable Fuels		24,150		35,962		—		60,112
Personal Products		31,753		64,966		—		96,719
Pharmaceuticals		—		252,370		—		252,370
Professional Services		—		69,956		—		69,956
Semiconductors & Semiconductor Equipment		45,742		15,338		—		61,080
Software		60,873		70,876		—		131,749
Tech Hardware, Storage & Peripherals		—		44,172		—		44,172
Textiles, Apparel & Luxury Goods		—		108,495		—		108,495
Tobacco		—		92,228		—		92,228
Total Common Stocks		215,710		1,930,596		—		2,146,306
Short-Term Investment
Investment Company		39,382		—		—		39,382
Total Assets	$	255,092	$	1,930,596	$	—	$	2,185,688

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	77,330	(a)	$	—	$	(77,330	)(b)(c)	$	0

(a) Represents market value of loaned securities at year end.

(b) The Fund received non-cash collateral of approximately $81,761,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

5. Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets. Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $3 billion				Over $3 billion
	0.80	%			0.75	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.79% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.95% for Class I shares, 1.30% for Class A shares, 1.80% for Class L shares, 2.05% for Class C shares and 0.91% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $58,000 of advisory fees were waived and approximately $817,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST

Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $393,905,000 and $612,792,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	33,370			$	346,347			$	340,335			$	121

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	39,382

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for

tax purposes. The tax character of distributions paid during fiscal years 2020 and 2019 was as follows:

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	29,392	$	—	$	43,718	$	164,037

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	1,945			$	26,648

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
International Equity Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of International Equity Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of International Equity Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020 by correspondence with the custodian. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Opportunity Portfolio Class I	$	1,000.00	$	1,364.90	$	1,020.26	$	5.77	$	4.93		0.97	%
International Opportunity Portfolio Class A		1,000.00		1,363.00		1,018.95		7.31		6.24		1.23
International Opportunity Portfolio Class L		1,000.00		1,358.90		1,015.89		10.91		9.32		1.84
International Opportunity Portfolio Class C		1,000.00		1,358.50		1,015.33		11.56		9.88		1.95
International Opportunity Portfolio Class IS		1,000.00		1,365.50		1,020.71		5.23		4.47		0.88
International Opportunity Portfolio Class IR		1,000.00		1,365.70		1,020.71		5.23		4.47		0.88

** Annualized.

Performance Compared to the MSCI All Country World ex USA Net Index⁽¹⁾ and the Lipper International Multi-Cap Growth Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽⁸⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		55.49	%		23.02	%		14.98	%		15.87	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		55.06			22.64			14.63			15.51
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		46.94			21.32			14.01			14.94
Fund — Class L Shares w/o sales charges⁽⁴⁾		54.15			21.97			14.02			14.91
Fund — Class C Shares w/o sales charges⁽⁶⁾		53.94			21.74			—			18.55
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁶⁾		52.94			21.74			—			18.55
Fund — Class IS Shares w/o sales charges⁽⁵⁾		55.63			23.07			—			19.19
Fund — Class IR Shares w/o sales charges⁽⁷⁾		55.64			—			—			21.63
MSCI All Country World ex USA Net Index		10.65			8.93			4.92			5.45
Lipper International Multi-Cap Growth Funds Index		15.49			9.70			6.14			6.81

⁽¹⁾ The MSCI All Country World ex USA Net Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed and emerging markets, excluding the United States. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to nonresident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

	Shares		Value (000)
Common Stocks (92.4%)
Argentina (1.0%)
Globant SA (a)		193,942	$	42,204
Canada (7.1%)
Canada Goose Holdings, Inc. (See Note G) (a)(b)		4,889,363		145,556
Shopify, Inc., Class A (a)		132,527		150,014
				295,570
China (24.2%)
Alibaba Group Holding Ltd. ADR (a)		381,545		88,797
China Resources Beer Holdings Co., Ltd. (c)		8,118,666		74,658
Foshan Haitian Flavouring & Food Co., Ltd., Class A		4,341,347		133,302
HUYA, Inc. ADR (a)(b)		3,512,678		70,008
Meituan Dianping, Class B (a)(c)		5,992,500		225,578
New Frontier Health Corp. (a)		1,583,308		13,616
Shenzhou International Group Holdings Ltd. (c)		1,849,900		36,255
TAL Education Group ADR (a)		3,236,986		231,477
Tencent Holdings Ltd. (c)		616,900		44,388
Trip.com Group Ltd. ADR (a)		2,744,107		92,559
				1,010,638
Denmark (4.5%)
DSV Panalpina A/S		1,111,323		186,771
France (3.4%)
Hermes International		132,364		142,328
Germany (3.7%)
Adidas AG (a)		169,343		61,608
HelloFresh SE (a)		1,203,894		93,123
				154,731
India (7.2%)
HDFC Bank Ltd. (a)		10,199,551		200,895
ICICI Bank Ltd. ADR (a)		3,274,157		48,654
Kotak Mahindra Bank Ltd. (a)		1,911,016		52,229
				301,778
Italy (4.4%)
Moncler SpA (a)		3,011,383		185,142
Japan (4.6%)
Keyence Corp.		274,300		154,298
Pigeon Corp.		938,600		38,739
				193,037
Korea, Republic of (2.3%)
NAVER Corp.		352,476		95,017
Netherlands (5.5%)
Adyen N.V. (a)		45,014		104,592
ASML Holding N.V.		170,501		82,552
Just Eat Takeaway.com N.V (a)		370,216		41,743
				228,887

	Shares		Value (000)
Sweden (1.1%)
Vitrolife AB (a)		1,677,497	$	43,921
Switzerland (1.5%)
Straumann Holding AG (Registered)		53,470		62,636
Taiwan (3.8%)
Taiwan Semiconductor Manufacturing Co., Ltd.		8,272,000		156,485
United Kingdom (2.2%)
Fevertree Drinks PLC		1,274,493		44,091
Rightmove PLC (a)		5,569,211		49,481
				93,572
United States (15.9%)
EPAM Systems, Inc. (a)		352,745		126,406
Farfetch Ltd., Class A (a)		2,938,763		187,523
MercadoLibre, Inc. (a)		64,042		107,284
Spotify Technology SA (a)		777,741		244,724
				665,937
Total Common Stocks (Cost $2,293,360)				3,858,654
Short-Term Investments (9.1%)
Securities held as Collateral on Loaned Securities (1.6%)
Investment Company (1.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		58,777,325		58,777
	Face Amount (000)
Repurchase Agreements (0.2%)
Barclays Capital, Inc., (0.05%, dated 12/31/20, due 1/4/21; proceeds $1,792; fully collateralized by a U.S. Government obligation; 1.63% due 11/15/22; valued at $1,828)	$	1,792		1,792
HSBC Securities USA, Inc., (0.05%, dated 12/31/20, due 1/4/21; proceeds $6,989; fully collateralized by a U.S. Government obligation; 0.15% due 10/31/22; valued at $7,129)		6,989		6,989
Merrill Lynch & Co., Inc., (0.06%, 12/31/20, due 1/4/21; proceeds $717; fully collateralized by a U.S. Government obligation; 2.50% due 5/15/46; valued at $731)		717		717
				9,498
Total Securities held as Collateral on Loaned Securities (Cost $68,275)				68,275

	Shares		Value (000)
Investment Company (7.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $313,356)		313,355,507	$	313,356
Total Short-Term Investments (Cost $381,631)				381,631
Total Investments (101.5%) (Cost $2,674,991) Including $67,239 of Securities Loaned (d)(e)				4,240,285
Liabilities in Excess of Other Assets (–1.5%)				(62,401	)
Net Assets (100.0%)			$	4,177,884

(a) Non-income producing security.

(b) All or a portion of this security was on loan at December 31, 2020.

(d) The approximate fair value and percentage of net assets, $2,309,832,000 and 55.3%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $2,679,578,000. The aggregate gross unrealized appreciation is approximately $1,575,696,000 and the aggregate gross unrealized depreciation is approximately $14,989,000, resulting in net unrealized appreciation of approximately $1,560,707,000.

ADR American Depositary Receipt.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $2,176,290)	$	3,722,596
Investment in Security of Affiliated Issuer, at Value (Cost $498,701)		517,689
Total Investments in Securities, at Value (Cost $2,674,991)		4,240,285
Foreign Currency, at Value (Cost $419)		420
Receivable for Investments Sold		15,631
Receivable for Fund Shares Sold		11,866
Dividends Receivable		868
Tax Reclaim Receivable		282
Receivable from Securities Lending Income		272
Receivable from Affiliate		3
Other Assets		236
Total Assets		4,269,863
Liabilities:
Collateral on Securities Loaned, at Value		68,275
Deferred Capital Gain Country Tax		8,382
Payable for Advisory Fees		6,893
Payable for Investments Purchased		4,108
Payable for Fund Shares Redeemed		3,406
Payable for Sub Transfer Agency Fees — Class I		129
Payable for Sub Transfer Agency Fees — Class A		6
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		2
Payable for Administration Fees		271
Payable for Shareholder Services Fees — Class A		140
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		74
Payable for Custodian Fees		143
Payable for Professional Fees		37
Payable for Transfer Agency Fees — Class I		27
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		3
Payable for Transfer Agency Fees — Class IS		2
Payable for Transfer Agency Fees — Class IR		—	@
Other Liabilities		79
Total Liabilities		91,979
Net Assets	$	4,177,884
Net Assets Consist of:
Paid-in-Capital	$	2,637,038
Total Distributable Earnings		1,540,846
Net Assets	$	4,177,884

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	3,152,320
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		76,041,479
Net Asset Value, Offering and Redemption Price Per Share	$	41.46
CLASS A:
Net Assets	$	683,897
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		16,856,815
Net Asset Value, Redemption Price Per Share	$	40.57
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	2.25
Maximum Offering Price Per Share	$	42.82
CLASS L:
Net Assets	$	533
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		13,751
Net Asset Value, Offering and Redemption Price Per Share	$	38.79
CLASS C:
Net Assets	$	90,845
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,372,786
Net Asset Value, Offering and Redemption Price Per Share	$	38.29
CLASS IS:
Net Assets	$	101,008
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,430,162
Net Asset Value, Offering and Redemption Price Per Share	$	41.56
CLASS IR:
Net Assets	$	149,281
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,590,229
Net Asset Value, Offering and Redemption Price Per Share	$	41.58
⁽¹⁾ Including: Securities on Loan, at Value:	$	67,239

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $895 of Foreign Taxes Withheld)	$	5,889
Income from Securities Loaned — Net		739
Dividends from Security of Affiliated Issuer (Note G)		489
Total Investment Income		7,117
Expenses:
Advisory Fees (Note B)		19,559
Sub Transfer Agency Fees — Class I		1,636
Sub Transfer Agency Fees — Class A		495
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		39
Shareholder Services Fees — Class A (Note D)		1,077
Distribution and Shareholder Services Fees — Class L (Note D)		4
Distribution and Shareholder Services Fees — Class C (Note D)		613
Administration Fees (Note C)		2,033
Custodian Fees (Note F)		487
Registration Fees		216
Shareholder Reporting Fees		150
Professional Fees		112
Transfer Agency Fees — Class I (Note E)		126
Transfer Agency Fees — Class A (Note E)		11
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		16
Transfer Agency Fees — Class IS (Note E)		8
Transfer Agency Fees — Class IR (Note E)		2
Pricing Fees		3
Other Expenses		69
Total Expenses		26,658
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(7	)
Rebate from Morgan Stanley Affiliate (Note G)		(327	)
Net Expenses		26,323
Net Investment Loss		(19,206	)
Realized Gain (Loss):
Investments Sold		48,181
Investments in Affiliates		(71	)
Foreign Currency Translation		(310	)
Net Realized Gain		47,800
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $6,951)		1,209,777
Investments in Affiliates		18,988
Foreign Currency Translation		42
Net Change in Unrealized Appreciation (Depreciation)		1,228,807
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		1,276,607
Net Increase in Net Assets Resulting from Operations	$	1,257,401

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(19,206	)	$	(3,384	)
Net Realized Gain (Loss)		47,800			(17,368	)
Net Change in Unrealized Appreciation (Depreciation)		1,228,807			417,116
Net Increase in Net Assets Resulting from Operations		1,257,401			396,364
Dividends and Distributions to Shareholders:
Class I		(7,420	)		—
Class A		(1,688	)		—
Class L		(1	)		—
Class C		(232	)		—
Class IS		(237	)		—
Class IR		(357	)		—
Total Dividends and Distributions to Shareholders		(9,935	)		—
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		1,419,406			585,257
Distributions Reinvested		7,256			—
Redeemed		(489,145	)		(219,531	)
Class A:
Subscribed		273,991			121,390
Distributions Reinvested		1,687			—
Redeemed		(133,945	)		(88,729	)
Class L:
Exchanged		11			—
Distributions Reinvested		1			—
Redeemed		(197	)		—
Class C:
Subscribed		22,956			15,512
Distributions Reinvested		230			—
Redeemed		(13,042	)		(9,844	)
Class IS:
Subscribed		39,019			43,659
Distributions Reinvested		237			—
Redeemed		(23,518	)		(13,026	)
Class IR:
Subscribed		20,000			—
Distributions Reinvested		357			—
Redeemed		(30,000	)		—
Net Increase in Net Assets Resulting from Capital Share Transactions		1,095,304			434,688
Redemption Fees		74			23
Total Increase in Net Assets		2,342,844			831,075
Net Assets:
Beginning of Period		1,835,040			1,003,965
End of Period	$	4,177,884		$	1,835,040

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		44,755			24,447
Shares Issued on Distributions Reinvested		178			—
Shares Redeemed		(16,959	)		(9,242	)
Net Increase in Class I Shares Outstanding		27,974			15,205
Class A:
Shares Subscribed		8,600			5,170
Shares Issued on Distributions Reinvested		42			—
Shares Redeemed		(4,599	)		(3,822	)
Net Increase in Class A Shares Outstanding		4,043			1,348
Class L:
Shares Exchanged		—	@@		—
Shares Issued on Distributions Reinvested		—	@@		—
Shares Redeemed		(7	)		—
Net Decrease in Class L Shares Outstanding		(7	)		—
Class C:
Shares Subscribed		740			682
Shares Issued on Distributions Reinvested		6			—
Shares Redeemed		(509	)		(440	)
Net Increase in Class C Shares Outstanding		237			242
Class IS:
Shares Subscribed		1,305			1,703
Shares Issued on Distributions Reinvested		6			—
Shares Redeemed		(751	)		(540	)
Net Increase in Class IS Shares Outstanding		560			1,163
Class IR:
Shares Subscribed		583			—
Shares Issued on Distributions Reinvested		9			—
Shares Redeemed		(1,124	)		—
Net Decrease in Class IR Shares Outstanding		(532	)		—

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	26.73		$	19.77		$	22.52		$	14.93		$	15.03
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.22	)		(0.04	)		(0.04	)		(0.08	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		15.05			7.00			(2.66	)		8.04			(0.07	)
Total from Investment Operations		14.83			6.96			(2.70	)		7.96			(0.10	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.00	)⁽³⁾
Net Realized Gain		(0.10	)		—			(0.05	)		(0.37	)		—
Total Distributions		(0.10	)		—			(0.05	)		(0.37	)		(0.00	)⁽³⁾
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	41.46		$	26.73		$	19.77		$	22.52		$	14.93
Total Return⁽⁴⁾		55.49	%		35.20	%		(12.04	)%		53.38	%		(0.65	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,152,320		$	1,284,678		$	649,580		$	358,141		$	62,440
Ratio of Expenses Before Expense Limitation		0.98	%		1.03	%		1.04	%		1.10	%		1.34	%
Ratio of Expenses After Expense Limitation		0.97	%⁽⁵⁾		0.99	%⁽⁵⁾		0.99	%⁽⁵⁾		0.98	%⁽⁵⁾		1.00	%⁽⁵⁾
Ratio of Net Investment Loss		(0.70	)%⁽⁵⁾		(0.15	)%⁽⁵⁾		(0.19	)%⁽⁵⁾		(0.42	)%⁽⁵⁾		(0.22	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.02	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		25	%		20	%		36	%		30	%		42	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	26.23		$	19.46		$	22.25		$	14.79		$	14.93
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.30	)		(0.10	)		(0.11	)		(0.15	)		(0.08	)
Net Realized and Unrealized Gain (Loss)		14.74			6.87			(2.63	)		7.98			(0.06	)
Total from Investment Operations		14.44			6.77			(2.74	)		7.83			(0.14	)
Distributions from and/or in Excess of:
Net Realized Gain		(0.10	)		—			(0.05	)		(0.37	)		—
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	40.57		$	26.23		$	19.46		$	22.25		$	14.79
Total Return⁽⁴⁾		55.06	%		34.79	%		(12.36	)%		53.01	%		(1.00	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	683,897		$	336,109		$	223,098		$	186,988		$	11,727
Ratio of Expenses Before Expense Limitation		1.26	%		1.30	%		1.34	%		1.36	%		1.66	%
Ratio of Expenses After Expense Limitation		1.25	%⁽⁵⁾		1.29	%⁽⁵⁾		1.33	%⁽⁵⁾		1.27	%⁽⁵⁾		1.35	%⁽⁵⁾
Ratio of Net Investment Loss		(0.96	)%⁽⁵⁾		(0.44	)%⁽⁵⁾		(0.51	)%⁽⁵⁾		(0.74	)%⁽⁵⁾		(0.55	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.02	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		25	%		20	%		36	%		30	%		42	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Amount is less than 0.005%.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	25.23		$	18.82		$	21.63		$	14.47		$	14.69
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.44	)		(0.23	)		(0.22	)		(0.22	)		(0.14	)
Net Realized and Unrealized Gain (Loss)		14.10			6.64			(2.54	)		7.75			(0.08	)
Total from Investment Operations		13.66			6.41			(2.76	)		7.53			(0.22	)
Distributions from and/or in Excess of:
Net Realized Gain		(0.10	)		—			(0.05	)		(0.37	)		—
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	38.79		$	25.23		$	18.82		$	21.63		$	14.47
Total Return⁽⁴⁾		54.15	%		34.06	%		(12.81	)%		52.11	%		(1.50	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	533		$	512		$	382		$	364		$	221
Ratio of Expenses Before Expense Limitation		2.14	%		2.19	%		2.28	%		2.51	%		3.16	%
Ratio of Expenses After Expense Limitation		1.84	%⁽⁵⁾		1.84	%⁽⁵⁾		1.84	%⁽⁵⁾		1.84	%⁽⁵⁾		1.85	%⁽⁵⁾
Ratio of Net Investment Loss		(1.54	)%⁽⁵⁾		(0.99	)%⁽⁵⁾		(1.02	)%⁽⁵⁾		(1.16	)%⁽⁵⁾		(1.00	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		25	%		20	%		36	%		30	%		42	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	24.94		$	18.63		$	21.46		$	14.39		$	14.63
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.48	)		(0.26	)		(0.27	)		(0.29	)		(0.19	)
Net Realized and Unrealized Gain (Loss)		13.93			6.57			(2.51	)		7.73			(0.05	)
Total from Investment Operations		13.45			6.31			(2.78	)		7.44			(0.24	)
Distributions from and/or in Excess of:
Net Realized Gain		(0.10	)		—			(0.05	)		(0.37	)		—
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	38.29		$	24.94		$	18.63		$	21.46		$	14.39
Total Return⁽⁴⁾		53.94	%		33.87	%		(13.00	)%		51.77	%		(1.71	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	90,845		$	53,257		$	35,297		$	23,334		$	1,862
Ratio of Expenses Before Expense Limitation		1.98	%		2.03	%		2.06	%		2.10	%		2.43	%
Ratio of Expenses After Expense Limitation		1.97	%⁽⁵⁾		2.02	%⁽⁵⁾		2.04	%⁽⁵⁾		2.01	%⁽⁵⁾		2.10	%⁽⁵⁾
Ratio of Net Investment Loss		(1.68	)%⁽⁵⁾		(1.17	)%⁽⁵⁾		(1.24	)%⁽⁵⁾		(1.45	)%⁽⁵⁾		(1.32	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%		0.02	%		0.00	%⁽⁶⁾
Portfolio Turnover Rate		25	%		20	%		36	%		30	%		42	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Amount is less than 0.005%.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	26.77		$	19.79		$	22.54		$	14.94		$	15.03
Income (Loss) from Investment Operations:
Net Investment Income (Loss)⁽²⁾		(0.18	)		(0.02	)		0.02			(0.12	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		15.07			7.00			(2.72	)		8.09			(0.06	)
Total from Investment Operations		14.89			6.98			(2.70	)		7.97			(0.09	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.00	)⁽³⁾
Net Realized Gain		(0.10	)		—			(0.05	)		(0.37	)		—
Total Distributions		(0.10	)		—			(0.05	)		(0.37	)		(0.00	)⁽³⁾
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	41.56		$	26.77		$	19.79		$	22.54		$	14.94
Total Return⁽⁴⁾		55.63	%		35.27	%		(12.03	)%		53.41	%		(0.64	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	101,008		$	50,083		$	14,016		$	57,629		$	1,030
Ratio of Expenses Before Expense Limitation		0.90	%		0.98	%		0.95	%		1.03	%		5.64	%
Ratio of Expenses After Expense Limitation		0.88	%⁽⁵⁾		0.91	%⁽⁵⁾		0.92	%⁽⁵⁾		0.92	%⁽⁵⁾		0.93	%⁽⁵⁾
Ratio of Net Investment Income (Loss)		(0.59	)%⁽⁵⁾		(0.07	)%⁽⁵⁾		0.09	%⁽⁵⁾		(0.56	)%⁽⁵⁾		(0.20	)%⁽⁵⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.02	%		0.02	%		0.01	%
Portfolio Turnover Rate		25	%		20	%		36	%		30	%		42	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

	Class IR
	Year Ended December 31,						Period from June 15, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	26.78		$	19.79		$	25.37
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.19	)		(0.02	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		15.09			7.01			(5.47	)
Total from Investment Operations		14.90			6.99			(5.53	)
Distributions from and/or in Excess of:
Net Realized Gain		(0.10	)		—			(0.05	)
Redemption Fees		0.00	⁽³⁾		0.00	⁽³⁾		0.00	⁽³⁾
Net Asset Value, End of Period	$	41.58		$	26.78		$	19.79
Total Return⁽⁴⁾		55.64	%		35.32	%		(21.84	)%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	149,281		$	110,401		$	81,592
Ratio of Expenses Before Expense Limitation		0.89	%		0.93	%		0.95	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		0.88	%⁽⁵⁾		0.91	%⁽⁵⁾		0.93	%⁽⁵⁾⁽⁷⁾
Ratio of Net Investment Loss		(0.60	)%⁽⁵⁾		(0.07	)%⁽⁵⁾		(0.46	)%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%⁽⁷⁾
Portfolio Turnover Rate		25	%		20	%		36	%

(1) Commencement of Offering.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Not annualized.

(7) Annualized.

The accompanying financial statements relate to the International Opportunity Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015 the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions. In addition, Class L shares of the Fund may be exchanged for Class L shares of any Morgan Stanley Multi-Class Fund, even though Class L shares are closed to investors.

the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances

under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	186,771	$	—	$	186,771
Banks		48,654		253,124		—		301,778
Beverages		—		118,749		—		118,749
Biotechnology		—		43,921		—		43,921
Diversified Consumer Services		231,477		—		—		231,477
Electronic Equipment, Instruments & Components		—		154,298		—		154,298
Entertainment		314,732		—		—		314,732
Food Products		—		133,302		—		133,302
Health Care Equipment & Supplies		—		62,636		—		62,636
Health Care Providers & Services		13,616		—		—		13,616
Household Products		—		38,739		—		38,739
Information Technology Services		318,624		104,592		—		423,216
Interactive Media & Services		—		188,886		—		188,886
Internet & Direct Marketing Retail		476,163		360,444		—		836,607
Semiconductors & Semiconductor Equipment		—		239,037		—		239,037
Textiles, Apparel & Luxury Goods		145,556		425,333		—		570,889
Total Common Stocks		1,548,822		2,309,832		—		3,858,654
Short-Term Investments
Investment Company		372,133		—		—		372,133
Repurchase Agreements		—		9,498		—		9,498
Total Short-Term Investments		372,133		9,498		—		381,631
Total Assets	$	1,920,955	$	2,319,330	$	—	$	4,240,285

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(4,002	)(a)

(a) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	3,507	(b)

(b) Amounts are included in Investments in the Statement of Operations.

For the year ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount					303,190,000

than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	67,239	(c)	$	—	$	(67,239	)(d)(e)	$	0

(d) The Fund received cash collateral of approximately $68,275,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $888,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(e) The actual collateral received is greater than the amount shown here due to overcollateralization.

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	68,275	$	—	$	—	$	—	$	68,275
Total Borrowings	$	68,275	$	—	$	—	$	—	$	68,275
Gross amount of recognized liabilities securities lending transactions									$	68,275

First $1 billion				Over $1 billion
	0.80	%			0.75	%

For the year ended December 31, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.76% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares, 0.94% for Class IS shares and 0.94% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $8,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $1,467,725,000 and $581,621,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"),

an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $327,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company/Issuer	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	161,533	$	1,034,024	$	823,424	$	489
Canada Goose Holdings, Inc.		—		127,447		808		—
	$	161,533	$	1,161,471	$	824,232	$	489

Affiliated Investment Company/Issuer (cont'd)	Realized Gain (Loss) (000)			Change in Unrealized Appreciation (Depreciation) (000)		Value December 31, 2020 (000)
Liquidity Funds	$	—		$	—	$	372,133
Canada Goose Holdings, Inc.		(71	)		18,988		145,556
	$	(71	)	$	18,988	$	517,689

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	—	$	9,935	$	—	$	—

Permanent differences, primarily due to a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Distributable Earnings (000)				Paid-in Capital (000)
$	8,033			$	(8,033	)

At December 31, 2020, the Fund had no distributable earnings on a tax basis.

During the year ended December 31, 2020, the Fund utilized capital loss carryforwards for U. S. federal income tax purposes of approximately $40,030,000.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2020, the Fund intends to defer to January 1, 2021 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)				Post-October Capital Losses (000)
$	—			$	11,470

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
International Opportunity Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of International Opportunity Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of International Opportunity Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Permanence Portfolio Class I	$	1,000.00	$	1,236.70	$	1,020.86	$	4.78	$	4.32		0.85	%
Permanence Portfolio Class A		1,000.00		1,234.50		1,019.10		6.74		6.09		1.20
Permanence Portfolio Class C		1,000.00		1,229.30		1,015.33		10.93		9.88		1.95
Permanence Portfolio Class IS		1,000.00		1,235.70		1,021.11		4.50		4.06		0.80

** Annualized.

The Fund seeks long-term capital appreciation.

Performance

For period from Fund inception on March 31, 2020 through December 31, 2020, the Fund's Class I shares had a total return based on net asset value and reinvestment of distributions per share of 55.46%, net of fees. The Fund's Class I shares outperformed the Fund's benchmark, the S&P 500® Index (the "Index"), which returned 47.26%.

Factors Affecting Performance

• U.S. equities reversed a steep sell-off caused by the COVID-19 pandemic shock, aided by massive fiscal and monetary stimulus that kept liquidity flowing and supported a faster-than-expected rebound in economic activity. Given the Fund's inception date at the end of March 2020, this reporting period did not include the steep sell-off in equity markets earlier in March that was triggered by the initial global spread of the virus and lockdowns across much of the world. Promising vaccine news throughout the year, along with the start of vaccine distribution across the U.S. and Europe in December 2020, also helped investors look past resurgences of the virus and renewed curbs on social and business activity that have slowed the economic recovery in the short term. Political uncertainty eased after the U.S. election in November 2020, with markets taking a positive stance on a Biden administration and the prospect for additional fiscal stimulus in 2021.

• All sectors in the Index produced double-digit gains in this nine-month reporting period, led by consumer discretionary. Utilities posted the smallest gain in the Index.

Performance Compared to the the S&P 500^® Index⁽¹⁾ and the Lipper Large-Cap Core Funds Index⁽²⁾

	Period Ended December 31, 2020 Total Returns⁽³⁾
	One Year		Five Years		Ten Years		Since Inception⁽⁵⁾
Fund — Class I Shares w/o sales charges⁽⁴⁾		—		—		—		55.46	%
Fund — Class A Shares w/o sales charges⁽⁴⁾		—		—		—		55.05
Fund — Class A Shares with maximum 5.25% sales charges⁽⁴⁾		—		—		—		46.97
Fund — Class C Shares w/o sales charges⁽⁴⁾		—		—		—		54.15
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁴⁾		—		—		—		53.15
Fund — Class IS Shares w/o sales charges⁽⁴⁾		—		—		—		55.45
S&P 500^® Index		—		—		—		47.26
Lipper Large-Cap Core Funds Index		—		—		—		46.16

Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. Performance assumes that all dividends and distributions, if any, were reinvested. For the most recent month-end performance figures, please visit www.morganstanley.com/im/shareholderreports. Investment return and principal value will fluctuate so that Fund shares, when redeemed, may be worth more or less than their original cost. Returns for periods less than one year are not annualized. Total returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance of share classes will vary due to difference in sales charges and expenses.

⁽¹⁾ The Standard & Poor's 500^® Index (S&P 500^® Index) measures the performance of the large cap segment of the U.S. equities market, covering approximately 80% of the U.S. equities market. The Index includes 500 leading companies in leading industries of the U.S. economy. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Lipper Large-Cap Core Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Large-Cap Core Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. As of the date of this report, the Fund was in the Lipper Large-Cap Core Funds classification.

⁽⁴⁾ Commenced operations on March 31, 2020.

⁽⁵⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (97.5%)
Aerospace & Defense (4.5%)
HEICO Corp., Class A		1,329	$	156
Capital Markets (4.7%)
Intercontinental Exchange, Inc.		644		74
S&P Global, Inc.		264		87
				161
Chemicals (6.4%)
Ecolab, Inc.		672		146
Sherwin-Williams Co. (The)		101		74
				220
Commercial Services & Supplies (2.9%)
Cintas Corp.		97		34
Copart, Inc. (a)		268		34
Rollins, Inc.		795		31
				99
Construction Materials (3.1%)
Martin Marietta Materials, Inc.		372		106
Containers & Packaging (2.2%)
Ball Corp.		802		75
Distributors (1.0%)
Pool Corp.		89		33
Diversified Consumer Services (1.9%)
Chegg, Inc. (a)		376		34
Service Corp. International		678		33
				67
Diversified Holding Companies (1.0%)
RedBall Acquisition Corp., Class A (a)		3,064		33
Entertainment (4.6%)
Madison Square Garden Sports Corp., Class A (a)		187		35
Walt Disney Co. (The) (a)		680		123
				158
Equity Real Estate Investment Trusts (REITs) (1.9%)
American Tower Corp. REIT		149		33
Equinix, Inc. REIT		47		34
				67
Food & Staples Retailing (4.7%)
Costco Wholesale Corp.		434		163
Food Products (0.9%)
UTZ Brands, Inc.		1,456		32
Health Care Equipment & Supplies (5.9%)
IDEXX Laboratories, Inc. (a)		68		34
Intuitive Surgical, Inc. (a)		205		168
				202
Health Care Technology (4.6%)
Veeva Systems, Inc., Class A (a)		583		159
Hotels, Restaurants & Leisure (2.5%)
Starbucks Corp.		491		52
Vail Resorts, Inc.		118		33
				85

	Shares		Value (000)
Household Products (1.4%)
Colgate-Palmolive Co.		578	$	49
Industrial Conglomerates (2.5%)
Roper Technologies, Inc.		199		86
Insurance (1.0%)
Progressive Corp. (The)		342		34
Internet & Direct Marketing Retail (5.8%)
Amazon.com, Inc. (a)		61		199
Metals & Mining (0.7%)
Royal Gold, Inc.		237		25
Oil, Gas & Consumable Fuels (1.6%)
Texas Pacific Land Trust		74		54
Pharmaceuticals (3.6%)
Royalty Pharma PLC, Class A (United Kingdom)		2,496		125
Professional Services (2.0%)
CoStar Group, Inc. (a)		37		34
Verisk Analytics, Inc.		165		34
				68
Real Estate Management & Development (3.5%)
FirstService Corp.		871		119
Semiconductors & Semiconductor Equipment (3.5%)
ASML Holding N.V.		245		119
Software (14.3%)
ANSYS, Inc. (a)		91		33
Appfolio, Inc., Class A (a)		498		90
Autodesk, Inc. (a)		111		34
Cadence Design Systems, Inc. (a)		375		51
Constellation Software, Inc.		89		115
Guidewire Software, Inc. (a)		261		34
Synopsys, Inc. (a)		194		50
Topicus.com, Inc. (a)		166		1
Tyler Technologies, Inc. (a)		190		83
				491
Specialty Retail (1.4%)
Home Depot, Inc. (The)		187		50
Textiles, Apparel & Luxury Goods (1.5%)
NIKE, Inc., Class B		364		51
Trading Companies & Distributors (1.9%)
Fastenal Co.		681		33
Watsco, Inc.		143		33
				66
Total Common Stocks (Cost $2,542)				3,352

Call Options Purchased:

The Fund had the following call options purchased open at December 31, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
JP Morgan Chase Bank NA	USD/CNH	CNH	7.70	Nov-21		700,000		700	$	2		$	3	$	(1	)
JP Morgan Chase Bank NA	USD/CNH	CNH	7.98	Sep-21		561,500		562		1			3		(2	)
JP Morgan Chase Bank NA	USD/CNH	CNH	8.10	Jul-21		591,131		591		—	@		3		(3	)
JP Morgan Chase Bank NA	USD/CNH	CNH	8.49	May-21		425,580		426		—	@		2		(2	)
									$	3		$	11	$	(8	)

@ Value is less than $500.

CNH — Chinese Yuan Renminbi Offshore

USD — United States Dollar

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $2,553)	$	3,355
Investment in Security of Affiliated Issuer, at Value (Cost $98)		98
Total Investments in Securities, at Value (Cost $2,651)		3,453
Due from Adviser		70
Prepaid Offering Costs		32
Receivable for Investments Sold		20
Receivable for Fund Shares Sold		2
Dividends Receivable		1
Receivable from Affiliate		—	@
Other Assets		5
Total Assets		3,583
Liabilities:
Payable for Offering Costs		81
Payable for Investments Purchased		31
Payable for Professional Fees		21
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Custodian Fees		1
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Administration Fees		—	@
Other Liabilities		8
Total Liabilities		143
Net Assets	$	3,440
Net Assets Consist of:
Paid-in-Capital	$	2,478
Total Distributable Earnings		962
Net Assets	$	3,440
CLASS I:
Net Assets	$	3,147
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		214,883
Net Asset Value, Offering and Redemption Price Per Share	$	14.65
CLASS A:
Net Assets	$	256
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		17,508
Net Asset Value, Redemption Price Per Share	$	14.61
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.81
Maximum Offering Price Per Share	$	15.42
CLASS C:
Net Assets	$	21
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,444
Net Asset Value, Offering and Redemption Price Per Share	$	14.52
CLASS IS:
Net Assets	$	16
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,061
Net Asset Value, Offering and Redemption Price Per Share	$	14.65

@ Amount is less than $500.

Statement of Operations	Period from March 31, 2020^ to December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $—@ of foreign Taxes Withheld)	$	17
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		17
Expenses:
Offering Costs		99
Professional Fees		77
Shareholder Reporting Fees		14
Advisory Fees (Note B)		13
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Custodian Fees (Note F)		3
Registration Fees		3
Administration Fees (Note C)		2
Pricing Fees		1
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Directors' Fees and Expenses		—	@
Other Expenses		8
Total Expenses		225
Expenses Reimbursed by Adviser (Note B)		(191	)
Waiver of Advisory Fees (Note B)		(13	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		17
Net Investment Loss		(—	@)
Realized Gain:
Investments Sold		343
Foreign Currency Translation		1
Net Realized Gain		344
Change in Unrealized Appreciation (Depreciation):
Investments		802
Foreign Currency Translation		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		802
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		1,146
Net Increase in Net Assets Resulting from Operations	$	1,146

^ Commencement of Operations.

@ Amount is less than $500.

Statement of Changes in Net Assets	Period from March 31, 2020^ to December 31, 2020 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(—	@)
Net Realized Gain		344
Net Change in Unrealized Appreciation (Depreciation)		802
Net Increase in Net Assets Resulting from Operations		1,146
Dividends and Distributions to Shareholders:
Class I		(174	)
Class A		(8	)
Class C		(1	)
Class IS		(1	)
Total Dividends and Distributions to Shareholders		(184	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		2,025
Distributions Reinvested		174
Class A:
Subscribed		248
Distributions Reinvested		8
Redeemed		(4	)
Class C:
Subscribed		15
Distributions Reinvested		1
Class IS:
Subscribed		10
Distributions Reinvested		1
Net Increase in Net Assets Resulting from Capital Share Transactions		2,478
Total Increase in Net Assets		3,440
Net Assets:
Beginning of Period		—
End of Period	$	3,440
(1) Capital Share Transactions:
Class I:
Shares Subscribed		203
Shares Issued on Distributions Reinvested		12
Net Increase in Class I Shares Outstanding		215
Class A:
Shares Subscribed		17
Shares Issued on Distributions Reinvested		1
Shares Redeemed		(—	@@)
Net Increase in Class A Shares Outstanding		18
Class C:
Shares Subscribed		1
Shares Issued on Distributions Reinvested		—	@@
Net Increase in Class C Shares Outstanding		1
Class IS:
Shares Subscribed		1
Shares Issued on Distributions Reinvested		—	@@
Net Increase in Class IS Shares Outstanding		1

^ Commencement of Operations.

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
Selected Per Share Data and Ratios	Period from March 31, 2020⁽¹⁾to December 31, 2020
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.00	)⁽³⁾
Net Realized and Unrealized Gain		5.51
Total from Investment Operations		5.51
Distributions from and/or in Excess of:
Net Realized Gain		(0.86	)
Net Asset Value, End of Period	$	14.65
Total Return⁽⁴⁾		55.46	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,147
Ratio of Expenses Before Expense Limitation		10.85	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		0.85	%⁽⁵⁾⁽⁸⁾
Ratio of Net Investment Loss		(0.02	)%⁽⁵⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾⁽⁸⁾
Portfolio Turnover Rate		68	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

	Class A
Selected Per Share Data and Ratios	Period from March 31, 2020⁽¹⁾to December 31, 2020
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.01	)
Net Realized and Unrealized Gain		5.48
Total from Investment Operations		5.47
Distributions from and/or in Excess of:
Net Realized Gain		(0.86	)
Net Asset Value, End of Period	$	14.61
Total Return⁽³⁾		55.05	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	256
Ratio of Expenses Before Expense Limitation		17.41	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		1.20	%⁽⁴⁾⁽⁷⁾
Ratio of Net Investment Loss		(0.06	)%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾⁽⁷⁾
Portfolio Turnover Rate		68	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

	Class C
Selected Per Share Data and Ratios	Period from March 31, 2020⁽¹⁾to December 31, 2020
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.11	)
Net Realized and Unrealized Gain		5.49
Total from Investment Operations		5.38
Distributions from and/or in Excess of:
Net Realized Gain		(0.86	)
Net Asset Value, End of Period	$	14.52
Total Return⁽³⁾		54.15	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	21
Ratio of Expenses Before Expense Limitation		24.15	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		1.95	%⁽⁴⁾⁽⁷⁾
Ratio of Net Investment Loss		(1.08	)%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾⁽⁷⁾
Portfolio Turnover Rate		68	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

	Class IS
Selected Per Share Data and Ratios	Period from March 31, 2020⁽¹⁾to December 31, 2020
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.00	)⁽³⁾
Net Realized and Unrealized Gain		5.51
Total from Investment Operations		5.51
Distributions from and/or in Excess of:
Net Realized Gain		(0.86	)
Net Asset Value, End of Period	$	14.65
Total Return⁽⁴⁾		55.45	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	16
Ratio of Expenses Before Expense Limitation		25.34	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		0.80	%⁽⁵⁾⁽⁸⁾
Ratio of Net Investment Income		0.03	%⁽⁵⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾⁽⁸⁾
Portfolio Turnover Rate		68	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

The accompanying financial statements relate to the Permanence Portfolio. The Fund seeks long-term capital appreciation.

The Fund commenced operations on March 31, 2020 and offers four classes of shares — Class I, Class A, Class C and Class IS.

mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	156	$	—	$	—	$	156
Capital Markets		161		—		—		161
Chemicals		220		—		—		220
Commercial Services & Supplies		99		—		—		99
Construction Materials		106		—		—		106
Containers & Packaging		75		—		—		75
Distributors		33		—		—		33
Diversified Consumer Services		67		—		—		67
Diversified Holding Companies		33		—		—		33
Entertainment		158		—		—		158
Equity Real Estate Investment Trusts (REITs)		67		—		—		67
Food & Staples Retailing		163		—		—		163
Food Products		32		—		—		32
Health Care Equipment & Supplies		202		—		—		202
Health Care Technology		159		—		—		159
Hotels, Restaurants & Leisure		85		—		—		85
Household Products		49		—		—		49
Industrial Conglomerates		86		—		—		86
Insurance		34		—		—		34
Internet & Direct Marketing Retail		199		—		—		199
Metals & Mining		25		—		—		25
Oil, Gas & Consumable Fuels		54		—		—		54
Pharmaceuticals		125		—		—		125
Professional Services		68		—		—		68
Real Estate Management & Development		119		—		—		119
Semiconductors & Semiconductor Equipment		119		—		—		119
Software		490		1		—		491
Specialty Retail		50		—		—		50
Textiles, Apparel & Luxury Goods		51		—		—		51
Trading Companies & Distributors		66		—		—		66
Total Common Stocks		3,351		1		—		3,352
Call Options Purchased		—		3		—		3
Short-Term Investment
Investment Company		98		—		—		98
Total Assets	$	3,449	$	4	$	—	$	3,453

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of December 31, 2020:

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Purchased Options

Investments, at Value
(Purchased Options)

Currency Risk

(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following table sets forth by primary risk exposure the Fund's change in unrealized appreciation (depreciation) by type of derivative contract for the period ended December 31, 2020 in accordance with ASC 815:

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(8	)(b)

(b) Amounts are included in Investments in the Statement of Operations.

At December 31, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(c) (000)			Liabilities(c) (000)
Purchased Options	$	3	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(c) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
JP Morgan Chase Bank NA	$	3	(a)	$	—	$	—	$	3

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the period ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount					1,017,000

expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

First $1 billion				Over $1 billion
	0.65	%			0.60	%

For the period ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.85% for Class I shares, 1.20% for Class A shares, 1.95% for Class C shares and 0.80% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the period ended December 31, 2020, approximately $13,000 of advisory fees were waived and approximately $195,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

G. Security Transactions and Transactions with Affiliates: For the period ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $4,032,000 and $1,834,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the period ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management

investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Liquidity Funds. For the period ended December 31, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the period ended December 31, 2020 is as follows:

Affiliated Investment Company				Value March 31, 2020 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	—			$	3,013			$	2,915			$	—	@

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	98

@ Amount is less than $500.

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the period ended December 31, 2020, the Fund did not engage in any cross-trade transactions.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. The tax year ended December 31, 2020 remains subject to examination by taxing authorities.

				2020 Distributions Paid From:
				Ordinary Income (000)
				$	184

Permanent differences, primarily due to a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Distributable Earnings (000)				Paid-in Capital (000)
$	—	@		$	(—	@)

@ Amount is less than $500

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. — Permanence Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of the Permanence Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statements of operations and changes in net assets and the financial highlights for the period from March 31, 2020 (commencement of operations) through December 31, 2020 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Permanence Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, and the results of its operations, the changes in its net assets and its financial highlights for the period from March 31, 2020 (commencement of operations) through December 31, 2020, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2020 by correspondence with the custodian and others. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Real Assets Portfolio Class I	$	1,000.00	$	1,126.40	$	1,021.32	$	4.06	$	3.86		0.76	%
Real Assets Portfolio Class A		1,000.00		1,125.40		1,019.46		6.04		5.74		1.13
Real Assets Portfolio Class C		1,000.00		1,120.40		1,015.74		9.97		9.48		1.87
Real Assets Portfolio Class IS		1,000.00		1,126.70		1,021.52		3.85		3.66		0.72

** Annualized.

The Fund seeks total return, targeted to be in excess of inflation, through capital appreciation and current income.

Performance

For the fiscal year ended December 31, 2020, the Fund's Class I shares had a total return based on net asset value and reinvestment of distributions per share of 0.39%, net of fees. The Fund's Class I shares underperformed the Fund's benchmark, the MSCI World Net Index (the "Index"), which returned 15.90%, and underperformed the MSIF Real Assets Benchmark Blend Index, which returned 2.88%.

Factors Affecting Performance

• Global asset markets had a roller coaster ride in 2020. Earlier in the year, equities dropped dramatically as the pandemic significantly disrupted the economy. Thanks to a combination of unprecedented monetary and fiscal policies, the market began to rally since March 2020. The leadership within the market for most of the year carried defensive undertones across style, sector and regional performance. The easy financial conditions also led to a very strong fixed income market, with interest rates falling and credit spreads largely falling back to pre-pandemic levels. Within commodities, precious metals outperformed due to demand for relative safe-haven assets and lower real yields. Energy prices suffered from the lockdown and restrictions in travels.

• Global real estate securities declined 9.0% (as represented by the FTSE EPRA Nareit Developed Real Estate Net Total Return Index) for the full year as the impacts of COVID-19 and the widespread economic and social shutdowns experienced worldwide disproportionately impacted fundamentals for the property sector. After a sharp decline in the first quarter of 2020 following the initial outbreak and spread of COVID-19, the sector posted gains for the remainder of the year, as markets responded positively to fiscal and monetary stimulus policies. Importantly, real estate posted strong gains in the fourth quarter of 2020, after a strong rally in November on news that the Pfizer-BioNTech and Moderna vaccines were over 90% effective in preventing COVID-19. The largest declines for the year from a sector perspective were experienced in the retail, hotel and office property sectors. Retail real estate experienced a pullback for

Performance Compared to the MSCI World Net Index⁽¹⁾, MSIF Real Assets Benchmark Blend Index⁽²⁾ and the Lipper Real Return Funds Index⁽³⁾

	Period Ended December 31, 2020 Total Returns⁽⁴⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁶⁾
Fund — Class I Shares w/o sales charges⁽⁵⁾		0.39	%		—		—		4.14	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		0.07			—		—		3.78
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		–5.16			—		—		1.61
Fund — Class C Shares w/o sales charges⁽⁵⁾		–0.81			—		—		2.97
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁵⁾		–1.80			—		—		2.97
Fund — Class IS Shares w/o sales charges⁽⁵⁾		0.42			—		—		4.17
MSCI World Net Index		15.90			—		—		11.65
MSIF Real Assets Benchmark Blend Index		2.88			—		—		7.03
Lipper Real Return Funds Index		4.77			—		—		2.80

⁽¹⁾ The MSCI World Net Index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The MSCI World Net Index currently consists of 23 developed market country indices. The performance of the Index is listed in US dollars and assumes reinvestment of net dividends. Net total return indices reinvest dividends after the deduction of withholding taxes, using (for international indices) a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

	Shares		Value (000)
Common Stocks (69.1%)
Australia (2.0%)
Atlas Arteria Ltd.		7,392	$	37
CSL Ltd.		153		33
Dexus REIT		7,847		57
GPT Group (The) REIT		4,732		16
Scentre Group REIT		6,762		15
Sydney Airport (a)		7,475		37
Transurban Group		9,732		103
Wesfarmers Ltd.		1,171		46
Woolworths Group Ltd.		961		29
				373
Canada (3.4%)
Bank of Montreal		460		35
Canadian National Railway Co.		460		51
Enbridge, Inc.		2,940		94
Gibson Energy, Inc. (b)		7,520		121
Keyera Corp. (b)		1,171		21
Manulife Financial Corp.		2,222		40
National Bank of Canada		6		—	@
Pembina Pipeline Corp. (b)		1,458		35
RioCan Real Estate Investment Trust REIT		4,283		56
Royal Bank of Canada		469		39
Sun Life Financial, Inc.		727		32
TC Energy Corp. (b)		2,283		93
TELUS Corp.		20		—	@
				617
China (1.7%)
China Everbright International Ltd. (c)		164,780		93
China Gas Holdings Ltd. (c)		26,118		104
China Merchants Port Holdings Co., Ltd. (c)		24,129		30
China Overseas Land & Investment Ltd. (c)		1,896		4
China Resources Land Ltd. (c)		3,264		13
China Resources Mixc Lifestyle Services Ltd. (a)(c)		25		—	@
China Tower Corp. Ltd. H Shares (c)		129,919		19
Jiangsu Expressway Co., Ltd. H Shares (c)		41,138		46
Zhejiang Expressway Co., Ltd., Class H (c)		12,000		10
				319
Denmark (0.3%)
Novo Nordisk A/S Series B		429		30
Orsted A/S		94		19
				49
Finland (0.1%)
Citycon Oyj (b)		1,403		14
France (3.9%)
Aeroports de Paris (ADP) (a)		116		15
Air Liquide SA		234		39
Edenred		637		36
Gecina SA REIT		793		123
Getlink SE (a)		2,296		40

	Shares		Value (000)
ICADE REIT		60	$	5
Klepierre SA REIT (b)		5,314		120
Legrand SA		471		42
LVMH Moet Hennessy Louis Vuitton SE		74		46
Mercialys SA REIT		4,558		40
Vinci SA		2,059		205
				711
Germany (1.5%)
BASF SE		615		49
Deutsche Wohnen SE		2,211		118
E.ON SE		2,696		30
SAP SE		187		24
Siemens AG (Registered)		278		40
Siemens Energy AG (a)		149		5
				266
Hong Kong (3.2%)
AIA Group Ltd.		2,565		31
CK Asset Holdings Ltd.		1,848		10
Hong Kong & China Gas Co., Ltd.		18,191		27
Hongkong Land Holdings Ltd.		40,991		169
Link REIT		4,737		43
New World Development Co. Ltd.		2,631		12
Power Assets Holdings Ltd.		8,500		46
Sun Hung Kai Properties Ltd.		7,773		100
Swire Properties Ltd.		36,391		106
Wharf Real Estate Investment Co., Ltd.		8,694		45
				589
India (0.6%)
Azure Power Global Ltd. (a)		2,491		101
Ireland (0.2%)
Hibernia REIT PLC		29,659		42
Italy (0.7%)
Atlantia SpA (a)		1,377		25
Infrastrutture Wireless Italiane SpA		3,681		44
Snam SpA		3,682		21
Terna Rete Elettrica Nazionale SpA		5,681		44
				134
Japan (4.5%)
Central Japan Railway Co.		200		28
East Japan Railway Co.		1,100		73
GLP J-REIT		7		11
ITOCHU Corp.		1,535		44
Japan Hotel REIT Investment Corp.		63		32
Marubeni Corp.		5,540		37
Mitsubishi Corp.		1,459		36
Mitsubishi Estate Co., Ltd.		7,498		121
Mitsui & Co., Ltd.		2,069		38
Mitsui Fudosan Co., Ltd.		5,290		111
Nippon Building Fund, Inc. REIT		13		75
Sumitomo Chemical Co., Ltd.		10,445		42
Sumitomo Corp.		2,548		34

	Shares		Value (000)
Japan (cont'd)
Sumitomo Mitsui Financial Group, Inc.		1,464	$	45
Sumitomo Realty & Development Co., Ltd.		1,510		47
Toyota Motor Corp.		476		37
				811
Mexico (0.9%)
Grupo Aeroportuario del Pacifico SAB de CV, Class B (a)		2,969		33
Grupo Aeroportuario del Sureste SAB de CV, Class B (a)		2,162		36
Promotora y Operadora de Infraestructura SAB de CV		9,911		88
				157
Netherlands (0.8%)
ASML Holding N.V.		89		43
Eurocommercial Properties N.V. CVA REIT (a)		3,050		57
Randstad N.V. (a)		656		43
				143
New Zealand (0.2%)
Auckland International Airport Ltd. (a)		7,396		40
Singapore (0.2%)
DBS Group Holdings Ltd.		2,117		40
UOL Group Ltd.		960		6
				46
Spain (1.4%)
Aena SME SA (a)		339		59
Cellnex Telecom SA		951		57
Ferrovial SA		2,129		59
Inmobiliaria Colonial Socimi SA REIT		1,785		17
Merlin Properties Socimi SA REIT		7,002		67
				259
Sweden (0.3%)
Hufvudstaden AB, Class A		1,466		24
Telia Co., AB		8,225		34
				58
Switzerland (1.3%)
Barry Callebaut AG (Registered)		14		33
Cie Financiere Richemont SA (Registered)		447		40
Flughafen Zurich AG (Registered) (a)		238		42
Nestle SA (Registered)		292		35
Novartis AG (Registered)		437		41
Roche Holding AG (Genusschein)		122		43
				234
United Kingdom (4.9%)
Anglo American PLC		1,435		47
British Land Co., PLC (The) REIT		17,314		116
Derwent London PLC REIT		1,529		65
GlaxoSmithKline PLC		1,827		33
Great Portland Estates PLC REIT		10,458		96
Hammerson PLC REIT		207,540		70

	Shares		Value (000)
Land Securities Group PLC REIT		14,891	$	138
National Grid PLC		14,007		166
Pennon Group PLC		2,511		32
Royal Dutch Shell PLC, Class B		2,817		48
Segro PLC REIT		3,832		50
Severn Trent PLC		1,032		32
				893
United States (37.0%)
Abbott Laboratories		300		33
Accenture PLC, Class A		131		34
Adobe, Inc. (a)		111		55
Advanced Micro Devices, Inc. (a)		260		24
AES Corp. (The)		1,435		34
Alexandria Real Estate Equities, Inc. REIT		194		35
Alphabet, Inc., Class A (a)		64		112
Amazon.com, Inc. (a)		38		124
Ameren Corp.		611		48
American Campus Communities, Inc. REIT		279		12
American Electric Power Co., Inc.		710		59
American Express Co.		367		44
American Tower Corp. REIT		1,331		299
American Water Works Co., Inc.		548		84
Amgen, Inc.		112		26
Apartment Income Corp. REIT (a)		142		5
Apple, Inc.		1,617		215
AT&T, Inc.		938		27
Atmos Energy Corp.		857		82
AvalonBay Communities, Inc. REIT		832		133
Avangrid, Inc.		798		36
Bank of America Corp.		1,781		54
Berkshire Hathaway, Inc., Class B (a)		203		47
Boston Properties, Inc. REIT		1,946		184
Brixmor Property Group, Inc. REIT		1,215		20
Camden Property Trust REIT		593		59
Celanese Corp.		258		33
Cheniere Energy, Inc. (a)		1,341		80
CMS Energy Corp.		519		32
Coca-Cola Co. (The)		525		29
Comcast Corp., Class A		668		35
Copart, Inc. (a)		290		37
Costco Wholesale Corp.		74		28
Crown Castle International Corp. REIT		1,322		210
CSX Corp.		371		34
CubeSmart REIT		688		23
Danaher Corp.		134		30
DiamondRock Hospitality Co. REIT		143		1
Digital Realty Trust, Inc. REIT		191		27
Dover Corp.		264		33
Edison International		1,136		71
Equity Residential REIT		2,053		122
Essential Utilities, Inc.		2,051		97

	Shares		Value (000)
United States (cont'd)
Essex Property Trust, Inc. REIT		176	$	42
Eversource Energy		891		77
Facebook, Inc., Class A (a)		262		72
Federal Realty Investment Trust REIT		130		11
Fidelity National Information Services, Inc.		204		29
Garmin Ltd.		325		39
Globe Life, Inc.		362		34
Goldman Sachs Group, Inc. (The)		139		37
Healthcare Realty Trust, Inc. REIT		598		18
Healthpeak Properties, Inc. REIT		1,213		37
Hilton Worldwide Holdings, Inc.		330		37
Home Depot, Inc. (The)		130		35
Honeywell International, Inc.		166		35
Host Hotels & Resorts, Inc. REIT		5,660		83
Hudson Pacific Properties, Inc. REIT		2,570		62
Intuitive Surgical, Inc. (a)		49		40
Invitation Homes, Inc. REIT		2,122		63
JBG SMITH Properties REIT		679		21
Johnson & Johnson		284		45
JPMorgan Chase & Co.		618		78
Kimco Realty Corp. REIT		1,491		22
Linde PLC		125		33
Mack-Cali Realty Corp. REIT		3,159		39
Marathon Oil Corp.		7,713		51
Marriott International, Inc., Class A		284		37
Mastercard, Inc., Class A		139		50
Medtronic PLC		262		31
Merck & Co., Inc.		419		34
Microsoft Corp.		701		156
Mid-America Apartment Communities, Inc. REIT		95		12
Netflix, Inc. (a)		56		30
NextEra Energy, Inc.		440		34
NiSource, Inc.		3,039		70
Norfolk Southern Corp.		144		34
NVIDIA Corp.		73		38
ONEOK, Inc.		2,356		90
Paramount Group, Inc. REIT		721		6
PayPal Holdings, Inc. (a)		184		43
PepsiCo, Inc.		220		33
PNC Financial Services Group, Inc. (The)		234		35
Procter & Gamble Co. (The)		340		47
ProLogis, Inc. REIT		2,730		272
Public Storage REIT		159		37
QTS Realty Trust, Inc., Class A REIT		219		14
QUALCOMM, Inc.		229		35
Regency Centers Corp. REIT		1,454		66
Republic Services, Inc.		293		28
RLJ Lodging Trust REIT		2,890		41
salesforce.com, Inc. (a)		188		42
SBA Communications Corp. REIT		428		121

	Shares		Value (000)
Sempra Energy		908	$	116
Simon Property Group, Inc. REIT		2,375		203
SL Green Realty Corp. REIT		3,576		213
Sunstone Hotel Investors, Inc. REIT		5,106		58
Targa Resources Corp.		2,143		57
Tesla, Inc. (a)		80		56
Texas Instruments, Inc.		224		37
Thermo Fisher Scientific, Inc.		68		32
Union Pacific Corp.		133		28
UnitedHealth Group, Inc.		135		47
Ventas, Inc. REIT		1,387		68
Visa, Inc., Class A		209		46
Vornado Realty Trust REIT		3,142		117
Voya Financial, Inc.		617		36
Walt Disney Co. (The) (a)		310		56
Waste Management, Inc.		423		50
Weingarten Realty Investors REIT		3,477		75
Weyerhaeuser Co. REIT		940		31
Williams Cos., Inc. (The)		2,805		56
Xcel Energy, Inc.		669		45
Zoetis, Inc.		156		26
				6,736
Total Common Stocks (Cost $10,975)				12,592
	No. of Warrants
Warrant (0.0%) (d)
Switzerland (0.0%) (d)
Cie Financiere Richemont SA, expires 11/22/23 (a) (Cost $—)		894		—	@
	Face Amount (000)
U.S. Treasury Securities (22.9%)
United States (22.9%)
U.S. Treasury Inflation Index Notes (TIPS),
0.13%, 7/15/22 - 7/15/24	$	816		854
0.38%, 7/15/23 - 1/15/27		433		469
0.50%, 1/15/28		327		371
0.75%, 2/15/42		149		189
0.88%, 1/15/29		241		284
1.00%, 2/15/46		173		236
2.00%, 1/15/26		24		28
2.13%, 2/15/40		65		101
3.88%, 4/15/29		90		130
U.S. Treasury Inflation Indexed Bonds,
0.13%, 1/15/30		305		340
0.25%, 1/15/25 - 2/15/50		589		644
0.38%, 7/15/25		396		436
1.00%, 2/15/48		58		81
Total U.S. Treasury Securities (Cost $3,835)				4,163

	Shares		Value (000)
Short-Term Investments (9.8%)
Securities held as Collateral on Loaned Securities (1.9%)
Investment Company (1.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G)		305,000	$	305
	Face Amount (000)
Repurchase Agreements (0.2%)
HSBC Securities USA, Inc. (0.05%, dated 12/31/20, due 1/4/21; proceeds $36; fully collateralized by a U.S. Government obligation; 0.15% due 10/31/22; valued at $37)	$	36		36
Merrill Lynch & Co., Inc. (0.06%, 12/31/20, due 1/4/21; proceeds $4; fully collateralized by a U.S. Government obligation; 2.50% due 5/15/46; valued at $4)		4		4
Barclays Capital, Inc. (0.05%, dated 12/31/20, due 1/4/21; proceeds $9; fully collateralized by a U.S. Government obligation; 1.63% due 11/15/22; valued at $9)		9		9
				49
Total Securities held as Collateral on Loaned Securities (Cost $354)				354
	Shares
Investment Company (7.9%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $1,433)		1,433,191		1,433
Total Short-Term Investments (Cost $1,787)				1,787
Total Investments (101.8%) (Cost $16,597) Including $395 of Securities Loaned (e)(f)				18,542
Liabilities in Excess of Other Assets (–1.8%)				(328	)
Net Assets (100.0%)			$	18,214

(a) Non-income producing security.

(b) All or a portion of this security was on loan at December 31, 2020.

(d) Amount is less than 0.05%.

(e) The approximate fair value and percentage of net assets, $4,981,000 and 27.3%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value⁽¹⁾ (Cost $14,859)	$	16,804
Investment in Security of Affiliated Issuer, at Value (Cost $1,738)		1,738
Total Investments in Securities, at Value (Cost $16,597)		18,542
Foreign Currency, at Value (Cost $47)		48
Receivable for Investments Sold		131
Due from Adviser		76
Dividends Receivable		36
Interest Receivable		7
Tax Reclaim Receivable		5
Receivable from Affiliate		—	@
Due from Broker		—	@
Receivable from Securities Lending Income		—	@
Other Assets		24
Total Assets		18,869
Liabilities:
Collateral on Securities Loaned, at Value		354
Payable for Investments Purchased		230
Payable for Professional Fees		31
Payable for Custodian Fees		25
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Administration Fees		1
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		14
Total Liabilities		655
Net Assets	$	18,214
Net Assets Consist of:
Paid-in-Capital	$	17,309
Total Distributable Earnings		905
Net Assets	$	18,214

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	17,942
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,728,378
Net Asset Value, Offering and Redemption Price Per Share	$	10.38
CLASS A:
Net Assets	$	43
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,174
Net Asset Value, Redemption Price Per Share	$	10.41
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.58
Maximum Offering Price Per Share	$	10.99
CLASS C:
Net Assets	$	218
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		21,015
Net Asset Value, Offering and Redemption Price Per Share	$	10.36
CLASS IS:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,037
Net Asset Value, Offering and Redemption Price Per Share	$	10.38
⁽¹⁾ Including: Securities on Loan, at Value:	$	395

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $16 of Foreign Taxes Withheld)	$	285
Interest from Securities of Unaffiliated Issuers		61
Dividends from Security of Affiliated Issuer (Note G)		2
Income from Securities Loaned — Net		—	@
Total Investment Income		348
Expenses:
Professional Fees		130
Advisory Fees (Note B)		85
Custodian Fees (Note F)		75
Registration Fees		51
Pricing Fees		18
Shareholder Reporting Fees		15
Administration Fees (Note C)		11
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Directors' Fees and Expenses		4
Sub Transfer Agency Fees — Class I		2
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class C		—	@
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		2
Other Expenses		22
Total Expenses		423
Expenses Reimbursed by Adviser (Note B)		(219	)
Waiver of Advisory Fees (Note B)		(85	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		112
Net Investment Income		236
Realized Gain (Loss):
Investments Sold		(913	)
Foreign Currency Translation		4
Futures Contracts		(15	)
Net Realized Loss		(924	)
Change in Unrealized Appreciation (Depreciation):
Investments		1,200
Foreign Currency Translation		1
Futures Contracts		(2	)
Net Change in Unrealized Appreciation (Depreciation)		1,199
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		275
Net Increase in Net Assets Resulting from Operations	$	511

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	236		$	191
Net Realized Gain (Loss)		(924	)		5
Net Change in Unrealized Appreciation (Depreciation)		1,199			1,488
Net Increase in Net Assets Resulting from Operations		511			1,684
Dividends and Distributions to Shareholders:
Class I		(235	)		(201	)
Class A		(—	@)		(1	)
Class C		(1	)		(1	)
Class IS		(—	@)		(—	@)
Paid-in-Capital:
Class I		—			(3	)
Class A		—			(—	@)
Class C		—			(—	@)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		(236	)		(206	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		6,900			37
Distributions Reinvested		235			204
Redeemed		(194	)		(6	)
Class A:
Subscribed		24			130
Distributions Reinvested		—	@		1
Redeemed		(23	)		(105	)
Class C:
Subscribed		50			153
Distributions Reinvested		1			1
Redeemed		(7	)		—
Class IS:
Distributions Reinvested		—	@		—	@
Net Increase in Net Assets Resulting from Capital Share Transactions		6,986			415
Total Increase in Net Assets		7,261			1,893
Net Assets:
Beginning of Period		10,953			9,060
End of Period	$	18,214		$	10,953
(1) Capital Share Transactions:
Class I:
Shares Subscribed		703			4
Shares Issued on Distributions Reinvested		25			20
Shares Redeemed		(20	)		(1	)
Net Increase in Class I Shares Outstanding		708			23
Class A:
Shares Subscribed		2			13
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		(2	)		(10	)
Net Increase in Class A Shares Outstanding		—	@@		3
Class C:
Shares Subscribed		6			15
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		(1	)		—
Net Increase in Class C Shares Outstanding		5			15
Class IS:
Shares Issued on Distributions Reinvested		—	@@		—	@@

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,						Period from June 18, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	10.51		$	9.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.16			0.19			0.13
Net Realized and Unrealized Gain (Loss)		(0.14	)		1.46			(0.79	)
Total from Investment Operations		0.02			1.65			(0.66	)
Distributions from and/or in Excess of:
Net Investment Income		(0.15	)		(0.20	)		(0.22	)
Paid-in-Capital		—			(0.00	)⁽³⁾		(0.06	)
Total Distributions		(0.15	)		(0.20	)		(0.28	)
Net Asset Value, End of Period	$	10.38		$	10.51		$	9.06
Total Return⁽⁴⁾		0.39	%		18.35	%		(6.70	)%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	17,942		$	10,728		$	9,033
Ratio of Expenses Before Expense Limitation		2.93	%		3.82	%		4.76	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		0.77	%⁽⁵⁾		0.76	%⁽⁵⁾		0.76	%⁽⁵⁾⁽⁷⁾
Ratio of Net Investment Income		1.68	%⁽⁵⁾		1.88	%⁽⁵⁾		2.52	%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%⁽⁷⁾
Portfolio Turnover Rate		68	%		65	%		26	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Not annualized.

(7) Annualized.

	Class A
	Year Ended December 31,						Period from June 18, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	10.53		$	9.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.11			0.15			0.11
Net Realized and Unrealized Gain (Loss)		(0.12	)		1.47			(0.79	)
Total from Investment Operations		(0.01	)		1.62			(0.68	)
Distributions from and/or in Excess of:
Net Investment Income		(0.11	)		(0.15	)		(0.20	)
Paid-in-Capital		—			(0.00	)⁽³⁾		(0.06	)
Total Distributions		(0.11	)		(0.15	)		(0.26	)
Net Asset Value, End of Period	$	10.41		$	10.53		$	9.06
Total Return⁽⁴⁾		0.07	%		17.93	%		(6.90	)%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	43		$	42		$	9
Ratio of Expenses Before Expense Limitation		10.61	%		7.63	%		22.79	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		1.14	%⁽⁵⁾		1.14	%⁽⁵⁾		1.14	%⁽⁵⁾⁽⁷⁾
Ratio of Net Investment Income		1.18	%⁽⁵⁾		1.46	%⁽⁵⁾		2.18	%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%⁽⁷⁾
Portfolio Turnover Rate		68	%		65	%		26	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Not annualized.

(7) Annualized.

	Class C
	Year Ended December 31,						Period from June 18, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	10.50		$	9.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.05			0.07			0.07
Net Realized and Unrealized Gain (Loss)		(0.14	)		1.48			(0.79	)
Total from Investment Operations		(0.09	)		1.55			(0.72	)
Distributions from and/or in Excess of:
Net Investment Income		(0.05	)		(0.11	)		(0.16	)
Paid-in-Capital		—			(0.00	)⁽³⁾		(0.06	)
Total Distributions		(0.05	)		(0.11	)		(0.22	)
Net Asset Value, End of Period	$	10.36		$	10.50		$	9.06
Total Return⁽⁴⁾		(0.81	)%		17.12	%		(7.27	)%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	218		$	172		$	9
Ratio of Expenses Before Expense Limitation		5.10	%		8.50	%		23.55	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		1.89	%⁽⁵⁾		1.89	%⁽⁵⁾		1.89	%⁽⁵⁾⁽⁷⁾
Ratio of Net Investment Income		0.54	%⁽⁵⁾		0.68	%⁽⁵⁾		1.37	%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%⁽⁷⁾
Portfolio Turnover Rate		68	%		65	%		26	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Not annualized.

(7) Annualized.

	Class IS
	Year Ended December 31,						Period from June 18, 2018⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			December 31, 2018
Net Asset Value, Beginning of Period	$	10.51		$	9.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.16			0.19			0.13
Net Realized and Unrealized Gain (Loss)		(0.13	)		1.47			(0.79	)
Total from Investment Operations		0.03			1.66			(0.66	)
Distributions from and/or in Excess of:
Net Investment Income		(0.16	)		(0.21	)		(0.22	)
Paid-in-Capital		—			(0.00	)⁽³⁾		(0.06	)
Total Distributions		(0.16	)		(0.21	)		(0.28	)
Net Asset Value, End of Period	$	10.38		$	10.51		$	9.06
Total Return⁽⁴⁾		0.42	%		18.37	%		(6.69	)%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11		$	11		$	9
Ratio of Expenses Before Expense Limitation		22.80	%		22.24	%		22.53	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		0.74	%⁽⁵⁾		0.74	%⁽⁵⁾		0.74	%⁽⁵⁾⁽⁷⁾
Ratio of Net Investment Income		1.62	%⁽⁵⁾		1.90	%⁽⁵⁾		2.53	%⁽⁵⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%		0.01	%		0.01	%⁽⁷⁾
Portfolio Turnover Rate		68	%		65	%		26	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value as of the last business day of the period.

(6) Not annualized.

(7) Annualized.

The accompanying financial statements relate to the Real Assets Portfolio. The Fund seeks total return, targeted to be in excess of inflation, through capital appreciation and current income.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) futures are valued at the settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (5) when market quotations are not readily available, including circumstances under which the Adviser or Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and

other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Automobiles	$	56	$	37	$	—	$	93
Banks		241		85		—		326
Beverages		62		—		—		62
Biotechnology		26		33		—		59
Capital Markets		37		—		—		37
Chemicals		66		130		—		196
Commercial Services & Supplies		115		93		—		208
Construction & Engineering		—		264		—		264
Consumer Finance		44		—		—		44
Diversified Financial Services		83		—		—		83
Diversified Telecommunication Services		27		154		—		181
Electric Utilities		322		109		—		431
Electrical Equipment		—		47		—		47
Entertainment		86		—		—		86
Equity Real Estate Investment Trusts (REITs)		2,918		1,255		—		4,173
Food & Staples Retailing		28		29		—		57
Food Products		—		68		—		68
Gas Utilities		82		152		—		234
Health Care Equipment & Supplies		134		—		—		134
Health Care Providers & Services		47		—		—		47
Hotels, Restaurants & Leisure		74		—		—		74
Household Durables		39		—		—		39
Household Products		47		—		—		47
Independent Power & Renewable Electricity Producers		135		—		—		135
Industrial Conglomerates		35		40		—		75
Information Technology Services		202		36		—		238
Insurance		106		31		—		137
Interactive Media & Services		184		—		—		184
Internet & Direct Marketing Retail		124		—		—		124
Life Sciences Tools & Services		32		—		—		32
Machinery		33		—		—		33
Media		35		—		—		35
Metals & Mining		—		47		—		47
Multi-Line Retail		—		46		—		46
Multi-Utilities		266		196		—		462
Oil, Gas & Consumable Fuels		698		48		—		746
Pharmaceuticals		105		147		—		252
Professional Services		—		43		—		43

Investment Type	Level 1 Unadjusted quoted prices (000)			Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Real Estate Management & Development	$	—	@	$	900	$	—	$	900
Road & Rail		147			101		—		248
Semiconductors & Semiconductor Equipment		134			43		—		177
Software		253			24		—		277
Specialty Retail		35			—		—		35
Tech Hardware, Storage & Peripherals		215			—		—		215
Textiles, Apparel & Luxury Goods		—			86		—		86
Trading Companies & Distributors		—			189		—		189
Transportation Infrastructure		157			484		—		641
Water Utilities		181			64		—		245
Total Common Stocks		7,611			4,981		—		12,592
Warrant		—	@		—		—		—	@
U.S. Treasury Securities		—			4,163		—		4,163
Short-Term Investments
Investment Company		1,738			—		—		1,738
Repurchase Agreements		—			49		—		49
Total Short-Term Investments		1,738			49		—		1,787
Total Assets	$	9,349		$	9,193	$	—	$	18,542

@ Value is less than $500.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

– investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

– investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

5. Treasury Inflation-Protected Securities: The Fund may invest in Treasury Inflation-Protected Securities ("TIPS"), including structured bonds in which the principal amount is adjusted daily to keep pace with inflation, as measured by the U.S. Consumer Pricing Index for Urban Consumers. The adjustments to principal due to inflation/deflation are reflected as increases/decreases to interest income with a corresponding adjustment to cost. Such adjustments may have a significant impact on the Fund's distributions and may result in a return of capital to shareholders. The repayment of the original bond principal upon maturity is guaranteed by the full faith and credit of the U.S. Government.

6. Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing

interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser and/or Sub-Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return and the potential loss from futures contracts can exceed the Fund's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

As of December 31, 2020, the Fund did not have any open futures contracts.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815") is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Funds use derivative instruments, how these derivative instruments are accounted for and their effects on a Fund's financial position and results of operations.

The following tables set forth by primary risk exposure the Fund's realized gain(loss) and change in unrealized appreciation (depreciation) by type of derivative contract for the period ended December 31, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Interest Rate Risk	Futures Contracts	$	(15	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Interest Rate Risk	Futures Contracts	$	(2	)

For the period ended December 31, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Futures Contracts:
Average monthly notional value				$	36,000

7. Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of December 31, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	395	(a)	$	—	$	(395	)(b)(c)	$	0

(a) Represents market value of loaned securities at year end.

(b) The Fund received cash collateral of approximately $354,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $63,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	354	$	—	$	—	$	—	$	354
Total Borrowings	$	354	$	—	$	—	$	—	$	354
Gross amount of recognized liabilities for securities lending transactions									$	354

9. Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid quarterly. Net realized capital gains, if any, are distributed at least annually.

doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion				Over $1 billion
	0.60	%			0.55	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.80% for Class I shares, 1.15% for Class A shares, 1.90% for Class C shares and 0.75% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time that the Directors act to discontinue all or a portion of such waivers or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $85,000 of advisory fees were waived and approximately $225,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $12,074,000 and $7,265,000, respectively. For the year ended December 31, 2020, purchases and sales of long-term U.S. Government securities were approximately $2,824,000 and $1,796,000, respectively.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	442			$	7,871			$	6,575			$	2

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	1,738

executed at the current market price in compliance with provisions of the Rule. For the year ended December 31, 2020, the Fund did not engage in any cross-trade transactions.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the three-year period ended December 31, 2020 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for

tax purposes. The tax character of distributions paid during fiscal years 2020 and 2019 was as follows:

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Paid-in- Capital (000)
$	236	$	—	$	203	$	3

Permanent differences, primarily due to a prior year distribution in excess of current earnings, resulted in the following reclassifications among the components of net assets at December 31, 2020:

Total Distributable Earnings (000)				Paid-in Capital (000)
$	12			$	(12	)

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	53			$	—

At December 31, 2020, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $361,000 and $288,000, respectively, that do not have an expiration date.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
Real Assets Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Real Assets Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the two years in the period then ended and the period from June 18, 2018 (commencement of operations) through December 31, 2018 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Real Assets Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the two years in the period then ended and the period from June 18, 2018 (commencement of operations) through December 31, 2018, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
US Core Portfolio Class I	$	1,000.00	$	1,265.40	$	1,021.11	$	4.56	$	4.06		0.80	%
US Core Portfolio Class A		1,000.00		1,263.70		1,019.56		6.32		5.63		1.11
US Core Portfolio Class C		1,000.00		1,259.20		1,015.58		10.79		9.63		1.90
US Core Portfolio Class IS		1,000.00		1,266.10		1,021.37		4.27		3.81		0.75

** Annualized.

Performance Compared to the S&P 500^® Index⁽¹⁾, the Lipper Multi-Cap Growth Funds Index⁽²⁾ and the Lipper Large-Cap Core Funds Index⁽³⁾

	Period Ended December 31, 2020 Total Returns⁽⁴⁾
				Average Annual
	One Year			Five Years		Ten Years		Since Inception⁽⁶⁾
Fund — Class I Shares w/o sales charges⁽⁵⁾		24.20	%		—		—		14.89	%
Fund — Class A Shares w/o sales charges⁽⁵⁾		23.77			—		—		14.48
Fund — Class A Shares with maximum 5.25% sales charges⁽⁵⁾		17.26			—		—		13.16
Fund — Class C Shares w/o sales charges⁽⁵⁾		22.84			—		—		13.62
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁵⁾		21.84			—		—		13.62
Fund — Class IS Shares w/o sales charges⁽⁵⁾		24.27			—		—		14.93
S&P 500^® Index		18.40			—		—		15.77
Lipper Multi-Cap Growth Funds Index		43.16			—		—		21.82
Lipper Large-Cap Core Funds Index		16.10			—		—		14.49

⁽³⁾ The Lipper Large-Cap Core Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Large-Cap Core Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index.

⁽⁵⁾ Commenced operations on May 27, 2016.

⁽⁶⁾ For comparative purposes, average annual since inception returns listed for the Indexes refer to the inception date of the Fund, not the inception of the Index.

	Shares		Value (000)
Common Stocks (98.4%)
Banks (12.0%)
First Republic Bank		10,512	$	1,545
JPMorgan Chase & Co.		6,479		823
SVB Financial Group (a)		3,012		1,168
				3,536
Building Products (1.7%)
Fortune Brands Home & Security, Inc.		5,820		499
Capital Markets (3.9%)
Ameriprise Financial, Inc.		5,999		1,166
Commercial Services & Supplies (1.5%)
Waste Management, Inc.		3,728		440
Electric Utilities (2.8%)
NextEra Energy, Inc.		10,611		819
Entertainment (2.0%)
Cinemark Holdings, Inc.		13,756		240
Live Nation Entertainment, Inc. (a)		5,013		368
				608
Equity Real Estate Investment Trusts (REITs) (4.8%)
STORE Capital Corp. REIT		41,564		1,412
Health Care Equipment & Supplies (6.6%)
Danaher Corp.		5,680		1,262
Edwards Lifesciences Corp. (a)		1,166		106
West Pharmaceutical Services, Inc.		2,101		595
				1,963
Health Care Providers & Services (2.3%)
Cigna Corp.		3,261		679
Health Care Technology (2.2%)
Veeva Systems, Inc., Class A (a)		2,428		661
Hotels, Restaurants & Leisure (10.6%)
Carnival Corp.		13,292		288
Domino's Pizza, Inc.		3,047		1,168
MGM Resorts International		36,112		1,138
Planet Fitness, Inc., Class A (a)		6,913		537
				3,131
Household Durables (1.7%)
Lennar Corp., Class A		6,510		496
Information Technology Services (6.3%)
Mastercard, Inc., Class A		5,223		1,864
Interactive Media & Services (3.5%)
Alphabet, Inc., Class A (a)		586		1,027
Oil, Gas & Consumable Fuels (1.8%)
Chevron Corp.		6,390		539
Personal Products (3.6%)
Estee Lauder Cos., Inc. (The), Class A		3,996		1,064
Software (12.0%)
Adobe, Inc. (a)		1,407		704
Microsoft Corp.		10,932		2,431
ServiceNow, Inc. (a)		763		420
				3,555

	Shares		Value (000)
Specialty Retail (3.7%)
Home Depot, Inc. (The)		4,112	$	1,092
Tech Hardware, Storage & Peripherals (9.0%)
Apple, Inc.		20,008		2,655
Textiles, Apparel & Luxury Goods (2.9%)
Lululemon Athletica, Inc. (a)		2,457		855
Trading Companies & Distributors (3.5%)
United Rentals, Inc. (a)		4,481		1,039
Total Common Stocks (Cost $20,332)				29,100
Short-Term Investment (1.6%)
Investment Company (1.6%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $459)		458,811		459
Total Investments (100.0%) (Cost $20,791) (b)				29,559
Liabilities in Excess of Other Assets (0.0%) (c)				(4	)
Net Assets (100.0%)			$	29,555

(a) Non-income producing security.

(b) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $20,830,000. The aggregate gross unrealized appreciation is approximately $8,734,000 and the aggregate gross unrealized depreciation is approximately $5,000, resulting in net unrealized appreciation of approximately $8,729,000.

REIT Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		43.5	%
Software		12.0
Banks		12.0
Hotels, Restaurants & Leisure		10.6
Tech Hardware, Storage & Peripherals		9.0
Health Care Equipment & Supplies		6.6
Information Technology Services		6.3
Total Investments		100.0	%

* Industries and/or investment types representing less than 5% of total investments.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $20,332)	$	29,100
Investment in Security of Affiliated Issuer, at Value (Cost $459)		459
Total Investments in Securities, at Value (Cost $20,791)		29,559
Receivable for Fund Shares Sold		191
Due from Adviser		24
Dividends Receivable		16
Receivable from Affiliate		—	@
Other Assets		26
Total Assets		29,816
Liabilities:
Payable for Investments Purchased		175
Payable for Fund Shares Redeemed		54
Payable for Professional Fees		18
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class C		3
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class C		—	@
Payable for Custodian Fees		2
Payable for Administration Fees		2
Payable for Sub Transfer Agency Fees — Class I		1
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Other Liabilities		4
Total Liabilities		261
Net Assets	$	29,555
Net Assets Consist of:
Paid-in-Capital	$	21,273
Total Distributable Earnings		8,282
Net Assets	$	29,555
CLASS I:
Net Assets	$	20,377
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,126,427
Net Asset Value, Offering and Redemption Price Per Share	$	18.09
CLASS A:
Net Assets	$	5,807
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		322,857
Net Asset Value, Redemption Price Per Share	$	17.99
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.00
Maximum Offering Price Per Share	$	18.99
CLASS C:
Net Assets	$	3,353
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		191,525
Net Asset Value, Offering and Redemption Price Per Share	$	17.51
CLASS IS:
Net Assets	$	18
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,017
Net Asset Value, Offering and Redemption Price Per Share	$	18.10

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers	$	220
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		221
Expenses:
Advisory Fees (Note B)		109
Professional Fees		108
Registration Fees		56
Shareholder Reporting Fees		36
Shareholder Services Fees — Class A (Note D)		9
Distribution and Shareholder Services Fees — Class C (Note D)		24
Administration Fees (Note C)		15
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		2
Custodian Fees (Note F)		7
Directors' Fees and Expenses		5
Sub Transfer Agency Fees — Class I		3
Sub Transfer Agency Fees — Class A		2
Sub Transfer Agency Fees — Class C		1
Pricing Fees		2
Interest Expenses		1
Other Expenses		13
Total Expenses		399
Waiver of Advisory Fees (Note B)		(109	)
Expenses Reimbursed by Adviser (Note B)		(104	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		184
Net Investment Income		37
Realized Loss:
Investments Sold		(496	)
Change in Unrealized Appreciation (Depreciation):
Investments		4,188
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		3,692
Net Increase in Net Assets Resulting from Operations	$	3,729

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	37		$	69
Net Realized Gain (Loss)		(496	)		263
Net Change in Unrealized Appreciation (Depreciation)		4,188			3,862
Net Increase in Net Assets Resulting from Operations		3,729			4,194
Dividends and Distributions to Shareholders:
Class I		(58	)		(171	)
Class A		(16	)		(30	)
Class C		(9	)		(16	)
Class IS		(—	@)		(—	@)
Total Dividends and Distributions to Shareholders		(83	)		(217	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		9,406			2,907
Distributions Reinvested		58			171
Redeemed		(4,434	)		(280	)
Class A:
Subscribed		2,711			1,732
Distributions Reinvested		16			30
Redeemed		(1,283	)		(872	)
Class C:
Subscribed		1,177			1,100
Distributions Reinvested		9			16
Redeemed		(735	)		(736	)
Class IS:
Subscribed		—			10
Distributions Reinvested		—	@		—	@
Redeemed		(10	)		—
Net Increase in Net Assets Resulting from Capital Share Transactions		6,915			4,078
Total Increase in Net Assets		10,561			8,055
Net Assets:
Beginning of Period		18,994			10,939
End of Period	$	29,555		$	18,994
(1) Capital Share Transactions:
Class I:
Shares Subscribed		570			214
Shares Issued on Distributions Reinvested		3			12
Shares Redeemed		(342	)		(23	)
Net Increase in Class I Shares Outstanding		231			203
Class A:
Shares Subscribed		176			132
Shares Issued on Distributions Reinvested		1			2
Shares Redeemed		(87	)		(70	)
Net Increase in Class A Shares Outstanding		90			64
Class C:
Shares Subscribed		75			84
Shares Issued on Distributions Reinvested		1			1
Shares Redeemed		(59	)		(57	)
Net Increase in Class C Shares Outstanding		17			28
Class IS:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		(1	)		—
Net Increase (Decrease) in Class IS Shares Outstanding		(1	)		1

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,												Period from May 27, 2016⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	14.61		$	10.89		$	12.41		$	10.45		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.06			0.09			0.11			0.08			0.07
Net Realized and Unrealized Gain (Loss)		3.47			3.82			(1.47	)		1.94			0.48
Total from Investment Operations		3.53			3.91			(1.36	)		2.02			0.55
Distributions from and/or in Excess of:
Net Investment Income		—			(0.09	)		(0.05	)		(0.05	)		(0.10	)
Net Realized Gain		(0.05	)		(0.10	)		(0.11	)		—			—
Paid-in-Capital		—			—			—			(0.01	)		—
Total Distributions		(0.05	)		(0.19	)		(0.16	)		(0.06	)		(0.10	)
Net Asset Value, End of Period	$	18.09		$	14.61		$	10.89		$	12.41		$	10.45
Total Return⁽³⁾		24.20	%		36.01	%		(11.00	)%		19.33	%		5.50	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	20,377		$	13,086		$	7,532		$	8,965		$	7,314
Ratio of Expenses Before Expense Limitation		1.97	%		2.09	%		2.31	%		2.78	%		3.62	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		0.80	%⁽⁴⁾		0.78	%⁽⁴⁾		0.80	%⁽⁴⁾		0.78	%⁽⁴⁾		0.77	%⁽⁴⁾⁽⁷⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.79	%⁽⁴⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.42	%⁽⁴⁾		0.71	%⁽⁴⁾		0.86	%⁽⁴⁾		0.68	%⁽⁴⁾		1.12	%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾⁽⁷⁾
Portfolio Turnover Rate		54	%		69	%		60	%		57	%		28	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

	Class A
	Year Ended December 31,												Period from May 27, 2016⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	14.58		$	10.86		$	12.38		$	10.44		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.01			0.05			0.07			0.04			0.04
Net Realized and Unrealized Gain (Loss)		3.45			3.82			(1.47	)		1.92			0.49
Total from Investment Operations		3.46			3.87			(1.40	)		1.96			0.53
Distributions from and/or in Excess of:
Net Investment Income		—			(0.05	)		(0.01	)		(0.01	)		(0.09	)
Net Realized Gain		(0.05	)		(0.10	)		(0.11	)		—			—
Paid-in-Capital		—			—			—			(0.01	)		—
Total Distributions		(0.05	)		(0.15	)		(0.12	)		(0.02	)		(0.09	)
Net Asset Value, End of Period	$	17.99		$	14.58		$	10.86		$	12.38		$	10.44
Total Return⁽³⁾		23.77	%		35.68	%		(11.35	)%		18.80	%		5.30	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	5,807		$	3,393		$	1,833		$	1,874		$	1,406
Ratio of Expenses Before Expense Limitation		2.29	%		2.46	%		2.68	%		3.23	%		4.12	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		1.12	%⁽⁴⁾		1.15	%⁽⁴⁾		1.15	%⁽⁴⁾		1.15	%⁽⁴⁾		1.15	%⁽⁴⁾⁽⁷⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.11	%⁽⁴⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.07	%⁽⁴⁾		0.34	%⁽⁴⁾		0.55	%⁽⁴⁾		0.31	%⁽⁴⁾		0.66	%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾⁽⁷⁾
Portfolio Turnover Rate		54	%		69	%		60	%		57	%		28	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

	Class C
	Year Ended December 31,												Period from May 27, 2016⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	14.30		$	10.70		$	12.28		$	10.41		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss⁽²⁾		(0.10	)		(0.05	)		(0.03	)		(0.05	)		(0.00	)⁽³⁾
Net Realized and Unrealized Gain (Loss)		3.36			3.75			(1.44	)		1.92			0.48
Total from Investment Operations		3.26			3.70			(1.47	)		1.87			0.48
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.07	)
Net Realized Gain		(0.05	)		(0.10	)		(0.11	)		—			—
Total Distributions		(0.05	)		(0.10	)		(0.11	)		—			(0.07	)
Net Asset Value, End of Period	$	17.51		$	14.30		$	10.70		$	12.28		$	10.41
Total Return⁽⁴⁾		22.84	%		34.50	%		(11.94	)%		17.96	%		4.79	%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,353		$	2,489		$	1,563		$	1,831		$	1,377
Ratio of Expenses Before Expense Limitation		3.07	%		3.23	%		3.44	%		3.94	%		4.99	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		1.90	%⁽⁵⁾		1.90	%⁽⁵⁾		1.90	%⁽⁵⁾		1.90	%⁽⁵⁾		1.90	%⁽⁵⁾⁽⁸⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.90	%⁽⁵⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(0.68	)%⁽⁵⁾		(0.39	)%⁽⁵⁾		(0.22	)%⁽⁵⁾		(0.43	)%⁽⁵⁾		(0.05	)%⁽⁵⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾⁽⁸⁾
Portfolio Turnover Rate		54	%		69	%		60	%		57	%		28	%⁽⁷⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Amount is less than $0.005 per share.

(4) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

	Class IS
	Year Ended December 31,												Period from May 27, 2016⁽¹⁾ to
Selected Per Share Data and Ratios	2020			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	14.61		$	10.88		$	12.41		$	10.45		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.07			0.10			0.12			0.08			0.07
Net Realized and Unrealized Gain (Loss)		3.47			3.83			(1.48	)		1.94			0.48
Total from Investment Operations		3.54			3.93			(1.36	)		2.02			0.55
Distributions from and/or in Excess of:
Net Investment Income		—			(0.10	)		(0.06	)		(0.01	)		(0.10	)
Net Realized Gain		(0.05	)		(0.10	)		(0.11	)		—			—
Paid-in-Capital		—			—			—			(0.05	)		—
Total Distributions		(0.05	)		(0.20	)		(0.17	)		(0.06	)		(0.10	)
Net Asset Value, End of Period	$	18.10		$	14.61		$	10.88		$	12.41		$	10.45
Total Return⁽³⁾		24.27	%		36.17	%		(11.04	)%		19.37	%		5.52	%⁽⁶⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	18		$	26		$	11		$	12		$	10
Ratio of Expenses Before Expense Limitation		13.73	%		16.90	%		16.44	%		19.96	%		19.22	%⁽⁷⁾
Ratio of Expenses After Expense Limitation		0.75	%⁽⁴⁾		0.75	%⁽⁴⁾		0.75	%⁽⁴⁾		0.75	%⁽⁴⁾		0.75	%⁽⁴⁾⁽⁷⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.75	%⁽⁴⁾		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.50	%⁽⁴⁾		0.74	%⁽⁴⁾		0.92	%⁽⁴⁾		0.71	%⁽⁴⁾		1.17	%⁽⁴⁾⁽⁷⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾		0.00	%⁽⁵⁾⁽⁷⁾
Portfolio Turnover Rate		54	%		69	%		60	%		57	%		28	%⁽⁶⁾

(1) Commencement of Operations.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Amount is less than 0.005%.

(6) Not annualized.

(7) Annualized.

The accompanying financial statements relate to the US Core Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a

pricing service and/or procedures approved by the Directors; and (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	3,536	$	—	$	—	$	3,536
Building Products		499		—		—		499
Capital Markets		1,166		—		—		1,166
Commercial Services & Supplies		440		—		—		440
Electric Utilities		819		—		—		819
Entertainment		608		—		—		608
Equity Real Estate Investment Trusts (REITs)		1,412		—		—		1,412
Health Care Equipment & Supplies		1,963		—		—		1,963
Health Care Providers & Services		679		—		—		679
Health Care Technology		661		—		—		661
Hotels, Restaurants & Leisure		3,131		—		—		3,131
Household Durables		496		—		—		496
Information Technology Services		1,864		—		—		1,864
Interactive Media & Services		1,027		—		—		1,027

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Oil, Gas & Consumable Fuels	$	539	$	—	$	—	$	539
Personal Products		1,064		—		—		1,064
Software		3,555		—		—		3,555
Specialty Retail		1,092		—		—		1,092
Tech Hardware, Storage & Peripherals		2,655		—		—		2,655
Textiles, Apparel & Luxury Goods		855		—		—		855
Trading Companies & Distributors		1,039		—		—		1,039
Total Common Stocks		29,100		—		—		29,100
Short-Term Investment
Investment Company		459		—		—		459
Total Assets	$	29,559	$	—	$	—	$	29,559

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

First $750 million				Next $750 million				Over $1.5 billion
	0.60	%			0.55	%			0.50	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.80% for Class I shares, 1.15% for Class A shares, 1.90% for Class C shares and 0.75% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $109,000 of advisory fees were waived and approximately $106,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $16,644,000 and $9,882,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	83			$	10,169			$	9,793			$	1

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	459

2020 Distributions Paid From:				2019 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	—	$	83	$	92	$	125

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	34			$	—

At December 31, 2020, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $456,000 that do not have an expiration date.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
US Core Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of US Core Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the four years in the period then ended and the period from May 27, 2016 (commencement of operations) through December 31, 2016 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of US Core Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the four years in the period then ended and the period from May 27, 2016 (commencement of operations) through December 31, 2016, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended December 31, 2020 and held for the entire six-month period.

Actual Expenses

Hypothetical Example for Comparison Purposes

	Beginning Account Value 7/1/20		Actual Ending Account Value 12/31/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
U.S. Real Estate Portfolio Class I	$	1,000.00	$	1,153.80	$	1,020.61	$	4.87	$	4.57		0.90	%
U.S. Real Estate Portfolio Class A		1,000.00		1,152.10		1,018.85		6.76		6.34		1.25
U.S. Real Estate Portfolio Class L		1,000.00		1,149.60		1,016.34		9.46		8.87		1.75
U.S. Real Estate Portfolio Class C		1,000.00		1,146.90		1,015.08		10.79		10.13		2.00
U.S. Real Estate Portfolio Class IS		1,000.00		1,154.40		1,020.96		4.49		4.22		0.83
U.S. Real Estate Portfolio Class IR		1,000.00		1,154.40		1,020.96		4.49		4.22		0.83

** Annualized.

The Fund seeks to provide above average current income and long-term capital appreciation by investing primarily in equity securities of companies in the U.S. real estate industry, including real estate investment trusts ("REITs").

Performance

For the fiscal year ended December 31, 2020, the Fund's Class I shares had a total return based on net asset value and reinvestment of distributions per share of –18.05%, net of fees. The Fund's Class I shares underperformed the Fund's benchmark, the FTSE Nareit Equity REITs Index (the "Index"), which returned –8.00%, and underperformed the S&P 500® Index, which returned 18.40%.

Factors Affecting Performance

• U.S. real estate securities declined during 2020 as the impacts of COVID-19 and the widespread economic and social shutdowns experienced in the country disproportionately impacted fundamentals for the property sector. Real estate securities did recover throughout the year, as markets responded positively to fiscal and monetary stimulus policies. Additionally, the sector was supported by relatively stable earnings and dividends and improving rent collection data. Importantly, real estate posted strong gains in the fourth quarter of 2020, after a strong rally in November on news that the Pfizer-BioNTech and Moderna vaccines were over 90% effective in preventing COVID-19.

• The largest declines for the year were experienced in the retail, hotel and office property sectors.

• Retail real estate experienced a pullback for the year given the direct impact social distancing and quarantining measures have had on earnings. The retail sector underperformed as malls declined 37.5% and shopping centers declined 27.7% for the full year.⁽ⁱ⁾ The temporary closure of a significant faction of retail real estate impaired cash rent collections. Additionally, the strain that the pandemic has placed on retail tenants has called into question the solvency of such tenants going forward, leading to greater uncertainty in cash flow projections for retail landlords.

• The Fund's security selection and overweight allocation to regional malls detracted from

Performance Compared to the FTSE Nareit Equity REITs Index⁽¹⁾, the S&P 500^® Index⁽²⁾ and the Lipper Real Estate Funds Index⁽³⁾

	Period Ended December 31, 2020 Total Returns⁽⁴⁾
				Average Annual
	One Year			Five Years			Ten Years			Since Inception⁽¹¹⁾
Fund — Class I Shares w/o sales charges⁽⁵⁾		–18.05	%		–0.40	%		5.12	%		9.98	%
Fund — Class A Shares w/o sales charges⁽⁶⁾		–18.28			–0.70			4.81			9.16
Fund — Class A Shares with maximum 5.25% sales charges⁽⁶⁾		–22.61			–1.77			4.25			8.92
Fund — Class L Shares w/o sales charges⁽⁷⁾		–18.77			–1.24			—			4.28
Fund — Class C Shares w/o sales charges⁽⁹⁾		–18.91			–1.48			—			–0.85
Fund — Class C Shares with maximum 1.00% deferred sales charges⁽⁹⁾		–19.71			–1.48			—			–0.85
Fund — Class IS Shares w/o sales charges⁽⁸⁾		–17.98			–0.32			—			3.90
Fund — Class IR Shares w/o sales charges⁽¹⁰⁾		–17.98			—			—			–3.38
FTSE Nareit Equity REITs Index		–8.00			4.77			8.31			9.90
S&P 500^® Index		18.40			15.22			13.88			10.31
Lipper Real Estate Funds Index		–2.91			5.75			8.42			N/A

⁽¹⁾ The FTSE Nareit (National Association of Real Estate Investment Trusts) Equity REITs Index is free float-adjusted market capitalization weighted index of tax-qualified REITs listed on the New York Stock Exchange, NYSE Amex and the NASDAQ National Market Systems. Effective December 20, 2010, the FTSE Nareit Equity REITs Index will not include "Timber REITs" The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

⁽²⁾ The Standard & Poor's 500^® Index (S&P 500^® Index) measures the performance of the large cap segment of the U.S. equities market, covering approximately 80% of the U.S. equities market. The Index includes 500 leading companies in leading industries of the U.S. economy. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

	Shares		Value (000)
Common Stocks (96.8%)
Apartments (15.3%)
American Campus Communities, Inc. REIT		9,641	$	413
Apartment Income Corp. REIT (a)		12,733		489
AvalonBay Communities, Inc. REIT		14,449		2,318
Camden Property Trust REIT		9,206		920
Equity Residential REIT		32,307		1,915
Essex Property Trust, Inc. REIT		3,416		811
UDR, Inc. REIT		6,716		258
				7,124
Data Centers (9.9%)
Digital Realty Trust, Inc. REIT		17,467		2,437
Equinix, Inc. REIT		2,639		1,885
QTS Realty Trust, Inc., Class A REIT		4,870		301
				4,623
Diversified (4.5%)
JBG SMITH Properties REIT		26,991		844
Mack-Cali Realty Corp. REIT		27,199		339
VEREIT, Inc. REIT		24,732		934
				2,117
Free Standing (1.4%)
NETSTREIT Corp. REIT		34,337		669
Health Care (11.8%)
Healthcare Realty Trust, Inc. REIT		34,810		1,030
Healthcare Trust of America, Inc., Class A REIT		14,323		394
Healthpeak Properties, Inc. REIT		43,946		1,329
Medical Properties Trust, Inc. REIT		38,867		847
Sabra Health Care, Inc. REIT		19,095		332
Ventas, Inc. REIT		23,027		1,129
Welltower, Inc. REIT		7,199		465
				5,526
Industrial (10.7%)
Duke Realty Corp. REIT		7,956		318
Exeter Industrial Value Fund, LP (a)(b)(c)		7,905,000		530
First Industrial Realty Trust, Inc. REIT		3,949		166
Granite REIT (Canada)		4,207		258
Prologis, Inc. REIT		37,229		3,710
				4,982
Lodging/Resorts (6.0%)
Host Hotels & Resorts, Inc. REIT		80,517		1,178
RLJ Lodging Trust REIT		37,454		530
Sunstone Hotel Investors, Inc. REIT		96,876		1,098
				2,806
Manufactured Homes (1.6%)
Equity Lifestyle Properties, Inc. REIT		11,499		729
Office (12.5%)
Alexandria Real Estate Equities, Inc. REIT		3,742		667
Boston Properties, Inc. REIT		14,614		1,381
Cousins Properties, Inc. REIT		21,187		710
Douglas Emmett, Inc. REIT		7,843		229
Highwoods Properties, Inc. REIT		4,366		173

	Shares		Value (000)
Hudson Pacific Properties, Inc. REIT		48,144	$	1,156
Kilroy Realty Corp. REIT		9,751		560
Paramount Group, Inc. REIT		1,452		13
SL Green Realty Corp. REIT		16,113		960
				5,849
Regional Malls (5.0%)
Simon Property Group, Inc. REIT		27,401		2,337
Self Storage (7.1%)
CubeSmart REIT		28,922		972
Public Storage REIT		10,225		2,361
				3,333
Shopping Centers (5.2%)
Brixmor Property Group, Inc. REIT		50,889		842
Regency Centers Corp. REIT		19,054		869
Weingarten Realty Investors REIT		32,506		704
				2,415
Single Family Homes (4.2%)
Invitation Homes, Inc. REIT		65,987		1,960
Specialty (1.6%)
Gaming and Leisure Properties, Inc. REIT		16,995		721
Total Common Stocks (Cost $34,097)				45,191
Short-Term Investment (2.3%)
Investment Company (2.3%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $1,051)		1,051,214		1,051
Total Investments (99.1%) (Cost $35,148) (d)				46,242
Other Assets in Excess of Liabilities (0.9%)				429
Net Assets (100.0%)			$	46,671

(a) Non-income producing security.

(b) Restricted security valued at fair value and not registered under the Securities Act of 1933. Exeter Industrial Value Fund, LP was acquired between 11/07 — 4/11 and has a current cost basis of approximately $0. At December 31, 2020, this security had an aggregate market value of approximately $530,000, representing 1.1% of net assets.

(c) At December 31, 2020, the Fund held a fair valued security valued at approximately $530,000, representing 1.1% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(d) At December 31, 2020, the aggregate cost for federal income tax purposes is approximately $38,712,000. The aggregate gross unrealized appreciation is approximately $8,207,000 and the aggregate gross unrealized depreciation is approximately $677,000, resulting in net unrealized appreciation of approximately $7,530,000.

REIT Real Estate Investment Trust.

Statement of Assets and Liabilities	December 31, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $34,097)	$	45,191
Investment in Security of Affiliated Issuer, at Value (Cost $1,051)		1,051
Total Investments in Securities, at Value (Cost $35,148)		46,242
Foreign Currency, at Value (Cost $1)		1
Dividends Receivable		321
Receivable for Investments Sold		267
Receivable for Fund Shares Sold		18
Receivable from Affiliate		—	@
Other Assets		78
Total Assets		46,927
Liabilities:
Payable for Fund Shares Redeemed		72
Payable for Advisory Fees		65
Payable for Professional Fees		19
Payable for Sub Transfer Agency Fees — Class I		19
Payable for Sub Transfer Agency Fees — Class A		7
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class I		3
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		2
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Custodian Fees		6
Payable for Shareholder Services Fees — Class A		2
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Administration Fees		3
Other Liabilities		53
Total Liabilities		256
Net Assets	$	46,671
Net Assets Consist of:
Paid-in-Capital	$	48,572
Total Accumulated Loss		(1,901	)
Net Assets	$	46,671

Statement of Assets and Liabilities (cont'd)	December 31, 2020 (000)
CLASS I:
Net Assets	$	33,708
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,834,193
Net Asset Value, Offering and Redemption Price Per Share	$	8.79
CLASS A:
Net Assets	$	11,043
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,318,203
Net Asset Value, Redemption Price Per Share	$	8.38
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.46
Maximum Offering Price Per Share	$	8.84
CLASS L:
Net Assets	$	1,586
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		189,688
Net Asset Value, Offering and Redemption Price Per Share	$	8.36
CLASS C:
Net Assets	$	206
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		24,725
Net Asset Value, Offering and Redemption Price Per Share	$	8.31
CLASS IS:
Net Assets	$	121
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		13,786
Net Asset Value, Offering and Redemption Price Per Share	$	8.79
CLASS IR:
Net Assets	$	7
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		812
Net Asset Value, Offering and Redemption Price Per Share	$	8.79

@ Amount is less than $500.

Statement of Operations	Year Ended December 31, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $ — @ of foreign Taxes Withheld)	$	2,131
Dividends from Security of Affiliated Issuer (Note G)		3
Total Investment Income		2,134
Expenses:
Advisory Fees (Note B)		626
Sub Transfer Agency Fees — Class I		56
Sub Transfer Agency Fees — Class A		23
Sub Transfer Agency Fees — Class L		1
Sub Transfer Agency Fees — Class C		—	@
Professional Fees		100
Administration Fees (Note C)		72
Shareholder Services Fees — Class A (Note D)		43
Distribution and Shareholder Services Fees — Class L (Note D)		12
Distribution and Shareholder Services Fees — Class C (Note D)		2
Registration Fees		85
Shareholder Reporting Fees		54
Transfer Agency Fees — Class I (Note E)		11
Transfer Agency Fees — Class A (Note E)		7
Transfer Agency Fees — Class L (Note E)		3
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		5
Transfer Agency Fees — Class IR (Note E)		2
Custodian Fees (Note F)		19
Directors' Fees and Expenses		3
Pricing Fees		3
Interest Expenses		1
Other Expenses		15
Total Expenses		1,145
Waiver of Advisory Fees (Note B)		(235	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(20	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(5	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		877
Net Investment Income		1,257
Realized Loss:
Investments Sold		(7,920	)
Foreign Currency Translation		(—	@)
Net Realized Loss		(7,920	)
Change in Unrealized Appreciation (Depreciation):
Investments		(36,112	)
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		(36,112	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(44,032	)
Net Decrease in Net Assets Resulting from Operations	$	(42,775	)

@ Amount is less than $500.

Statements of Changes in Net Assets	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,257		$	4,955
Net Realized Gain (Loss)		(7,920	)		19,067
Net Change in Unrealized Appreciation (Depreciation)		(36,112	)		17,154
Net Increase (Decrease) in Net Assets Resulting from Operations		(42,775	)		41,176
Dividends and Distributions to Shareholders:
Class I		(1,465	)		(21,074	)
Class A		(330	)		(4,680	)
Class L		(30	)		(293	)
Class C		(3	)		(31	)
Class IS		(94	)		(1,835	)
Class IR		(—	@)		(1	)
Paid-in-Capital:
Class I		(273	)		—
Class A		(62	)		—
Class L		(5	)		—
Class C		(1	)		—
Class IS		(17	)		—
Class IR		(—	@)		—
Total Dividends and Distributions to Shareholders		(2,280	)		(27,914	)
Capital Share Transactions:⁽¹⁾
Class I:
Subscribed		10,619			19,431
Distributions Reinvested		1,717			20,897
Redeemed		(81,226	)		(92,286	)
Class A:
Subscribed		2,945			5,250
Distributions Reinvested		388			4,645
Redeemed		(16,948	)		(13,017	)
Class L:
Exchanged		209			—
Distributions Reinvested		35			290
Redeemed		(394	)		(239	)
Class C:
Subscribed		62			56
Distributions Reinvested		4			31
Redeemed		(41	)		(205	)
Class IS:
Subscribed		484			1,331
Distributions Reinvested		111			1,835
Redeemed		(8,403	)		(23,192	)
Class IR:
Distributions Reinvested		—	@		1
Net Decrease in Net Assets Resulting from Capital Share Transactions		(90,438	)		(75,172	)
Total Decrease in Net Assets		(135,493	)		(61,910	)
Net Assets:
Beginning of Period		182,164			244,074
End of Period	$	46,671		$	182,164

Statements of Changes in Net Assets (cont'd)	Year Ended December 31, 2020 (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		1,302			1,610
Shares Issued on Distributions Reinvested		240			1,882
Shares Redeemed		(9,879	)		(7,745	)
Net Decrease in Class I Shares Outstanding		(8,337	)		(4,253	)
Class A:
Shares Subscribed		365			454
Shares Issued on Distributions Reinvested		58			440
Shares Redeemed		(2,193	)		(1,127	)
Net Decrease in Class A Shares Outstanding		(1,770	)		(233	)
Class L:
Shares Exchanged		28			—
Shares Issued on Distributions Reinvested		5			28
Shares Redeemed		(48	)		(21	)
Net Increase (Decrease) in Class L Shares Outstanding		(15	)		7
Class C:
Shares Subscribed		8			4
Shares Issued on Distributions Reinvested		1			3
Shares Redeemed		(6	)		(18	)
Net Increase (Decrease) in Class C Shares Outstanding		3			(11	)
Class IS:
Shares Subscribed		53			110
Shares Issued on Distributions Reinvested		17			164
Shares Redeemed		(1,167	)		(1,893	)
Net Decrease in Class IS Shares Outstanding		(1,097	)		(1,619	)
Class IR:
Shares Issued on Distributions Reinvested		—	@@		—	@@

@ Amount is less than $500.

@@ Amount is less than 500 shares.

	Class I
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	11.08		$	10.82		$	15.24		$	17.21		$	17.86
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.13			0.26			0.34			0.37			0.31
Net Realized and Unrealized Gain (Loss)		(2.18	)		1.69			(1.33	)		0.16			0.91
Total from Investment Operations		(2.05	)		1.95			(0.99	)		0.53			1.22
Distributions from and/or in Excess of:
Net Investment Income		(0.20	)		(0.40	)		(0.34	)		(0.26	)		(0.38	)
Net Realized Gain		—			(1.29	)		(3.09	)		(2.24	)		(1.49	)
Paid-in-Capital		(0.04	)		—			—			—			—
Total Distributions		(0.24	)		(1.69	)		(3.43	)		(2.50	)		(1.87	)
Net Asset Value, End of Period	$	8.79		$	11.08		$	10.82		$	15.24		$	17.21
Total Return⁽³⁾		(18.05	)%		18.40	%		(8.44	)%		3.31	%		6.79	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	33,708		$	134,856		$	177,690		$	331,637		$	494,967
Ratio of Expenses Before Expense Limitation		1.19	%		1.02	%		1.02	%		1.02	%		1.02	%
Ratio of Expenses After Expense Limitation		0.90	%⁽⁴⁾		0.90	%⁽⁴⁾		0.95	%⁽⁴⁾⁽⁵⁾		1.00	%⁽⁴⁾		1.00	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.90	%⁽⁴⁾		N/A			0.95	%⁽⁴⁾		1.00	%⁽⁴⁾		N/A
Ratio of Net Investment Income		1.52	%⁽⁴⁾		2.18	%⁽⁴⁾		2.44	%⁽⁴⁾		2.19	%⁽⁴⁾		1.73	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		39	%		21	%		39	%		43	%		24	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.90% for Class I shares. Prior to July 1, 2018, the maximum ratio was 1.00% for Class I shares.

(6) Amount is less than 0.005%.

	Class A
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	10.56		$	10.38		$	14.76		$	16.74		$	17.42
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.09			0.22			0.29			0.31			0.24
Net Realized and Unrealized Gain (Loss)		(2.06	)		1.61			(1.28	)		0.15			0.89
Total from Investment Operations		(1.97	)		1.83			(0.99	)		0.46			1.13
Distributions from and/or in Excess of:
Net Investment Income		(0.17	)		(0.36	)		(0.30	)		(0.20	)		(0.32	)
Net Realized Gain		—			(1.29	)		(3.09	)		(2.24	)		(1.49	)
Paid-in-Capital		(0.04	)		—			—			—			—
Total Distributions		(0.21	)		(1.65	)		(3.39	)		(2.44	)		(1.81	)
Net Asset Value, End of Period	$	8.38		$	10.56		$	10.38		$	14.76		$	16.74
Total Return⁽³⁾		(18.28	)%		18.02	%		(8.71	)%		2.98	%		6.47	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11,043		$	32,596		$	34,459		$	55,640		$	76,082
Ratio of Expenses Before Expense Limitation		1.52	%		1.31	%		1.30	%		N/A			1.30	%
Ratio of Expenses After Expense Limitation		1.25	%⁽⁴⁾		1.22	%⁽⁴⁾		1.26	%⁽⁴⁾⁽⁵⁾		1.34	%⁽⁴⁾		1.29	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.25	%⁽⁴⁾		N/A			1.26	%⁽⁴⁾		1.34	%⁽⁴⁾		N/A
Ratio of Net Investment Income		1.09	%⁽⁴⁾		1.91	%⁽⁴⁾		2.14	%⁽⁴⁾		1.87	%⁽⁴⁾		1.37	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		39	%		21	%		39	%		43	%		24	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class A shares. Prior to July 1, 2018, the maximum ratio was 1.35% for Class A shares.

(6) Amount is less than 0.005%.

	Class L
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	10.55		$	10.37		$	14.74		$	16.73		$	17.41
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.09			0.16			0.23			0.22			0.15
Net Realized and Unrealized Gain (Loss)		(2.11	)		1.61			(1.28	)		0.15			0.89
Total from Investment Operations		(2.02	)		1.77			(1.05	)		0.37			1.04
Distributions from and/or in Excess of:
Net Investment Income		(0.13	)		(0.30	)		(0.23	)		(0.12	)		(0.23	)
Net Realized Gain		—			(1.29	)		(3.09	)		(2.24	)		(1.49	)
Paid-in-Capital		(0.04	)		—			—			—			—
Total Distributions		(0.17	)		(1.59	)		(3.32	)		(2.36	)		(1.72	)
Net Asset Value, End of Period	$	8.36		$	10.55		$	10.37		$	14.74		$	16.73
Total Return⁽³⁾		(18.77	)%		17.43	%		(9.16	)%		2.37	%		5.91	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,586		$	2,164		$	2,057		$	2,787		$	3,471
Ratio of Expenses Before Expense Limitation		2.11	%		1.88	%		1.84	%		1.89	%		1.84	%
Ratio of Expenses After Expense Limitation		1.75	%⁽⁴⁾		1.75	%⁽⁴⁾		1.79	%⁽⁴⁾⁽⁵⁾		1.85	%⁽⁴⁾		1.84	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		1.75	%⁽⁴⁾		N/A			1.79	%⁽⁴⁾		1.85	%⁽⁴⁾		N/A
Ratio of Net Investment Income		1.41	%⁽⁴⁾		1.42	%⁽⁴⁾		1.71	%⁽⁴⁾		1.37	%⁽⁴⁾		0.84	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		39	%		21	%		39	%		43	%		24	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.75% for Class L shares. Prior to July 1, 2018, the maximum ratio was 1.85% for Class L shares.

(6) Amount is less than 0.005%.

	Class C
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	10.48		$	10.31		$	14.68		$	16.67		$	17.36
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.09			0.14			0.19			0.20			0.13
Net Realized and Unrealized Gain (Loss)		(2.10	)		1.59			(1.29	)		0.13			0.87
Total from Investment Operations		(2.01	)		1.73			(1.10	)		0.33			1.00
Distributions from and/or in Excess of:
Net Investment Income		(0.12	)		(0.27	)		(0.18	)		(0.08	)		(0.20	)
Net Realized Gain		—			(1.29	)		(3.09	)		(2.24	)		(1.49	)
Paid-in-Capital		(0.04	)		—			—			—			—
Total Distributions		(0.16	)		(1.56	)		(3.27	)		(2.32	)		(1.69	)
Net Asset Value, End of Period	$	8.31		$	10.48		$	10.31		$	14.68		$	16.67
Total Return⁽³⁾		(18.91	)%		17.07	%		(9.47	)%		2.14	%		5.72	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	206		$	232		$	338		$	486		$	427
Ratio of Expenses Before Expense Limitation		3.39	%		2.92	%		2.75	%		2.46	%		3.13	%
Ratio of Expenses After Expense Limitation		2.00	%⁽⁴⁾		2.00	%⁽⁴⁾		2.05	%⁽⁴⁾⁽⁵⁾		2.10	%⁽⁴⁾		2.10	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		2.00	%⁽⁴⁾		N/A			2.05	%⁽⁴⁾		2.10	%⁽⁴⁾		N/A
Ratio of Net Investment Income		1.20	%⁽⁴⁾		1.18	%⁽⁴⁾		1.39	%⁽⁴⁾		1.21	%⁽⁴⁾		0.73	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		39	%		21	%		39	%		43	%		24	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5) Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.00% for Class C shares. Prior to July 1, 2018, the maximum ratio was 2.10% for Class C shares.

(6) Amount is less than 0.005%.

	Class IS
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			2018			2017			2016⁽¹⁾
Net Asset Value, Beginning of Period	$	11.08		$	10.82		$	15.24		$	17.22		$	17.86
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.09			0.25			0.28			0.39			0.33
Net Realized and Unrealized Gain (Loss)		(2.13	)		1.71			(1.26	)		0.14			0.92
Total from Investment Operations		(2.04	)		1.96			(0.98	)		0.53			1.25
Distributions from and/or in Excess of:
Net Investment Income		(0.21	)		(0.41	)		(0.35	)		(0.27	)		(0.40	)
Net Realized Gain		—			(1.29	)		(3.09	)		(2.24	)		(1.49	)
Paid-in-Capital		(0.04	)		—			—			—			—
Total Distributions		(0.25	)		(1.70	)		(3.44	)		(2.51	)		(1.89	)
Net Asset Value, End of Period	$	8.79		$	11.08		$	10.82		$	15.24		$	17.22
Total Return⁽³⁾		(17.98	)%		18.48	%		(8.36	)%		3.32	%		6.96	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	121		$	12,307		$	29,523		$	196,536		$	195,490
Ratio of Expenses Before Expense Limitation		1.20	%		1.04	%		0.97	%		N/A			0.90	%
Ratio of Expenses After Expense Limitation		0.83	%⁽⁴⁾		0.83	%⁽⁴⁾		0.91	%⁽⁴⁾⁽⁵⁾		0.93	%⁽⁴⁾		0.89	%⁽⁴⁾
Ratio of Expenses After Expense Limitation Excluding Interest Expenses		0.83	%⁽⁴⁾		N/A			0.91	%⁽⁴⁾		0.93	%⁽⁴⁾		N/A
Ratio of Net Investment Income		1.00	%⁽⁴⁾		2.09	%⁽⁴⁾		1.98	%⁽⁴⁾		2.33	%⁽⁴⁾		1.79	%⁽⁴⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Portfolio Turnover Rate		39	%		21	%		39	%		43	%		24	%

(1) Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.83% for Class IS shares. Prior to July 1, 2018, the maximum ratio was 0.93% for Class IS shares.

(6) Amount is less than 0.005%.

	Class IR
	Year Ended December 31,
Selected Per Share Data and Ratios	2020			2019			Period from June 15, 2018⁽¹⁾ to December 31, 2018
Net Asset Value, Beginning of Period	$	11.08		$	10.82		$	14.74
Income (Loss) from Investment Operations:
Net Investment Income⁽²⁾		0.20			0.33			0.43
Net Realized and Unrealized Gain (Loss)		(2.24	)		1.63			(0.98	)
Total from Investment Operations		(2.04	)		1.96			(0.55	)
Distributions from and/or in Excess of:
Net Investment Income		(0.21	)		(0.41	)		(0.28	)
Net Realized Gain		—			(1.29	)		(3.09	)
Paid-in-Capital		(0.04	)		—			—
Total Distributions		(0.25	)		(1.70	)		(3.37	)
Net Asset Value, End of Period	$	8.79		$	11.08		$	10.82
Total Return⁽³⁾		(17.98	)%		18.48	%		(5.73	)%⁽⁷⁾
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	7		$	9		$	7
Ratio of Expenses Before Expense Limitation		30.10	%		23.80	%		19.12	%⁽⁸⁾
Ratio of Expenses After Expense Limitation		0.83	%⁽⁴⁾		0.83	%⁽⁴⁾		0.84	%^(4)(5)(8)
Ratios of Expenses After Expense Limitation Excluding Interest Expenses		0.83	%⁽⁴⁾		N/A			0.84	%⁽⁴⁾⁽⁸⁾
Ratio of Net Investment Income		2.40	%⁽⁵⁾		2.70	%⁽⁴⁾		4.23	%⁽⁴⁾⁽⁸⁾
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾⁽⁸⁾
Portfolio Turnover Rate		39	%		21	%		39	%

(1) Commencement of Offering.

(2) Per share amount is based on average shares outstanding.

(3) Calculated based on the net asset value as of the last business day of the period.

(5) Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.83% for Class IR shares. Prior to July 1, 2018, the maximum ratio was 0.93% for Class IR shares.

(6) Amount is less than 0.005%.

(7) Not annualized.

(8) Annualized.

The accompanying financial statements relate to the U.S. Real Estate Portfolio. The Fund seeks to provide above average current income and long-term capital appreciation by investing primarily in equity securities of companies in the U.S. real estate industry, including real estate investment trusts ("REITs"). The Fund has a capital subscription commitment to an investee company for this same purpose, the details of which are disclosed in the Unfunded Commitments note.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions. in addition, Class L shares of the Fund may be exchanged for Class L shares of any Morgan Stanley Multi-Class Fund, even though Class L shares are closed to investors.

curity is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at

their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Fund invests a significant portion of its assets in securities of REITs. The market's perception of prospective declines in private real estate values and other financial assets may result in increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Fund.

2. Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codifi-

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Apartments	$	7,124	$	—	$	—	$	7,124
Data Centers		4,623		—		—		4,623
Diversified		2,117		—		—		2,117
Free Standing		669		—		—		669
Health Care		5,526		—		—		5,526
Industrial		4,452		—		530		4,982
Lodging/Resorts		2,806		—		—		2,806
Manufactured Homes		729		—		—		729
Office		5,849		—		—		5,849
Regional Malls		2,337		—		—		2,337
Self Storage		3,333		—		—		3,333
Shopping Centers		2,415		—		—		2,415
Single Family Homes		1,960		—		—		1,960
Specialty		721		—		—		721
Total Common Stocks		44,661		—		530		45,191
Short-Term Investment
Investment Company		1,051		—		—		1,051
Total Assets	$	45,712	$	—	$	530	$	46,242

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stock (000)
Beginning Balance	$	546
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		(16	)
Realized gains (losses)		—
Ending Balance	$	530
Net change in unrealized depreciation from investments still held as of December 31, 2020	$	(16	)

4. Unfunded Commitments: Subject to the terms of a Subscription Agreement between the Fund and Exeter Industrial Value Fund LP, the Fund has made a subscription commitment of $8,500,000 for which it will receive 8,500,000 shares of common stock. As of December 31, 2020, Exeter Industrial Value Fund LP has drawn down approximately $7,905,000, which represents 93.0% of the commitment.

5. Restricted Securities: The Fund invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered

or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

7. Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid quarterly. Net realized capital gains, if any, are distributed at least annually.

8. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are

allocated to each class of shares based upon their relative net assets.

First $500 million				Next $500 million				Over $1 billion
	0.70	%			0.65	%			0.60	%

For the year ended December 31, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.44% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.90% for Class I shares, 1.25% for Class A shares, 1.75% for Class L shares, 2.00% for Class C shares, 0.83% for Class IS shares and 0.83% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the year ended December 31, 2020, approximately $235,000 of advisory fees were waived and approximately $32,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the year ended December 31, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $34,734,000 and $124,004,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the year ended December 31, 2020, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2020 is as follows:

Affiliated Investment Company				Value December 31, 2019 (000)				Purchases at Cost (000)				Proceeds from Sales (000)				Dividend Income (000)
Liquidity Funds				$	1,251			$	23,259			$	23,459			$	3

Affiliated Investment Company (cont'd)				Realized Gain (Loss) (000)				Change in Unrealized Appreciation (Depreciation) (000)				Value December 31, 2020 (000)
Liquidity Funds				$	—			$	—			$	1,051

Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

2020 Distributions Paid From:						2019 Distributions Paid From:
Ordinary Income (000)		Paid-in- Capital (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	1,906	$	358	$	16	$	6,211	$	21,703

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations

which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2020.

At December 31, 2020, the Fund had no distributable earnings on a tax basis.

At December 31, 2020, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $898,000 and $8,502,000, respectively, that do not have an expiration date.

To the Shareholders and Board of Directors of
Morgan Stanley Institutional Fund, Inc. —
U.S. Real Estate Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of U.S. Real Estate Portfolio (the "Fund") (one of the funds constituting Morgan Stanley Institutional Fund, Inc. (the "Company")), including the portfolio of investments, as of December 31, 2020, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of U.S. Real Estate Portfolio (one of the funds constituting Morgan Stanley Institutional Fund, Inc.) at December 31, 2020, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.
Boston, Massachusetts
February 26, 2021

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions? Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?				Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Independent Directors:

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Frank L. Bowman
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1944

Director

Since August 2006

Kathleen A. Dennis
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1953

Director

Since August 2006

Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations.

Nancy C. Everett
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1955

Director

Since January 2015

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Jakki L. Haussler
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1957

Director

Since January 2015

Dr. Manuel H. Johnson
c/o Johnson Smick International, Inc.
220 I Street, NE — Suite 200
Washington, D.C. 20002
Birth Year: 1949

Director

Since July 1991

Director of NVR, Inc. (home construction).

Independent Directors (cont'd):

Name, Address and Birth
Year of Independent Director

Position(s)
Held with
Registrant

Length of Time
Served*

Principal Occupation(s) During Past 5 Years and Other
Relevant Professional Experience

Number of
Funds
in Fund Complex
Overseen by
Independent
Director**

Other Directorships
Held by Independent
Director***

Joseph J. Kearns
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1942

Director

Since August 1994

Director, Rubicon Investment (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation.

Michael F. Klein
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1958

Director

Since August 2006

Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals).

Patricia Maleski
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1960

Director

Since January 2017

None.

W. Allen Reed
c/o Perkins Coie LLP
Counsel to the Independent Directors
1155 Avenue of the Americas,
22nd Floor
New York, NY 10036
Birth Year: 1947

Chair of the Board and Director

Chair of the Boards since August 2020 and Director since August 2006

Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015).

* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

Executive Officers:

Name, Address and
Birth Year of Executive Officer

Position(s) Held
with
Registrant

Length of
Time Served*

Principal Occupation(s) During Past 5 Years

John H. Gernon
522 Fifth Avenue
New York, NY 10036
Birth Year: 1963

President and Principal Executive Officer

Since September 2013

Timothy J. Knierim
1633 Broadway
New York, NY 10019
Birth Year: 1959

Chief Compliance Officer

Since December 2016

Francis J. Smith
522 Fifth Avenue
New York, NY 10036
Birth Year: 1965

Treasurer and Principal Financial Officer

Treasurer since July 2003 and Principal Financial Officer since September 2002

Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002).

Mary E. Mullin
1633 Broadway
New York, NY 10019
Birth Year: 1967

Secretary

Since June 1999

Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999).

Michael J. Key
522 Fifth Avenue
New York, NY 10036
Birth Year: 1979

Vice President

Since June 2017

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected and qualifies.

Reporting to Shareholders

Proxy Voting Policies and Procedures and Proxy Voting Record

(a) The registrant has adopted a code of ethics (the "Code of Ethics") that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.

The registrant's Board of Directors has determined that Joseph J. Kearns, an “independent” Trustee, is an “audit committee financial expert" serving on its audit committee. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Directors in the absence of such designation or identification.

(e)(1) The audit committee’s pre-approval policies and procedures are as follows:

The Audit Committee of the Board is required to review and, in its sole discretion, pre-approve all Covered Services to be provided by the Independent Auditors to the Fund and Covered Entities in order to assure that services performed by the Independent Auditors do not impair the auditor’s independence from the Fund.

The SEC has issued rules specifying the types of services that an independent auditor may not provide to its audit client, as well as the audit committee’s administration of the engagement of the independent auditor. The SEC’s rules establish two different approaches to pre-approving services, which the SEC considers to be equally valid. Proposed services either: may be pre-approved without consideration of specific case-by-case services by the Audit Committee (“general pre-approval”); or require the specific pre-approval of the Audit Committee or its delegate (“specific pre-approval”). The Audit Committee believes that the combination of these two approaches in this Policy will result in an effective and efficient procedure to pre-approve services performed by the Independent Auditors. As set forth in this Policy, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee (or by any member of the Audit Committee to which pre-approval authority has been delegated) if it is to be provided by the Independent Auditors. Any proposed services exceeding pre-approved cost levels or budgeted amounts will also require specific pre-approval by the Audit Committee.

The appendices to this Policy describe the Audit, Audit-related, Tax and All Other services that have the general pre-approval of the Audit Committee. The term of any general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee considers and provides a different period and states otherwise. The Audit Committee will annually review and pre-approve the services that may be provided by the Independent Auditors without obtaining specific pre-approval from the Audit Committee. The Audit Committee will add to or subtract from the list of general pre-approved services from time to time, based on subsequent determinations.

The purpose of this Policy is to set forth the policy and procedures by which the Audit Committee intends to fulfill its responsibilities. It does not delegate the Audit Committee’s responsibilities to pre-approve services performed by the Independent Auditors to management.

The Fund’s Independent Auditors have reviewed this Policy and believes that implementation of the Policy will not adversely affect the Independent Auditors’ independence.

³ This Audit Committee Audit and Non-Audit Services Pre-Approval Policy and Procedures (the “Policy”), adopted as of the date above, supersedes and replaces all prior versions that may have been adopted from time to time.

As provided in the Act and the SEC’s rules, the Audit Committee may delegate either type of pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting.

The annual Audit services engagement terms and fees are subject to the specific pre-approval of the Audit Committee. Audit services include the annual financial statement audit and other procedures required to be performed by the Independent Auditors to be able to form an opinion on the Fund’s financial statements. These other procedures include information systems and procedural reviews and testing performed in order to understand and place reliance on the systems of internal control, and consultations relating to the audit. The Audit Committee will approve, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope, Fund structure or other items.

In addition to the annual Audit services engagement approved by the Audit Committee, the Audit Committee may grant general pre-approval to other Audit services, which are those services that only the Independent Auditors reasonably can provide. Other Audit services may include statutory audits and services associated with SEC registration statements (on Forms N-1A, N-2, N-3, N-4, etc.), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings.

The Audit Committee has pre-approved the Audit services in Appendix A. All other Audit services not listed in Appendix A must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Fund’s financial statements and, to the extent they are Covered Services, the Covered Entities or that are traditionally performed by the Independent Auditors. Because the Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor and is consistent with the SEC’s rules on auditor independence, the Audit Committee may grant general pre-approval to Audit-related services. Audit-related services include, among others, accounting consultations related to accounting, financial reporting or disclosure matters not classified as “Audit services”; assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities; agreed-upon or expanded audit procedures related to accounting and/or billing records required to respond to or comply with financial, accounting or regulatory reporting matters; and assistance with internal control reporting requirements under Forms N-CEN and/or N-CSR.

The Audit Committee has pre-approved the Audit-related services in Appendix A. All other Audit-related services not listed in Appendix A must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

The Audit Committee believes that the Independent Auditors can provide Tax services to the Fund and, to the extent they are Covered Services, the Covered Entities, such as tax compliance, tax planning and tax advice without impairing the auditor’s independence, and the SEC has stated that the Independent Auditors may provide such services.

Pursuant to the preceding paragraph, the Audit Committee has pre-approved the Tax Services in Appendix A. All Tax services in Appendix A must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

The Audit Committee believes, based on the SEC’s rules prohibiting the Independent Auditors from providing specific non-audit services, that other types of non-audit services are permitted. Accordingly, the Audit Committee believes it may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, would not impair the independence of the auditor and are consistent with the SEC’s rules on auditor independence.

The Audit Committee has pre-approved the All Other services in Appendix A. Permissible All Other services not listed in Appendix A must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

Pre-approval fee levels or budgeted amounts for all services to be provided by the Independent Auditors will be established annually by the Audit Committee. Any proposed services exceeding these levels or amounts will require specific pre-approval by the Audit Committee. The Audit Committee is mindful of the overall relationship of fees for audit and non-audit services in determining whether to pre-approve any such services.

All requests or applications for services to be provided by the Independent Auditors that do not require specific approval by the Audit Committee will be submitted to the Fund’s Principal Financial and Accounting Officer and must include a detailed description of the services to be rendered. The Fund’s Principal Financial and Accounting Officer will determine whether such services are included within the list of services that have received the general pre-approval of the Audit Committee. The Audit Committee will be informed on a timely basis of any such services rendered by the Independent Auditors. Requests or applications to provide services that require specific approval by the Audit Committee or Chairperson of the Audit Committee will be submitted to the Audit Committee by the Fund's Principal Financial and Accounting Officer, who, after consultation with the Independent Auditors, will discuss whether, the request or application is consistent with the SEC’s rules on auditor independence.

The Audit Committee has designated the Fund’s Principal Financial and Accounting Officer to monitor the performance of all services provided by the Independent Auditors and to determine whether such services are in compliance with this Policy. The Fund’s Principal Financial and Accounting Officer will report to the Audit Committee on a periodic basis on the results of its monitoring. Both the Fund’s Principal Financial and Accounting Officer and management will immediately report to the Chairperson of the Audit Committee any breach of this Policy that comes to the attention of the Fund’s Principal Financial and Accounting Officer or any member of management.

The Audit Committee has determined to take additional measures on an annual basis to meet its responsibility to oversee the work of the Independent Auditors and to assure the auditor’s independence from the Fund, such as reviewing a formal written statement from the Independent Auditors delineating all relationships between the Independent Auditors and the Fund, consistent with the PCAOB’s Ethics and Independence Rule 3526, and discussing with the Independent Auditors its methods and procedures for ensuring independence.

Covered Entities include the Fund’s investment adviser(s) and any entity controlling, controlled by or under common control with the Fund’s investment adviser(s) that provides ongoing services to the Fund(s). Beginning with non-audit service contracts entered into on or after May 6, 2003, the Fund’s audit committee must pre-approve non-audit services provided not only to the Fund but also to the Covered Entities if the engagements relate directly to the operations and financial reporting of the Fund. This list of Covered Entities would include:

(e)(2) Beginning with non-audit service contracts entered into on or after May 6, 2003, the audit committee also is required to pre-approve services to Covered Entities to the extent that the services are determined to have a direct impact on the operations or financial reporting of the Registrant. 100% of such services were pre-approved by the audit committee pursuant to the Audit Committee’s pre-approval policies and procedures (attached hereto).

(h) The audit committee of the Board of Directors has considered whether the provision of services other than audit services performed by the auditors to the Registrant and Covered Entities is compatible with maintaining the auditors' independence in performing audit services.

*Aggregate fees related to the pre-approved services will be limited to 10% of the 2020/2021 annual fees for audit and tax services (see fee schedule distributed by the Auditors).

** Audit and tax services for new funds/portfolios will be subject to the maximum audit and tax fee for a fund/portfolio on fee schedule distributed by the Auditors.

(a) The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act whose members are:

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

There have been no material changes to the procedures by which shareholders may recommend nominee to the Fund’s Board of Directors since the Fund last provided disclosure in response to this item.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

(b) There were no changes in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed End Management Investment Companies.

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.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

522 Fifth Avenue, New York, New York	10036
(Address of principal executive offices)	(Zip code)

Shareholders' Letter					2
Expense Example					3
Investment Overview					4
Portfolio of Investments					7
Statement of Assets and Liabilities					10
Statement of Operations					12
Statements of Changes in Net Assets					13
Financial Highlights					15
Notes to Financial Statements					21
Report of Independent Registered Public Accounting Firm					32
Liquidity Risk Management Program					33
Federal Tax Notice					34
Privacy Notice					35
Director and Officer Information					38

Qualified Late Year Ordinary Losses (000)				Post-October Capital Losses (000)
$	21			$	—

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	42,371			$	16,306

Classification	Percentage of Total Investments
Other**		43.5	%
Semiconductors & Semiconductor Equipment		15.5
Interactive Media & Services		9.4
Internet & Direct Marketing Retail		7.6
Banks		7.1
Tech Hardware, Storage & Peripherals		6.0
Beverages		5.6
Oil, Gas & Consumable Fuels		5.3
Total Investments		100.0	%

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	11,251			$	30,141

Classification	Percentage of Total Investments
Oil & Gas Storage & Transportation		27.0	%
Communications		18.0
Electricity Transmission & Distribution		13.4
Other**		11.0
Toll Roads		9.6
Water		8.4
Airports		6.3
Diversified		6.3
Total Investments		100.0	%

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	43,646			$	9,786

	Common Stocks (000)
Beginning Balance	$	147
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		(3	)
Realized gains (losses)		—
Ending Balance	$	144
Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2020	$	(3	)

	Shares		Value (000)
Short-Term Investment (2.8%)
Investment Company (2.8%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $98)		98,132	$	98
Total Investments Excluding Purchased Options (100.3%) (Cost $2,640)				3,450
Total Purchased Options Outstanding (0.1%) (Cost $11)				3
Total Investments (100.4%) (Cost $2,651) (b)				3,453
Liabilities in Excess of Other Assets (–0.4%)				(13	)
Net Assets (100.0%)			$	3,440

2020
	Registrant			Covered Entities⁽¹⁾
Audit Fees	$	1,458,418			N/A

Non-Audit Fees
Audit-Related Fees	$	—	⁽²⁾	$	—	⁽²⁾
Tax Fees	$	—	⁽³⁾	$	231,320	⁽⁴⁾
All Other Fees	$	—		$	—	⁽⁵⁾
Total Non-Audit Fees	$	—		$	231,320

Total	$	1,458,418		$	231,320

2019
	Registrant			Covered Entities⁽¹⁾
Audit Fees	$	1,501,837			N/A

Non-Audit Fees
Audit-Related Fees	$	—	⁽²⁾	$	—	⁽²⁾
Tax Fees	$	163,394	⁽³⁾	$	535,939	⁽⁴⁾
All Other Fees	$	—		$	30,000	⁽⁵⁾
Total Non-Audit Fees	$	163,394		$	565,939

Total	$	1,665,231		$	565,939

Service Range of Fees
	The Fund(s)	Covered Entities
Statutory audits or financial audits for the Funds	For a complete list of fees, please contact the legal department **	N/A
Services associated with SEC registration statements (including new fund filings/seed audits), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters for closed-end fund offerings, consents), and assistance in responding to SEC comment letters	*	*
Consultations by the Fund’s management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard setting bodies (Note: Under SEC rules, some consultations may be “audit related” services rather than “audit” services)	*	*

Identification of Passive Foreign Investment Companies	$150,000 PwC	*
PwC ITV Tool – assist in determining which Fund holdings have foreign capital gains tax exposure	$125,000 PwC	*
Foreign Tax Services - Preparation of local foreign tax returns and assistance with local tax compliance issues (including maintenance of transaction schedules, assistance in periodic tax remittances, tax registration, representing funds before foreign revenue authorities and assistance with assessment orders)	$500,000 PwC/EY	*
Assistance with tax audits and appeals before the IRS and similar state, local and foreign agencies	*	*
Tax advice and assistance regarding statutory, regulatory or administrative developments (e.g., excise tax reviews, evaluation of Fund’s tax compliance function)	*	*