N-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number		811-08455
Morgan Stanley Global Advantage Fund
(Exact name of registrant as specified in charter)
522 Fifth Avenue, New York, New York			10036
(Address of principal executive offices)			(Zip code)
Randy Takian 522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)
Registrant’s telephone number, including area code:		212-296-6963
Date of fiscal year end:	May 31, 2010
Date of reporting period:	August 31, 2009

Item 1.  Schedule of Investments.

The Fund’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:

Morgan Stanley Global Advantage Fund

Portfolio of Investments ·August 31, 2009 (unaudited)

NUMBER OF SHARES		VALUE
	Common Stocks (97.5%)
	Australia (2.3%)
	IT Services
346,905	Computershare Ltd. (a)	$	2,955,859
	Bermuda (7.6%)
	Distributors
886,040	Li & Fung Ltd. (a)(b)	2,926,957
	Food Products
1,469,000	China Yurun Food Group Ltd. (a)(b)	2,533,837
	Insurance
104,484	Axis Capital Holdings Ltd.	3,184,672
	Specialty Retail
200,600	Esprit Holdings Ltd. (a)(b)	1,223,070
	Total Bermuda	9,868,536
	Brazil (1.0%)
	IT Services
159,700	Companhia Brasileira de Meios de Pagamento	1,358,302
	China (1.7%)
	Oil, Gas & Consumable Fuels
550,500	China Shenhua Energy Co., Ltd. (a)	2,225,365
	Finland (1.4%)
	Electrical Equipment
46,741	Vacon Plc. (a)	1,756,780
	France (5.6%)
	Food Products
38,859	Groupe Danone S.A. (a)	2,115,139
	Hotels, Restaurants & Leisure
42,532	Sodexo (a)	2,452,752
	Pharmaceuticals
53,908	Ipsen S.A. (a)	2,667,531
	Total France	7,235,422
	Germany (8.8%)
	Health Care Providers & Services
90,938	Fresenius Medical Care AG & Co. (a)	4,089,505
	Internet Software & Services
208,800	United Internet AG (a)(c)	2,958,653
	IT Services
264,320	Wirecard AG (a)	2,781,926
	Textiles, Apparel & Luxury Goods
33,189	Adidas AG (a)	1,566,960
	Total Germany	11,397,044
	Ireland (1.7%)
	Life Sciences Tools & Services
103,900	Icon PLC (c)	2,246,318
	Israel (4.9%)
	Food Products
162,499	Strauss Group Ltd. (a)	1,895,454
	Pharmaceuticals
86,400	Teva Pharmaceutical Industries Ltd. (ADR)	4,449,600
	Total Israel	6,345,054
	Japan (5.5%)
	Food Products
42,900	Unicharm Petcare Corp. (a)	1,537,064
	Life Sciences Tools & Services
530	EPS Co., Ltd. (a)	2,175,437
	Real Estate Management & Development
72,100	Daito Trust Construction Co., Ltd. (a)	3,422,678
	Total Japan	7,135,179

	Mexico (1.9%)
	Beverages
68,200	Fomento Economico Mexicano S.A.B. de C.V. (ADR) (Units) (d)	$	2,481,116
	South Africa (1.9%)
	Pharmaceuticals
336,797	Aspen Pharmacare Holdings Ltd. (a)(c)	2,534,507
	South Korea (1.6%)
	Internet Software & Services
14,834	NHN Corp. (a)(c)	2,018,070
	Spain (4.0%)
	Commercial Banks
194,025	Banco Santander SA (a)	2,992,694
	Diversified Telecommunication Services
86,463	Telefonica SA (a)	2,183,086
	Total Spain	5,175,780
	Switzerland (1.9%)
	Life Sciences Tools & Services
25,715	Lonza Group AG (a)	2,526,506
	United Kingdom (13.8%)
	Beverages
154,497	SABMiller PLC (a)	3,580,068
	Capital Markets
486,745	Man Group PLC (a)	2,108,825
	Commercial Banks
136,500	Standard Chartered PLC (a)	3,098,206
	Internet Software & Services
315,100	Telecity Group PLC (a)(c)	1,738,050
	Pharmaceuticals
158,415	Shire PLC (a)	2,626,086
	Professional Services
240,167	Intertek Group PLC (a)	4,712,554
	Total United Kingdom	17,863,789
	United States (31.9%)
	Beverages
54,000	PepsiCo, Inc.	3,060,180
	Biotechnology
55,400	Gilead Sciences, Inc. (c)	2,496,324
	Chemicals
24,900	Monsanto Co.	2,088,612
	Commercial Services & Supplies
212,200	EnergySolutions, Inc.	1,884,336
	Computers & Peripherals
26,411	Apple, Inc. (c)	4,442,594
	Electrical Equipment
8,300	First Solar, Inc. (c)	1,009,114
	Electronic Equipment, Instruments & Components
88,100	Amphenol Corp. (Class A)	3,079,976
	Food Products
295,000	Smart Balance, Inc. (c)	1,885,050
	Health Care Equipment & Supplies
35,900	C.R. Bard, Inc.	2,892,822
33,600	West Pharmaceutical Services, Inc.	1,350,384
		4,243,206
	Insurance
64,900	Prudential Financial, Inc.	3,282,642
	Life Sciences Tools & Services
110,800	QIAGEN N.V. (c)	2,276,940

64,800	Thermo Fisher Scientific, Inc. (c)	$	2,929,608
		5,206,548
	Professional Services
53,600	FTI Consulting, Inc. (c)	2,333,744
	Specialty Retail
95,200	Staples, Inc.	2,057,272
	Wireless Telecommunication Services
208,400	MetroPCS Communications, Inc. (c)	1,658,864
114,900	NII Holdings, Inc. (c)	2,724,279
		4,383,143
	Total United States	41,452,741
	Total Common Stocks (Cost $128,663,231)	126,576,368

NUMBER OF SHARES (000)
	Short-Term Investment (e)(1.7%)
	Investment Company
2,161	Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class  (Cost $2,161,033)			2,161,033
	Total Investments (Cost $130,824,264) (f)	99.2	%	128,737,401
	Other Assets in Excess of Liabilities	0.8		1,063,323
	Net Assets	100.0	%	$	129,800,724

ADR	American Depositary Receipt.
(a)	Securities with a total market value equal to $71,403,619 have been valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund’s Trustees. Such fair value measurements may be level 2 measurements if observable inputs are available.
(b)	Security trades on a Hong Kong exchange.
(c)	Non-income producing security.
(d)	Consists of one or more class of securities traded together as a unit; stocks with attached warrants.
(e)	The Fund invests in Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class, an open-end management investment company managed by the Investment Adviser. Investment advisory fees paid by the Fund are reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class with respect to assets invested by the Fund in Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class.
(f)	The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes.

Forward Foreign Currency Contracts Open at August 31, 2009:

CURRENCY	CONTRACTS TO DELIVER	CURRENCY	IN EXCHANGE FOR	DELIVERY DATE	UNREALIZED APPRECIATION (DEPRECIATION)
$	682,346	EUR	979,918	09/01/2009	$	1,699
$	53,145	EUR	76,003	09/02/2009	(186		)
		Net Unrealized Appreciation			$	1,513

Currency Abbreviations:

EUREuro.

Summary of Investments

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Pharmaceuticals	$	12,277,724	9.5	%
Life Sciences Tools & Services	12,154,809		9.4
Food Products	9,966,544		7.7
Beverages	9,121,364		7.1
IT Services	7,096,087		5.5
Professional Services	7,046,298		5.5
Internet Software & Services	6,714,773		5.2
Insurance	6,467,314		5.0
Commercial Banks	6,090,900		4.7
Computers & Peripherials	4,442,594		3.5
Wireless Telecommunication Services	4,383,143		3.4
Health Care Equipment & Supplies	4,243,206		3.3
Health Care Providers & Services	4,089,505		3.2
Real Estate Management & Development	3,422,678		2.7
Specialty Retail	3,280,342		2.6
Electronic Equipment, Instruments & Components	3,079,976		2.4
Distributors	2,926,957		2.3
Electrical Equipment	2,765,894		2.2
Biotechnology	2,496,324		1.9
Hotels, Restaurants & Leisure	2,452,752		1.9
Oil, Gas & Consumable Fuels	2,225,365		1.7
Diversified Telecommunication Services	2,183,086		1.7
Investment Company	2,161,033		1.7
Capital Markets	2,108,825		1.6
Chemicals	2,088,612		1.6
Commercial Services & Supplies	1,884,336		1.5
Textiles, Apparel & Luxury Goods	1,566,960		1.2
	$	128,737,401	100.0	%

See Notes to Financial Statement

MS Global Advantage Fund

Notes to the Portfolio of Investments

SFAS 157 Disclosure

8/31/2009

The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), effective June 1, 2008.  In accordance with SFAS 157, fair value is defined as the price 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 marketthe most advantageous market for the investment or liability.  SFAS 157 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing 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 pricing an asset or liability developed baed 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)

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 as of August 31, 2009 in valuing the Fund’s investments carried at value:

	Fair Value Measurements at August 31, 2009 Using
				Unadjusted
				Quoted Prices In		Significant			Significant
				Active Market for		Other Observable			Unobservable
				Identical Investments		Inputs			Inputs
Investment Type	Total			(Level 1)		(Level 2)			(Level 3)
Assets
Common Stocks
Beverages	$	9,121,364		$	5,541,296	$	3,580,068		—
Biotechnology	2,496,324			2,496,324		—			—
Capital Markets	2,108,825			—		2,108,825			—
Chemicals	2,088,612			2,088,612		—			—
Commercial Banks	6,090,900			—		6,090,900			—
Commercial Services & Supplies	1,884,336			1,884,336		—			—
Computers & Peripherals	4,442,594			4,442,594		—			—
Distributors	2,926,957			—		2,926,957			—
Diversified Telecommunication Services	2,183,086			—		2,183,086			—
Electrical Equipment	2,765,894			1,009,114		1,756,780			—
Electronic Equipment, Instruments & Components	3,079,976			3,079,976		—			—
Food Products	9,966,544			1,885,050		8,081,494			—
Health Care Equipment & Supplies	4,243,206			4,243,206		—			—
Health Care Providers & Services	4,089,505			—		4,089,505			—
Hotels, Restaurants & Leisure	2,452,752			—		2,452,752			—
Insurance	6,467,314			6,467,314		—			—
Internet Software & Services	6,714,773			—		6,714,773			—
IT Services	7,096,087			1,358,302		5,737,785			—
Life Sciences Tools & Services	12,154,809			7,452,866		4,701,943			—
Oil, Gas & Consumable Fuels	2,225,365			—		2,225,365			—
Pharmaceuticals	12,277,724			4,449,600		7,828,124			—
Professional Services	7,046,298			2,333,744		4,712,554			—
Real Estate Management & Development	3,422,678			—		3,422,678			—
Specialty Retail	3,280,342			2,057,272		1,223,070			—
Textiles, Apparel & Luxury Goods	1,566,960			—		1,566,960			—
Wireless Telecommunication Services	4,383,143			4,383,143		—			—
Total Common Stocks	126,576,368			55,172,749		71,403,619			—
Short-Term Investment - Investment Company	2,161,033			2,161,033		—			—
Forward Foreign Currency Contracts	1,699			—		1,699			—
Total	$	128,739,100		$	57,333,782	$	71,405,318		—
Liabilities
Forward Foreign Currency Contracts	$	(186	)	—		$	(186	)	—

Valuation of Investments — (1) for equity securities traded on foreign exchanges, the last reported sale price or the latest bid price may be used if there were no sales on a particular day; (2) an equity portfolio security listed or traded on the New York Stock Exchange (“NYSE”) or American Stock Exchange or other exchange is valued at its latest sale price prior to the time when assets are valued; if there were no sales that day, the security is valued at the mean between the last reported bid and ask price; (3) an equity portfolio security listed or traded on the Nasdaq is valued at the Nasdaq Official Closing Price; if there were no sales that day, the security is valued at the mean between the last reported bid and ask price; (4) all other portfolio securities for which over-the-counter market quotations are readily available are valued at the mean between the last reported bid and ask price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (5) when market quotations are not readily available including circumstances under which Morgan Stanley Investment Advisors Inc. (the “Investment Adviser”) determines that the latest sale price, the bid price or the mean between the last reported bid and ask price do not reflect 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 Fund’s Trustees.  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 on the 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 Fund’s Trustees or by the Investment Adviser using a pricing service and/or procedures approved by the Trustees of the Fund; (6) certain portfolio securities may be valued by an outside pricing service approved by the Fund’s Trustees; (7) investments in open-end mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (8) short-term debt securities having a maturity date of more than sixty days at time of purchase are valued on a mark-to-market basis until sixty days prior to maturity and thereafter at amortized cost based on their value on the 61st day. Short-term debt securities having a maturity date of sixty days or less at the time of purchase are valued at amortized cost, which approximates market value.

Item 2.  Controls and Procedures.

(a) The Fund’s principal executive officer and principal financial officer have concluded that the Fund’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-Q 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 Fund’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

Item 3.  Exhibits.

(a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Morgan Stanley Global Advantage Fund

/s/ Randy Takian

Randy Takian

Principal Executive Officer

October 22, 2009

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.

/s/ Randy Takian

Randy Takian

Principal Executive Officer

October 22, 2009

/s/ Francis Smith

Francis Smith

Principal Financial Officer

October 22, 2009

EX-99.CERT

Exhibit 99.CERT

Exhibit 3 A1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Randy Takian, certify that:

1.I have reviewed this report on Form N-Q of Morgan Stanley Global Advantage Fund;

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

3.Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;

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

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

(b)Omitted;

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

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the 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; and

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

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

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

Date: October 22, 2009
	/s/ Randy Takian
	Randy Takian
	Principal Executive Officer

Exhibit 3 A2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Francis Smith, certify that:

1.I have reviewed this report on Form N-Q of Morgan Stanley Global Advantage Fund;

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

3.Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;

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

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

(b)Omitted;

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

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

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

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

Date: October 22, 2009
	/s/ Francis Smith
	Francis Smith
	Principal Financial Officer