Morgan Stanley S&P 500 Index Fund 1221 Avenue of the Americas New York, NY 10020 December 20, 2006 Securities and Exchange Commission Judiciary Plaza 100 F Street, NE Washington, DC 20549 Attention: Larry Greene, Division of Investment Management Mail Stop 0505 RE: MORGAN STANLEY S&P 500 INDEX FUND (FILE NOS. 333-29721 AND 811-8265) Dear Mr. Greene: Thank you for your telephonic comments regarding the registration statement on Form N-1A for Morgan Stanley S&P 500 Index Fund (the "Fund") filed with the Securities and Exchange Commission on October 26, 2006. Below, we describe the changes made to the registration statement in response to the Staff's comments and provide any responses to or any supplemental explanations of such comments, as requested. These changes will be reflected in post-effective amendment number 15 to the Fund's registration statement on Form N-1A, which will be filed via EDGAR on or about December 20, 2006. COMMENTS TO THE PROSPECTUS COMMENT 1. THE Q&A RELATING TO RULE 35D-1 STATES THAT THE STAFF EXPECTS THAT INDEX FUNDS WILL INVEST SUBSTANTIALLY MORE THAN 80% OF THEIR ASSETS IN INVESTMENTS CONNOTED BY THE APPLICABLE INDEX AND NOT JUST THE 80% MINIMUM OF RULE 35D-1. PLEASE EXPLAIN SUPPLEMENTALLY HOW THIS IS CONSISTENT WITH THE DISCLOSURE ON PAGE 1 OF THE PROSPECTUS STATING THAT THE FUND WILL "NORMALLY INVEST AT LEAST 80% OF ITS ASSETS IN COMMON STOCKS OF COMPANIES INCLUDED IN THE S&P 500 INDEX." Response 1. In the third paragraph under the "Principal Investment Strategies" section of the Prospectus, we further disclosure that the "Investment Adviser seeks a correlation between the performance of the Fund, before expenses, and that of the S&P 500 Index of 95% or better." This high correlation is expected to be achieved by the Fund's investing substantially more than 80% of its assets in the stocks of the S&P 500 Index, which we believe satisfies the requirements of Rule 35d-1 and the Staff's guidance with respect to Rule 35d-1. COMMENT 2. UNDER THE "PRINCIPAL INVESTMENT STRATEGIES" SECTION, IT STATES THAT THE FUND MAY INVEST IN EMERGING MARKET COUNTRIES. IF IT IS NOT ALREADY INCLUDED, PLEASE INCLUDE RISK DISCLOSURE REGARDING INVESTMENTS IN EMERGING MARKET COUNTRIES. Response 2. Risk disclosure regarding investments in emerging market countries is already included under the Additional Risk Information section of the prospectus. COMMENT 3. PLEASE CLARIFY SUPPLEMENTALLY WHETHER THE INVESTMENT ADVISER OR ANY AFFILIATES ARE ABLE TO RECOUP ANY OF THE WAIVED FEES REFERRED TO IN FOOTNOTE 7 OF THE FEE TABLE. Response 3. Neither the Investment Adviser nor any affiliates are able to recoup any fees waived. COMMENT 4. PLEASE CONFIRM WHETHER THE FEE WAIVER REFERRED TO IN FOOTNOTE 7 OF THE FEE TABLE CAN BE TERMINATED BY THE FUND'S BOARD OF TRUSTEES? Response 4. The Fund currently has two fee waivers in place: a contractual fee waiver set at 0.40% and an additional voluntary fee waiver set at 0.34%. The contractual waiver is a permanent contractual obligation and, as such, the Board may not terminate it. This contractual fee waiver has been in effect since May 1, 2004. In addition, effective June 1, 2006, the Board approved a voluntary fee waiver to further reduce the expense cap of the Fund from 0.40% to 0.34%. This fee waiver will remain in effect until such time as the Board or Fund management, as applicable, determines that such fee waiver is no longer required. If that determination is made and the voluntary fee waiver is terminated, the contractual fee waiver of 0.40% would still remain in place. We have revised the disclosure in footnote 7 to clarify that the Fund currently has these two different fee waivers in place. COMMENT 5. PLEASE INCLUDE THE ORDER PROCESSING FEE IN THE FEE TABLE AS REQUIRED BY FORM N-1A IF AN INVESTOR WILL INCUR THIS CHARGE WHEN IT INVESTS IN THE FUND. Response 5. Form N-1A requires that the costs and expenses that an investor will bear directly or indirectly be include in the Fee Table. The order processing fee that Morgan Stanley DW Inc. charges clients when a client purchases or tenders shares of the Fund is not required in the fee table because only investors that purchase shares through Morgan Stanley DW Inc. would be subject to the fee. As you have requested and consistent with SEC Release 2004-89, the Fund hereby acknowledges that: o the Fund is responsible for the adequacy and accuracy of the disclosure in the filings; o the Staff's comments or changes to disclosure in response to Staff comments in the filings reviewed by the Staff do not foreclose the Commission from taking any action with respect to the filings; and o the Fund may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. If you would like to discuss any of these responses in further detail or if you have any questions, please feel free to contact me at (212) 762-6810. Thank you. Sincerely, /s/ Eric C. Griffith Eric C. Griffith