corresp
Morgan Stanley International Value Equity Fund
522 Fifth Avenue
New York, NY 10036
December 22, 2009
Securities and Exchange Commission
Judiciary Plaza
100 F Street, NE
Washington, D.C. 20549
|
|
|
Attention: |
|
Larry Greene, Division of Investment Management
Mail Stop 0505 |
|
|
|
Re: |
|
Morgan Stanley International Value Equity Fund
(File No. 333-53546; 811-10273) |
Dear Mr. Greene:
Thank you for your telephonic comments regarding the registration statement on Form N-1A for
Morgan Stanley International Value Equity Fund (the Fund) filed with the Securities and Exchange
Commission (the Commission) on October 28, 2009 incorporating changes to the Prospectus and
Statement of Additional Information in compliance with changes to Form N-1A that came into effect
in February 2009. Below, we describe the changes made to the registration statement in response to
the Staffs comments and provide any responses to or any supplemental explanations of such
comments, as requested. These changes will be reflected in Post-Effective Amendment No. 13 to the
Funds registration statement on Form N-1A, which will be filed via EDGAR on or about December 22,
2009.
GENERAL COMMENTS TO FORM N-1A
|
|
|
Comment 1. |
|
Please file a letter responding to these comments from the
Staff of the Commission that incorporates the Tandy
information via EDGAR. |
Response 1. This response letter, which incorporates the Tandy
information, will be filed via EDGAR as correspondence separate from the
registration statement filing.
COMMENTS TO THE PROSPECTUS
|
|
|
Comment 2. |
|
Please add risk disclosure regarding the credit crisis and
related market turbulence as it pertains to the securities in
which the Fund invests. |
Response 2. The Fund has reviewed the risk disclosure in the
Prospectus and believes that the sections entitled Fund
Summary Principal Risks and Additional Information About the Funds
Investment Objective, Strategies and Risks currently provide adequate
disclosure relating to the risks of the securities in which this Fund
invests. Thus, the Fund respectfully believes that additional disclosure is
not necessary.
|
|
|
Comment 3. |
|
The disclosure in the section entitled Fund DetailsPrincipal Investment Strategies
states that the Fund invests in at least three different countries outside of the United
States. Consistent with the Staffs position regarding funds with International in their
name, please confirm that the Fund invests a substantial portion of its assets in the
securities of issuers located in multiple countries throughout the world. |
Response 3. We confirm that the Fund invests a substantial portion
of its assets in the securities of issuers located in multiple countries
throughout the world.
|
|
|
Comment 4. |
|
Please ensure that the font size of the table entitled Shareholder Fees complies with
the requirements of Form N-1A. |
Response 4. The font size complies with the requirements of Form
N-1A.
|
|
|
Comment 5. |
|
Pursuant to General Instruction C. 3.(b) of Form N-1A, the information required by Items
2 through 8 of Form N-1A may not include disclosure other than that required or permitted by
those items. Please ensure that the footnotes following the Fee Table and the Average Annual
Total Return table are required or permitted by the Form. |
Response 5. Footnote 6 to the Fee Table, disclosing the maximum
possible amount of the 12b-1 fee that each class may incur, has been
deleted. We believe that the remaining footnotes are either specifically
permitted by Form N-1A or are explanatory in nature and do not alter or add
to the disclosure permitted in either the Fee Table or the Average Annual
Total Return Table.
|
|
|
Comment 6. |
|
In the first paragraph in the section titled Principal Investment Strategies, the
disclosure indicates that derivative instruments will be counted towards the Funds 80%
investment policy to the extent that the derivatives in which the Fund invests have economic
characteristics similar to the securities included within that policy. Please explain what
economic considerations are analyzed in making this determination. |
Response 6. In the release adopting Rule 35d-1, the Staff of the
Commission recognized that an investment company may include a synthetic
instrument in its 80% names rule basket if it has economic characteristics
similar to the securities included in that basket. See Investment Company
Act Release No. 24828 (Jan. 17, 2001) at note 13. In accordance with the
Commissions interpretive guidance, the Fund would apply exposure from
derivatives towards its 80% names rule basket only if the exposure has
economic characteristics similar to common stock and other equity securities
of companies located outside of the United States.
|
|
|
Comment 7. |
|
Confirm whether the Funds investments in forward foreign currency exchange contracts
falls within the Funds 20% investment basket described in the Prospectus, which includes
equity securities of companies located within the United States. |
Response 7. In addition to the Funds 80% policy, the Fund may
invest up to 20% of its assets in equity securities of companies located in
the United States.
2
Investments by the Fund in forward foreign currency exchange contracts are
not included within this 20% basket. Because the Fund may only invest up to
20% of its assets in investments other than equity securities of companies
located outside of the United States, any investments in forward foreign
currency exchange contracts would reduce the Funds ability to invest in
equity securities of companies located within the United States.
|
|
|
Comment 8. |
|
The Principal Risk section includes disclosure relating to small and medium
capitalization companies. Will the Fund focus on investments in small and medium
capitalization companies and if so, provide an indication of what constitutes a small
capitalization company and a medium capitalization company. |
Response 8. The requested disclosure has been added to the section
entitled Fund DetailsPrincipal Investment Strategies.
|
|
|
Comment 9. |
|
The disclosure in the section titled Fund SummaryInvestment Adviser and Sub-Advisers
states that the International Equity team manages the Fund. Please confirm that every member
of the team manages the Fund, otherwise please revise the disclosure. |
Response 9. The Fund is managed by some, but not all, members of
the International Equity team. The disclosure in this section has been
revised to state that The Fund is managed by members of the International Equity team.
COMMENT TO THE STATEMENT OF ADDITIONAL INFORMATION
|
|
|
Comment 10. |
|
With respect to Investment Restriction #5 regarding the issuance of senior securities,
consider adding explanatory language following the restrictions that states clearly the Funds
policy regarding the issuance of senior securities. |
Response 10. An explanation of the Funds policy regarding the
issuance of senior securities is included in the section of the Statement of
Additional Information entitled Description of the Fund and its Investments
and RisksInvestment Strategies and RisksBorrowing.
As you have requested and consistent with Commission Release 2004-89, the Fund hereby
acknowledges that:
|
|
the Fund is responsible for the adequacy and accuracy of the disclosure in the filings; |
|
|
|
the Staffs 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 |
|
|
|
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) 296-6993 (tel) or (212) 404-9620 (fax). Thank
you.
Best regards,
/s/ Debra Rubano
Debra Rubano
3