N-CSRS 1 a07-19598_1ncsrs.htm N-CSRS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number			811-03692

Morgan Stanley Variable Investment Series
(Exact name of registrant as specified in charter)

522 Fifth Avenue, New York, New York					10036
(Address of principal executive offices)					(Zip code)

Ronald E. Robison 522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)

Registrant’s telephone number, including area code:				212-296-6990

Date of fiscal year end:	December 31, 2007

Date of reporting period:		June 30, 2007

Item 1 - Report to Shareholders

MORGAN STANLEY
VARIABLE INVESTMENT SERIES

Semi-Annual Report

JUNE 30, 2007

Morgan Stanley Variable Investment Series

Table of Contents

Letter to the Shareholders					1

Fund Performance					21

Expense Example					23

Investment Advisory Agreement Approval					29

Portfolio of Investments:

Money Market					33

Limited Duration					37

Income Plus					49

High Yield					58

Utilities					68

Income Builder					70

Dividend Growth					77

Global Dividend Growth					81

European Equity					87

Equity					92

S&P 500 Index					95

Global Advantage					107

Aggressive Equity					111

Strategist					114

Financial Statements:

Statements of Assets and Liabilities					130

Statements of Operations					133

Statements of Changes in Net Assets					136

Notes to Financial Statements					148

Financial Highlights					164

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007

Dear Shareholder,

A number of headwinds emerged during the six-month period ended June 30, 2007, sending jitters through the fixed income and equity markets both domestically and abroad. Among the most challenging was the collapsing subprime mortgage market (which makes loans to less creditworthy borrowers), which ruined several hedge funds and loan originators and threatened to spread into the credit market, corporate buyout activity, consumer spending and other areas of the economy. However, equities enjoyed modestly positive gains, with international markets outperforming the domestic market, and most segments of the fixed income market produced flat to slightly positive returns.

Domestic Equity Overview

For the U.S. stock market, the first half of 2007 was an environment in which investors began to catch glimpses of what could be a more challenging environment to come. The first quarter's economic growth rate slowed considerably, oil prices resumed their climb, interest rates rose, the housing market continued to deteriorate, and fears about the health of consumer and business spending heightened. The stock market, as measured by the commonly cited S&P 500^® Index, was up 6.96 percent during the six-month period but volatility levels were also up after several years of near historical lows.

In the final days of February, China's stock market declined precipitously, the subprime mortgage woes came to light and former Federal Open Market Committee (the "Fed") Chairman Alan Greenspan publicly stated his belief that the U.S. economy could enter a recession — all of which led to a sell-off in the U.S. market on concerns of a U.S.-led global recession. The disruption was temporary, persisting through March, after which the markets turned upward. In June, however, volatility rose again as investors anxiously awaited second quarter corporate earnings reports. During the month, several hedge funds collapsed as a result of investments in subprime mortgage-related securities, and investors feared the contagion could become widespread. The Fed remained on hold with regard to monetary policy, further dashing hopes that inflation would be sufficiently contained to begin a cycle of monetary easing some time later this year.

Nonetheless, corporate profits continued to demonstrate resilience in spite of these difficulties. Generally, first quarter corporate earnings were able to exceed the already lowered expectations set by analysts and company managements, which along with the robust merger and acquisition (M&A) and stock buyback activities helped fuel the stock market's advance during the period. Consumer spending was kept aloft, in part, by wage growth and decent employment rates, and other economic data released throughout the months comprising the second quarter seemed to indicate that GDP growth would recover from the first quarter's sluggishness.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

From a sector view (using the S&P 500 Index sectors), the energy sector continued to perform very well given the prolonged period of high commodity prices. The materials sector commanded solid gains as well, benefiting from strong demand on a global scale for metals and mining, paper and forest products, and chemicals, as well as from industry consolidation. Also among the best performing sector groups was telecommunication services. Conversely, the financials sector faced a number of challenges with regard to the subprime fallout and the housing slump. As a result, thrifts, real estate investment trusts (REITs) and commercial banks were among the weakest performing groups during the period. Not surprisingly, consumer-related sectors also took a hit during the period, including homebuilders and specialty retailers within the consumer discretionary sector, and household products within the consumer staples sector. In terms of style, growth stocks edged slightly higher than value stocks, which is historically typical in the later stages of an economic cycle.

Fixed Income Overview

Many of the same factors driving the domestic equity market also played a role in the fixed income market's movements during the period. Increases in business spending and manufacturing in the second quarter, coupled with persistently strong employment data, signaled an acceleration in economic growth from the first quarter's sluggish pace. At the same time, annualized inflation — as measured by core personal consumption expenditure (PCE) — moderated somewhat, falling within the Fed's comfort zone of 1 to 2 percent. Against this backdrop, the Fed held the target federal funds rate steady at 5.25 percent, where it has stood since June 2006, but continued to state that inflation risks remain their predominant policy concern.

Although the improved economic outlook may have been reassuring for the Fed, it did not bode particularly well for the performance of most sectors of the fixed income market as it effectively dispelled the market's expectations of an ease in monetary policy. This change in expectations caused Treasury yields to move sharply higher. Although yields declined in the last weeks of June, when the highly publicized failure of two mortgage-related hedge funds fueled a flight-to-quality Treasury market rally, they finished the overall period higher. Yields on the long end curve rose more than those on the short end, causing the yield curve to steepen.

Early in the year, the lower-rated, higher-yielding sectors of the market outperformed higher-quality bonds, but rising interest rates and increased market volatility over the course of the period caused yield spreads to widen and high-yield performance to wane. Nonetheless, high-yield bonds still outperformed Treasuries for the overall period as spreads remained relatively tight in historical terms and various other factors, including low default rates, strong global demand, and solid corporate earnings provided ongoing

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

support to the sector. With regard to the mortgage sector, lower-coupon mortgage-backed securities initially outperformed higher-coupon mortgage-backed securities but as interest rates rose, mortgage pre-payments slowed. As a result, higher-coupon mortgage-backed securities outperformed their lower-coupon counterparts as well as equal-duration Treasuries for the six-month reporting period. The performance of agency and asset-backed securities lagged as widening spreads in the latter months of the period pushed prices in these sectors lower.

International Equity Overview

International equity markets continued to outperform the U.S. equity market. However, global markets' advance slowed in June, with most markets ending the period either declining or moving sideways. While the condition of the U.S. economy remained a concern, the economies of Europe and Asia provided more positive news in the first half of 2007.

In Europe, much of the Euroland economy produced an ongoing flow of strongly positive data. Labor markets continued to improve and the German economy showed very little drag from the increase in sales tax implemented in January. European manufacturing and service industries, which make up two-thirds of the economy, grew at a rapid pace. Business activity remained robust and unemployment prospects continued to improve. The European Central Bank increased Euroland interest rates by another 25 basis points in early June. The move came amid the strongest expansion in over a decade and as higher oil prices and robust spending continued to stoke inflation. In the U.K., the Bank of England lifted base rates to 5.75 percent, the fifth increase in 12 months.

In Asia, economic data suggested a more solid picture of the Japanese economic recovery than had been seen in 2006. While lending growth continued to slow, other data was mainly positive. Machinery orders rose, a signal that companies are optimistic that both domestic and overseas demand will accelerate. Retail sales also rose for the first time in eight months. The strong data re-enforced widespread expectations that the Bank of Japan would raise rates again in August, though they left them unchanged during the first half of 2007. The People's Bank of China raised one year lending rates for the third time in 11 months in an attempt to curb soaring investment.

Emerging market equities rebounded sharply from the market correction at the end of February, and easily outperformed the developed markets during the six-month period. Within the emerging markets, Latin America was the best performer on a regional basis, led by Peru, which was the best performing market in the MSCI Emerging Markets Index. Asia was up modestly, with gains from Malaysia, China, and South Korea. Emerging Europe, Middle East and Africa (EMEA) underperformed as a sharp decline in index heavyweight Russia offset strong gains in Turkey, Poland and Morocco.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

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. For the most recent month-end performance figures, please visit www.morganstanley.com or speak with your Financial Advisor. Investment returns and principal value will fluctuate and portfolio shares, when redeemed, may be worth more or less than their original cost.

Aggressive Equity Portfolio

For the six-month period ended June 30, 2007, Aggressive Equity Portfolio Class X shares produced a total return of 9.49 percent outperforming the Russell 3000^® Growth Index¹ which returned 8.22 percent. For the same period, the Portfolio's Class Y shares returned 9.35 percent. Past performance is no guarantee of future results.

The performance of the Portfolio's two share classes varies because each has different expenses. The Portfolio's total returns assume the reinvestment of all distributions but do not reflect the deduction of any charges by your insurance company. Such costs would lower performance.

The Portfolio's outperformance against the Russell 3000 Growth Index was partially due to contributions from the health care, utilities and multi-industry sectors. The health care sector had the most significantly positive impact on relative performance, which was mostly driven by the strong returns of a medical and dental instruments holding. An underweight allocation in the health care sector also helped shield the Fund's returns from the weak performance of health care stocks within the broad market. A single wireless holding within the utilities sector further added to relative returns. In the multi-industry sector, which includes conglomerates, stock selection and an overweight allocation turned out to be advantageous for the Portfolio's relative performance.

In contrast, the sectors that detracted the most from the Portfolio's performance relative to the Russell 3000 Growth Index were the financial services, producer durables and technology sectors. In the financial services sector, the Portfolio's results were diminished by weak performance from investments in financial information services stocks and financial data processing and services stocks. Unfavorable stock selection combined with an underweight allocation in the producer durables sector also was detrimental to performance. Finally, an underweight position in the technology sector hampered relative returns.

At the close of the period, consumer discretionary represented the largest sector weight and overweight in the Portfolio, followed by the financial services and multi-industry sectors. The financial services sector was underweight relative to the Russell 3000 Growth Index, while the multi-industry sector was overweight relative to the Russell 3000 Growth Index.

1 The Russell 3000^® Growth Index measures the performance of those companies in the Russell 3000^® Index with higher price-to-book ratios and higher forecasted growth values. 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.

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Letter to the Shareholders n June 30, 2007 continued

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

Dividend Growth Portfolio

For the six-month period ended June 30, 2007, Dividend Growth Portfolio Class X shares produced a total return of 6.57 percent underperforming the S&P 500^® Index² which returned 6.96 percent. For the same period, the Portfolio's Class Y shares returned 6.38 percent. Past performance is no guarantee of future results.

The Portfolio's underperformance relative to the S&P 500 Index during the period was partially attributable to our stock selection in the health care sector, as flat to negative returns among several pharmaceutical holdings and a managed care provider detracted from results. Within the industrials sector, the market favored segments of the sector in which the Portfolio didn't own any stocks. In particular, the more "cyclical" companies — those tied strongly to the economic cycle — such as the machinery and the road and rail transportation industries have continued to benefit from a favorable economic backdrop. On the other hand, the Portfolio's positions in industrial conglomerates lagged the returns of sector's stronger performers. An underweight allocation to the materials sector also dampened gains. The S&P 500 Index's materials sector performed well during the period, and the Portfolio's lesser exposure muted the positive effects of the broad sector's advance.

However, other areas within the Portfolio contributed positively to returns relative to the S&P 500 Index. The Portfolio was well positioned within the financials sector to weather the specific challenges faced by the sector during the period. The housing slump, rising interest rates and the subprime mortgage market woes did not bode well for banks and real estate investment trusts (REITs), and the Portfolio was underweighted in both segments. Additionally, strong stock selection in a number of insurance stocks further bolstered the Portfolio's relative performance. Within the energy sector, the Portfolio benefited from favorable stock selection among equipment and services stocks. Finally, the consumer discretionary sector was also additive to the Portfolio's results, primarily due to several multi-line retailers and apparel stocks.

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

2 The Standard & Poor's 500^® Index (S&P 500^®) is a broad-based index, the performance of which is based on the performance of 500 widely-held common stocks chosen for market size, liquidity and industry group representation. 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.

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Letter to the Shareholders n June 30, 2007 continued

Equity Portfolio

For the six-month period ended June 30, 2007, Equity Portfolio Class X shares produced a total return of 9.63 percent outperforming the Russell 3000^® Growth Index³ which returned 8.22 percent. For the same period, the Portfolio's Class Y shares returned 9.51 percent. Past performance is no guarantee of future results.

The sectors that had the greatest positive contribution toward the Portfolio's outperformance of the Russell 3000 Growth Index were the health care, utilities and multi-industry sectors. For the period, the health care sector contributed the most to relative returns, primarily driven by a holding in the medical and dental instrument segment. Furthermore, an underweight allocation in the health care sector was beneficial to relative returns. In the utilities sector, a single wireless holding boosted performance. Security selection and an overweight position in the multi-industry sector, which includes conglomerates, also turned out to be advantageous to the Portfolio's returns.

Although the Portfolio's performance was strong, both in an absolute context and relative to the Russell 3000 Growth Index, there were a few areas of weakness that hindered returns. Among these was the financial services sector, where security selection in financial information services stocks and financial data processing and services stocks was detrimental to relative returns. In the producer durables sector, unfavorable stock selection combined with an underweight allocation hurt relative performance, as did an underweight position in the technology sector.

At the close of the period, consumer discretionary represented the largest sector weight and overweight versus the Russell 3000 Growth Index, followed by the financial services and multi-industry sectors. The financial services sector was underweight, while the multi-industry sector was overweight relative to the Russell 3000 Growth Index.

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

3 The Russell 3000^® Growth Index measures the performance of those companies in the Russell 3000^® Index with higher price-to-book ratios and higher forecasted growth values. 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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

European Equity Portfolio

For the six-month period ended June 30, 2007, European Equity Portfolio Class X shares produced a total return of 12.71 percent outperforming the MSCI Europe Index⁴ which returned 12.49 percent. For the same period, the Portfolio's Class Y shares returned 12.61 percent. Past performance is no guarantee of future results.

The Portfolio's outperformance relative to the MSCI Europe Index was primarily attributable to stock selection, which is consistent with our bottom-up investment process. The most significant contributions to positive performance came from the utilities and bank sectors. In the utilities sector, a holding in a French power company with exposure to nuclear generation benefited from the rising energy price environment without being encumbered by rising fuel costs. Within banks, the Portfolio's performance was helped by holdings in smaller banks that have greater exposure to some of Europe's faster growing markets, such as Greece and Eastern Europe. Additionally, both stock selection and an overweight allocation in the capital goods industry bolstered relative performance. Capital goods was the best performing industry group within the MSCI Europe Index during the period under review, and the Portfolio held several strong performing stocks including a mining equipment manufacturer, a truck manufacturer, and an industrial conglomerate with exposure to energy-related and power generation businesses. Finally, a lack of exposure to real estate securities, which was the only industry with a negative return in the MSCI Europe Index, also added value. Real estate securities had enjoyed a sustained period of outperformance, but with a backdrop of credit concerns and higher interest rates, investors rotated away from the group.

However, the Portfolio's performance was less strong in other areas. Relative to the MSCI Europe Index, the Portfolio's stock selection in automobiles hurt performance. We emphasized higher quality auto companies that we believe are likely to deliver promising results in the long term, but these names lagged behind the restructuring automobile companies that performed strongly in the period. An underweight allocation to and stock selection in the materials sector was disadvantageous. The materials sector performed very well during the period, driven by increased merger and acquisition speculation among the group's major players. However, valuations in the sector have been too expensive by our measures and the

4 The Morgan Stanley Capital International (MSCI) Europe Index is a free float-adjusted market capitalization index that is designed to measure global stock markets within Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. 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 dividends" reflects a reduction in dividends after taking into account withholding of taxes by certain foreign countries represented in the Index. 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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

Portfolio's reduced exposure therefore limited the potential to capture gains. The pharmaceuticals sector was another detractor from relative returns, due to stock selection and the overweight allocation. A wave of negative sentiment about drug pipelines dragged down many stocks in the sector, as a number of key drugs were downgraded, had their efficacies challenged or were rejected by regulators during their trial periods. However, we believe the reaction to be temporary and overblown, and we continue to believe the sector holds long-term value.

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

Global Advantage Portfolio

For the six-month period ended June 30, 2007, Global Advantage Portfolio Class X shares produced a total return of 10.78 percent outperforming the MSCI World Index⁵ which returned 9.17 percent. For the same period, the Portfolio's Class Y shares returned 10.66 percent. Past performance is no guarantee of future results.

The Portfolio employs a bottom-up investment process that seeks opportunities on a stock by stock basis; therefore, all broad country and sector weightings are a result of these individual bottom-up stock selections and not active top-down allocations. That said, relative to the MSCI World Index, the Portfolio's country weightings contributed positively to performance in the first half of the year. The most beneficial country weighting was the considerable underweight in Japan, which helped to minimize the effect of the country's weak market returns on the Portfolio. Japan was the worst performing market in the MSCI World Index during the period. Additionally, overweight allocations to Singapore and Israel, two strong performing markets, added to relative gains. However, the positive influence from these allocations was somewhat offset by the negative effects of the Portfolio's underweight allocations in Canada and France, both of which performed well during the period. The Portfolio also benefited from good stock selection during the period, most notably in the U.S., with stock selections in Singapore and Hong Kong also adding to results. However, stock selection in Germany, Spain and Australia detracted modestly from the Portfolio's performance relative to the MSCI World Index.

The Portfolio's sector allocations were somewhat detrimental to performance relative to the MSCI World Index in the period, as the Portfolio held underweight positions in the energy and materials sectors, both of

5 The Morgan Stanley Capital International (MSCI) World Index is a free float-adjusted market capitalization index that is designed to measure global developed market equity performance. 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 consists of the following 23 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States. 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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

which outperformed the market in the first half of the year. However, the negative effect of the Portfolio's sector allocation was more than offset by positive stock selection. Stocks within the financials, health care and information technology sectors were particularly beneficial to the Portfolio's relative performance.

Other notable factors affecting performance during the period included the Portfolio's exposure to small-capitalization stocks, a segment which outpaced large-cap stocks during this six-month period. In addition, the Portfolio's exposure to the strongly performing emerging markets was additive to relative performance during the period. Finally, after many years of value stock dominance, growth stocks outperformed value stocks during the period under review, providing a tailwind to the Portfolio's more growth-oriented style of investing.

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

Global Dividend Growth Portfolio

For the six-month period ended June 30, 2007, Global Dividend Growth Portfolio Class X shares produced a total return of 10.51 percent outperforming the MSCI World Index⁶ which returned 9.17 percent. For the same period, the Portfolio's Class Y shares returned 10.34 percent. Past performance is no guarantee of future results.

Stock selection in the consumer staples sector was the strongest contributor to performance relative to the MSCI World Index over the six-month review period. Within this sector, the majority of the Portfolio is invested in the food, beverage and tobacco group, which delivered very strong returns. Stock selection within the industrials sector was also beneficial, with stocks across the capital goods and transportation groups performing well. The Portfolio's holdings within the information technology sector further contributed positively to performance. Here, software and services companies led performance for the Portfolio, followed by the hardware equipment group.

Conversely, the health care sector was the weakest performing sector for the Portfolio. Within this sector, the Portfolio's overweight in pharmaceutical stocks hurt performance and stock selection in health care equipment and services companies also diminished gains. The Portfolio's performance was also challenged

6 The Morgan Stanley Capital International (MSCI) World Index is a free float-adjusted market capitalization index that is designed to measure global developed market equity performance. 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 consists of the following 23 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States. 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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

in the financials sector where the negative impact of stock selection in banks and diversified financials offset the positive influence of an underweight in the real estate group.

On a regional basis, we continue to find value in Europe and remain overweight there. The Portfolio's underweights to the U.S. and Japan have both been marginally reduced. From a sector view, we continue to find value in the consumer staples, health care and telecommunication services sectors. We have taken profits within the industrials sector and the Portfolio is underweight here. We have selectively added to the energy sector but remain underweight versus the MSCI World Index. The Portfolio continues to be underweight in the financials sector. As bottom-up investors, we continue to focus our research on identifying attractive opportunities globally which meet our valuation criteria.

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

High Yield Portfolio

For the six-month period ended June 30, 2007, High Yield Portfolio Class X shares produced a total return of 3.42 percent outperforming the Lehman Brothers U.S. Corporate High Yield — 2% Issuer Cap Index⁷ which returned 2.96 percent. For the same period, the Portfolio's Class Y shares returned 3.29 percent. Past performance is no guarantee of future results.

Although high-yield spreads widened in the latter months of the reporting period, they still remained tight by historical standards. As such, we continued to believe there to be a strong likelihood that credit spreads would widen further, which led us to maintain the Portfolio's higher credit-rating profile. Although this defensive positioning was beneficial late in the period when spreads widened, it detracted from performance for the overall period as lower-quality bonds generally outperformed.

The Portfolio's interest-rate positioning was also somewhat defensive as we maintained a lower relative duration* throughout the period. During the first quarter of the year, this positioning dampened performance as interest rates generally declined. In the second quarter, however, interest rates rose and the

7 The Lehman Brothers U.S. Corporate High Yield — 2% Issuer Cap Index is the 2% Issuer Cap component of the Lehman Brothers U.S. Corporate High Yield Index which covers the U.S. dollar-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as yield if the middle rating of Moody's, Fitch, and S&P is Ba1/BB+/BB+ or below. The index excludes Emerging Markets debt. 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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

lower duration proved additive to returns. As a result, the Portfolio's duration had a minimal impact on performance for the overall period.

Strong security selection in various sectors, including energy and utilities, added to relative returns, as did an underweight to the building products/home builders sector early in the period. Conversely, security selection in the auto/vehicle parts and telecommunication services sectors detracted from performance.

We continued to seek to maintain a balanced and well-diversified portfolio while allowing for strategic overweights in securities and sectors that we believed possessed the most attractive risk profiles. In terms of issuer size, we generally focus on larger companies because of their financial flexibility, ability to withstand less favorable financial conditions, and superior access to capital markets. These strategies led to major sector overweights in the energy, health care, and food and tobacco sectors as of the end of the period. The largest sectors underweights were in technology, cable, telecom, and media.

* A measure of the sensitivity of a bond's price to changes in interest rates, expressed in years. Each year of duration represents an expected 1 percent change in the price of a bond for every 1 percent change in interest rates. The longer a bond's duration, the greater the effect of interest-rate movements on its price. Typically, portfolio's with shorter durations perform better in rising interest-rate environments, while potfolio's with longer durations perform better when rates decline.

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

Income Builder Portfolio

For the six-month period ended June 30, 2007, Income Builder Portfolio Class X shares produced a total return of 5.88 percent underperforming the Russell 1000^® Value Index⁸ which returned 6.23 percent and outperforming the Lehman Brothers U.S. Government/Credit Index⁹ which returned 0.97 percent. For the same period, the Portfolio's Class Y shares returned 5.75 percent. Past performance is no guarantee of future results.

8 The Russell 1000^® Value Index measures the performance of those companies in the Russell 1000^® Index with lower price-to-book ratios and lower forecasted growth values. 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.

9 The Lehman Brothers U.S. Government/Credit Index tracks the performance of government and corporate obligations, including U.S. government agency and Treasury securities and corporate and Yankee bonds. 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.

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Letter to the Shareholders n June 30, 2007 continued

In the stock portion of the Portfolio, underperformance relative to the Russell 1000 Value Index was due, in part, to an underweight in the energy sector. The sector has continued to perform well, but energy stocks' expensive valuations remain unattractive in our view. The telecommunication services sector was another source of weakness for the Portfolio. The performance of the Portfolio's telecom holdings lagged that of other telecom stocks represented in the Russell 1000 Value Index, and the Portfolio's underweight in the sector also hurt results. The technology sector also hampered relative performance, particularly stock selection in the software and services industry. Here, one of the Portfolio's holdings has continued to stumble in integrating a company it recently acquired, and has faltered in a more competitive environment.

However, other areas of the Portfolio had a positive effect on performance relative to the Russell 1000 Value Index. The Portfolio's financial services holdings were well positioned to capitalize on certain dynamics within the sector. Real estate investment trusts (REITs) and regional banks performed poorly amid a weakening housing market and the problems in the subprime mortgage market, but the Portfolio had no exposure to REITs and limited exposure to regional bank stocks. Stock selection in diversified financials companies added to performance, due to these companies' capital markets and merger and acquisition businesses. The Portfolio's insurance holdings, especially property and casualty stocks, were also standouts. With no major disasters in 2006, the property and casualty industry was able to recover following 2005's catastrophic hurricane season, and investors rewarded the turnaround.

Elsewhere, the Portfolio's health care sector contributed positively to returns, given its strong focus on pharmaceutical stocks. The industry experienced a return to favor with investors as earnings improvements and a better outlook for products fueled a rotation into the sector. Finally, stock selection in the consumer staples sector rounded out the Portfolio's top three contributing sectors. A food and beverage company (in which the Portfolio owned a position) announced a spin-off of one of its business units, causing a rally in the share prices of the company and in other companies across the food and beverage industry.

As of the end of the reporting period, the Portfolio held 61.4 percent in stocks, 11.8 percent in bonds and 21.7 percent in convertible securities. With regard to bonds, we continued to keep the Portfolio's overall duration* below that of the Lehman Brothers U.S. Government/Credit Index. This conservative interest-rate posture proved additive to performance as interest rates rose throughout the reporting period. With regard to credit risk, we maintained the Portfolio's below-benchmark sensitivity to credit spreads, also known as "spread duration". This lower spread sensitivity had a positive impact on performance as spreads widened during the period. We continued to modestly favor selected insurance issues and medium-quality credits, and security selection within both the investment grade and below-investment grade sectors was generally additive to performance.

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Letter to the Shareholders n June 30, 2007 continued

longer a bond's duration, the greater the effect of interest-rate movements on its price. Typically, portfolio's with shorter durations perform better in rising interest-rate environments, while portfolio's with longer durations perform better when rates decline.

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

Income Plus Portfolio

For the six-month period ended June 30, 2007, Income Plus Portfolio Class X shares produced a total return of 0.45 percent underperforming the Lehman Brothers U.S. Corporate Index¹⁰ which returned 0.71 percent. For the same period, the Portfolio's Class Y shares returned 0.32 percent. Past performance is no guarantee of future results.

The Portfolio's underperformance versus the benchmark Lehman Brothers U.S. Corporate Index was primarily the result of the Portfolio's relative spread sensitivity (for a portion of the period) and its exposure to interest-rate swaps.

We also maintained the Portfolio's below-benchmark sensitivity to credit spreads, also known as "spread duration". This lower spread sensitivity detracted from performance early in the period when credit spreads narrowed, but had a positive impact on performance later in the period when spreads widened. We also used interest rate swaps to adjust the Portfolio's liquidity profile. Interest-rate swap spreads widened during the period and had a negative impact on relative performance.

On a positive note, we continued to keep the Portfolio's overall duration* below that of the Lehman Brothers U.S. Corporate Index. This conservative interest-rate posture proved additive to performance as interest rates rose throughout the reporting period. We continued to modestly favor selected insurance issues and medium-quality credits. Security selection within both the investment grade and below-investment grade sectors was also generally beneficial to performance.

10 The Lehman Brothers U.S. Corporate Index covers U.S. dollar-denominated, investment-grade, fixed rate, taxable securities sold by industrial, utility and financial issuers. It includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity and quality requirements. 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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

Limited Duration Portfolio

For the six-month period ended June 30, 2007, Limited Duration Portfolio Class X shares produced a total return of 2.31 percent outperforming the Lehman Brothers U.S. Credit Index (1-5 Year)¹¹ which returned 1.93 percent. For the same period, the Portfolio's Class Y shares returned 2.19 percent. Past performance is no guarantee of future results.

The primary driver of the Portfolio's performance during the reporting period was its defensive duration* positioning. We maintained a lower overall duration than that of the benchmark Lehman Brothers U.S. Credit Index (1-5 Year), which proved additive to performance as interest rates rose across the Treasury curve throughout the period.

The Portfolio was also positioned defensively in that its mortgage and corporate credit holdings were underweighted relative to the Lehman Brothers U.S. Credit Index (1-5 Year). The Portfolio's emphasis on higher-quality securities helped performance, particularly in June when spreads widened considerably. At that time, however, the Portfolio's holdings within financial services did detract somewhat from performance as this sector underperformed other sectors.

Although the widening of mortgage spreads in June hurt the performance of the Portfolio's holdings in this sector, this was more than offset by the benefits of our emphasis on higher-coupon mortgages. We favored higher-coupon mortgages over current coupon mortgages because their slower pre-payment rates make them less sensitive to rising interest rates. Given that rates rose over the course of the reporting period and higher-coupon mortgages outperformed, the Portfolio's overweight here proved particularly additive to performance. The re-setting of coupons on certain agency and non-agency adjustable rate mortgage (ARM) holdings also helped boost returns.

11 The Lehman Brothers U.S. Credit Index (1-5 Year) includes U.S. corporate and specified foreign debentures and secured notes with maturities of one to five years. 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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

* A measure of the sensitivity of a bond's price to changes in interest rates, expressed in years. Each year of duration represents an expected 1 percent change in the price of a bond for every 1 percent change in interest rates. The longer a bond's duration, the greater the effect of interest-rate movements on its price. Typically, portfolio's with shorter durations perform better in rising interest-rate environments, while portfolio's with longer durations perform better when rates decline.

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

Money Market Portfolio

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in such funds.

As of June 30, 2007, Money Market Portfolio had net assets of more than $225 million with an average portfolio maturity of 54 days. For the seven-day period ended June 30, 2007, the Portfolio's Class X shares provided an effective annualized yield of 4.95 percent and a current yield of 4.83 percent, while its 30-day moving average yield for June was 4.83 percent. For the six-month period ended June 30, 2007, the Portfolio's Class X shares returned 2.43 percent. Past performance is no guarantee of future results.

For the seven-day period ended June 30, 2007, the Portfolio's Class Y shares provided an effective annualized yield of 4.68 percent and a current yield of 4.58 percent, while its 30-day moving average yield for June was 4.58 percent. For the six-month period ended June 30, 2007, the Portfolio's Class Y shares returned 2.30 percent. Past performance is no guarantee of future results.

Our strategy in managing the Portfolio remained consistent with its long-term focus on preservation of capital and liquidity. Prior to the start of the reporting period, our primary strategy consisted of focusing our investments in fixed-rate securities that matured or floating-rate notes that reset near upcoming Federal Open Market Committee meeting dates in order to capitalize on higher expected money market interest rates. However, as the months progressed and economic data became more mixed, we further diversified and extended the maturity structure of the Portfolio. From late May through early June, we took advantage of slightly higher yields in the six-month and longer portion of the curve in order to extend the weighted

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

average maturity of the Portfolio. During that time, we also purchased what we believe to be many attractively priced offerings, as dealers were motivated to trim their balance sheets in advance of semi-annual financial statement dates.

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

S&P 500 Index Portfolio

For the six-month period ended June 30, 2007, the S&P 500 Index Portfolio Class X shares produced a total return of 6.79 percent underperforming the S&P 500^® Index¹² which returned 6.96 percent. For the same period, the Portfolio's Class Y shares returned 6.65 percent. Past performance is no guarantee of future results.

The sectors with the largest gains in the S&P 500 Index and the Portfolio during the six-month period were energy, materials and telecommunication services. Energy prices began rising again in 2007, after declining in the second half of 2006, which drove strong performance of stocks in the energy sector. Stocks in the materials sector continued to rise on the back of robust global demand for metals and chemicals, in particular, and a number of merger and acquisition activity announcements within the sector. In the telecommunication services sector, the benefits of industry consolidation continued to fuel investors' positive sentiment for the sector.

During the six-month period, the three weakest performing sectors in the S&P 500 Index and the Portfolio were financials, consumer discretionary and consumer staples. The financials sector was the only sector with a negative return, while the consumer discretionary and consumer staples sectors had the smallest positive returns. With the housing market showing further deterioration, the subprime mortgage market collapsing and interest rates rising, the outlook turned grim for certain banks, real estate investment trusts (REITs), homebuilders and other housing-related stocks, and companies dependent on consumer spending. As a result, the financials and consumer-related sectors underperformed the broad S&P 500 Index.

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

12 The Standard & Poor's 500^® Index (S&P 500^®) is a broad-based index, the performance of which is based on the performance of 500 widely-held common stocks chosen for market size, liquidity and industry group representation. 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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

Strategist Portfolio

For the six-month period ended June 30, 2007, Strategist Portfolio Class X shares produced a total return of 6.31 percent underperforming the S&P 500^® Index¹³ which returned 6.96 percent and outperforming the Lehman Brothers U.S. Government/Credit Index¹⁴ which returned 0.97 percent. For further comparison, the Lipper Variable Annuity (Underlying Funds) Flexible Portfolio Funds Average total return was 4.80 percent and U.S. Treasury bills returned 2.55 percent. For the same period, the Portfolio's Class Y shares returned 6.12 percent. Past performance is no guarantee of future results.

Strategist Portfolio's flexible investment approach allows investment across stocks, bonds, cash and other investment classes. To determine the specific allocation among asset classes throughout the period, we rigorously evaluate a comprehensive array of quantitative and qualitative factors. The quantitative analysis comprises an extensive "top-down" asset class review of many macroeconomic variables, with primary focus on three core factors: monetary policy and its impact on liquidity, inflation trends and corporate profitability. A second, more qualitative process then broadens the analysis to determine which individual sectors and industries would offer the best opportunities, in our view, given the macroeconomic climate. Individual holdings are then selected to provide desired exposure to asset classes and sectors.

The management team maintained a consistent asset allocation throughout the period under review, as a more defensive stance toward fixed income contrasted with a generally positive view toward equities. The Portfolio's assets were allocated as follows: 60 percent equity, 20 percent long-term fixed income and 20 percent in short-term fixed income and cash-equivalent instruments.

Within the stock portion, the Portfolio's sector exposures also remained generally consistent throughout the period, with only minor changes to our industry selections and individual security holdings. We continued to favor sectors benefiting from growth outside the United States as well as those with less consumer and interest rate exposure. Among the 10 broad S&P 500 Index equity sectors, the Portfolio's relative overweight exposures included: basic materials, information technology, telecommunication services and health care. The Portfolio's

13 The Standard & Poor's 500^® Index (S&P 500^®) is a broad-based index, the performance of which is based on the performance of 500 widely-held common stocks chosen for market size, liquidity and industry group representation. 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.

14 The Lehman Brothers U.S. Government/Credit Index tracks the performance of government and corporate obligations, including U.S. government agency and Treasury securities and corporate and Yankee bonds. 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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

largest sector underweights included utilities, financial services and energy. Industrials, consumer discretionary and consumer staple exposures were generally in line with the benchmark S&P 500 Index.

The fixed income component of the Portfolio remained generally defensive throughout the period under review. Long-term U.S. government bond exposure was limited, while short-term debt instruments represented about one-third of the overall fixed income portfolio. Mortgages, asset-backed credits and foreign government debt made up the balance of the Portfolio's bond holdings.

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

Utilities Portfolio

For the six-month period ended June 30, 2007, Utilities Portfolio Class X shares produced a total return of 12.34 percent outperforming the S&P 500^® Utilities Index¹⁵ which returned 8.87 percent and the S&P 500^® Index¹⁶ which returned 6.96 percent. For the same period, the Portfolio's Class Y shares returned 12.21 percent. Past performance is no guarantee of future results.

The Portfolio's strong relative performance was attributed to a combination of commodity-sensitive electric and natural gas stock positions. Additionally, the Portfolio's investment in global telecommunications stocks having significant wireless assets significantly boosted relative returns. Although all sub-sectors of the utilities sector provided strong returns relative to the broad market, the clear detractor to overall performance for the period was the Portfolio's underweight allocation to those specific electric utilities which yielded above-average total returns over the last six months.

Given the attractive opportunities within the broad utility markets, the Portfolio was fully invested throughout the period and held an average cash balance in the range of 1 to 3 percent. The Portfolio provided shareholders with diversified exposure to the utilities sector, and at the close of the period had a 64 percent allocation to electric utilities, a 17 percent allocation in natural gas/energy and a 19 percent

15 The Standard & Poor's 500^® Utilities Index (S&P 500^® Utilities Index) is an unmanaged, market capitalization weighted index consisting of utilities companies in the S&P 500^® Index and is designed to measure the performance of the utilities sector. It includes reinvested 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.

16 The Standard & Poor's 500^® Index (S&P 500^®) is a broad-based index, the performance of which is based on the performance of 500 widely-held common stocks chosen for market size, liquidity and industry group representation. 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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

allocation to telecommunications services. Overall, the Portfolio had a 7 percent allocation outside the United States. We note that the Portfolio's holdings and allocations may be modified at any time, in response to our analysis of broader trends or company specific fundamentals.

There is no guarantee that any sectors mentioned will continue to perform as discussed above or that securities in such sectors will be held by the Portfolio in the future.

We appreciate your ongoing support of Morgan Stanley Variable Investment Series and look forward to continuing to serve your investment needs.

Very truly yours,

Ronald E. Robison
President and Principal Executive Officer

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2007 continued

Proxy Voting Policy and Procedures and Proxy Voting Record

You may obtain a copy of the Portfolios' Proxy Voting Policy and Procedures without charge, upon request, by calling toll free (800) 869-NEWS or by visiting the Mutual Fund Center on our Web site at www.morganstanley.com. It is also available on the Securities and Exchange Commission's Web site at http://www.sec.gov.

You may obtain information regarding how the Portfolios voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 without charge by visiting the Mutual Fund Center on our Web site at www.morganstanley.com. This information is also available on the Securities and Exchange Commission's Web site at http://www.sec.gov.

For More Information About Portfolio Holdings

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semiannual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semiannual reports and the 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 semiannual and annual reports to fund shareholders and makes these reports available on its public web site, www.morganstanley.com. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public web site. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's web site, http://www.sec.gov. You may also review and copy them at the SEC's public reference room in Washington, DC. Information on the operation of the SEC's public reference room may be obtained by calling the SEC at (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's e-mail address (publicinfo@sec.gov) or by writing the public reference section of the SEC, Washington, DC 20549-0102.

Morgan Stanley Variable Investment Series

Fund Performance n June 30, 2007

Average Annual Total Returns—Period Ended June 30, 2007⁽¹⁾

Class X	1 Year			5 Years			10 Years			Since Inception			Date of Inception
Aggressive Equity		15.32	%		12.46	%		N/A			6.27	%	5/4/1999
Dividend Growth		18.79			7.99			5.39	%		9.39		3/1/1990
Equity		15.76			9.72			8.65			12.18		3/9/1984
European Equity		31.54			14.16			9.06			12.63		3/1/1991
Global Advantage		27.32			12.14			N/A			2.85		5/18/1998
Global Dividend Growth		28.22			13.40			8.23			10.11		2/23/1994
High Yield		10.06			9.49			(3.93	)		3.85		3/9/1984
Income Builder		17.72			10.18			7.47			7.94		1/21/1997
Income Plus		7.00			5.62			6.07			7.34		3/1/1987
Limited Duration		5.26			2.89			N/A			3.70		5/4/1999
Money Market		4.92			2.39			3.52			4.99		3/9/1984
S&P 500 Index		20.28			10.33			N/A			4.69		5/18/1998
Strategist		15.91			11.69			8.90			9.67		3/1/1987
Utilities		29.21			15.28			8.07			9.47		3/1/1990

Past performance is not predictive of future returns. Investment return and principal value will fluctuate. When you sell fund shares, they may be worth less than their original cost. The table does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Performance for Class X shares will vary from the Performance of Class Y shares due to differences in expenses.

(1) Figure assumes reinvestment of all distributions for the underlying fund based on net asset value (NAV). It does not reflect the deduction of insurance expenses, an annual contract maintenance fee, or surrender charges.

Morgan Stanley Variable Investment Series

Fund Performance n June 30, 2007 continued

Average Annual Total Returns—Period Ended June 30, 2007⁽¹⁾

Class Y	1 Year			5 Years			10 Years	Since Inception			Date of Inception
Aggressive Equity		15.00	%		12.17	%	N/A		1.33	%	6/5/2000
Dividend Growth		18.45			7.72		N/A		5.16		6/5/2000
Equity		15.51			9.44		N/A		0.04		6/5/2000
European Equity		31.26			13.88		N/A		4.54		6/5/2000
Global Advantage		27.12			11.88		N/A		0.68		6/5/2000
Global Dividend Growth		27.87			13.12		N/A		8.30		6/5/2000
High Yield		9.77			9.22		N/A		(5.19	)	6/5/2000
Income Builder		17.37			9.91		N/A		7.16		6/5/2000
Income Plus		6.74			5.34		N/A		6.32		6/5/2000
Limited Duration		4.89			2.62		N/A		3.53		6/5/2000
Money Market		4.66			2.13		N/A		2.59		6/5/2000
S&P 500 Index		19.93			10.04		N/A		1.39		6/5/2000
Strategist		15.57			11.40		N/A		5.59		6/5/2000
Utilities		28.90			14.98		N/A		3.34		6/5/2000

Past performance is not predictive of future returns. Investment return and principal value will fluctuate. When you sell fund shares, they may be worth less than their original cost. The table does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Performance for Class Y shares will vary from the Performance of Class X shares due to differences in expenses.

Morgan Stanley Variable Investment Series

Expense Example n June 30, 2007

Expense Example

As a shareholder of the Portfolio, you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, including advisory fees; distribution and service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period 01/01/07 – 06/30/07.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, 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 first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio'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 cost of investing in the Portfolio 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 insurance company charges. Therefore, the second line of the table is useful in comparing ongoing costs, and will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

Morgan Stanley Variable Investment Series

Expense Example n June 30, 2007 continued

Money Market

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (2.43% return)	$	1,000.00	$	1,024.30	$	2.78
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.19	$	2.77
Class Y
Actual (2.30% return)	$	1,000.00	$	1,023.00	$	4.03
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.94	$	4.03

* Expenses are equal to the Portfolio's annualized expense ratios of 0.55% and 0.80% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 182**/365 (to reflect the one-half year period).

** Adjusted to reflect non-business days accruals.

Limited Duration

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (2.31% return)	$	1,000.00	$	1,023.10	$	2.36
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.46	$	2.36
Class Y
Actual (2.19% return)	$	1,000.00	$	1,021.90	$	3.61
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,021.22	$	3.61

* Expenses are equal to the Portfolio's annualized expense ratios of 0.47% and 0.72% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Income Plus

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (0.45% return)	$	1,000.00	$	1,004.50	$	2.73
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.07	$	2.76
Class Y
Actual (0.32% return)	$	1,000.00	$	1,003.20	$	3.97
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.83	$	4.01

Morgan Stanley Variable Investment Series

Expense Example n June 30, 2007 continued

High Yield

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (3.42% return)	$	1,000.00	$	1,034.20	$	5.09
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.79	$	5.06
Class Y
Actual (3.29% return)	$	1,000.00	$	1,032.90	$	6.35
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,018.55	$	6.31

* Expenses are equal to the Portfolio's annualized expense ratios of 1.01% and 1.26% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Utilities

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (12.34% return)	$	1,000.00	$	1,123.40	$	3.74
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,021.27	$	3.56
Class Y
Actual (12.21% return)	$	1,000.00	$	1,122.10	$	5.05
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.03	$	4.81

* Expenses are equal to the Portfolio's annualized expense ratios of 0.71% and 0.96% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Income Builder

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (5.88% return)	$	1,000.00	$	1,058.80	$	4.29
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.63	$	4.21
Class Y
Actual (5.75% return)	$	1,000.00	$	1,057.50	$	5.56
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.39	$	5.46

* Expenses are equal to the Portfolio's annualized expense ratios of 0.84% and 1.09% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Morgan Stanley Variable Investment Series

Expense Example n June 30, 2007 continued

Dividend Growth

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (6.57% return)	$	1,000.00	$	1,065.70	$	3.02
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,021.87	$	2.96
Class Y
Actual (6.38% return)	$	1,000.00	$	1,063.80	$	4.30
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.63	$	4.21

* Expenses are equal to the Portfolio's annualized expense ratios of 0.59% and 0.84% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Global Dividend Growth

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (10.51% return)	$	1,000.00	$	1,105.10	$	4.28
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.73	$	4.11
Class Y
Actual (10.34% return)	$	1,000.00	$	1,103.40	$	5.58
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.49	$	5.36

* Expenses are equal to the Portfolio's annualized expense ratios of 0.82% and 1.07% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

European Equity

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (12.71% return)	$	1,000.00	$	1,127.10	$	5.27
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.84	$	5.01
Class Y
Actual (12.61% return)	$	1,000.00	$	1,126.10	$	6.59
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,018.60	$	6.26

* Expenses are equal to the Portfolio's annualized expense ratios of 1.00% and 1.25% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). If the Fund had borne all of its expenses, the annualized expense ratios would have been 1.05% and 1.30% for Class X and Class Y shares, respectively.

Morgan Stanley Variable Investment Series

Expense Example n June 30, 2007 continued

Equity

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (9.63% return)	$	1,000.00	$	1,096.30	$	2.75
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.17	$	2.66
Class Y
Actual (9.51% return)	$	1,000.00	$	1,095.10	$	4.05
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.93	$	3.91

* Expenses are equal to the Portfolio's annualized expense ratios of 0.53% and 0.78% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

S&P 500 Index

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (6.79% return)	$	1,000.00	$	1,067.90	$	1.38
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,023.46	$	1.35
Class Y
Actual (6.65% return)	$	1,000.00	$	1,066.50	$	2.66
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.22	$	2.61

* Expenses are equal to the Portfolio's annualized expense ratios of 0.27% and 0.52% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Global Advantage

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (10.78% return)	$	1,000.00	$	1,107.80	$	4.44
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.58	$	4.26
Class Y
Actual (10.66% return)	$	1,000.00	$	1,106.60	$	5.75
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.34	$	5.51

* Expenses are equal to the Portfolio's annualized expense ratios of 0.85% and 1.10% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Morgan Stanley Variable Investment Series

Expense Example n June 30, 2007 continued

Aggressive Equity

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (9.49% return)	$	1,000.00	$	1,094.90	$	4.42
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.58	$	4.26
Class Y
Actual (9.35% return)	$	1,000.00	$	1,093.50	$	5.71
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.34	$	5.51

Strategist

	Beginning Account Value		Ending Account Value		Expenses Paid During Period *
	01/01/07		06/30/07		01/01/07 – 06/30/07
Class X
Actual (6.31% return)	$	1,000.00	$	1,063.10	$	2.86
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.02	$	2.81
Class Y
Actual (6.12% return)	$	1,000.00	$	1,061.20	$	4.14
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.78	$	4.06

* Expenses are equal to the Portfolio's annualized expense ratios of 0.56% and 0.81% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval n June 30, 2007

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Investment Adviser under the Advisory Agreement, including portfolio management, investment research and fixed income securities trading. The Board reviewed similar information and factors regarding each Sub-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Portfolios' Administrator under the Administration Agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Investment Adviser's expense. (The Investment Adviser, the Sub-Advisers and the Administrator together are referred to as the "Adviser" and the Advisory and Administration Agreements together are referred to as the "Management Agreement.") The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Portfolios. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of each Portfolio. The Board also concluded that the overall quality of the advisory and administrative services was satisfactory.

Performance Relative to Comparable Funds Managed by Other Advisers

On a regular basis, the Board reviews the performance of all funds in the Morgan Stanley Fund Complex, including the Portfolios, compared to their peers, paying specific attention to the underperforming funds. In addition, the Board specifically reviewed each Portfolio's performance for the one-, three- and five-year periods ended November 30, 2006, as shown in reports provided by Lipper (the "Lipper Reports"), compared to the performance of comparable funds selected by Lipper (the "performance peer group") for each Portfolio. The Board discussed with the Adviser the performance goals and the actual results achieved in managing each Portfolio. When a fund underperforms its performance peer group, the Board discusses with the Adviser the causes of the underperformance and, where necessary, specific changes to the fund's investment strategy or investment personnel.

With respect to the Strategist, Income Builder, S&P 500 Index, Aggressive Equity, Equity, Income Plus and Money Market Portfolios, the Board concluded that each Portfolio's performance was competitive with that of its performance peer group.

With respect to the European Equity and Global Advantage Portfolios, the Board concluded that each Portfolio's performance was acceptable.

With respect to the Global Dividend Growth Portfolio, the Board noted that the Adviser had added portfolio managers to the Portfolio's portfolio management team in the past twelve to eighteen months. The Board also

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval n June 30, 2007 continued

noted the Portfolio's recent improved performance as of February 28, 2007 and concluded that the Portfolio's performance was competitive with that of its performance peer group.

With respect to the Dividend Growth and Utilities Portfolios, the Board noted that the Adviser is evaluating various alternatives to improve performance, including portfolio manager changes/additions. The Board concluded that each Portfolio's performance was acceptable.

With respect to the Limited Duration and High Yield Portfolios, the Board concluded that each Portfolio can reasonably be expected to be competitive with that of its performance peer group based on recent action taken or proposed to be taken with respect to each Portfolio's investment strategy and/or investment personnel.

Fees Relative to Other Proprietary Funds Managed by the Adviser with Comparable Investment Strategies

The Board reviewed the advisory and administrative fee (together, the "management fee") rate paid by each Portfolio under the Management Agreement.

With respect to the Dividend Growth, Strategist, European Equity, Global Advantage, Utilities, S&P 500 Index, Aggressive Equity and Equity Portfolios, the Board noted that the management fee rates were comparable to the management fee rates charged by the Adviser to other proprietary funds it manages with investment strategies comparable to those of the Portfolios.

With respect to the Global Dividend Growth, High Yield, Income Plus and Limited Duration Portfolios, the Board noted that the management fee rates were comparable to the management fee rates charged by the Adviser to other proprietary funds it manages with investment strategies comparable to those of the Portfolios taking into account the scope of the services provided.

With respect to the Income Builder Portfolio, the Board noted that the Adviser did not manage any other funds with investment strategies comparable to those of the Portfolio. With respect to the Money Market Portfolio, the Board noted that the Adviser did not manage any other funds with investment strategies substantially comparable to those of the Portfolio.

Fees and Expenses Relative to Comparable Funds Managed by Other Advisers

The Board reviewed the management fee rate and total expense ratio of each Portfolio as compared to the average management fee rate and average total expense ratio for funds, selected by Lipper (the "expense peer group"), managed by other advisers with investment strategies comparable to those of the Portfolios, as shown in the Lipper Reports.

With respect to the Dividend Growth, Strategist, Income Builder, European Equity, Global Dividend Growth, Global Advantage, Utilities, S&P 500 Index, Aggressive Equity, Equity, High Yield, Income Plus and Limited Duration Portfolios, the Board concluded that each Portfolio's management fee rate and total expense ratio were competitive with those of its expense peer group.

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval n June 30, 2007 continued

With respect to the Money Market Portfolio, the Board concluded that the Portfolio's management fee rate was acceptable as the total expense ratio was competitive with its expense peer group.

Breakpoints and Economies of Scale

The Board reviewed the structure of each Portfolio's management fee schedule under the Management Agreement and noted that each Portfolio's management fee schedule, except the Limited Duration Portfolio, includes one or more breakpoints. The Board also reviewed the level of each Portfolio's management fee and noted that each fee, as a percentage of the Portfolio's net assets, would decrease as net assets increase because each management fee includes one or more breakpoints. The Board concluded that each Portfolio's management fee would reflect economies of scale as assets increase.

With respect to the Limited Duration Portfolio, the Board noted that the management fee schedule does not include any breakpoints. The Board noted that the Portfolio's assets were relatively small. The Board concluded that it would be premature to consider economies of scale as a factor in approving the Management Agreement at the present time.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and affiliates during the last year from their relationship with each Portfolio and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. Based on its review of the information it received, the Board concluded that the profits earned by the Adviser and affiliates were not excessive in light of the advisory, administrative and other services provided to the Portfolios.

Fall-Out Benefits

The Board considered so-called "fall-out benefits" derived by the Adviser and affiliates from their relationship with the Portfolio and the Morgan Stanley Fund Complex. The Board considered the "float" benefits derived from handling of checks for purchases and sales of Portfolio shares, through a broker-dealer affiliate of the Adviser. The Board also considered that a broker-dealer affiliate of the Adviser receives from each Portfolio 12b-1 fees for distribution and shareholder services. The Board concluded that the float benefits were relatively small and the 12b-1 fees were competitive with those of other broker-dealers.

With respect to the Dividend Growth, Strategist, Income Builder, European Equity, Global Dividend Growth, Global Advantage, Utilities, S&P 500 Index, Aggressive Equity and Equity Portfolios, the Board considered "soft dollar" benefits (discussed in the next section).

Soft Dollar Benefits

The Board considered whether the Adviser realizes any benefits as a result of brokerage transactions executed through "soft dollar" arrangements. Under such arrangements, brokerage commissions paid by the Portfolios

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval n June 30, 2007 continued

and/or other funds managed by the Adviser would be used to pay for research that a securities broker obtains from third parties, or to pay for both research and execution services from securities brokers who effect transactions for the Portfolios.

With respect to the Dividend Growth, Strategist, Income Builder, European Equity, Global Dividend Growth, Global Advantage, Utilities, Aggressive Equity and Equity Portfolios, the Board recognized that the receipt of such research from brokers may reduce the Adviser's costs but concluded that the receipt of such research strengthens the investment management resources of the Adviser, which may ultimately benefit the Portfolios and other funds in the Morgan Stanley Fund Complex.

With respect to the S&P 500 Index Portfolio, the Board recognized that the Portfolio's commissions are used to pay for execution services only.

With respect to the High Yield, Income Plus, Limited Duration and Money Market Portfolios, the Board noted that each Portfolio invests only in fixed income securities, which do not generate soft dollars.

Adviser Financially Sound and Financially Capable of Meeting the Portfolios' Needs

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement.

Historical Relationship Between the Portfolios and the Adviser

The Board also reviewed and considered the historical relationship between each Portfolio and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Portfolios' operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that it is beneficial for each Portfolio to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of each Portfolio's business.

General Conclusion

On April 25, 2007, after considering and weighing all of the above factors, the Board concluded that it would be in the best interest of each Portfolio and its shareholders to approve renewal of the Management Agreement for another year until April 30, 2008. On June 20, 2007, the Board again considered and weighed all of the above factors and concluded that it would be in the best interest of each Portfolio and its shareholders to approve renewal of the Management Agreement to continue until June 30, 2008.

Morgan Stanley Variable Investment Series - Money Market

Portfolio of Investments n June 30, 2007 (unaudited)

PRINCIPAL AMOUNT IN THOUSANDS		DESCRIPTION	ANNUALIZED YIELD ON DATE OF PURCHASE			MATURITY DATE	VALUE
		Commercial Paper (82.2%)
		Asset-Backed - Auto (4.4%)
$	6,000	DaimlerChrysler Revolving Auto Conduit LLC-A1 (Series I)		5.30 - 5.32	%	07/02/07 - 08/07/07	$	5,987,723
	1,000	DaimlerChrysler Revolving Auto Conduit LLC-A1 (Series I)		5.36		08/17/07		992,920
	2,911	DaimlerChrysler Revolving Auto Conduit LLC-A1 (Series I)		5.31 - 5.36		08/02/07 - 08/20/07		2,895,331
								9,875,974
		Asset-Backed - Consumer (10.1%)
	836	Bryant Park Funding LLC*		5.36		08/15/07		830,317
	1,000	Keel Capital, Inc.*		5.35		07/27/07		996,010
	4,000	Mont Blanc Capital Corp.*		5.31		08/15/07		3,973,218
	1,650	Park Avenue Receivables Co., LLC*		5.32 - 5.33		07/10/07 - 08/02/07		1,644,684
	1,400	Ranger Funding Co., LLC*		5.32		07/12/07		1,397,531
	3,000	Ranger Funding Co., LLC*		5.31		07/26/07		2,988,592
	1,000	Thames Asset Global Securitization*		5.34		07/18/07		997,340
	9,860	Three Rivers Funding Corp.*		5.40		07/02/07		9,857,042
								22,684,734
		Asset-Backed - Corporate (7.3%)
	1,000	Atlantis One Funding*		5.36		12/19/07		975,060
	10,322	Kaiserplatz Funding (Delaware) LLC*		5.31 - 5.36		07/05/07 - 09/21/07		10,285,239
	1,800	Nieuw Amsterdam Receivables Corp.*		5.30		07/30/07		1,792,185
	3,475	Simba Funding Corp.*		5.31 - 5.32		07/23/07 - 09/05/07		3,454,162
								16,506,646
		Asset-Backed - Diversified (5.7%)
	564	Atlantic Asset Securitization LLC*		5.33		08/27/07		559,220
	760	Compass Securitization LLC*		5.33		07/03/07		759,664
	567	Fairway Finance Co., LLC*		5.35		08/01/07		564,324
	870	Falcon Asset Securitization Co. LLC*		5.33		08/03/07		865,653
	10,079	Lexington Parker Capital Co. LLC*		5.31 - 5.33		07/03/07 - 10/19/07		10,017,503
								12,766,364
		Asset-Backed - Mortgage (4.5%)
	10,110	Sydney Capital Corp.*		5.32 - 5.35		07/23/07 - 08/21/07		10,060,821
		Asset-Backed - Securities (15.1%)
	3,276	Amstel Funding Corp.*		5.32 - 5.36		07/20/07 - 10/29/07		3,256,817
	1,100	Bavaria TRR Corp.*		5.44		07/02/07		1,099,668
	2,680	Beethoven Funding Corp.*		5.34 - 5.35		08/10/07 - 09/10/07		2,656,888
	5,949	Giro Lion (US) Funding LLC*		5.34 - 5.36		07/02/07 - 09/18/07		5,904,828
	7,700	Grampian Funding LLC*		5.31 - 5.35		07/20/07 - 11/14/07		7,634,946

See Notes to Financial Statements
33

Morgan Stanley Variable Investment Series - Money Market

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS		DESCRIPTION	ANNUALIZED YIELD ON DATE OF PURCHASE			MATURITY DATE	VALUE
$	500	North Sea Funding LLC*		5.35	%	09/17/07	$	494,207
	635	Polonius, Inc.*		5.34		08/27/07		629,598
	7,560	Scaldis Capital LLC*		5.29 - 5.33		09/04/07 - 11/05/07		7,470,191
	5,000	Solitaire Funding LLC*		5.33		07/13/07		4,990,394
								34,137,537
		Asset-Backed - Structured Investment Vehicles (5.4%)
	5,000	Asscher Finance Corp.*		5.34		10/02/07		4,931,458
	1,710	Atlas Capital Funding Corp.*		5.31		07/23/07		1,704,264
	1,000	Beta Finance*		5.33		11/26/07		978,540
	500	CC USA, Inc.*		5.31		08/15/07		496,652
	4,000	Dorada Finance, Inc.*		5.31 - 5.33		08/06/07 - 09/05/07		3,974,054
								12,084,968
		Banking (4.8%)
	11,000	Citigroup Funding Inc.		5.32 - 5.35		08/02/07 - 09/14/07		10,905,853
		Insurance (3.2%)
	7,265	Irish Life & Permanent PLC*		5.31 - 5.32		08/22/07 - 09/24/07		7,200,419
		International Banks (21.7%)
	600	Bank of Ireland		5.32		07/10/07		599,125
	6,250	Barclays (U.S.) Funding PLC		5.32 - 5.33		08/29/07 - 08/31/07		6,193,963
	5,000	Commerzbank (U.S.) Finance Inc.		5.31		08/09/07		4,970,889
	6,400	DEPFA Bank PLC*		5.29 - 5.31		08/24/07		6,349,308
	1,400	Dexia Delaware LLC		5.32 - 5.36		08/10/07 - 09/17/07		1,387,139
	800	HBOS Treasury Services PLC		5.31		07/03/07		799,650
	1,000	Kommunalkredit International Bank*		5.36		10/29/07		982,337
	2,400	Natexis Banques Populaires - NY		5.30		08/01/07		2,388,907
	9,150	Societe Generale N.A., Inc.		5.31 - 5.35		07/26/07 - 11/26/07		9,041,510
	5,500	Swedbank		5.31		07/09/07 - 11/16/07		5,399,532
	3,000	Swedbank Mortgage AB		5.32		08/14/07		2,980,425
	2,801	UBS Finance (Delaware) LLC		5.30 - 5.31		07/11/07 - 09/04/07		2,785,781
	5,000	Unicredito Italiano Bank (Ireland) PLC		5.32		11/19/07		4,897,938
								48,776,504
		Total Commercial Paper (Cost $184,999,820)						184,999,820
		Floating Rate Notes (10.1%)
		Asset-Backed - Structured Investment Vehicles (1.8%)
	2,000	Asscher Finance Corp.*		5.34	†	09/25/07‡		1,999,800
	2,000	Cullinan Finance Corp.*		5.32	†	07/02/07‡		1,999,805
								3,999,605

See Notes to Financial Statements
34

Morgan Stanley Variable Investment Series - Money Market

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS		DESCRIPTION	ANNUALIZED YIELD ON DATE OF PURCHASE			MATURITY DATE			VALUE
		Domestic Banks (5.1%)
$	3,000	American Express Centurion Bank		5.41	† %	07/19/07‡			$	3,000,156
	3,600	Bank of America Corp.		5.67	†	09/06/07‡				3,602,209
	5,000	Bank of New York (The)		5.34	†	08/16/07‡				5,000,108
										11,602,473
		International Banks (1.0%)
	600	Nordea Bank Finland (NY)		5.26 - 5.30	†	07/31/07 - 08/28/07‡				599,612
	1,600	UniCredito Italiano SpA		5.36	†	09/04/07 - 09/13/07‡				1,600,080
										2,199,692
		Investment Banks/Brokers (2.2%)
	5,000	Merrill Lynch & Co., Inc.		5.48	†	07/19/07‡				5,002,322
		Total Floating Rate Notes (Cost $22,804,092)								22,804,092
		Certificates of Deposit (7.1%)
		International Banks
	500	Barclays Bank PLC		5.37		06/04/08				500,000
	5,000	BNP Paribas		5.31		11/09/07				5,000,000
	5,000	Canadian Imperial Bank of Commerce		5.33		10/26/07				4,997,874
	5,000	Norinchukin Bank		5.31		07/26/07				5,000,000
	500	Westpac Banking Corp.*		5.36		10/29/07				499,675
		Total Certificates of Deposit (Cost $15,997,549)								15,997,549
		Bankers' Acceptances (0.5%)
		Domestic Banks
	1,054	JP Morgan Chase & Co. (Cost $1,048,579)		5.32 - 5.33		07/03/07 - 08/13/07				1,048,579
		Total Investments (Cost $224,850,040) (a)					99.9	%		224,850,040
		Other Assets in Excess of Liabilities					0.1			311,867
		Net Assets					100.0	%	$	225,161,907

* Resale is restricted to qualified institutional investors.

† Rate shown is the rate in effect at June 30, 2007.

‡ Date of next interest rate reset.

(a) Cost is the same for federal income tax purposes.

See Notes to Financial Statements
35

Morgan Stanley Variable Investment Series - Money Market

Summary of Investments n June 30, 2007 (unaudited) continued

MATURITY SCHEDULE	PERCENT OF MARKET VALUE
1 - 30 Days		33	%
31 - 60 Days		32
61 - 90 Days		17
91 - 120 Days		8
121 - 207 Days		10
		100	%

See Notes to Financial Statements
36

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2007 (unaudited)

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Corporate Bonds (30.8%)
		Aerospace & Defense (0.4%)
$	400	BAE Systems Holdings Inc. - 144A*		4.75	%	08/15/10	$	391,417
	111	Raytheon Co.		6.75		08/15/07		111,147
								502,564
		Air Freight/Couriers (0.2%)
	330	FedEx Corp.		5.50		08/15/09		330,449
		Beverages: Alcoholic (0.3%)
	415	Miller Brewing Co. - 144A*		4.25		08/15/08		408,842
		Building Products (0.1%)
	145	Masco Corp.		4.625		08/15/07		144,827
		Cable/Satellite TV (0.6%)
	490	Comcast Cable Communications, Inc.		6.875		06/15/09		501,926
	70	Comcast Corp.		5.85		01/15/10		70,507
	242	Cox Communications Inc.		5.91	†	12/14/07		242,536
								814,969
		Chemicals: Major Diversified (0.1%)
	170	ICI Wilmington Inc.		4.375		12/01/08		167,192
		Containers/Packaging (0.1%)
	90	Sealed Air Corp. - 144A*		6.95		05/15/09		92,203
		Department Stores (0.8%)
	230	Federated Department Stores, Inc.		6.625		09/01/08		231,573
	370	JC Penney Corp., Inc.		7.375		08/15/08		375,349
	525	May Department Stores Co., Inc.		3.95		07/15/07		524,731
								1,131,653
		Drugstore Chains (0.4%)
	175	CVS Corp.		3.875		11/01/07		174,020
	390	CVS Corp.		4.00		09/15/09		377,651
								551,671
		Electric Utilities (4.4%)
	470	Baltimore Gas & Electric Co.		6.625		03/15/08		473,170
	710	Carolina Power & Light Company Inc.		6.80		08/15/07		710,853
	248	Columbus Southern Power Co. (Series E)		4.40		12/01/10		238,966
	380	Consumers Energy Co. (Series H)		4.80		02/17/09		375,542
	325	Detroit Edison Co. (The)		6.125		10/01/10		331,034
	330	Dominion Resources Inc. (Series A)		5.687	†	05/15/08		330,466
	240	Duke Energy Corp.		3.75		03/05/08		237,327
	170	Entergy Gulf States, Inc.		3.60		06/01/08		167,003
	220	Entergy Gulf States, Inc.		5.76	†	12/01/09		220,014

See Notes to Financial Statements
37

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	45	Entergy Gulf States, Inc. - 144A*		6.11	†%	12/08/08	$	45,136
	495	FPL Group Capital Inc. (Series B)		5.551		02/16/08		494,778
	405	Ohio Power Co.		5.53	†	04/05/10		405,543
	570	Pacific Gas & Electric Co.		3.60		03/01/09		553,359
	390	Peco Energy Co.		3.50		05/01/08		383,745
	235	Public Service Co. of Colorado (Series A)		6.875		07/15/09		240,911
	330	Southwestern Public Service Co. (Series A)		6.20		03/01/09		332,826
	400	Texas-New Mexico Power Co.		6.25		01/15/09		403,329
	200	Wisconsin Electric Power Co.		3.50		12/01/07		198,387
								6,142,389
		Electrical Products (0.3%)
	420	Cooper Industries, Inc.		5.25		07/01/07		420,000
		Environmental Services (0.0%)
	60	USA Waste Services, Inc.		7.125		10/01/07		60,173
		Finance/Rental/Leasing (2.3%)
	560	American Honda Finance Corp. - 144A*		3.85		11/06/08		548,891
	410	Capmark Financial Group - 144A*		5.875		05/10/12		405,048
	90	CIT Group Inc.		5.00		11/24/08		89,445
	370	CIT Group Inc. (Series MTN)		4.75		08/15/08		366,961
	540	Countrywide Home Loans, Inc. (Series L)		3.25		05/21/08		529,356
	455	Residential Capital Corp.		6.00		02/22/11		440,627
	430	Residential Capital Corp.		6.375		06/30/10		424,733
	525	SLM Corp.		4.00		01/15/10		488,866
								3,293,927
		Financial Conglomerates (1.3%)
	95	Bank One Corp. (Series A)		6.00		02/17/09		95,842
	150	Chase Manhattan Corp.		6.00		02/15/09		151,326
	55	Chase Manhattan Corp.		7.00		11/15/09		56,845
	315	Citicorp (Series F)		6.375		11/15/08		319,233
	170	Citigroup Inc.		3.625		02/09/09		165,634
	120	General Electric Capital Corp. (Series A)		4.25		12/01/10		115,875
	515	Pricoa Global Funding I - 144A*		3.90		12/15/08		503,548
	340	Prudential Funding LLC - 144A*		6.60		05/15/08		342,966
								1,751,269
		Food Retail (0.4%)
	305	Fred Meyer, Inc.		7.45		03/01/08		308,852
	230	Safeway Inc.		7.50		09/15/09		239,239
								548,091

See Notes to Financial Statements
38

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Food: Major Diversified (1.0%)
$	440	General Mills Inc.		3.875	%	11/30/07	$	437,310
	200	Kraft Foods Inc.		4.00		10/01/08		196,276
	385	Kraft Foods Inc.		4.125		11/12/09		373,176
	485	Sara Lee Corp.		2.75		06/15/08		471,771
								1,478,533
		Gas Distributors (0.7%)
	175	Keyspan Corp.		4.90		05/16/08		174,168
	180	NiSource Finance Corp.		5.93	†	11/23/09		180,380
	650	Sempra Energy		4.75		05/15/09		642,855
								997,403
		Home Improvement Chains (0.3%)
	410	Home Depot Inc.		5.485	†	12/16/09		409,595
		Household/Personal Care (0.3%)
	425	Clorox Co. (The)		5.485	†	12/14/07		425,261
		Industrial Conglomerates (0.3%)
	415	Textron Financial Corp.		4.125		03/03/08		411,703
		Investment Banks/Brokers (0.6%)
	775	Goldman Sachs Group Inc. (The)		4.125		01/15/08		770,245
		Life/Health Insurance (1.5%)
	545	John Hancock Financial Services, Inc.		5.625		12/01/08		546,910
	765	Met Life Global - 144A* (Note 4)		4.625		08/19/10		748,196
	300	Monumental Global Funding II - 144A*		3.85		03/03/08		296,799
	450	Monumental Global Funding II - 144A*		4.375		07/30/09		440,627
								2,032,532
		Major Banks (4.0%)
	575	Bank of America Corp.		3.375		02/17/09		558,102
	215	Bank of New York Co., Inc. (The)		5.20		07/01/07		215,000
	800	HBOS Treasury Services PLC - 144A* (United Kingdom)		5.625		07/20/09		804,486
	980	HSBC Finance Corp.		6.75		05/15/11		1,018,127
	250	MBNA Corp. (Series F)		5.786	†	05/05/08		250,997
	380	Popular North America, Inc. (Series F)		5.65		04/15/09		379,915
	615	Suntrust Bank Atlanta		4.55		05/25/09		606,258
	615	Unicredit Luxembourg Finance S.A. - 144A* (Luxembourg)		5.405	†	10/24/08		615,365
	810	Wachovia Corp.		5.35		03/15/11		806,447
	390	Well Fargo & Co.		3.12		08/15/08		379,050
								5,633,747

See Notes to Financial Statements
39

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Major Telecommunications (1.4%)
$	590	AT&T Inc.		5.456	†%	02/05/10	$	591,038
	300	Deutsche Telekom International Finance BV (Netherlands)		8.00		06/15/10		319,967
	350	Sprint Nextel Corp.		5.76	†	06/28/10		350,191
	505	Telecom Italia Capital SA (Luxembourg)		4.875		10/01/10		492,240
	150	Verizon Global Funding Corp.		7.25		12/01/10		158,241
								1,911,677
		Managed Health Care (0.3%)
	210	United Healthcare Group Inc.		5.44	†	03/02/09		210,119
	175	UnitedHealth Group Inc.		4.125		08/15/09		170,842
								380,961
		Media Conglomerates (0.7%)
	480	Time Warner, Inc.		5.59	†	11/13/09		480,725
	160	Viacom Inc.		5.71	†	06/16/09		160,557
	300	Viacom Inc.		5.75		04/30/11		299,819
								941,101
		Medical Specialties (0.6%)
	495	Baxter International, Inc.		5.196		02/16/08		494,350
	375	Hospira, Inc.		5.84	†	03/30/10		376,178
								870,528
		Motor Vehicles (0.4%)
	335	DaimlerChrysler North American Holdings Co.		5.79	†	03/13/09		336,549
	155	DaimlerChrysler North American Holdings Co.		4.05		06/04/08		152,859
								489,408
		Multi-Line Insurance (1.2%)
	690	American General Finance Corp. (Series H)		4.625		09/01/10		672,133
	120	Equitable Income Co., Inc.		6.50		04/01/08		120,864
	500	Hartford Financial Services Group, Inc. (The)		5.55		08/16/08		500,563
	415	International Lease Finance Corp. (Series Q)		4.625		06/02/08		411,891
								1,705,451
		Oil & Gas Pipelines (0.4%)
	500	Enbridge Energy Partners, LP		4.00		01/15/09		489,017
		Oil Refining/Marketing (0.4%)
	600	Valero Energy Corp.		3.50		04/01/09		581,998
		Other Metals/Minerals (0.3%)
	445	Brascan Corp. (Canada)		8.125		12/15/08		460,767
		Property - Casualty Insurers (1.0%)
	595	Mantis Reef Ltd. - 144A* (Australia)		4.692		11/14/08		588,255

See Notes to Financial Statements
40

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	195	Platinum Underwriters Holdings, Ltd. (Series B) (Bermuda)		6.371	%	11/16/07	$	194,439
	285	St. Paul Travelers Companies, Inc. (The)		5.01		08/16/07		284,885
	375	XLLIAC Global Funding - 144A*		4.80		08/10/10		367,017
								1,434,596
		Railroads (0.7%)
	315	Burlington North Santa Fe Railway Co.		6.125		03/15/09		318,456
	670	Union Pacific Corp. (Series E)		6.79		11/09/07		672,490
								990,946
		Real Estate Development (0.5%)
	562	World Financial Properties - 144A*		6.91		09/01/13		580,461
	166	World Financial Properties - 144A*		6.95		09/01/13		171,420
								751,881
		Regional Banks (0.5%)
	700	Banco Santander Central Hispano Issuances Ltd. (Cayman Islands)		7.625		11/03/09		734,037
		Restaurants (0.4%)
	580	Tricon Global Restaurant, Inc.		7.65		05/15/08		589,358
		Savings Banks (0.9%)
	575	Sovereign BanCorp Inc.		5.59	†	03/23/10		575,530
	100	Sovereign Bank (Series CD)		4.00		02/01/08		99,166
	200	Washington Mutual Inc.		4.00		01/15/09		195,738
	350	Washington Mutual Inc.		8.25		04/01/10		372,652
								1,243,086
		Trucks/Construction/Farm Machinery (0.3%)
	405	Caterpillar Financial Services Corp. (Series F)		3.625		11/15/07		402,400
		Wireless Telecommunications (0.4%)
	510	Vodafone Group PLC (United Kingdom)		5.45	†	12/28/07		510,275
		Total Corporate Bonds (Cost $43,411,064)						43,006,725
		Collateralized Mortgage Obligations (36.7%)
		U.S. Government Agencies (1.8%)
	868	Federal Home Loan Mortgage Corp. 2644 AU (PAC)		3.50		05/15/22		858,375
	661	Federal Home Loan Mortgage Corp. 2182 ZC		7.50		09/15/29		687,724
	481	Federal National Mortgage Assoc. 2005-27 NA (PAC)		5.50		01/25/24		480,106
	426	Federal National Mortgage Assoc. 2005-52 PA (PAC)		6.50		06/25/35		437,438
		Total U.S. Government Agencies						2,463,643

See Notes to Financial Statements
41

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Private Issues (34.9%)
$	1,083	American Home Mortgage Investment Trust 2007-1 GAIC		5.51	%	05/25/47	$	1,083,254
	880	Bank of America Funding Corp. 2006-H 3A1		6.218		09/20/46		882,698
	518	Bear Stearns Alt-A Trust 2003-3 3A		5.67	†	10/25/33		520,272
		Bear Stearns Mortgage Funding Trust
	690	2006-AR5 1A2		5.53	†	12/25/36		691,719
	784	2007-AR1 1A2		5.53	†	01/25/37		784,951
	823	2006-AR3 1A1		5.50	†	10/25/36		825,380
	827	2006-AR1 1A2		5.57	†	07/25/36		825,581
		Countrywide Alternative Loan Trust
	638	2006-0A1 1A2		5.62	†	03/20/46		638,942
	2,899	2005-81 X1 (IO)		1.909	†	02/25/37		141,315
	644	2006-0A14 2A1		5.51	†	11/25/46		645,333
	705	2006-0A16 A3		5.57	†	10/25/46		704,664
	706	2006-0A22 A2		5.53	†	02/25/47		706,489
	3,819	2006-0A1 2X (IO)		2.189	†	03/20/46		161,309
	961	2006-0A10 2A2		5.55	†	08/25/46		964,335
	704	2006-0A2 A3		5.59	†	05/20/46		704,435
	602	2005-76 2A2		6.73	†	02/25/36		605,698
	47	Countrywide Alternative Loan Trust NIM 2006-OA6N N1 - 144A*		5.25		07/25/46		46,513
		Countrywide Home Loans
	567	2006-0A4 A2		5.59	†	04/25/46		567,274
	3,881	2004-25 1X (IO)		1.589	†	02/25/35		83,835
	928	DSLA Mortgage Loan Trust 2006-AR2 2A1A		5.52	†	11/19/37		930,847
	5,449	DSLA NIM Corp. 2006-1 N1 - 144A*		5.926		04/20/46		5,446
	910	First Horizon Alt Mtg Sec 2006-FA8 1A7		6.00		02/25/37		910,530
		Greenpoint Mortgage Funding Trust
	627	2006-AR2 4A1		7.03	†	03/25/36		642,791
	1,904	2005-AR3 X1 (IO)		2.207	†	08/25/45		56,536
	2,880	2005-AR4 X4 (IO)		2.111	†	10/25/45		85,526
	286	GS Mortgage Securities Corp. 2007-NIM1 N1 - 144A*		6.25		08/25/46		285,750
	54	GS Mortgage Securities Corp. 2006-NIM3 N1 - 144A*		6.41		06/25/46		54,232
		Harborview Mortgage Loan Trust
	3,115	2005-2 X (IO)		1.967	†	05/19/35		71,555
	1,108	2006-10 2A1B		5.56	†	11/19/36		1,104,708
	723	2006-7 2A1B		5.57	†	10/19/37		724,969
	877	2006-8 2A1B		5.57	†	08/21/36		878,739
	640	2006-1 2A1B		5.56	†	03/19/37		641,181
	767	2006-14 2A1B		5.52	†	03/19/38		768,148
	970	2006-9 2AB2		5.60	†	11/19/36		975,247

See Notes to Financial Statements
42

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	‡	2006-5 PO2 (PO)		0.00	%	07/19/47	$	18
	5,877	2006-5 X2 (IO)		2.245	†	07/19/47		208,450
	1,944	2005-16 X1 (IO)		2.306	†	01/19/36		55,880
	4,804	2005-16 X3 (IO)		2.075	†	01/19/36		120,096
	3,171	2005-3 X2 (IO)		1.466	†	06/19/35		71,851
	234	2005-9 B1		5.92	†	06/20/35		236,099
	2	2006-1 PO1 (PO)		0.00		03/19/37		1,436
	1,235	2006-12 2A2B		5.57	†	01/19/38		1,239,964
	527	2005-12 2A11		7.03	†	10/19/35		535,739
	1,320	2005-16 4A1A		7.03	†	01/19/36		1,342,265
	3,678	2006-1 X1 (IO)		2.316	†	03/19/37		158,042
	920	2005-9 2A1C		5.77	†	06/20/35		923,403
		Harborview NIM Corp.
	341	2006-12 N1 - 144A*		6.41		12/19/36		340,879
	279	2006-14 N1 - 144A*		6.41		03/19/38		278,361
	205	2007-1A N1 - 144A*		6.41		03/19/37		204,565
	138	2006-9A N1		6.41		11/19/36		137,925
	34	2006-7A N1 - 144A*		6.41		09/19/36		33,537
		Indymac Index Mortgage Loan Trust
	219	2004-AR3 B1		5.82	†	07/25/34		218,989
	2,650	2005-AR12 AX2 (IO)		1.432	†	07/25/35		82,819
	57	Indymac Index NIM Corp. 2006-AR6 N1 - 144A*		6.65		06/25/46		57,077
	62	Lehman XS Net Interest Margin Notes 2006-GP1 A1 - 144A*		6.25		05/28/46		62,320
		Luminent Mortgage Trust
	867	2006-6 A1		5.52	†	10/25/46		869,490
	535	2006-1 A1		5.56	†	04/25/36		535,937
	859	2006-2 A1B		5.60	†	02/25/46		597,543
	737	2006-4 A1B		5.55	†	05/25/46		859,721
	736	Mortgageit Trust 2006-1 2A1B		5.60	†	04/25/36		740,612
	47	Rali NIM Corp. 2006-Q04 N1 - 144A*		6.05		04/25/46		46,678
		Residential Accredit Loans Inc.
	280	2006-QO1 1A1		5.58	†	02/25/46		280,682
	269	2006-QO1 2A1		5.59	†	02/25/46		269,363
	950	2006-QO10 A2		5.52	†	01/25/37		948,943
	772	2006-QH1 A1		5.51	†	12/25/36		768,529
	1,015	2006-QO6 A2		5.55	†	06/25/46		1,014,320
	923	2006-QO2 A2		5.59	†	02/25/46		924,520
	689	2007 QO3 A3		5.58	†	03/25/47		688,849
	597	2007 QO4 A2		5.58	†	05/25/47		596,954
	348	2007 QO4 A3		5.62	†	05/25/47		348,169
	1,210	2007 QH1 A2		5.51	†	02/25/37		1,210,427
	70	Sharps SP I LLC Net Interest Margin Trust 2006-AHM3 N1 - 144A*		7.00		10/25/46		69,936

See Notes to Financial Statements
43

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Structured Asset Mortgage Investments Inc.
$	472	2006-AR1 2A2		5.63	† %	02/25/36	$	474,420
	709	2006-AR2 A2		5.63	†	02/25/36		712,320
	777	2007-AR1 2A2		5.53	†	01/25/37		778,677
	890	2007-AR2 1A2		5.51	†	02/25/37		892,151
	1,007	2006-AR8 A1A		5.52	†	10/25/36		1,009,343
	909	2006-AR3 11A2		5.59	†	04/25/36		911,853
		Washington Mutual Mortgage Pass-Through Certificates
	881	2007-OA1 A1B		5.52	†	02/25/47		883,334
	840	2006-AR4 1A1B		5.97	†	05/25/46		839,823
	525	2005-AR13 A1B3		5.68	†	10/25/45		526,595
	537	2005-AR15 A1B3		5.66	†	11/25/45		538,837
	489	2005-AR8 2AB3		5.68	†	07/25/45		491,162
	1,268	2006-AR9 1A		6.03	†	08/25/46		1,269,433
	2,746	2004-AR10 X (IO)		1.291	†	07/25/44		45,906
	3,956	2004-AR12 X (IO)		1.148	†	10/25/44		66,138
	1,453	2004-AR8 X (IO)		1.327	†	06/25/44		23,608
		Washington Mutual Alternative Loan Trust Mortgage Pass-Through Certificates
	738	2006-AR6 2A		5.99	†	08/25/46		739,440
	821	2006-AR2 A1A		5.97	†	04/25/46		821,376
	856	2007-OA1 CA1B		5.52	†	12/25/46		856,701
		Total Private Issues						48,681,707
		Total Collateralized Mortgage Obligations (Cost $52,045,479)						51,145,350
		Commercial Mortgage-Backed Securities (0.6%)
	800	JP Morgan Chase Commercial Mortgage Securities Co. 2007-LD11 A1 (WI) (Cost $801,997)		5.651		06/15/49		803,711
		Asset-Backed Securities (16.8%)
		Finance/Rental/Leasing
	250	Aegis Asset Backed Securities Trust 2004-2 B1		7.32	†	06/25/34		240,376
	375	Ameriquest Mortgage Securities Inc. 2004-R7 M5		6.47	†	08/25/34		376,866
	1,500	Capital Auto Receivables Asset Trust 2006-1 A3		5.03		10/15/09		1,496,400
	1,100	Capital Auto Receivables Asset Trust 2006-2 A3A		4.98		05/15/11		1,095,797
	1,400	Capital Auto Receivables Asset Trust 2007-SN1 A3A		5.38		07/15/10		1,400,853
	575	Capital One Auto Finance Trust 2006-C A3A		5.07		07/15/11		573,341
	1,050	Caterpillar Financial Asset Trust 2006-A A3		5.57		05/25/10		1,053,416
	888	Chase Manhattan Auto Owner Trust 2004-A A4		2.83		09/15/10		876,651
	81	CIT Equipment Collateral 2004-EF1 A3		3.50		09/20/08		80,390
	725	CIT Equipment Collateral 2006-VT2 A3		5.07		02/20/10		722,727

See Notes to Financial Statements
44

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	267	CNH Equipment Trust 2005-A A3		4.02	%	04/15/09	$	266,444
	525	CNH Equipment Trust 2006-B A3		5.20		06/15/10		523,722
	1,100	Ford Credit Auto Owner Trust 2006-B A3		5.26		10/15/10		1,098,963
	1,175	Ford Credit Auto Owner Trust 2007-A A3A		5.40		08/15/11		1,175,550
	1,004	GE Equipment Small Ticket LLC 2005-2A A3		4.88		10/22/09		1,000,880
	1,175	GS Auto Loan Trust 2006-1 A3		5.37		12/15/10		1,175,645
	850	Harley Davidson Motorcycle Trust 2005-3 A2		4.41		06/15/12		839,665
	545	Harley-Davidson Motorcycle Trust 2003-3 A2		2.76		05/15/11		540,649
	725	Harley-Davidson Motorcycle Trust 2004-2 A2		3.56		02/15/12		714,087
	750	Harley-Davidson Motorcycle Trust 2005-2 A2		4.07		02/15/12		739,992
	625	Hertz Vehicle Financing LLC 2005-2A A2 - 144A*		4.93		02/25/10		621,019
	150	Home Equity Asset Trust 2004-3 B1		7.42	†	08/25/34		150,237
	864	Honda Auto Receivables Owner Trust 2005-5 A3		4.61		08/17/09		861,648
	850	Honda Auto Receivables Owner Trust 2005-6 A3		4.85		10/19/07		848,220
	624	Merrill Auto Trust Securitization 2005-1 A3		4.10		08/25/09		621,589
	581	National City Auto Receivables Trust 2004-A A4		2.88		05/15/11		571,735
	641	Nissan Auto Receivables Owner Trust 2004-A A4		2.76		07/15/09		633,042
	650	Nissan Auto Receivables Owner Trust 2006-C A3		5.44		04/15/10		651,590
	450	Park Place Securities Inc. 2004-MCW1 M7		7.17	†	10/25/34		450,184
	224	Structured Asset Investment Loan Trust 2003-BC4 M2		8.32	†	06/25/33		224,090
	1,046	USAA Auto Owner Trust 2005-3 A3		4.55		02/16/10		1,042,588
	324	Wachovia Auto Owner Trust 2005-A A3		4.06		09/21/09		322,384
	440	Whole Auto Loan Trust 2003-1 A4		2.58		03/15/10		435,817
		Total Asset-Backed Securities (Cost $23,531,234)						23,426,557
		U.S. Government Agencies - Mortgage-Backed Securities (8.2%)
	59	Federal Home Loan Mortgage Corp.		7.50		08/01/32		61,853
	376	Federal Home Loan Mortgage Corp. PC Gold		7.50		02/01/27 - 04/01/32		392,325
	427	Federal Home Loan Mortgage Corp. (ARM)		4.148		08/01/34		430,097
	263	Federal Home Loan Mortgage Corp. (ARM)		3.695		07/01/34		262,681
	830	Federal Home Loan Mortgage Corp. (ARM)		4.352		10/01/33		824,564
	786	Federal Home Loan Mortgage Corp. (ARM)		4.368		07/01/35		779,219
	221	Federal National Mortgage Assoc.(ARM)		4.165		09/01/34		221,602
	560	Federal National Mortgage Assoc.(ARM)		4.208		05/01/35		568,686
	549	Federal National Mortgage Assoc.(ARM)		4.282		04/01/35		547,702
	463	Federal National Mortgage Assoc.(ARM)		4.335		05/01/35		470,023
	111	Federal National Mortgage Assoc.(ARM)		4.417		06/01/34		112,233
	788	Federal National Mortgage Assoc.(ARM)		4.477		05/01/35		781,854
	236	Federal National Mortgage Assoc.(ARM)		4.492		07/01/34		237,011
	229	Federal National Mortgage Assoc.(ARM)		4.552		04/01/35		228,674

See Notes to Financial Statements
45

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE			VALUE
$	752	Federal National Mortgage Assoc.(ARM)		4.71	%	09/01/35			$	742,694
	626	Federal National Mortgage Assoc.(ARM)		4.742		07/01/35				618,567
	290	Federal National Mortgage Assoc.(ARM)		6.539		07/01/33				295,116
	824	Federal National Mortgage Assoc.		6.50		01/01/32 - 11/01/33				839,422
	1,694	Federal National Mortgage Assoc.		7.00		11/01/24 - 10/01/35				1,748,917
	1,219	Federal National Mortgage Assoc.		7.50		03/01/24 - 08/01/32				1,272,259
		Total U.S. Government Agencies - Mortgage-Backed Securities (Cost $11,558,478)								11,435,499
		Short-Term Investments (6.8%)
		Investment Company (a) (6.7%)
	9,303	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $9,303,341)								9,303,341
		U.S. Government Obligation (b) (0.1%)
	125	U.S. Treasury Bill** (Cost $124,812)		4.915		07/12/07				124,795
		Total Short-Term Investments (Cost $9,428,153)								9,428,136
		Total Investments (Cost $140,776,405) (c) (d)					99.9	%		139,245,978
		Other Assets in Excess of Liabilities					0.1			139,308
		Net Assets					100.0	%	$	139,385,286

ARM Adjustable Rate Mortgage. Interest rate in effect as of June 30, 2007.

IO Interest Only Security.

MTN Medium Term Note.

PAC Planned Amortization Class.

PC Participation Certificate.

PO Principal Only Security.

WI When-Issued Security.

* Resale is restricted to qualified institutional investors.

** A portion of this security has been physically segregated in connection with open futures contracts in the amount of $50,910.

† Floating rate security. Rate shown is the rate in effect at June 30, 2007.

‡ Amount is less than one thousand.

(a) See Note 4 to financial statements regarding investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(b) Purchased on a discount basis. The interest rate shown has been adjusted to reflect a money market equivalent yield.

(c) Securities have been designated as collateral in an amount equal to $54,384,113 in connection with purchase of when-issued security, open futures contracts and open swap contracts.

(d) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $130,873 and the aggregate gross unrealized depreciation is $1,661,300, resulting in net unrealized depreciation of $1,530,427.

See Notes to Financial Statements
46

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2007 (unaudited) continued

FUTURES CONTRACTS OPEN AT JUNE 30, 2007:

NUMBER OF CONTRACTS	LONG/SHORT	DESCRIPTION, DELIVERY MONTH AND YEAR	UNDERLYING FACE AMOUNT AT VALUE			UNREALIZED APPRECIATION (DEPRECIATION)
171	Long	U.S. Treasury Note 10 year, September 2007	$	18,075,235		$	(279,369	)
33	Long	U.S. Treasury Note 5 year, September 2007		3,434,578			(9,506	)
92	Short	U.S. Treasury Bond 20 year, September 2007		(9,913,000	)		129,276
107	Short	U.S. Treasury Note 2 year, September 2007		(21,804,595	)		(24,952	)
Net Unrealized Depreciation						$(184,551)

CREDIT DEFAULT SWAP CONTRACTS OPEN AT JUNE 30, 2007:

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		PAY/RECEIVE FIXED RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Goldman Sachs International Southwest Airlines Co.	Buy	$	400		0.22	%	December 20, 2011	$	2,160
Citibank, N.A., New York Tyco International Limited	Buy		160		0.43		March 20, 2012		0
Citibank, N.A., New York Tyco International Limited	Buy		390		0.43		March 20, 2012		0
Goldman Sachs International Dell Inc.	Buy		365		0.22		March 20, 2012		(255	)
Net Unrealized Appreciation								$1,905

INTEREST RATE SWAP CONTRACTS OPEN AT JUNE 30, 2007:

SWAP COUNTERPARTY

NOTIONAL
AMOUNT
(000'S)

PAYMENTS
RECEIVED BY
PORTFOLIO

PAYMENTS
MADE BY
PORTFOLIO

TERMINATION
DATE

UNREALIZED
APPRECIATION

JPMorgan Chase Bank N.A.
New York

2,800

Fixed Rate 5.391%

Floating Rate 5.36%

June 6, 2009

1,960

JPMorgan Chase Bank N.A.
New York

2,800

Fixed Rate 5.486

Floating Rate 5.36

June 14, 2009

7,000

JPMorgan Chase Bank N.A.
New York

2,800

Fixed Rate 5.364

Floating Rate 5.36

June 28, 2009

1,065

Total Unrealized Appreciation

$10,025

See Notes to Financial Statements
47

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2007 (unaudited) continued

LONG-TERM CREDIT ANALYSIS
AAA	66.3	%
AA	9.7
A	13.3
BBB	10.7
	100	%*

* Does not include open long futures contracts with an underlying face amount of $21,509,813 with unrealized depreciation of $288,875, open short futures contracts with an underlying face amount of $31,717,595 with unrealized appreciation of $104,324 and open swap contracts with unrealized appreciation of $11,930.

See Notes to Financial Statements
48

Morgan Stanley Variable Investments Series - Income Plus

Portfolio of Investments n June 30, 2007 (unaudited)

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Corporate Bonds (57.9%)
		Advertising/Marketing Services (0.2%)
$	730	Interpublic Group of Companies, Inc. (The)		6.25	%	11/15/14	$	673,425
		Air Freight/Couriers (1.2%)
	4,092	FedEx Corp. (Series 97-A)		7.50		01/15/18		4,458,266
		Airlines (0.8%)
	1,417	America West Airlines, Inc. (Class A)		6.85		07/02/09		1,423,808
	1,408	America West Airlines, Inc. (Series 01-1)		7.10		04/02/21		1,486,622
								2,910,430
		Auto Parts: O.E.M. (0.3%)
	1,080	ArvinMeritor, Inc.		8.75		03/01/12		1,096,200
		Beverages: Alcoholic (0.7%)
	2,635	FBG Finance Ltd. - 144A* (Australia)		5.125		06/15/15		2,473,453
		Cable/Satellite TV (1.8%)
	1,650	Comcast Cable Communications, Inc.		6.75		01/30/11		1,709,187
	995	Comcast Cable Communications, Inc.		7.125		06/15/13		1,055,833
	1,880	Comcast Corp.		6.50		01/15/15		1,930,506
	895	EchoStar DBS Corp.		6.375		10/01/11		879,338
	970	EchoStar DBS Corp.		6.625		10/01/14		928,775
								6,503,639
		Department Stores (1.9%)
	2,275	Federated Department Stores, Inc.		6.625		09/01/08		2,290,556
	610	JC Penny Corp., Inc.		5.75		02/15/18		590,037
	1,875	May Department Stores Co.		5.95		11/01/08		1,877,786
	2,280	May Department Stores Co.		6.70		07/15/34		2,125,842
								6,884,221
		Drugstore Chains (1.5%)
	1,280	CVS Caremark Corp.		5.75		06/01/17		1,237,263
	970	CVS Corp.		3.875		11/01/07		964,567
	1,180	CVS Corp.		5.75		08/15/11		1,180,984
	2,246	CVS Corp. - 144A*		6.036		12/10/28		2,186,140
								5,568,954
		Electric Utilities (7.0%)
	3,090	Arizona Public Service Co.		5.80		06/30/14		3,053,387
	670	CenterPoint Energy Resources Corp.		6.25		02/01/37		647,394
	1,070	Consolidated Natural Gas Co. (Series C)		6.25		11/01/11		1,094,007
	2,195	Consumers Energy Co. (Series H)		4.80		02/17/09		2,169,248
	120	Detroit Edison Co. (The)		5.20		10/15/12		117,635
	1,535	Detroit Edison Co. (The)		6.125		10/01/10		1,563,499

See Notes to Financial Statements
49

Morgan Stanley Variable Investments Series - Income Plus

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	2,170	Duquesne Light Co. (Series O)		6.70	%	04/15/12	$	2,268,151
	940	Entergy Gulf States, Inc.		3.60		06/01/08		923,430
	1,875	Entergy Gulf States, Inc.		5.76	†	12/01/09		1,875,120
	2,425	Entergy Gulf States, Inc. - 144A*		6.11	†	12/08/08		2,432,321
	530	Exelon Corp.		6.75		05/01/11		546,525
	1,905	Ohio Edison		6.40		07/15/16		1,949,484
	2,205	Ohio Power Company - IBC (Series K)		6.00		06/01/16		2,210,879
	1,015	Public Service Electric & Gas Co. (Series G)		5.125		09/01/12		993,367
	1,475	Texas Eastern Transmission, LP		7.00		07/15/32		1,622,993
	1,440	TXU Energy Co.		7.00		03/15/13		1,487,079
	985	Union Electric Co.		6.40		06/15/17		1,006,745
								25,961,264
		Electrical Products (0.9%)
	1,945	Cooper Industries, Inc.		5.25		07/01/07		1,945,000
	1,580	Cooper Industries, Inc.		5.25		11/15/12		1,551,190
								3,496,190
		Electronic Equipment/Instruments (0.2%)
	830	Xerox Corp.		5.50		05/15/12		816,599
		Environmental Services (1.5%)
	5,155	Waste Management, Inc.		7.375		08/01/10		5,404,631
		Finance/Rental/Leasing (4.7%)
	2,120	Capmark Financial Group - 144A*		5.875		05/10/12		2,094,395
	870	Capmark Financial Group - 144A*		6.30		05/10/17		857,675
	4,055	Countrywide Home Loans, Inc. (Series L)		3.25		05/21/08		3,975,072
	2,990	Ford Motor Credit Co.		7.25		10/25/11		2,880,273
	4,660	Residential Capital LLC		6.375		06/30/10		4,602,924
	3,000	SLM Corp. (Series A)		5.515	†	07/26/10		2,847,642
								17,257,981
		Financial Conglomerates (4.4%)
	330	Bank One Corp. (Series A)		6.00		02/17/09		332,926
	1,165	Brookfield Asset Management Inc.		5.80		04/25/17		1,127,513
	1,845	Citigroup Inc.		5.25		02/27/12		1,822,869
	4,600	General Motors Acceptance Corp.		6.875		09/15/11		4,528,866
	5,290	JPMorgan Chase & Co.		6.75		02/01/11		5,500,426
	3,120	MBNA Corp. (Series F)		5.786	†	05/05/08		3,132,443
								16,445,043
		Food Retail (1.0%)
	1,400	Delhaize America, Inc.		9.00		04/15/31		1,698,409
	1,930	Fred Meyer, Inc.		7.45		03/01/08		1,954,376
								3,652,785

See Notes to Financial Statements
50

Morgan Stanley Variable Investments Series - Income Plus

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Food: Major Diversified (1.0%)
$	1,045	ConAgra Foods, Inc.		7.00	%	10/01/28	$	1,091,627
	1,040	ConAgra Foods, Inc.		8.25		09/15/30		1,234,490
	1,655	Sara Lee Corp.		6.125		11/01/32		1,485,053
								3,811,170
		Food: Meat/Fish/Dairy (0.5%)
	790	Pilgrim's Pride Corp.		7.625		05/01/15		791,975
	350	Pilgrim's Pride Corp.		9.625		09/15/11		364,000
	800	Smithfield Foods Inc. (Series B)		8.00		10/15/09		828,000
								1,983,975
		Gas Distributors (0.7%)
	815	Keyspan Corp.		4.90		05/16/08		811,123
	1,870	NiSource Finance Corp.		5.93	†	11/23/09		1,873,944
								2,685,067
		Home Improvement Chains (0.9%)
	3,345	Home Depot, Inc.		5.485	†	12/16/09		3,341,698
		Insurance Brokers/Services (1.4%)
	1,500	Farmers Exchange Capital - 144A*		7.05		07/15/28		1,523,710
	3,105	Farmers Insurance Exchange - 144A*		8.625		05/01/24		3,596,028
								5,119,738
		Integrated Oil (0.4%)
	1,460	Amerada Hess Corp.		6.65		08/15/11		1,509,812
		Major Banks (4.5%)
	1,500	Bank of America Corp. (WI)		4.875		09/15/12		1,451,016
	1,660	HSBC Finance Corp.		6.75		05/15/11		1,724,582
	1,800	Huntington National Bank (Series T)		4.375		01/15/10		1,754,271
	1,580	Popular North America, Inc. (Series F)		5.65		04/15/09		1,579,645
	4,910	Unicredit Luxembourg Finance S.A. - 144A* (Luxembourg)		5.405	†	10/24/08		4,912,917
	5,000	Wells Fargo Bank NA		7.55		06/21/10		5,294,665
								16,717,096
		Major Telecommunications (4.7%)
	3,245	AT&T Corp.		8.00		11/15/31		3,868,261
	2,335	France Telecom S.A. (France)		8.50		03/01/31		2,942,359
	2,165	SBC Communications, Inc.		6.15		09/15/34		2,082,505
	2,005	Sprint Capital Corp.		8.75		03/15/32		2,257,959
	3,645	Telecom Italia Capital SA (Luxembourg)		4.00		01/15/10		3,506,100
	2,515	Telefonica Europe BV (Netherlands)		8.25		09/15/30		2,931,265
								17,588,449

See Notes to Financial Statements
51

Morgan Stanley Variable Investments Series - Income Plus

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Media Conglomerates (1.8%)
$	2,690	Time Warner, Inc.		5.59	† %	11/13/09	$	2,694,065
	1,905	Time Warner, Inc.		5.875		11/15/16		1,856,087
	2,320	Viacom, Inc.		6.875		04/30/36		2,248,273
								6,798,425
		Medical Specialties (0.8%)
	3,135	Hospira, Inc.		5.84	†	03/30/10		3,144,847
		Motor Vehicles (0.8%)
	1,490	DaimlerChrysler North American Holdings Co.		8.00		06/15/10		1,585,782
	1,015	DaimlerChrysler North American Holdings Co.		8.50		01/18/31		1,286,336
								2,872,118
		Multi-Line Insurance (1.1%)
	4,060	American General Finance Corp. (Series H)		4.625		09/01/10		3,954,870
		Oil & Gas Pipelines (1.8%)
	805	Colorado Interstate Gas Co.		6.80		11/15/15		831,899
	1,265	Enterprise Products Operating LP		5.60		10/15/14		1,231,553
	2,465	Kinder Morgan Finance Co. (Canada)		5.70		01/05/16		2,275,656
	2,310	Plains All American Pipeline LP/PAA Finance Corp.		6.70		05/15/36		2,320,049
								6,659,157
		Oil & Gas Production (0.7%)
	860	Chesapeak Energy Corp.		7.625		07/15/13		885,800
	1,805	Devon Financing Corp.		6.875		09/30/11		1,886,025
								2,771,825
		Oil Refining/Marketing (0.3%)
	1,210	Valero Energy Corp.		3.50		04/01/09		1,173,696
		Other Metals/Minerals (0.7%)
	2,435	Brascan Corp. (Canada)		7.125		06/15/12		2,560,670
		Property - Casualty Insurers (1.6%)
	2,500	Mantis Reef Ltd. - 144A* (Australia)		4.692		11/14/08		2,471,660
	2,545	Platinum Underwriters Finance Inc. (Series B)		7.50		06/01/17		2,624,501
	825	Platinum Underwriters Holdings, Ltd. (Series B) (Bermuda)		6.371		11/16/07		822,625
								5,918,786
		Railroads (1.8%)
	2,774	Burlington Northern Santa Fe Corp. (Series 95-A)		7.97		01/01/15		2,934,218
	2,925	Union Pacific Corp.		6.625		02/01/08		2,944,170
	790	Union Pacific Corp. (Series E)		6.79		11/09/07		792,936
								6,671,324

See Notes to Financial Statements
52

Morgan Stanley Variable Investments Series - Income Plus

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Real Estate Development (0.4%)
$	1,299	World Financial Properties - 144A*		6.91	%	09/01/13	$	1,341,959
	166	World Financial Properties - 144A*		6.95		09/01/13		171,420
								1,513,379
		Restaurants (0.4%)
	1,345	Tricon Global Restaurants, Inc.		8.875		04/15/11		1,480,990
		Savings Banks (3.3%)
	500	Household Finance Corp.		4.125		11/16/09		485,790
	1,140	Household Finance Corp.		6.375		10/15/11		1,172,458
	1,915	Household Finance Corp.		8.00		07/15/10		2,046,675
	4,655	Sovereign Bancorp Inc.		5.59	†	03/23/10		4,659,287
	3,630	Washington Mutual Inc.		8.25		04/01/10		3,864,934
								12,229,144
		Tobacco (0.2%)
	795	RJ Reynolds Tobacco Holdings		6.50		07/15/10		812,159
		Total Corporate Bonds (Cost $215,263,425)						214,921,476
		U.S. Government Agencies & Obligations (19.2%)
	3	Federal Home Loan Mortgage Corp.		11.50		05/01/19		3,262
	5	Federal Home Loan Mortgage Corp. Gold		6.50		12/01/28		4,733
	27			8.50		01/01/22 - 12/01/24		28,611
		Federal National Mortgage Assoc.
	121			7.50		06/01/28 - 04/01/32		126,480
	1,479			8.00		08/01/29 - 04/01/32		1,559,259
	2			9.00		06/01/21 - 01/01/25		2,262
		Government National Mortgage Assoc.
	1			7.50		04/15/24		815
	483			8.00		10/15/24 - 11/15/29		512,016
	81			8.50		09/15/21 - 03/01/28		87,689
	86			9.00		07/15/24 - 11/15/24		92,825
	6			10.00		05/15/16 - 04/15/19		6,675
		U.S. Treasury Bond
	24,900			6.125		08/15/29		27,938,597
	6,675	U.S. Treasury Note		6.375		08/15/27		7,632,449
	5,765			4.25		08/15/13††		5,570,033
	8,850			4.25		11/15/13		8,522,965
	6,000			4.25		11/15/14††		5,728,650
	13,000			6.50		02/15/10		13,506,805
		Total U.S. Government Agencies & Obligations (Cost $73,527,244)						71,324,126

See Notes to Financial Statements
53

Morgan Stanley Variable Investments Series - Income Plus

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Asset-Backed Securities (3.6%)
		Finance/Rental/Leasing
$	287	CIT Equipment Collateral 2004-EF1 A3		3.50	%	09/20/08	$	285,833
	795	DaimlerChrysler Auto Trust 2003-B A4		2.86		03/09/09		794,989
	524	Ford Credit Auto Owner Trust 2005-B A3		4.17		01/15/09		523,074
	3,100	Ford Credit Auto Owner Trust - 2007-A A3A		5.40		08/15/11		3,101,451
	2,950	GS Auto LoanTrust - 2007-1 A3		5.39		12/15/11		2,950,301
	1,771	Harley-Davidson Motorcycle Trust 2004-2 A2		3.56		02/15/12		1,745,546
	566	Honda Auto Receivables Owner Trust 2005-2 A3		3.93		01/15/09		563,714
	2,425	TXU Electric Delivery Transition Bond Co. LLC 2004-1 A2		4.81		11/17/14		2,376,233
	789	USAA Auto Owner Trust 2005-1 A3		3.90		07/15/09		785,761
	236	Volkswagen Auto Lease Trust 2005-A A3		3.82		05/20/08		236,325
		Total Asset-Backed Securities (Cost $13,450,840)						13,363,227
		Foreign Government Obligations (0.7%)
MXN	18,385	Mexican Fixed Rate Bonds (Series I10) (Mexico)		9.50		12/18/14		1,874,740
$	1,545	Republic of Argentina (Argentina)		5.83		12/31/33		690,229
		Total Foreign Government Obligations (Cost $2,528,007)						2,564,969
		Commercial Mortgage-Backed Securities (1.2%)
	2,100	GS Mortgage Securities Corp II 2007-GG10 A4 (WI)		5.993		08/10/45		2,093,929
	2,200	JP Morgan Chase Commercial Mortgage Securities Corp. 2007-LD11 A4 (WI)		6.007		06/15/49		2,187,766
		Total Commercial Morgage-Backed Securities (Cost $4,271,915)						4,281,695
		Short-Term Investments (20.8%)
		Investment Company (a) (0.6%)
	2,290	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $2,289,651)						2,289,651
		U.S. Government Agencies & Obligations (b) (20.2%)
		Federal Home Loan Bank
	18,000			5.16		07/25/07		17,935,500
	18,200			5.145		07/18/07		18,153,181
		Federal Home Loan Mortgage Corp.
	5,765			5.14		07/18/07		5,750,184
	18,000			5.155		08/13/07		17,886,590
	14,500	Federal National Mortgage Assoc.		5.13		07/12/07		14,475,205

See Notes to Financial Statements
54

Morgan Stanley Variable Investments Series - Income Plus

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE			VALUE
		U.S. Treasury Bills**
$	30			4.875	%	07/12/07			$	29,951
	70			4.915		07/12/07				698,853
		Total U.S. Government Agencies & Obligations (Cost $74,940,211)								74,929,464
		Total Short-Term Investments (Cost $77,229,862)								77,219,115
		Total Investments (Cost $386,271,293) (c) (d)					103.4	%		383,674,608
		Liabilities in Excess of Other Assets					(3.4	)		(12,547,025	)
		Net Assets					100.0	%	$	371,127,583

MTN Medium Term Note.

MXN Mexican New Peso.

WI When-Issued Security.

* Resale is restricted to qualified institutional investors.

** A portion of this security has been physically segregated in connection with open futures contracts in the amount of $705,540.

† Floating rate security. Rate shown is the rate in effect at June 30, 2007.

†† Security purchased on a forward commitment basis.

(a) See Note 4 to financial statements regarding investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(b) Purchased on a discount basis. The interest rate shown has been adjusted to reflect a money market equivalent yield.

(c) Securities have been designated as collateral in a amount equal to $199,822,399 in connection with securities purchased on forward commitment basis, when-issued securities, open futures contracts and open swap contracts.

(d) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $2,355 301 and the aggregate gross unrealized depreciation is $4,951,986, resulting in net unrealized depreciation of $2 596,685.

FUTURES CONTRACTS OPEN AT JUNE 30, 2007:

NUMBER OF CONTRACTS		LONG/SHORT	DESCRIPTION, DELIVERY MONTH AND YEAR	UNDERLYING FACE AMOUNT AT VALUE			UNREALIZED APPRECIATION (DEPRECIATION)
	469	Long	U.S. Treasury Note 5 year, September 2007	$	48,812,643		$	(424,671	)
	147	Long	U.S. Treasury Note 2 year, September 2007		29,955,845			1,582
	399	Short	U.S. Treasury Note 10 year, September 2007		(42,175,549	)		166,541
	540	Short	U.S. Treasury Bond 20 year, September 2007		(58,185,000	)		764,828
	Net Unrealized Appreciation						$	(508,280	)

See Notes to Financial Statements
55

Morgan Stanley Variable Investments Series - Income Plus

Portfolio of Investments n June 30, 2007 (unaudited) continued

CREDIT DEFAULT SWAP CONTRACTS OPEN AT JUNE 30, 2007:

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000's)		PAY/RECEIVE FIXED RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Goldman Sachs Capital Markets, L.P. Dow Jones CDX.NA.IG.HVOL.6 Index	Buy	$	15,900		0.75	%	June 20, 2011	$	97,166
Goldman Sachs Capital Markets, L.P. Dow Jones CDX.NA.HVOL Index	Buy		7,850		0.75		December 20, 2011		45,183
Goldman Sachs International Hartford Financial Services Group Inc.	Buy		3,900		0.12		December 20, 2011		0
Goldman Sachs International Motorola, Inc.	Buy		2,640		0.157		December 20, 2011		13,200
Goldman Sachs International Motorola, Inc.	Buy		1,270		0.15		December 20, 2011		6,604
Goldman Sachs International Southwest Airlines Co.	Buy		4,000		0.22		December 20, 2011		21,604
Goldman Sachs International Union Pacific Corporation	Buy		1,950		0.20		December 20, 2011		3,708
Citibank, N.A., New York Tyco International LTD	Buy		2,300		0.43		March 20, 2012		0
Citibank, N.A., New York Tyco International LTD	Buy		1,200		0.43		March 20, 2012		0
Goldman Sachs International Chubb Corp.	Buy		3,900		0.10		March 20, 2012		4,294
Goldman Sachs International Dell Inc.	Buy		1,960		0.22		March 20, 2012		(1,370	)
Goldman Sachs International GAP Inc.	Buy		2,360		1.19		March 20, 2012		(25,014	)
Goldman Sachs International SLM Corp.	Sell		3,860		0.737		June 20, 2012		(284,100	)
JPMorgan Chase Bank, N.A. Belo Corp.	Buy		655		1.18		June 20, 2014		5,175
JPMorgan Chase Bank, N.A. Belo Corp.	Buy		1,900		1.30		June 20, 2014		2,282
Goldman Sachs International Residential Capital LLC	Sell		3,950		2.00		March 20, 2017		(148,524	)
Net Unrealized Depreciation								$(259,792)

See Notes to Financial Statements
56

Morgan Stanley Variable Investments Series - Income Plus

Portfolio of Investments n June 30, 2007 (unaudited) continued

INTEREST RATE SWAP CONTRACTS OPEN AT JUNE 30, 2007:

SWAP COUNTERPARTY

NOTIONAL
AMOUNT
(000's)

PAYMENTS
RECEIVED BY
PORTFOLIO

PAYMENTS
MADE BY
PORTFOLIO

TERMINATION
DATE

UNREALIZED
DEPRECIATION

Deutsche Bank (TD)

75,550

Fixed Rate 5.389%

Floating Rate 5.36%

May 25, 2017

(1,593,350

)

Deutsche Bank (TD)

11,600

Fixed Rate 5.429

Floating Rate 5.36

May 29, 2017

(210,308

)

JPMorgan Chase Bank N.A.
New York

11,600

Fixed Rate 5.448

Floating Rate 5.36

May 29, 2017

(193,256

)

JPMorgan Chase Bank N.A.
New York

40,200

Fixed Rate 5.454

Floating Rate 5.36

June 4, 2017

(657,270

)

Total Unrealized Depreciation

$(2,654,184)

LONG-TERM CREDIT ANALYSIS
AAA	41.2	%
AA	8.0
A	16.6
BBB	29.6
BB	3.0
B	1.6
	100	%*

* Does not include open long futures contracts with an underlying face amount of $78,768,488 with unrealized depreciation of $423,179 open short futures contracts with underlying face amount of $100,360,549 with unrealized appreciation of $931,369 and open swap contracts with unrealized depreciation of $2,913,976.

See Notes to Financial Statements
57

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2007 (unaudited)

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Corporate Bonds (94.1%)
		Advertising/Marketing Services (2.0.%)
$	445	Idearc Inc.		8.00	%	11/15/16	$	451,675
	220	Interpublic Group of Companies, Inc. (The)		6.25		11/15/14		202,950
	380	Valassis Communications Inc. - 144A* (a)		8.25		03/01/15		372,400
								1,027,025
		Aerospace & Defense (1.3%)
	650	K&F Acquisition Inc.		7.75		11/15/14		692,250
		Aluminum (1.3%)
	665	Novelis, Inc. - (Canada)		7.25		02/15/15		685,781
		Apparel/Footwear (1.2%)
	225	Oxford Industries, Inc.		8.875		06/01/11		233,437
	405	Phillips-Van Heusen Corp.		7.25		02/15/11		413,100
								646,537
		Apparel/Footwear Retail (0.7%)
	330	Brown Shoe Co., Inc.		8.75		05/01/12		346,500
		Auto Parts: O.E.M. (0.7%)
	390	ArvinMeritor, Inc. (a)		8.75		03/01/12		395,850
		Beverages: Alcoholic (0.1%)
	60	Constellation Brands Inc - 144A*		7.25		05/15/17		58,800
		Broadcasting (1.2%)
	375	LIN Television Corp.		6.50		05/15/13		368,438
	255	Univision Communications Inc - 144A* (a)		9.75		03/15/15		253,087
								621,525
		Building Products (1.8%)
	275	Interface Inc.		9.50		02/01/14		297,688
	145	Interface Inc.		10.375		02/01/10		156,600
	505	Nortek Inc.		8.50		09/01/14		483,537
								937,825
		Cable/Satellite TV (3.5%)
	565	Cablevision Systems Corp. (Series B)		9.82	**	04/01/09		593,250
	182	CCH I LLC/CCH I CAP Co.		11.00		10/01/15		190,872
	100	EchoStar DBS Corp.		6.375		10/01/11		98,250
	350	Echostar DBS Corp.		6.625		10/01/14		335,125
	85	Intelsat Bermuda Ltd. (Bermuda)		8.871	**	01/15/15		87,231
	45	Intelsat Sub holdings Co. Ltd. (Bermuda)		8.25		01/15/13		45,900
	440	Intelsat Sub holdings Co. Ltd. (Bermuda)		8.625		01/15/15		453,200
	65	NTL Cable PLC (United Kingdom) (a)		8.75		04/15/14		67,275
								1,871,103

See Notes to Financial Statements
58

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Casino/Gaming (5.2%)
$	4,485	Aladdin Gaming Holdings/Capital Corp. LLC (Series B) (b) (c) (f)		13.50	%	03/01/10	$	0
	680	Isle of Capri Casinos		7.00		03/01/14		646,850
	555	Las Vegas Sands Corp. (a)		6.375		02/15/15		530,719
	845	MGM Mirage Inc.		6.00		10/01/09		841,831
	7,210	Resort At Summerlin LP/Ras Co. (Series B) (b) (c) (f)		13.00		12/15/07		0
	700	Station Casinos, Inc.		6.00		04/01/12		661,500
	85	Station Casinos, Inc.		7.75		08/15/16		84,575
								2,765,475
		Chemicals: Agricultural (0.5%)
	295	Terra Capital Inc.		7.00		02/01/17		286,150
		Chemicals: Major Diversified (0.5%)
	290	Westlake Chemical Corp.		6.625		01/15/16		276,225
		Chemicals: Specialty (2.1%)
	245	Equistar Chemical Funding		10.125		09/01/08		256,025
	160	Innophos Holdings Inc - 144A*		9.50		04/15/12		163,200
	270	Innophos, Inc. (a)		8.875		08/15/14		280,800
	250	Koppers Holdings, Inc.		9.875	†	11/15/14		215,000
	175	Koppers Industry Inc.		9.875		10/15/13		187,688
								1,102,713
		Coal (1.4%)
	140	Foundation PA Coal Co.		7.25		08/01/14		139,475
	635	Massey Energy Co.		6.875		12/15/13		584,994
								724,469
		Containers/Packaging (5.0%)
	560	Berry Plastics Holding Corp.		8.875		09/15/14		569,800
	260	Berry Plastics Holding Corp. - 144A* (a)		10.25		03/01/16		261,300
	155	Graham Packaging Company Inc.		8.50		10/15/12		156,744
	415	Graham Packaging Company Inc. (a)		9.875		10/15/14		421,744
	430	Graphic Packaging International Corp.		9.50		08/15/13		448,812
	400	Owens-Brockway Glass Containers Corp.		8.75		11/15/12		419,000
	60	Owens-Illinois, Inc.		7.35		05/15/08		60,450
	285	Owens-Illinois, Inc. (a)		7.50		05/15/10		288,919
								2,626,769
		Data Processing Services (0.7%)
	345	Sungard Data Systems Inc.		9.125		08/15/13		354,919
		Drugstore Chains (0.4%)
	210	Rite Aid Corp.		8.125		05/01/10		213,412

See Notes to Financial Statements
59

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Electric Utilities (4.3%)
$	370	AES Corp. (The)		7.75	%	03/01/14	$	372,775
	42	AES Corp. (The)		8.875		02/15/11		44,467
	54	AES Corp. (The)		9.375		09/15/10		57,713
	150	AES Corp. (The) - 144A*		9.00		05/15/15		159,562
	595	CMS Energy Corp. (a)		7.50		01/15/09		613,124
	275	IPALCO Enterprises, Inc.		8.375		11/14/08		281,875
	115	IPALCO Enterprises, Inc.		8.625		11/14/11		123,625
	200	Nevada Power Co.		8.25		06/01/11		217,411
	303	PSEG Energy Holdings Inc.		8.625		02/15/08		308,512
	90	Reliant Energy Inc.		7.875		06/15/17		87,975
								2,267,039
		Electrical Products (1.0%)
	540	Ormat Funding Corp.		8.25		12/30/20		553,148
		Environmental Services (1.2%)
	280	Allied Waste North America, Inc.		5.75		02/15/11		267,750
	355	Allied Waste North America, Inc.		7.875		04/15/13		360,769
	9	Allied Waste North America, Inc.		9.25		09/01/12		9,461
								637,980
		Finance/Rental/Leasing (3.5%)
	75	Capmark Financial Group - 144A*		5.875		05/10/12		74,094
	35	Capmark Financial Group - 144A* (a)		6.30		05/10/17		34,504
	455	Ford Motor Credit		7.00		10/01/13		422,073
	415	Ford Motor Credit Co.		7.25		10/25/11		399,770
	380	Ford Motor Credit Corp.		5.80		01/12/09		372,096
	325	Residential Capital Corp.		6.375		06/30/10		321,019
	225	Residential Capital LLC		6.50		04/17/13		217,737
								1,841,293
		Financial Conglomerates (2.0%)
	460	General Motors Acceptance Corp.		4.375		12/10/07		456,731
	600	General Motors Acceptance Corp.		6.875		09/15/11		590,722
								1,047,453
		Food Retail (1.1%)
	179	CA FM Lease Trust - 144A*		8.50		07/15/17		190,446
	125	Delhaize America, Inc.		9.00		04/15/31		151,643
	210	Supervalu Inc.		7.50		05/15/12		219,836
								561,925
		Food: Meat/Fish/Dairy (4.0%)
	290	Michael Foods Inc. (Series B)		8.00		11/15/13		294,350
	440	Pilgrim's Pride Corp.		7.625		05/01/15		441,100

See Notes to Financial Statements
60

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	710	Pilgrim's Pride Corp.		9.625	%	09/15/11	$	738,400
	75	Smithfield Foods Inc.		7.75		05/15/13		76,500
	535	Smithfield Foods Inc. (Series B)		8.00		10/15/09		553,725
								2,104,075
		Forest Products (0.9%)
	220	Crown Americas, Inc.		7.625		11/15/13		223,300
EUR	200	Crown Euro Holdings SA (France)		6.25		09/01/11		277,697
								500,997
		Gas Distributors (0.5%)
$	285	DYNEGY Holdings Inc. - 144A*		7.75		06/01/19		266,475
		Home Furnishings (0.7%)
	355	Jarden Corp.		7.50		05/01/17		352,338
		Hospital/Nursing Management (4.1%)
	515	Community Health System Inc.		6.50		12/15/12		537,515
	150	Community Health Systems - 144A*		8.875		07/15/15		152,813
	385	HCA, Inc		6.25		02/15/13		348,425
	255	HCA, Inc.		5.75		03/15/14		216,431
	150	HCA, Inc. (a)		6.50		02/15/16		127,688
	200	HCA, Inc.		8.70		02/10/10		209,650
	90	HCA, Inc.		8.75		09/01/10		94,163
	210	Sun Healthcare Group Inc - 144A*		9.125		04/15/15		219,450
	165	Tenet Healthcare Corp.		7.375		02/01/13		149,944
	130	Tenet Healthcare Corp. (a)		9.875		07/01/14		129,350
								2,185,429
		Industrial Machinery (0.2%)
	100	Goodman Global Holding Company, Inc. (Series B)		8.36	**	06/15/12		101,000
		Industrial Specialties (1.6%)
	560	Johnsondiversey, Inc.		9.625		05/15/12		587,300
	226	UCAR Finance, Inc.		10.25		02/15/12		237,865
								825,165
		Integrated Oil (0.2%)
	90	Cimarex Energy Co		7.125		05/01/17		88,200
		Media Conglomerates (1.1%)
	581	Canwest Media Inc. (Canada)		8.00		09/15/12		579,548
		Medical Specialties (1.3%)
	655	Fisher Scientific International, Inc.		6.125		07/01/15		644,152
	65	Invacare Corp. - 144A*		9.75		02/15/15		65,813
								709,965

See Notes to Financial Statements
61

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Medical/Nursing Services (3.0%)
$	330	DaVita Inc.		6.625	%	03/15/13	$	323,812
	370	FMC Finance III SA 144A*		6.875		07/15/17		364,450
	755	Fresenius Medical Care Capital Trust		7.875		06/15/11		785,200
	95	Fresenius Medical Care Capital Trust II		7.875		02/01/08		95,713
								1,569,175
		Metal Fabrications (0.8%)
	460	Hexcell Corp. (a)		6.75		02/01/15		448,500
		Miscellaneous Commercial Services (1.1%)
	585	Iron Mountain Inc.		8.625		04/01/13		589,388
		Miscellaneous Manufacturing (0.5%)
	320	Propex Fabrics Inc.		10.00		12/01/12		288,000
		Motor Vehicles (0.7%)
	175	General Motors Corp. (a)		7.125		07/15/13		164,719
	215	General Motors Corp. (a)		8.375		07/15/33		197,263
								361,982
		Oil & Gas Pipelines (3.3%)
	550	Colorado Interstate Gas Co.		6.80		11/15/15		568,378
	375	Pacific Energy Partners/Finance		7.125		06/15/14		388,384
	735	Williams Companies, Inc. (The)		7.875		09/01/21		793,800
								1,750,562
		Oil & Gas Production (5.9%)
	70	Chaparral Energy Inc. - 144A*		8.875		02/01/17		69,475
	485	Chaparral Energy, Inc.		8.50		12/01/15		476,513
	565	Chesapeake Energy Corp.		7.50		09/15/13		577,713
	28	Chesapeake Energy Corp. (a)		7.75		01/15/15		28,630
	60	Chesepeaks Energy Corp.		7.625		07/15/13		61,800
	620	Hilcorp Energy/Finance - 144A*		7.75		11/01/15		604,500
	345	Husky Oil Ltd. (Canada)		8.90		08/15/28		357,377
	250	Opti Canada Inc. - 144A* (Canada)		8.25		12/15/14		255,000
	410	Pogo Producing Co.		6.875		10/01/17		408,975
	265	Sandridge Energy		8.625		04/01/15		271,625
								3,111,608
		Oilfield Services/Equipment (1.7%)
	205	CIE Gener de Geophysique S.A. (France)		7.50		05/15/15		206,025
	135	Hanover Compressor Co.		8.625		12/15/10		139,894
	185	Hanover Compressor Co.		9.00		06/01/14		196,562
	128	Hanover Equipment Trust 2001 A (Series A)		8.50		09/01/08		128,000
	210	Hanover Equipment Trust 2001 B (Series B)		8.75		09/01/11		216,825
								887,306

See Notes to Financial Statements
62

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Other Transportation (1.2%)
$	650	CHC Helicopter Corp. (Canada)		7.375	%	05/01/14	$	622,375
		Pharmaceuticals: Major (0.5%)
	260	Warner Chilcott Corp.		8.75		02/01/15		268,450
		Precious Metals (0.5%)
	240	Freeport-Mcmoran C & G		8.375		04/01/17		256,800
		Publishing: Books/Magazines (1.5%)
	206	Dex Media East/Finance		12.125		11/15/12		222,222
	327	Dex Media West/Finance		9.875		08/15/13		351,525
	215	PGS Solutions Inc. - 144A*		9.625		02/15/15		218,472
								792,219
		Pulp & Paper (0.8%)
	340	Georgia Pacific Corp. - 144A*		7.125		01/15/17		328,100
	110	Glatfelter P.H.		7.125		05/01/16		111,375
								439,475
		Real Estate Development (0.3%)
	140	Realogy Corp. - 144A* (a)		10.50		04/15/14		133,700
		Real Estate Investment Trusts (1.4%)
	390	Host Marriott LP		6.375		03/15/15		376,350
	335	Host Marriott LP		7.125		11/01/13		336,256
								712,606
		Restaurants (0.5%)
	75	Aramark Corp. - 144A*		8.50		02/01/15		76,687
	25	Aramark Corp. - 144A*		8.86		02/01/15		25,500
	165	Aramark Services Inc.		5.00		06/01/12		146,025
								248,212
		Semiconductors (0.7%)
	365	Freescale Semiconductor - 144A*		8.875		12/15/14		350,400
		Services to the Health Industry (1.3%)
	270	National Mentor Holdings Inc.		11.25		07/01/14		292,950
	70	Omnicare Inc.		6.875		12/15/15		66,850
	345	Omnicare Inc.		6.75		12/15/13		331,200
								691,000
		Specialty Stores (3.0%)
	150	Asbury Automotive Group - 144A*		7.625		03/15/17		148,500
	580	Petro Stopping Centers LP/Petro Financial Corp.		9.00		02/15/12		613,350
	520	Sonic Automotive, Inc.		8.625		08/15/13		538,200
	280	United Auto Group		7.75		12/15/16		280,000
								1,580,050

See Notes to Financial Statements
63

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Specialty Telecommunications (2.5%)
$	320	American Tower Corp.		7.125	%	10/15/12	$	328,800
	310	American Tower Corp.		7.50		05/01/12		320,075
	125	Citizens Communications		6.25		01/15/13		120,469
	98	Panamsat Corp.		9.00		08/15/14		102,655
	296	Qwest Communications International		8.86	**	02/15/09		300,440
	125	Winstream Corp.		8.125		08/01/13		131,250
								1,303,689
		Telecommunications (1.5%)
	357	Axtel SA (Mexico)		11.00		12/15/13		394,485
	615	Exodus Communications, Inc. (b) (c) (f)		11.625		07/15/10		0
	135	Nordic Tel Company - 144A* (Denmark)		8.875		05/01/16		143,775
	4,679	Rhythms Netconnections, Inc. (b) (c) (f)		12.75		04/15/09		0
EUR	110	TDC AS (Denmark)		6.50		04/19/12		152,845
$	100	U.S. West Communications Corp. (a)		5.625		11/15/08		100,125
								791,230
		Tobacco (0.6%)
	295	RJ Reynolds Tobacco Holdings		6.50		07/15/10		301,367
		Trucks/Construction/Farm Machinery (0.7%)
	347	Manitowoc Inc. (The)		10.50		08/01/12		366,085
		Water Utilities (1.3%)
	275	Nalco Co.		7.75		11/15/11		278,438
	385	Nalco Co.		8.875		11/15/13		401,362
								679,800
		Wholesale Distributors (0.9%)
	440	RBS Global & Rexnold Corp.		9.50		08/01/14		453,200
		Wireless Telecommunications (0.6%)
	300	Wind Acquisition Finance SA - 144A* (Luxembourg)		10.75		12/01/15		345,750
		Total Corporate Bonds (Cost $65,244,286)						49,598,287

NUMBER OF SHARES
		Common Stocks (0.7%)
		Casino/Gaming (0.0%)
	2,000	Fitzgeralds Gaming Corp. +(e)(f)	0
		Food: Specialty/Candy (d)(e)(f) (0.0%)
	436	SFAC New Holdings Inc.	0
	2,375	SFAC New Holdings Inc. ++	0
			0

See Notes to Financial Statements
64

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Restaurants (e)(f) (0.1%)
	7,750	American Restaurant Group Holdings, Inc. - 144A*	$	0
	37,167	American Restaurant Group Holdings, Inc. (d)		0
	4,366	American Restaurant Group Holdings, Inc. (d)		0
	3,374	American Restaurant Group Holdings, Inc. (d)		26,992
	92,158	Catalina Restaurant Group (escrow) (d)		922
				27,914
		Specialty Telecommunications (d)(e) (0.0%)
	12,688	Birch Telecom Inc. +++(f)		127
	131,683	PFB Telecom NV (Series B) (f)		0
	565	XO Holdings, Inc.		2,520
				2,647
		Telecommunications (0.0%)
	2,251	Viatel Holdings Bermuda Ltd. (Bermuda) (d)(e)		25
		Textiles (0.0%)
	298,461	U.S. Leather, Inc. (d)(e)(f)		0
		Wireless Telecommunications (d) (0.6%)
	4,000	NII Holdings Inc. (a)(e)		322,960
	521	USA Mobility, Inc.		13,942
	38,444	Vast Solutions, Inc. (Class B1) (e)(f)		0
	38,444	Vast Solutions, Inc. (Class B2) (e)(f)		0
	38,444	Vast Solutions, Inc. (Class B3) (e)(f)		0
				336,902
		Total Common Stocks (Cost $43,109,835)		367,488

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE
		Convertible Bond (0.7%)
		Telecommunication Equipment (0.7%)
$	370	Nortel Networks Corp. (Canada) (Cost $364,438)		4.25	%	09/01/08	366,763
		U.S. Government & Agencies Obligations (0.5%)
MXN	2,360	Mexican Fixed Rate Bonds (Series M20) (Mexico) (Cost $240,273)		9.50		12/18/14	240,652

See Notes to Financial Statements
65

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			EXPIRATION DATE	VALUE
		Warrants (e) (0.0%)
		Casino/Gaming (f) (0.0%)
	83,500	Aladdin Gaming Enterprises, Inc. - 144A*	03/01/10	$	0
	6,000	Resort At Summerlin LP - 144A*	12/15/07		0
					0
		Personnel Services (0.0%)
	42,250	Comforce Corp. - 144A* (f)	12/01/09		0
		Restaurants (0.0%)
	1,500	American Restaurant Group Holdings, Inc. - 144A* (f)	08/15/08		0
		Specialty Telecommunications (d) (0.0%)
	1,132	XO Holdings, Inc. (Series A)	01/16/10		838
	849	XO Holdings, Inc. (Series B)	01/16/10		331
	849	XO Holdings, Inc. (Series C)	01/16/10		136
					1,305
		Total Warrants (Cost $128,479)			1,305

PRINCIPAL AMOUNT IN THOUSANDS
		Short-Term Investments (11.7%)
		Investment Company (g) (2.6%)
$	1,378	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (cost $1,378,127)				1,378,127
		Security Purchased from Security Lending Collateral (9.1%)
	4,822	The Bank of New York Institutional Cash Reserve Fund (Cost $4,821,713)				4,821,713
		Total Short-Term Investments (Cost $6,199,840)				6,199,840
		Total Investments (Cost $115,287,151) (h)	107.7	%		56,774,335
		Liabilities in Excess of Other Assets	(7.7	)		(4,048,399	)
		Net Assets	100.0	%	$	52,725,936

* Resale is restricted to qualified institutional investors.

** Floating rate security. Rate shown is the rate in effect at June 30, 2007.

+ Resale is restricted, acquired (12/22/98) at a cost basis of $9,020.

++ Resale is restricted, acquired (06/10/99) at a cost basis of $24.

+++ Resale is restricted, acquired (between 03/06/98 and 08/25/98) at a cost basic of $6,473,685.

See Notes to Financial Statements
66

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Portfolio of Investments n June 30, 2007 (unaudited) continued

† Currently a zero coupon bond and is scheduled to pay interest at the rate shown at a future specified date.

(a) As of June 30, 2007 all or a portion of this security were on loan.

(b) Issuer in bankruptcy.

(c) Non-income producing security, bond in default.

(d) Acquired through exchange offer.

(e) Non-income producing securities.

(f) Securities with total market value equal to $28,041 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.

(g) See Note 4 to the financial statements regarding Investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(h) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $894,132 and the aggregate gross unrealized depreciation is $59,406,948, resulting in net unrealized depreciation of $58,512,816.

FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JUNE 30, 2007

CONTRACTS TO DELIVER				IN EXCHANGE FOR				DELIVERY DATE				UNREALIZED APPRECIATION
EUR	333,000			$	454,262				07/31/07			$	3,114

Currency Abbreviations:

EUR Euro.

MXN Mexican New Peso.

CREDIT DEFAULT SWAP CONTRACTS OPEN AT JUNE 30, 2007

SWAP COUNTERPARTY AND REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		PAY/RECEIVE FIXED RATE			TERMINATION DATE	UNREALIZED APPRECIATION
JPMorgan Chase & Co. Belo Corp.	Buy	$	100,000		1.18	%	June 20, 2014	$	790
JPMorgan Chase & Co. Belo Corp.	Buy		280,000		1.30		June 20, 2014		336
Total Unrealized Appreciation								$1,126

LONG-TERM CREDIT ANALYSIS

A	2.2	%
BBB	3.7
BB	24.6
B	48.1
CCC	19.3
NR	2.1
	100.0	%*

* Does not include open forward foreign currency contract with unrealized appreciation of $3,114 and open swap contracts with an underlying face amount of $380,000 with net unrealized appreciation of $1,126.

See Notes to Financial Statements
67

Morgan Stanley Variable Investment Series - Utilities

Portfolio of Investments n June 30, 2007 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (97.4%)
		Electric Utilities (62.1%)
	210,000	AES Corp. (The)*	$	4,594,800
	81,000	Allegheny Energy, Inc.*		4,190,940
	45,000	Ameren Corp. (a)		2,205,450
	95,000	American Electric Power Co., Inc.		4,278,800
	34,000	Cleco Corp. (a)		833,000
	51,000	Consolidated Edison, Inc. (a)		2,301,120
	50,000	Constellation Energy Group Inc.		4,358,500
	30,000	Covanta Holding Corp.* (a)		739,500
	57,000	Dominion Resources, Inc.(a)		4,919,670
	71,000	DPL, Inc. (a)		2,012,140
	35,000	DTE Energy Co.		1,687,700
	161,432	Duke Energy Corp. (a)		2,954,206
	98,000	Edison International		5,499,760
	49,000	Entergy Corp.		5,260,150
	83,000	Exelon Corp.		6,025,800
	81,000	FirstEnergy Corp. (a)		5,243,130
	94,000	FPL Group, Inc. (a)		5,333,560
	58,000	Mirant Corp.*		2,473,700
	134,000	NRG Energy, Inc.* (a)		5,570,380
	66,000	NSTAR		2,141,700
	106,000	PG&E Corp.		4,801,800
	32,000	Pinnacle West Capital Corp. (a)		1,275,200
	63,000	PNM Resources Inc. (a)		1,750,770
	128,000	PPL Corp.		5,989,120
	65,000	Public Service Enterprise Group Inc.		5,705,700
	70,000	Reliant Energy Inc.* (a)		1,886,500
	84,000	SCANA Corp.		3,216,360
	108,000	Southern Co. (a)		3,703,320
	75,000	TXU Corp.		5,047,500
	73,000	Wisconsin Energy Corp.		3,228,790
				109,229,066
		Energy (17.3%)
	92,000	AGL Resources Inc.		3,724,160
	120,861	Dynegy, Inc. (Class A)* (a)		1,140,928
	65,000	Equitable Resources, Inc. (a)		3,221,400
	115,000	MDU Resources Group, Inc.		3,224,600

NUMBER OF SHARES			VALUE
	47,000	New Jersey Resources Corp.	$	2,397,940
	19,000	Peabody Energy Corp. (a)		919,220
	74,000	Questar Corp. (a)		3,910,900
	89,000	Sempra Energy		5,271,470
	80,216	Spectra Energy Corp.		2,082,407
	142,000	Williams Companies, Inc. (The)		4,490,040
				30,383,065
		Telecommunications (18.0%)
	50,932	ALLTEL Corp.		3,440,457
	40,000	America Movil SAB de C.V. (Series L) (ADR) (Mexico) (a)		2,477,200
	156,221	AT&T Inc.		6,483,172
	44,000	Citizens Communications Co.		671,880
	76,000	Crown Castle International Corp.* (a)		2,756,520
	8,000	NII Holdings Inc.* (a)		645,920
	85,000	Qwest Communications International Inc.* (a)		824,500
	70,000	Rogers Communications, Inc. (Class B) (Canada)		2,974,300
	37,860	Telefonica S.A. (ADR) (Spain)		2,527,534
	81,000	Telefonos de Mexico SAB de CV (Series L) (ADR) (Mexico) (a)		3,069,090
	97,120	Verizon Communications, Inc.		3,998,430
	120,965	Windstream Corp.		1,785,443
				31,654,446
		Total Common Stocks (Cost $84,702,885)		171,266,577
PRINCIPAL AMOUNT IN THOUSANDS
		Short-Term Investments (29.1%)
		Investment Company (b) (2.5%)
$	4,306	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $4,306,267)		4,306,267

See Notes to Financial Statements
68

Morgan Stanley Variable Investment Series - Utilities

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS					VALUE
		Security Purchased from Securities Lending Collateral (26.6%)
$	46,808	The Bank of New York Institutional Cash Reserve Fund (Cost $46,807,923)			$	46,807,923
		Total Short-Term Investments (Cost $51,114,190)				51,114,190
Total Investments (Cost $135,817,075) (c )			126.5	%		222,380,767
Liabilities in Excess of Other Assets			(26.5	)		(46,557,604	)
Net Assets			100.0	%	$	175,823,163

ADR American Depositary Receipt.

* Non-income producing security.

(a) All or a portion of this security was on loan as of June 30, 2007.

(b) See Note 4 to financial statements regarding investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(c) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $86,721,637 and the aggregate gross unrealized depreciation is $157,945, resulting in net unrealized appreciation of $86,563,692.

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Electric Utilities	$	109,229,066		49.1	%
Security Purchased from Securities Lending Collateral		46,807,923		21.0
Telecommunications		31,654,446		14.3
Energy		30,383,065		13.7
Investment Company		4,306,267		1.9
	$	222,380,767		100.0	%

See Notes to Financial Statements
69

Morgan Stanley Variable Investment Series - Income Builder

Portfolio of Investments n June 30, 2007 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (61.4%)
		Aerospace & Defense (0.7%)
	10,210	Raytheon Co.	$	550,217
		Beverages: Non-Alcoholic (1.1%)
	15,690	Coca-Cola Co. (The)		820,744
		Cable/Satellite TV (0.9%)
	24,358	Comcast Corp. (Class A)*		684,947
		Chemicals: Major Diversified (2.6%)
	20,760	Bayer AG (ADR) (Germany)		1,563,228
	7,860	E.I. du Pont de Nemours & Co.		399,602
				1,962,830
		Computer Communications (0.3%)
	9,500	Cisco Systems, Inc.*		264,575
		Computer Processing Hardware (0.2%)
	3,951	Hewlett-Packard Co.		176,294
		Discount Stores (1.4%)
	22,130	Wal-Mart Stores, Inc.		1,064,674
		Drugstore Chains (0.1%)
	16,000	Rite Aid Corp.*		102,080
		Electric Utilities (2.9%)
	16,380	American Electric Power Co., Inc.		737,755
	8,353	Entergy Corp.		896,695
	8,630	FirstEnergy Corp.		558,620
				2,193,070
		Finance/Rental/Leasing (1.2%)
	15,240	Freddie Mac		925,068
		Financial Conglomerates (3.9%)
	26,320	Citigroup, Inc.		1,349,953
	32,038	JPMorgan Chase & Co.		1,552,241
				2,902,194
		Food: Major Diversified (2.0%)
	9,020	ConAgra Foods Inc.		242,277
	15,638	Kraft Foods Inc. (Class A)		551,239
	22,500	Unilever N.V. (NY Registered Shares) (Netherlands)		697,950
				1,491,466
		Food: Specialty/Candy (0.8%)
	11,770	Cadbury Schweppes PLC (ADR) (United Kingdom)		639,111
		Home Improvement Chains (0.7%)
	12,500	Home Depot, Inc. (The)		491,875

See Notes to Financial Statements
70

Morgan Stanley Variable Investment Series - Income Builder

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Household/Personal Care (1.3%)
	6,050	Estee Lauder Companies, Inc. (The) (Class A)	$	275,335
	3,220	Kimberly-Clark Corp.		215,386
	7,510	Procter & Gamble Co. (The)		459,537
				950,258
		Industrial Conglomerates (4.1%)
	30,430	General Electric Co.		1,164,860
	6,730	Siemens AG (ADR) (Germany)		962,794
	26,760	Tyco International Ltd. (Bermuda)		904,220
				3,031,874
		Insurance Brokers/Services (1.4%)
	33,750	Marsh & McLennan Companies, Inc.		1,042,200
		Integrated Oil (3.0%)
	11,258	ConocoPhillips		883,753
	5,780	Exxon Mobil Corp.		484,826
	10,290	Royal Dutch Shell PLC (ADR) (Class A) (United Kingdom)		835,548
				2,204,127
		Internet Retail (0.6%)
	6,860	Amazon.com, Inc.*		469,293
		Internet Software/Services (0.8%)
	21,664	Yahoo! Inc.*		587,744
		Investment Banks/Brokers (2.1%)
	34,490	Charles Schwab Corp. (The)		707,735
	9,880	Merrill Lynch & Co., Inc.		825,770
				1,533,505
		Life/Health Insurance (0.3%)
	10,830	Aegon N.V. (NY Registered Shares) (Netherlands)		212,810
		Major Banks (1.3%)
	10,495	Bank of America Corp.		513,101
	5,920	PNC Financial Services Group, Inc.		423,754
				936,855
		Major Telecommunications (3.2%)
	4,366	Embarq Corp.		276,673
	12,640	France Telecom S.A. (ADR) (France)		347,347
	32,387	Sprint Nextel Corp.		670,735
	27,184	Verizon Communications, Inc.		1,119,165
				2,413,920
		Managed Health Care (0.6%)
	8,020	CIGNA Corp.		418,804

See Notes to Financial Statements
71

Morgan Stanley Variable Investment Series - Income Builder

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Media Conglomerates (2.9%)
	57,400	Time Warner, Inc.	$	1,207,696
	21,980	Viacom Inc. (Class B)*		915,027
				2,122,723
		Medical Specialties (0.7%)
	5,920	Applera Corp. - Applied Biosystems Group		180,797
	21,870	Boston Scientific Corp.*		335,486
				516,283
		Motor Vehicles (0.4%)
	9,050	Honda Motor Co., Ltd. (ADR) (Japan)		328,425
		Multi-Line Insurance (0.6%)
	4,860	Hartford Financial Services Group, Inc. (The)		478,759
		Oil & Gas Pipelines (0.3%)
	7,870	Williams Companies, Inc. (The)		248,849
		Oil & Gas Production (1.0%)
	2,550	Devon Energy Corp.		199,639
	9,070	Occidental Petroleum Corp.		524,972
				724,611
		Oil Refining/Marketing (0.5%)
	5,660	Marathon Oil Corp.		339,374
		Oilfield Services/Equipment (0.9%)
	7,510	Schlumberger Ltd. (Netherlands Antilles)		637,899
		Packaged Software (0.9%)
	31,300	Symantec Corp.*		632,260
		Pharmaceuticals: Major (8.9%)
	19,810	Abbott Laboratories		1,060,825
	32,130	Bristol-Myers Squibb Co.		1,014,023
	16,940	Eli Lilly & Co.		946,607
	5,530	GlaxoSmithKline PLC (ADR) (United Kingdom)		289,606
	15,570	Pfizer, Inc.		398,125
	6,330	Roche Holdings AG (ADR) (Switzerland)		562,579
	3,890	Sanofi-Aventis (ADR) (France)		156,650
	44,820	Schering-Plough Corp.		1,364,321
	14,090	Wyeth		807,921
				6,600,657
		Precious Metals (0.6%)
	11,660	Newmont Mining Corp.		455,440

See Notes to Financial Statements
72

Morgan Stanley Variable Investment Series - Income Builder

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Property - Casualty Insurers (2.6%)
	12,360	Chubb Corp. (The)	$	669,170
	15,273	Travelers Companies, Inc. (The)		817,105
	5,520	XL Capital Ltd. (Class A) (Cayman Islands)		465,281
				1,951,556
		Regional Banks (0.5%)
	9,620	Fifth Third Bancorp		382,587
		Restaurants (0.4%)
	5,530	McDonald's Corp.		280,703
		Semiconductors (0.9%)
	14,599	Intel Corp.		346,872
	22,920	Micron Technology, Inc.*		287,188
				634,060
		Specialty Stores (0.3%)
	6,892	Office Depot, Inc.*		208,828
		Telecommunication Equipment (0.7%)
	36,540	Alcatel-Lucent (ADR) (France)		511,560
		Tobacco (0.8%)
	8,120	Altria Group, Inc.		569,537
		Total Common Stocks (Cost $36,223,732)		45,694,646

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE
		Convertible Bonds (12.9%)
		Electric Utilities (0.8%)
$	173	PG&E Corp.		9.50	%	06/30/10	567,007
		Electronic Components (1.3%)
	1,000	Solectron Corp. (Series B)		.50		02/15/34	958,750
		Electronic Production Equipment (1.5%)
	1,100	Veeco Instruments, Inc.		4.125		12/21/08	1,095,875
		Hotels/Resorts/Cruiselines (2.0%)
	1,000	Hilton Hotels Corp. - 144A**		3.375		04/15/23	1,511,250
		Household/Personal Care (2.2%)
	1,000	Church & Dwight Co., Inc. - 144A**		5.25		08/15/33	1,607,500
		Internet Retail (1.2%)
	901	Amazon.com, Inc.		4.75		02/01/09	922,399

See Notes to Financial Statements
73

Morgan Stanley Variable Investment Series - Income Builder

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Media Conglomerates (1.7%)
$	1,080	Walt Disney Co. (The)		2.125	%	04/15/23	$	1,298,700
		Semiconductors (2.2%)
	1,450	Intel Corp. - 144A**		2.95		12/15/35		1,390,188
	282	Skyworks Solutions, Inc.		4.75		11/15/07		283,410
								1,673,598
		Total Convertible Bonds (Cost $8,143,732)						9,635,079
		Corporate Bonds (11.8%)
		Agricultural Commodities/Milling (2.0%)
	1,460	Corn Products International Inc.		8.25		07/15/07		1,460,945
		Broadcasting (1.6%)
	1,200	Clear Channel Communications, Inc.		8.00		11/01/08		1,231,218
		Building Products (1.7%)
	1,200	American Standard, Inc.		8.25		06/01/09		1,253,987
		Home Building (1.6%)
	1,200	Toll Corp.		8.25		02/01/11		1,227,000
		Hotels/Resorts/Cruiselines (2.8%)
	2,000	Starwood Hotels & Resorts Worldwide, Inc.		7.875		05/01/12		2,084,768
		Industrial Specialties (2.1%)
	1,500	Buckeye Technologies Inc.		8.50		10/01/13		1,541,250
		Total Corporate Bonds (Cost $8,824,092)						8,799,168

NUMBER OF SHARES
		Convertible Preferred Stocks (8.8%)
		Drugstore Chains (1.8%)
	40,000	Rite Aid Corp. $1.3752	1,310,000
		Financial Conglomerates (1.1%)
	27,000	Citigroup Funding Inc. (Series GNW) $1.7006	850,500
		Investment Banks/Brokers (1.4%)
	38,000	Lehman Brothers Holdings Inc. (Series GIS) $1.5625	1,028,280
		Life/Health Insurance (1.9%)
	44,000	MetLife, Inc. $1.5938 (Note 4)	1,423,840
		Pharmaceuticals: Major (0.6%)
	6,200	Schering-Plough Corp. $3.00	426,560

See Notes to Financial Statements
74

Morgan Stanley Variable Investment Series - Income Builder

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Real Estate Investment Trusts (0.6%)
	9,000	Equity Residential Properties Trust (Series E) $1.75	$	458,640
		Telecommunication Equipment (1.4%)
	1,000	Lucent Technologies Capital Trust I $77.50		1,029,910
		Total Convertible Preferred Stocks (Cost $5,820,340)		6,527,730
		Investment Trusts/Mutual Funds (0.5%)
	23,610	iShares MSCI Japan Index Fund (Cost $345,516)		342,581

PRINCIPAL AMOUNT IN THOUSANDS
		Short-Term Investment (a) (4.7%)
		Investment Company
$	3,475	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $3,474,696)				3,474,696
		Total Investments (Cost $62,832,108) (b)	100.1	%		74,473,900
		Liabilities In Excess of Other Assets	(0.1	)		(96,203	)
		Net Assets	100.0	%	$	74,377,697

ADR American Depositary Receipt.

* Non-income producing security.

** Resale is restricted to qualified institutional investors.

(a) See Note 4 to the financial statements regarding Investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(b) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $12,351,693 and the aggregate gross unrealized depreciation is $709,901, resulting in net unrealized appreciation of $11,641,792.

See Notes to Financial Statements
75

Morgan Stanley Variable Investment Series - Income Builder

Summary of Investments n June 30, 2007 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Pharmaceuticals: Major	$	7,027,217		9.4	%
Financial Conglomerates		3,752,694		5.0
Hotels/Resorts/Cruiselines		3,596,018		4.8
Investment Company		3,474,696		4.7
Media Conglomerates		3,421,423		4.6
Industrial Conglomerates		3,031,874		4.1
Electric Utilities		2,760,077		3.7
Investment Banks/Brokers		2,561,785		3.4
Household/Personal Care		2,557,758		3.4
Major Telecommunications		2,413,920		3.2
Semiconductors		2,307,658		3.1
Integrated Oil		2,204,127		3.0
Chemicals: Major Diversified		1,962,830		2.6
Property - Casualty Insurers		1,951,556		2.6
Life/Health Insurance		1,636,650		2.2
Telecommunication Equipment		1,541,470		2.1
Industrial Specialties		1,541,250		2.1
Food: Major Diversified		1,491,466		2.0
Agricultural Commodities/ Milling		1,460,945		2.0
Drugstore Chains		1,412,080		1.9
Internet Retail		1,391,692		1.9
Building Products		1,253,987		1.7
Broadcasting		1,231,218		1.7
Home Building		1,227,000		1.6
Electronic Production Equipment		1,095,875		1.5
Discount Stores		1,064,674		1.4
Insurance Brokers/ Services		1,042,200		1.4

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Electronic Components	$	958,750		1.3	%
Major Banks		936,855		1.3
Finance/Rental/Leasing		925,068		1.2
Beverages: Non-Alcoholic		820,744		1.1
Oil & Gas Production		724,611		1.0
Cable/Satellite TV		684,947		0.9
Food: Specialty/Candy		639,111		0.9
Oilfield Services/Equipment		637,899		0.9
Packaged Software		632,260		0.8
Internet Software/Services		587,744		0.8
Tobacco		569,537		0.8
Aerospace & Defense		550,217		0.7
Medical Specialties		516,283		0.7
Home Improvement Chains		491,875		0.7
Multi-Line Insurance		478,759		0.6
Real Estate Investment Trusts		458,640		0.6
Precious Metals		455,440		0.6
Managed Health Care		418,804		0.6
Regional Banks		382,587		0.5
Investment Trusts/Mutual Funds		342,581		0.5
Oil Refining/Marketing		339,374		0.5
Motor Vehicles		328,425		0.4
Restaurants		280,703		0.4
Computer Communications		264,575		0.3
Oil & Gas Pipelines		248,849		0.3
Specialty Stores		208,828		0.3
Computer Processing Hardware		176,294		0.2
	$	74,473,900		100.0	%

See Notes to Financial Statements
76

Morgan Stanley Variable Investment Series - Dividend Growth

Portfolio of Investments n June 30, 2007 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (98.0%)
		Aerospace & Defense (3.5%)
	106,963	Boeing Co. (The)	$	10,285,562
	122,626	Northrop Grumman Corp.		9,548,887
				19,834,449
		Aluminum (0.7%)
	92,500	Alcoa, Inc.		3,749,025
		Apparel/Footwear (1.3%)
	83,349	V.F. Corp.		7,633,101
		Beverages: Alcoholic (1.0%)
	67,438	Diageo PLC (ADR) (United Kingdom)		5,618,260
		Beverages: Non-Alcoholic (3.2%)
	284,251	PepsiCo, Inc.		18,433,677
		Cable/Satellite TV (0.5%)
	101,600	Comcast Corp. (Class A)*		2,856,992
		Chemicals: Agricultural (0.8%)
	64,638	Monsanto Co.		4,365,651
		Chemicals: Major Diversified (0.5%)
	55,200	E.I. du Pont de Nemours & Co.		2,806,368
		Computer Communications (2.3%)
	468,347	Cisco Systems, Inc.*		13,043,464
		Computer Peripherals (2.0%)
	617,229	EMC Corp.*		11,171,845
		Computer Processing Hardware (1.1%)
	218,429	Dell Inc.*		6,236,148
		Contract Drilling (1.0%)
	169,000	Nabors Industries, Ltd. (Bermuda)*		5,641,220
		Data Processing Services (2.1%)
	249,227	Automatic Data Processing, Inc.		12,080,033
		Department Stores (0.9%)
	126,050	Macy's, Inc.		5,014,269

NUMBER OF SHARES			VALUE
		Discount Stores (1.7%)
	149,844	Target Corp.	$	9,530,078
		Drugstore Chains (1.5%)
	185,237	CVS Caremark Corp.		6,751,889
	232,300	Rite Aid Corp.*		1,482,074
				8,233,963
		Electric Utilities (1.5%)
	113,083	Exelon Corp.		8,209,826
		Electronic Production Equipment (0.5%)
	143,000	Applied Materials, Inc.		2,841,410
		Financial Conglomerates (11.1%)
	200,947	American Express Co.		12,293,937
	374,345	Citigroup, Inc. (Note 4)		19,200,155
	303,112	JPMorgan Chase & Co.		14,685,776
	115,165	Prudential Financial, Inc.		11,197,493
	93,388	UBS AG (Switzerland)		5,604,214
				62,981,575
		Food: Major Diversified (0.4%)
	72,148	Kraft Foods Inc. (Class A)		2,543,217
		Home Improvement Chains (0.5%)
	75,600	Home Depot, Inc. (The)		2,974,860
		Hotels/Resorts/ Cruiselines (0.6%)
	52,956	Starwood Hotels & Resorts Worldwide, Inc.		3,551,759
		Household/Personal Care (3.1%)
	282,824	Procter & Gamble Co. (The)		17,306,001
		Industrial Conglomerates (7.4%)
	56,000	3M Co.		4,860,240
	437,507	General Electric Co.		16,747,768
	286,379	United Technologies Corp.		20,312,862
				41,920,870

See Notes to Financial Statements
77

Morgan Stanley Variable Investment Series - Dividend Growth

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Information Technology Services (1.7%)
	229,113	Accenture Ltd. (Class A) (Bermuda)	$	9,826,657
		Integrated Oil (3.5%)
	238,473	Exxon Mobil Corp.		20,003,115
		Internet Software/ Services (0.5%)
	5,091	Google Inc. (Class A)*		2,664,528
		Investment Banks/ Brokers (2.1%)
	20,188	Goldman Sachs Group, Inc. (The)		4,375,749
	87,694	Merrill Lynch & Co., Inc.		7,329,464
				11,705,213
		Investment Managers (2.0%)
	258,687	Mellon Financial Corp.		11,382,228
		Life/Health Insurance (1.2%)
	47,942	Lincoln National Corp.		3,401,485
	53,155	MetLife, Inc. (Note 4)		3,427,434
				6,828,919
		Major Banks (0.6%)
	68,759	Wachovia Corp.		3,523,899
		Major Telecommunications (3.2%)
	206,100	AT&T Inc.		8,553,150
	309,600	Sprint Nextel Corp.		6,411,816
	83,500	Verizon Communications, Inc.		3,437,695
				18,402,661
		Managed Health Care (1.3%)
	146,912	UnitedHealth Group Inc.		7,513,080
		Media Conglomerates (2.7%)
	586,509	Time Warner, Inc.		12,340,149
	75,400	Viacom Inc. (Class B)*		3,138,902
				15,479,051

NUMBER OF SHARES			VALUE
		Medical Specialties (1.6%)
	21,406	Alcon, Inc. (Switzerland)	$	2,887,883
	55,400	Medtronic, Inc.		2,873,044
	65,495	Thermo Fisher Scientific, Inc.*		3,387,401
				9,148,328
		Multi-Line Insurance (1.7%)
	134,917	American International Group, Inc.		9,448,238
		Office Equipment/ Supplies (1.2%)
	149,406	Pitney Bowes Inc.		6,995,189
		Oil & Gas Production (1.0%)
	95,395	XTO Energy, Inc.		5,733,240
		Oilfield Services/ Equipment (3.6%)
	76,788	Cameron International Corp.*		5,488,038
	110,979	Schlumberger Ltd. (Netherlands Antilles)		9,426,556
	94,191	Weatherford International Ltd. (Bermuda)*		5,203,111
				20,117,705
		Other Consumer Services (1.0%)
	172,903	eBay Inc.*		5,564,019
		Packaged Software (3.2%)
	476,787	Microsoft Corp.		14,050,913
	205,800	Oracle Corp.*		4,056,318
				18,107,231
		Pharmaceuticals: Major (8.0%)
	112,900	Abbott Laboratories		6,045,795
	204,835	Johnson & Johnson		12,621,933
	413,924	Pfizer, Inc.		10,584,037
	284,052	Wyeth		16,287,541
				45,539,306

See Notes to Financial Statements
78

Morgan Stanley Variable Investment Series - Dividend Growth

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES					VALUE
		Property - Casualty Insurers (1.5%)
	99,525	XL Capital Ltd. (Class A) (Cayman Islands)			$	8,388,962
		Publishing: Newspapers (0.5%)
	49,500	Gannett Co., Inc.				2,720,025
		Pulp & Paper (1.2%)
	171,400	International Paper Co.				6,693,170
		Regional Banks (0.5%)
	68,700	Fifth Third Bancorp				2,732,199
		Semiconductors (1.9%)
	448,024	Intel Corp.				10,645,050
		Specialty Stores (0.6%)
	155,852	Staples, Inc.				3,698,368
		Tobacco (2.5%)
	200,668	Altria Group, Inc.				14,074,854
		Total Common Stocks (Cost $468,587,705)				555,513,296
PRINCIPAL AMOUNT IN THOUSANDS
		Short-Term Investment (a) (2.0%)
		Investment Company
$	11,217	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $11,217,277)				11,217,277
Total Investments (Cost $479,804,982) (b)			100.0	%		566,730,573
Liabilities in Excess of Other Assets			(0.0	)		(173,289	)
Net Assets			100.0	%	$	566,557,284

ADR American Depositary Receipt.

* Non-income producing security.

(a) See Note 4 to the financial statements regarding investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(b) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $90,067,534 and the aggregate gross unrealized depreciation is $3,141,943 resulting in net unrealized appreciation of $86,925,591.

See Notes to Financial Statements
79

Morgan Stanley Variable Investment Series - Dividend Growth

Summary of Investments n June 30, 2007 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Financial Conglomerates	$	62,981,575		11.1	%
Pharmaceuticals:Major		45,539,306		8.0
Industrial Conglomerates		41,920,870		7.4
Oilfield Services/Equipment		20,117,705		3.5
Integrated Oil		20,003,115		3.5
Aerospace & Defense		19,834,449		3.5
Beverages:Non-Alcoholic		18,433,677		3.3
Major Telecommunications		18,402,661		3.2
Packaged Software		18,107,231		3.2
Household/Personal Care		17,306,001		3.1
Media Conglomerates		15,479,051		2.7
Tobacco		14,074,854		2.5
Computer Communications		13,043,464		2.3
Data Processing Services		12,080,033		2.1
Investment Banks/Brokers		11,705,213		2.1
Investment Managers		11,382,228		2.0
Investment Company		11,217,277		2.0
Computer Peripherals		11,171,845		2.0
Semiconductors		10,645,050		1.9
Information Technology Services		9,826,657		1.7
Discount Stores		9,530,078		1.7
Multi-Line Insurance		9,448,238		1.7
Medical Specialties		9,148,328		1.6
Property - Casualty Insurers		8,388,962		1.5
Drugstore Chains		8,233,963		1.5
Electric Utilities		8,209,826		1.4

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Apparel/Footwear	$	7,633,101		1.3	%
Managed Health Care		7,513,080		1.3
Office Equipment /Supplies		6,995,189		1.2
Life/Health Insurance		6,828,919		1.2
Pulp & paper		6,693,170		1.2
Computer Processing Hardware		6,236,148		1.1
Oil & Gas Production		5,733,240		1.0
Contract Drilling		5,641,220		1.0
Beverages: Alcoholic		5,618,260		1.0
Other Consumer Services		5,564,019		1.0
Department Stores		5,014,269		0.9
Chemicals: Agricultural		4,365,651		0.8
Aluminum		3,749,025		0.7
Specialty Stores		3,698,368		0.7
Hotels/Resorts/Cruiselines		3,551,759		0.6
Major Banks		3,523,899		0.6
Home Improvement Chains		2,974,860		0.5
Cable/Satellite TV		2,856,992		0.5
Electronic Production Equipment		2,841,410		0.5
Chemicals:Major Diversified		2,806,368		0.5
Regional Banks		2,732,199		0.5
Publishing:Newspapers		2,720,025		0.5
Internet Software/Services		2,664,528		0.5
Food: Major Diversified		2,543,217		0.4
	$	566,730,573		100.0	%

See Notes to Financial Statements
80

Morgan Stanley Variable Investment Series - Global Dividend Growth

Portfolio of Investments n June 30, 2007 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (99.4%)
		Australia (2.0%)
		Beverages: Alcoholic
	247,345	Foster's Group Ltd. (a)	$	1,337,565
		Construction Materials
	173,520	Boral Ltd. (a)		1,289,853
		Food: Major Diversified
	996,747	Goodman Fielder Ltd.		2,052,968
		Total Australia		4,680,386
		Bermuda (3.3%)
		Industrial Conglomerates
	50,370	Ingersoll - Rand Ltd. (Class A)		2,761,283
	149,196	Tyco International Ltd.		5,041,333
		Total Bermuda		7,802,616
		Cayman Islands (1.8%)
		Property - Casualty Insurers
	50,580	XL Capital Ltd. (Class A)		4,263,388
		France (7.3%)
		Construction Materials
	22,076	Lafarge S.A. (a)		4,045,136
		Integrated Oil
	49,655	Total S.A.		4,049,358
		Major Banks
	56,311	BNP Paribas (a)		6,733,534
		Pharmaceuticals: Major
	30,180	Sanofi-Aventis		2,454,640
		Total France		17,282,668
		Germany (3.1%)
		Chemicals: Major Diversified
	13,046	BASF AG		1,716,787
		Motor Vehicles
	40,504	Bayerische Motoren Werke (BMW) AG		2,631,623

NUMBER OF SHARES			VALUE
	32,392	DaimlerChrysler AG (Registered Shares)	$	3,006,718
				5,638,341
		Total Germany		7,355,128
		Ireland (2.2%)
		Food: Specialty/Candy
	105,124	Kerry Group PLC (A Shares)		2,944,871
		Major Banks
	106,467	Bank of Ireland		2,152,582
		Total Ireland		5,097,453
		Italy (1.1%)
		Integrated Oil
	72,092	Eni SpA (a)		2,624,421
		Japan (9.4%)
		Auto Parts: O.E.M.
	154,900	Keihin Corp. (a)		2,991,198
		Electrical Products
	163,200	Sumitomo Electric Industries, Ltd. (a)		2,436,257
		Electronic Equipment/Instruments
	61,800	Canon Inc. (a)		3,632,930
		Household/Personal Care
	114,000	Kao Corp.		2,956,826
		Motor Vehicles
	239,700	Nissan Motor Co., Ltd.		2,574,548
		Pharmaceuticals: Major
	32,800	Takeda Pharmaceutical Co., Ltd.		2,122,839
		Pharmaceuticals: Other
	48,000	Astellas Pharma Inc. (a)		2,091,877
		Property - Casualty Insurers
	92,000	Mitsui Sumitomo Insurance Co., Ltd.		1,183,381
		Recreational Products
	52,300	Sankyo Co., Ltd.		2,206,984
		Total Japan		22,196,840

See Notes to Financial Statements
81

Morgan Stanley Variable Investment Series - Global Dividend Growth

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Netherlands (2.9%)
		Food: Major Diversified
	118,995	Unilever NV (Share Certificates)	$	3,713,489
		Industrial Conglomerates
	26,957	Koninklijke (Royal) Philips Electronics NV		1,151,337
		Publishing: Books/Magazines
	67,186	Wolters Kluwer NV (Share Certificates)		2,059,402
		Total Netherlands		6,924,228
		Norway (1.4%)
		Integrated Oil
	105,272	Statoil ASA (a)		3,273,971
		Singapore (1.0%)
		Other Transportation
	1,685,000	ComfortDelGro Corp. Ltd. (a)		2,400,379
		South Korea (0.8%)
		Wireless Telecommunications
	66,588	SK Telecom Co., Ltd. (ADR) (a)		1,821,182
		Spain (3.2%)
		Major Banks
	152,695	Banco Bilbao Vizcaya Argentaria, S.A. (a)		3,760,887
		Major Telecommunications
	173,630	Telefonica S.A.		3,886,461
		Total Spain		7,647,348
		Switzerland (2.4%)
		Chemicals: Agricultural
	11,345	Syngenta AG (Registered Shares)*		2,221,996
		Financial Conglomerates
	43,951	UBS AG (Registered Shares)		2,648,648

NUMBER OF SHARES			VALUE
		Pharmaceuticals: Major
	15,911	Novartis AG (Registered Shares)	$	898,927
		Total Switzerland		5,769,571
		Taiwan (0.6%)
		Major Telecommunications
	72,557	Chunghwa Telecom Co., Ltd. (ADR)		1,368,425
		United Kingdom (21.3%)
		Advertising/Marketing Services
	243,824	WPP Group PLC		3,664,098
		Aerospace & Defense
	377,831	Rolls-Royce Group PLC*		4,084,906
	24,195,040	Rolls-Royce Group PLC (B Shares)		49,548
				4,134,454
		Beverages: Alcoholic
	111,101	Diageo PLC		2,313,106
		Financial Conglomerates
	796,759	Old Mutual PLC		2,701,814
		Food Retail
	568,860	Morrison (W.M.) Supermarkets PLC		3,454,853
		Food: Specialty/Candy
	415,573	Cadbury Schweppes PLC		5,673,552
		Integrated Oil
	64,178	Royal Dutch Shell PLC (ADR) (Class A)		5,211,254
		Major Banks
	229,003	Barclays PLC		3,199,994
	356,874	Royal Bank of Scotland Group PLC		4,535,419
				7,735,413
		Pharmaceuticals: Major
	189,289	GlaxoSmithKline PLC		4,959,464

See Notes to Financial Statements
82

Morgan Stanley Variable Investment Series - Global Dividend Growth

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Publishing: Books/Magazines
	229,745	Reed Elsevier PLC	$	2,982,040
		Tobacco
	105,989	Imperial Tobacco Group PLC		4,909,160
		Wireless Telecommunications
	770,024	Vodafone Group PLC		2,594,150
		Total United Kingdom		50,333,358
		United States (35.6%)
		Aluminum
	48,001	Alcoa, Inc.		1,945,481
		Coal
	55,322	Peabody Energy Corp.		2,676,478
		Computer Peripherals
	223,902	EMC Corp.*		4,052,626
		Computer Processing Hardware
	54,577	Hewlett-Packard Co.		2,435,226
		Data Processing Services
	87,654	First Data Corp.		2,863,656
		Electric Utilities
	26,994	American Electric Power Co., Inc.		1,215,810
	27,166	Dominion Resources, Inc.		2,344,697
				3,560,507
		Finance/Rental/Leasing
	74,008	Freddie Mac		4,492,286
		Financial Conglomerates
	83,023	Citigroup, Inc.		4,258,250
		Forest Products
	15,742	Weyerhaeuser Co.		1,242,516
		Industrial Machinery
	43,864	Illinois Tool Works Inc.		2,376,990
		Information Technology Services
	50,636	International Business Machines Corp.		5,329,439
		Insurance Brokers/Services
	110,836	Marsh & McLennan Companies, Inc. (a)		3,422,616

NUMBER OF SHARES			VALUE
		Integrated Oil
	51,567	Chevron Corp.	$	4,344,004
		Investment Banks/Brokers
	36,277	Merrill Lynch & Co., Inc.		3,032,032
		Investment Managers
	74,647	Mellon Financial Corp.		3,284,468
		Major Telecommunications
	37,592	AT&T Inc.		1,560,068
	54,297	Verizon Communications, Inc.		2,235,407
				3,795,475
		Managed Health Care
	74,173	UnitedHealth Group Inc.		3,793,207
		Miscellaneous Manufacturing
	58,340	Pentair, Inc. (a)		2,250,174
		Multi-Line Insurance
	35,692	American International Group, Inc.		2,499,511
		Packaged Software
	63,289	McAfee Inc.* (a)		2,227,773
		Pharmaceuticals: Major
	123,384	Pfizer, Inc.		3,154,929
	114,685	Schering-Plough Corp.		3,491,011
	83,716	Wyeth		4,800,275
				11,446,215
		Property - Casualty Insurers
	43,503	St. Paul Travelers Companies, Inc. (The)		2,327,410
		Tobacco
	90,131	Altria Group, Inc.		6,321,788
		Total United States		83,978,128
		Total Common Stocks (Cost $151,009,435)		234,819,490

See Notes to Financial Statements
83

Morgan Stanley Variable Investment Series - Global Dividend Growth

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			VALUE
		Short-Term Investments (13.1%)
		Short-Term Debt Securities held as Collateral on Loaned Securities (12.5%)
$	852	AIG-FP Match Funding Corp., 5.30%, 12/17/07 (b)	$	852,348
	609	Alliance & Leister Plc., 5.33%, 07/29/08 (b)		608,790
	296	Anglo Irish Bank Corp. PLC , 5.35%, 07/09/07		296,378
	304	Bancaja, 5.36%, 07/29/08 (b)		304,395
	41	Banco Bilbao Viz Argentaria, Madrid, 5.44% , 07/02/07		40,687
	304	Bank of New York Co., Inc., 5.32%, 07/29/08 (b)		304,395
	304	BASF AG, 5.36%, 07/18/08 (b)		304,365
	609	Bear Stearns, 5.38%, 07/29/08 (b)		608,790
	609	BNP Paribas Mtn., 5.35%, 07/29/08 (b)		608,790
	1,218	Cam US Finance SA Unipersonal, 5.36%, 07/29/08 (b)		1,217,581
		CIC NY,
	426	5.30%, 09/04/07 (b)		426,138
	1,096	CIT Group Holdings, 5.37%, 06/18/08 (b)		1,095,823
	609	Credit Suisse First Boston, NY, 5.32%, 03/14/08 (b)		608,790
	609	Dexia Bank NY, 5.32%, 09/28/07 (b)		608,760
	1,218	Dresdner London, 5.42% , 07/02/07		1,217,581
	621	Ebbets Funding LLC., 5.32%, 07/17/07		620,965
		First Tennessee Bank,
	304	5.33%, 07/29/08 (b)		304,395
	1,217	5.34%, 07/29/08 (b)		1,217,467
	613	Glitner Banki HF, 5.35%, 07/20/07 (b)		612,695

PRINCIPAL AMOUNT IN THOUSANDS			VALUE
		Goldman Sachs Group, Inc.,
$	304	5.37%, 07/29/08 (b)	$	304,395
	572	5.50%, 06/27/08 (b)		572,263
	304	HSBC Finance Corp., 5.33%, 07/29/08 (b)		304,395
	1,218	IBM Corp., 5.29%, 07/29/08 (b)		1,217,780
	609	Macquarie Bank Ltd., 5.34%, 07/29/08 (b)		608,790
	610	Marshall & Ilsley Bank, 5.37%, 12/17/07		610,498
	365	Merrill Lynch and Co., 5.45%, 07/06/07 (b)		365,274
	913	Metropolitan Life Global Funding, 5.31%, 07/29/08 (b)		913,185
		Natexis Banques Populaires NY,
	609	5.33%, 09/07/07 (b)		608,790
	463	National Australia Bank Ltd., 5.31%, 07/29/08 (b)		462,681
	304	National City Bank Cleveland, 5.32%, 09/18/07 (b)		304,389
	1,218	National Rural Utilites Coop., Fin., 5.33% 07/29/08 (b)		1,217,581
	706	Nationwide Building Society, 5.44%, 06/27/08 (b)		706,197
	1,217	National Bank of Canada, 5.31%, 04/02/08 (b)		1,217,333
	1,218	Norinchukin Bank NY, 5.32%, 07/26/07		1,217,581
	606	Old Line Funding, 5.32%, 07/24/07		606,191
	601	Rhein-Gold Securitisation, 5.32%, 07/16/07		601,333
		Scaldis Capital LLC.,
	491	5.34%, 07/20/07		490,716
	303	5.34%, 07/23/07		303,181
	1,515	Sheffield Receivable Corp., 5.31%, 07/12/07		1,515,266

See Notes to Financial Statements
84

Morgan Stanley Variable Investment Series - Global Dividend Growth

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS					VALUE
$	609	Skandi New York, 5.32%, 07/29/08 (b)			$	608,790
	1,461	Societe Generale, N.Y., 5.30%, 12/31/07 (b)				1,460,871
	404	Ticonderoga Funding LLC. 5.34%, 07/25/07				403,680
	670	UniCredito Delaware Inc., 5.33% 07/29/08 (b)				669,703
	426	Unicredito Italiano Bank (IRE) PLC, 5.34%, 07/29/08 (b)				426,153
		Total Short-Term Debt Securities held as Collateral on Loaned Securities (Cost $29,576,149)				29,576,149
		Investment Company (c) (0.6%)
	1,363	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $1,362,972)				1,362,972
		Total Short-Term Investments (Cost $30,939,121)				30,939,121
Total Investments (Cost $181,948,556) (d)			112.5	%		265,758,611
Liabilities in Excess of Other Assets			(12.5	)		(29,593,697	)
Net Assets			100.0	%	$	236,164,914

ADR American Depositary Receipt.

* Non-income producing security.

(a) All or portion of this security was on loan as of June 30, 2007.

(b) Variable/Floating Rate Security - interest rate changes on these instruments are based on changes in a designated base rate. The rates shown are those in effect on June 30, 2007.

(c) See Note 4 to financial statements regarding investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(d) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $84,454,120 and the aggregate gross unrealized depreciation is $644,065, resulting in net unrealized appreciation of $83,810,055.

See Notes to Financial Statements
85

Morgan Stanley Variable Investment Series - Global Dividend Growth

Summary of Investments n June 30, 2007 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Collateral on Loaned Securities	$	29,576,149		11.1	%
Pharmaceuticals: Major		21,882,085		8.2
Major Banks		20,382,416		7.7
Integrated Oil		19,503,008		7.3
Tobacco		11,230,948		4.2
Financial Conglomerates		9,608,712		3.6
Major Telecommunications		9,050,361		3.4
Industrial Conglomerates		8,953,953		3.4
Food: Specialty/Candy		8,618,423		3.2
Motor Vehicles		8,212,889		3.1
Property - Casualty Insurers		7,774,180		2.9
Food: Major Diversified		5,766,457		2.2
Construction Materials		5,334,989		2.0
Information Technology Services		5,329,439		2.0
Publishing: Books/Magazines		5,041,442		1.9
Finance/Rental/Leasing		4,492,286		1.7
Wireless Telecommunications		4,415,332		1.7
Aerospace & Defense		4,134,454		1.6
Computer Peripherals		4,052,626		1.5
Managed Health Care		3,793,207		1.4
Advertising/Marketing Services		3,664,098		1.4
Beverages: Alcoholic		3,650,671		1.4
Electronic Equipment/ Instruments		3,632,930		1.4

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Electric Utilities	$	3,560,506		1.4	%
Food Retail		3,454,853		1.3
Insurance Brokers/Services		3,422,616		1.3
Investment Managers		3,284,468		1.2
Investment Banks/Brokers		3,032,032		1.1
Auto Parts: O.E.M.		2,991,198		1.1
Household/Personal Care		2,956,826		1.1
Data Processing Services		2,863,656		1.1
Coal		2,676,478		1.0
Multi-Line Insurance		2,499,511		1.0
Electrical Products		2,436,257		0.9
Computer Processing Hardware		2,435,226		0.9
Other Transportation		2,400,379		0.9
Industrial Machinery		2,376,990		0.9
Miscellaneous Manufacturing		2,250,174		0.9
Packaged Software		2,227,773		0.8
Chemicals: Agricultural		2,221,996		0.8
Recreational Products		2,206,984		0.8
Pharmaceuticals: Other		2,091,877		0.8
Aluminum		1,945,481		0.7
Chemicals: Major Diversified		1,716,787		0.7
Investment Company		1,362,972		0.5
Forest Products		1,242,516		0.5
	$	265,758,611		100.0	%

See Notes to Financial Statements
86

Morgan Stanley Variable Investment Series - European Equity

Portfolio of Investments n June 30, 2007 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (97.6%) Austria (0.9%)
		Major Telecommunications
	65,658	Telekom Austria AG	$	1,643,817
		Belgium (1.3%)
		Other Metals/Minerals
	11,204	Umicore		2,445,236
		France (14.1%)
		Construction Materials
	22,960	Lafarge S.A.		4,207,117
		Electric Utilities
	35,656	Electricite de France (a)		3,873,772
	66,542	Suez S.A. (a)		3,826,279
				7,700,051
		Electrical Products
	26,058	Schneider Electric S.A. (a)		3,672,071
		Major Banks
	39,047	BNP Paribas		4,669,146
		Motor Vehicles
	14,258	Renault S.A. (a)		2,300,199
		Pharmaceuticals: Major
	42,283	Sanofi-Aventis (a)		3,439,017
		Total France		25,987,601
		Germany (14.4%)
		Industrial Conglomerates
	36,653	MAN AG		5,295,564
	39,883	Siemens AG (Registered Shares)		5,751,973
				11,047,537
		Major Banks
	76,589	Commerzbank AG (a)		3,678,464
		Motor Vehicles
	45,811	Bayerische Motoren Werke (BMW) AG (a)		2,976,429
		Multi-Line Insurance
	20,127	Allianz SE (Registered Shares) (a)		4,728,222

NUMBER OF SHARES			VALUE
	22,199	Muenchener Rueckversicherungss- Gesellschaft AG (Registered Shares)	$	4,091,407
				8,819,629
		Total Germany		26,522,059
		Greece (3.2%)
		Major Banks
	60,334	National Bank of Greece S.A.		3,461,960
		Regional Banks
	75,504	EFG Eurobank Ergasias		2,472,746
		Total Greece		5,934,706
		Italy (4.3%)
		Integrated Oil
	117,908	ENI SpA (a)		4,292,296
		Major Banks
	416,265	UniCredito Italiano SpA		3,734,887
		Total Italy		8,027,183
		Netherlands (3.5%)
		Air Freight/Couriers
	63,295	TNT NV		2,863,518
		Publishing: Books/Magazines
	114,580	Wolters Kluwer NV (Share Certificates)		3,512,134
		Total Netherlands		6,375,652
		Norway (1.1%)
		Major Telecommunications
	106,695	Telenor ASA*		2,093,105
		Spain (6.4%)
		Major Banks
	173,368	Banco Bilbao Vizcaya Argentaria, S.A. (a)		4,270,064
		Major Telecommunications
	178,844	Telefonica S.A.		4,003,169

See Notes to Financial Statements
87

Morgan Stanley Variable Investment Series - European Equity

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Tobacco
	53,987	Altadis, S.A. (a)	$	3,594,582
		Total Spain		11,867,815
		Sweden (4.0%)
		Industrial Machinery
	176,424	Sandvik AB		3,582,606
		Telecommunication Equipment
	934,912	Telefonaktiebolaget LM Ericsson (B Shares)		3,750,575
		Total Sweden		7,333,181
		Switzerland (16.3%)
		Financial Conglomerates
	72,417	UBS AG (Registered Shares)		4,364,113
		Food: Major Diversified
	16,861	Nestle S.A. (Registered Shares)		6,433,494
		Medical Specialties
	6,357	Nobel Biocare Holding AG Bearer		2,084,646
		Multi-Line Insurance
	10,964	Zurich Financial Services AG (Registered Shares) (a)		3,404,648
		Other Consumer Specialties
	67,334	Compagnie Financiere Richemont AG (Series A) (Units)†		4,052,280
		Pharmaceuticals: Major
	86,519	Novartis AG (Registered Shares)		4,888,079
	27,075	Roche Holding AG		4,819,541
				9,707,620
		Total Switzerland		30,046,801

NUMBER OF SHARES			VALUE
		United Kingdom (28.1%)
		Aerospace & Defense
	371,656	BAE Systems PLC	$	3,022,004
	266,723	Rolls-Royce Group PLC*		2,883,666
	17,250,939	Rolls-Royce Group PLC (B Shares)		35,327
				5,940,997
		Food Retail
	404,829	Morrison (W.M.) Supermarkets PLC		2,458,645
	471,361	Tesco PLC		3,960,481
				6,419,126
		Integrated Oil
	215,543	Royal Dutch Shell PLC (A Shares)		8,802,047
		Investment Managers
	188,553	Man Group PLC		2,305,417
		Major Banks
	237,939	Barclays PLC		3,324,863
	338,752	HSBC Holdings PLC		6,223,028
				9,547,891
		Other Metals/Minerals
	69,229	Anglo American PLC		4,093,287
		Pharmaceuticals: Major
	164,741	GlaxoSmithKline PLC		4,316,294
		Publishing: Books/ Magazines
	154,021	Reed Elsevier PLC		1,999,159
		Tobacco
	64,626	Imperial Tobacco Group PLC		2,993,324
		Wireless Telecommunications
	1,618,146	Vodafone Group PLC		5,451,405
		Total United Kingdom		51,868,947
		Total Common Stocks (Cost $128,510,520)		180,146,103

See Notes to Financial Statements
88

Morgan Stanley Variable Investment Series - European Equity

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Preferred Stock (1.0%) Germany
		Medical Specialties
	23,863	Fresenius AG (Cost $1,930,787)	$	1,819,755
PRINCIPAL AMOUNT IN THOUSANDS
		Short-Term Investments (14.3%) Short-Term Debt Securities held as Collateral on Loaned Securities (12.9%)
$	688	AIG Match Funding Corp., 5.30%, 12/17/07 (b)		687,688
	491	Alliance and Leister PLC., 5.33%, 07/29/08 (b)		491,182
	239	Anglo Irish Bank Corp PLC., 5.35%, 07/09/07		239,122
	246	Bancaja, 5.36%, 07/29/08 (b)		245,591
	33	Banco Bilbao Viz Argentina, Madrid, 5.44%, 07/02/07		32,827
	246	Bank of New York Co., Inc. 5.32%, 07/29/08 (b)		245,591
	246	BASF AG, 5.36%, 07/18/08 (b)		245,567
	491	Bear Stearns, 5.38%, 07/29/08 (b)		491,182
	491	BNP Paribas Mtn., 5.35%, 07/29/08 (b)		491,182
	982	CAM U.S. Finance SA Unipersonal, 5.36%, 07/29/08 (b)		982,365
	344	CIC NY, 5.30%, 09/04/07 (b)		343,815
	884	CIT Group Holdings Inc., 5.37%, 06/18/08 (b)		884,128

PRINCIPAL AMOUNT IN THOUSANDS			VALUE
$	491	Credit Suisse First Boston, NY, 5.32%, 03/14/08 (b)	$	491,182
	491	Dexia Bank NY, 5.32%, 09/28/07 (b)		491,158
	982	Dresdner London, 5.42%, 07/02/07		982,364
	501	Ebbets Funding LLC., 5.32%, 07/17/07		501,005
		First Tennesee Bank,
	246	5.33%, 07/29/08 (b)		245,591
	982	5.34%, 07/29/08 (b)		982,273
	494	Glitner Bank HF, 5.35%, 07/20/07 (b)		494,333
		Goldman Sachs Group, Inc.,
	246	5.37%, 07/29/08 (b)		245,591
	462	5.50%, 06/27/08 (b)		461,711
	982	IBM Corp., 5.29%, 07/29/08 (b)		982,525
	246	HSBC Finance Corp., 5.33%, 07/29/08 (b)		245,591
	491	Macquarie Bank Ltd., 5.34%, 07/29/08 (b)		491,182
	493	Marshall & Ilsley Bank, 5.37%, 12/17/07		492,560
	295	Merrill Lynch & Co., 5.45%, 07/06/07 (b)		294,709
	737	Metropolitan Life Global Funding, 5.31%, 07/29/08 (b)		736,773
	491	Natexis Banques Populaires NY, 5.33%, 09/07/07 (b)		491,182
	373	National Australia Bank Ltd., 5.31%, 07/29/08 (b)		373,299
	982	National Bank of Canada, 5.31%, 04/02/08 (b)		982,164
	246	National City Bank Cleveland, 5.32%, 09/18/07 (b)		245,587
	982	National Rural Utilities Coop., Fin., 5.33%, 07/29/08 (b)		982,364

See Notes to Financial Statements
89

Morgan Stanley Variable Investment Series - European Equity

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS					VALUE
$	570	Nationwide Building Society, 5.44%, 06/27/08 (b)			$	569,771
	982	Norinchukin Bank , NY, 5.32%, 07/26/07				982,365
	489	Old Line Funding, 5.32%, 07/24/07				489,085
	485	RheinGold Securitization, 5.32%, 07/16/07				485,165
		Scaldis Capital LLC,
	396	5.34%, 07/20/07				395,918
	245	5.34%, 07/23/07				244,611
	1,223	Sheffield Receivable Corp., 5.31%, 07/12/07				1,222,542
	491	Skandi New York, 5.32%, 07/29/08 (b)				491,182
	1,179	Societe Generale, NY, 5.30%, 12/31/07 (b)				1,178,655
	326	Ticonderoga Funding LLC, 5.34%, 07/25/07				325,696
	540	Unicredito Delaware Inc., 5.33%, 07/29/08 (b)				540,328
	344	Unicredito Italiano Bank Plc., (IRE) 5.34%, 07/29/08 (b)				343,828
		Total Short-Term Debt Securities held as Collateral on Loaned Securities (Cost $23,862,530)				23,862,530
		Investment Company (c) (1.4%)
	2,622	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $2,622,192)				2,622,192
	Investments	Total Short-Term (Cost $26,484,722)				26,484,722
	Total Investments (Cost $156,926,029) (d)		112.9	%		208,450,580
	Liabilities in Excess of Other Assets		(12.9	)		(23,849,943	)
	Net Assets		100.0	%	$	184,600,637

* Non-income producing security.

† Consists of one or more class of securities traded together as a unit; stocks with attached warrants.

(a) All or portion of this security was on loan as of June 30, 2007.

(b) Variable/Floating Rate Security - interest rate changes on these instruments are based on changes in a designated base rate. The rates shown are those in effect on June 30, 2007.

(c) See Note 4 to financial statements regarding investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(d) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $52,300,464 and the aggregate gross unrealized depreciation is $775,913, resulting in net unrealized appreciation of $51,524,551.

FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JUNE 30, 2007:

CONTRACTS TO DELIVER		IN EXCHANGE FOR		DELIVERY DATE	UNREALIZED APPRECIATION (DEPRECIATION)
EUR	75,818	$	102,097	07/02/07	$	(508	)
EUR	388,914	$	525,093	07/02/07		(1,225	)
EUR	282,976	$	382,074	07/03/07		(877	)
$	1,009,982	CHF	1,239,046	07/03/07		4,548
Net Unrealized Appreciation					$	1,938

Currency Abbreviations:

EUR Euro.

CHF Swiss Franc.

See Notes to Financial Statements
90

Morgan Stanley Variable Investment Series - European Equity

Summary of Investments n June 30, 2007

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Major Banks	$	29,362,412		14.1	%
Collateral on loaned securities		23,862,530		11.4
Pharmaceuticals: Major		17,462,931		8.4
Integrated Oil		13,094,343		6.3
Multi-Line Insurance		12,224,277		5.9
Industrial Conglomerates		11,047,537		5.3
Major Telecommunications		7,740,091		3.7
Electric Utilities		7,700,051		3.7
Tobacco		6,587,906		3.2
Other Metals/Minerals		6,538,523		3.1
Food: Major Diversified		6,433,494		3.1
Food Retail		6,419,126		3.1
Aerospace & Defense		5,940,997		2.8
Publishing: Books/ Magazines		5,511,293		2.6

INDUSTRY	VALUE			PERCENT OF TOTAL INVESTMENTS
Wireless Telecommunications	$	5,451,405			2.6	%
Motor Vehicles		5,276,628			2.5
Financial Conglomerates		4,364,113			2.1
Construction Materials		4,207,117			2.0
Other Consumer Specialties		4,052,280			1.9
Medical Specialties		3,904,401			1.9
Telecommunication Equipment		3,750,575			1.8
Electrical Products		3,672,071			1.8
Industrial Machinery		3,582,606			1.7
Air Freight/Couriers		2,863,518			1.4
Investment Company		2,622,192			1.3
Regional Banks		2,472,746			1.2
Investment Managers		2,305,417			1.1
	$	208,450,580	*		100.0	%

* Does not include open forward foreign currency contracts with a net unrealized appreciation of $1,938.

See Notes to Financial Statements
91

Morgan Stanley Variable Investment Series - Equity

Portfolio of Investments n June 30, 2007 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (98.6%)
		Air Freight/Couriers (5.4%)
	274,104	C.H. Robinson Worldwide, Inc.	$	14,395,942
	253,717	Expeditors International of Washington, Inc.		10,478,512
				24,874,454
		Apparel/Footwear Retail (2.7%)
	170,337	Abercrombie & Fitch Co. (Class A)		12,431,194
		Biotechnology (2.2%)
	178,511	Techne Corp.*		10,212,614
		Broadcasting (3.0%)
	508,202	Grupo Televisa S.A. (ADR) (Mexico)		14,031,457
		Casino/Gaming (2.5%)
	129,929	Wynn Resorts, Ltd.		11,653,332
		Chemicals: Agricultural (6.2%)
	427,332	Monsanto Co.		28,862,003
		Discount Stores (7.8%)
	238,710	Costco Wholesale Corp.		13,969,309
	129,297	Sears Holdings Corp.*		21,915,842
				35,885,151
		Financial Conglomerates (10.4%)
	329,178	American Express Co.		20,139,110
	706,776	Brookfield Asset Management Inc. (Class A) (Canada)		28,200,362
				48,339,472
		Financial Publishing/ Services (3.8%)
	284,337	Moody's Corp.		17,685,762
		Hotels/Resorts/ Cruiselines (2.7%)
	138,997	Accor S.A. (France)		12,362,237
		Internet Retail (4.9%)
	332,074	Amazon.com, Inc.*		22,717,182

NUMBER OF SHARES			VALUE
		Internet Software/Services (9.2%)
	59,054	Google, Inc. (Class A)*	$	30,907,683
	437,165	Yahoo!, Inc.*		11,860,287
				42,767,970
		Investment Banks/ Brokers (2.5%)
	166,895	Greenhill & Co., Inc.		11,467,356
		Investment Trusts/ Mutual Funds (3.1%)
	716,249	Aeroplan Income Fund † (Units) (Canada)		14,288,636
		Medical Specialties (3.1%)
	271,038	Dade Behring Holdings, Inc.		14,397,539
		Miscellaneous Commercial Services (2.8%)
	200,940	Corporate Executive Board Co. (The)		13,043,015
		Oil & Gas Production (4.3%)
	360,413	Ultra Petroleum Corp. (Canada)*		19,909,214
		Other Consumer Services (4.9%)
	700,373	eBay, Inc.*		22,538,003
		Personnel Services (2.4%)
	266,212	Monster Worldwide, Inc.*		10,941,313
		Property - Casualty Insurers (2.8%)
	3,579	Berkshire Hathaway Inc. (Class B)*		12,902,295
		Specialty Telecommunications (2.1%)
	322,326	Cogent Communications Group, Inc.*		9,627,878
		Steel (2.2%)
	175,291	Nucor Corp.		10,280,817
		Water Utilities (2.0%)
	330,224	Nalco Holding Co.		9,064,649

See Notes to Financial Statements
92

Morgan Stanley Variable Investment Series - Equity

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES					VALUE
		Wholesale Distributors (2.1%)
	2,664,000	Li & Fung Ltd. (Hong Kong)			$	9,590,822
		Wireless Telecommunications (3.5%)
	259,080	America Movil SAB de C.V. (Series L) (ADR) (Mexico)				16,044,824
		Total Common Stocks (Cost $384,527,646)				455,919,189
PRINCIPAL AMOUNT IN THOUSANDS
		Short-Term Investment (a)(1.6%)
		Investment Company
$	7,530	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $7,530,354)			$	7,530,354
Total Investments (Cost $392,058,000) (b)			100.2	%		463,449,543
Liabilities In Excess of Other Assets			(0.2	)		(1,038,286	)
Net Assets			100.0	%	$	462,411,257

ADR American Depositary Receipt.

* Non-income producing security.

† Consists of one or more class of securities traded together as a unit; stocks with attached warrants.

(a) See Note 4 to the financial statements regarding Investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(b) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is 93,035,764 and the aggregate gross unrealized depreciation is $21,644,221, resulting in net unrealized appreciation of $71,391,543.

See Notes to Financial Statements
93

Morgan Stanley Variable Investment Series - Equity

Summary of Investments n June 30, 2007 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Financial Conglomerates	$	48,339,472		10.4	%
Internet Software/ Services		42,767,970		9.2
Discount Stores		35,885,151		7.7
Chemicals: Agricultural		28,862,003		6.2
Air Freight/Couriers		24,874,454		5.4
Internet Retail		22,717,182		4.9
Other Consumer Services		22,538,003		4.9
Oil & Gas Production		19,909,214		4.3
Financial Publishing/ Services		17,685,762		3.8
Wireless Telecommunications		16,044,824		3.5
Medical Specialties		14,397,539		3.1
Investment Trusts/ Mutual Funds		14,288,636		3.1
Broadcasting		14,031,457		3.0
Miscellaneous Commercial Services		13,043,015		2.8

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Property - Casualty Insurers	$	12,902,295		2.8	%
Apparel/Footwear Retail		12,431,194		2.7
Hotels/Resorts/ Cruiselines		12,362,237		2.7
Casino/Gaming		11,653,332		2.5
Investment Banks/ Brokers		11,467,356		2.5
Personnel Services		10,941,313		2.4
Steel		10,280,817		2.2
Biotechnology		10,212,614		2.2
Specialty Telecommunications		9,627,878		2.1
Wholesale Distributors		9,590,822		2.1
Water Utilities		9,064,649		1.9
Investment Company		7,530,354		1.6
	$	463,449,543		100.0	%

See Notes to Financial Statements
94

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2007 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (99.3%)
		Advertising/Marketing Services (0.2%)
	8,737	Interpublic Group of Companies, Inc. (The)*	$	99,602
	6,230	Omnicom Group, Inc.		329,691
				429,293
		Aerospace & Defense (1.8%)
	14,623	Boeing Co. (The)		1,406,147
	7,563	General Dynamics Corp.		591,578
	2,337	Goodrich Corp.		139,192
	2,321	L-3 Communications Holdings, Inc.		226,042
	6,615	Lockheed Martin Corp.		622,670
	6,409	Northrop Grumman Corp.		499,069
	2,555	Precision Castparts Corp.		310,075
	8,317	Raytheon Co.		448,203
	3,136	Rockwell Collins, Inc.		221,527
				4,464,503
		Agricultural Commodities/ Milling (0.2%)
	12,167	Archer-Daniels-Midland Co.		402,606
		Air Freight/Couriers (0.9%)
	3,227	C.H. Robinson Worldwide, Inc.		169,482
	5,725	FedEx Corp.		635,303
	19,667	United Parcel Service, Inc. (Class B)		1,435,691
				2,240,476
		Airlines (0.1%)
	14,501	Southwest Airlines Co.		216,210
		Aluminum (0.3%)
	16,209	Alcoa, Inc.		656,951
		Apparel/Footwear (0.5%)
	6,900	Coach, Inc.*		326,991
	2,022	Jones Apparel Group, Inc.		57,122
	1,928	Liz Claiborne, Inc.		71,914
	7,046	Nike, Inc. (Class B)		410,711
	1,165	Polo Ralph Lauren Corp.		114,298
	1,679	V.F. Corp.		153,763
				1,134,799

NUMBER OF SHARES			VALUE
		Apparel/Footwear Retail (0.4%)
	1,645	Abercrombie & Fitch Co. (Class A)	$	120,052
	9,822	Gap, Inc. (The)		187,600
	6,376	Limited Brands, Inc.		175,021
	4,168	Nordstrom, Inc.		213,068
	8,483	TJX Companies, Inc. (The)		233,283
				929,024
		Auto Parts: O.E.M. (0.3%)
	2,725	Eaton Corp.		253,425
	3,663	Johnson Controls, Inc.		424,066
				677,491
		Automotive Aftermarket (0.1%)
	3,831	Goodyear Tire & Rubber Co. (The)*		133,166
		Beverages: Alcoholic (0.4%)
	14,110	Anheuser-Busch Companies, Inc.		735,978
	1,516	Brown-Forman Corp. (Class B)		110,789
	3,588	Constellation Brands Inc. (Class A)*		87,117
	892	Molson Coors Brewing Co. (Class B)		82,474
				1,016,358
		Beverages: Non-Alcoholic (1.6%)
	37,319	Coca-Cola Co. (The)		1,952,157
	5,188	Coca-Cola Enterprises Inc.		124,512
	2,451	Pepsi Bottling Group, Inc. (The)		82,550
	30,250	PepsiCo, Inc.		1,961,712
				4,120,931
		Biotechnology (1.2%)
	21,535	Amgen Inc.*		1,190,670
	6,383	Biogen Idec Inc.*		341,491
	7,038	Celgene Corp.*		403,489
	4,911	Genzyme Corp.*		316,268
	17,324	Gilead Sciences, Inc.*		671,651
	1,025	Millipore Corp.*		76,967
				3,000,536

See Notes to Financial Statements
95

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Broadcasting (0.1%)
	2,932	Citadel Broadcasting Corp.	$	18,914
	9,249	Clear Channel Communications, Inc.		349,797
				368,711
		Building Products (0.2%)
	3,257	American Standard Companies, Inc.		192,098
	7,014	Masco Corp.		199,688
				391,786
		Cable/Satellite TV (0.8%)
	57,793	Comcast Corp. (Class A)*		1,625,139
	14,318	DIRECTV Group, Inc. (The)*		330,889
				1,956,028
		Casino/Gaming (0.2%)
	3,475	Harrah's Entertainment, Inc.		296,278
	6,174	International Game Technology		245,108
				541,386
		Chemicals: Agricultural (0.3%)
	10,131	Monsanto Co.		684,248
		Chemicals: Major Diversified (0.8%)
	17,702	Dow Chemical Co. (The)		782,782
	17,226	E.I. du Pont de Nemours & Co.		875,770
	1,559	Eastman Chemical Co.		100,290
	2,170	Hercules Inc.*		42,641
	2,653	Rohm & Haas Co.		145,066
				1,946,549
		Chemicals: Specialty (0.4%)
	4,035	Air Products & Chemicals, Inc.		324,293
	1,060	Ashland Inc.		67,787
	5,972	Praxair, Inc.		429,924
	2,462	Sigma-Aldrich Corp.		105,054
				927,058

NUMBER OF SHARES			VALUE
		Coal (0.2%)
	3,402	CONSOL Energy, Inc.	$	156,866
	4,934	Peabody Energy Corp.		238,707
				395,573
		Commercial Printing/ Forms (0.1%)
	4,071	Donnelley (R.R.) & Sons Co.		177,129
		Computer Communications (1.4%)
	8,354	Avaya Inc.*		140,681
	112,747	Cisco Systems, Inc.*		3,140,004
	10,517	Juniper Networks, Inc.*		264,713
	2,965	QLogic Corp.*		49,367
				3,594,765
		Computer Peripherals (0.4%)
	38,970	EMC Corp.*		705,357
	1,790	Lexmark International, Inc. (Class A)*		88,265
	6,917	Network Appliance, Inc.*		201,976
	4,225	Seagate Technology Inc. (Escrow) (a)*		0
				995,598
		Computer Processing Hardware (2.3%)
	16,066	Apple Inc.*		1,960,695
	42,185	Dell, Inc.*		1,204,382
	48,634	Hewlett-Packard Co.		2,170,049
	3,337	NCR Corp.*		175,326
	66,302	Sun Microsystems, Inc.*		348,748
				5,859,200
		Construction Materials (0.1%)
	1,771	Vulcan Materials Co.		202,850
		Containers/Packaging (0.2%)
	1,922	Ball Corp.		102,193
	1,950	Bemis Company, Inc.		64,701
	2,477	Pactiv Corp.*		78,991
	3,008	Sealed Air Corp.		93,308
	1,960	Temple-Inland Inc.		120,599
				459,792

See Notes to Financial Statements
96

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Contract Drilling (0.5%)
	2,813	ENSCO International Inc.	$	171,621
	5,191	Nabors Industries, Ltd. (Bermuda)*		173,275
	2,507	Noble Corp. (Cayman Islands)		244,483
	2,060	Rowan Companies, Inc.		84,419
	5,351	Transocean Inc. (Cayman Islands)*		567,099
				1,240,897
		Data Processing Services (0.9%)
	1,844	Affiliated Computer Services, Inc. (Class A)*		104,592
	10,258	Automatic Data Processing, Inc.		497,205
	3,229	Computer Sciences Corp.*		190,995
	2,547	Convergys Corp.*		61,739
	3,034	Fidelity National Information Services, Inc.		164,686
	14,036	First Data Corp.		458,556
	3,180	Fiserv, Inc.*		180,624
	6,323	Paychex, Inc.		247,356
	14,390	Western Union Co.		299,744
				2,205,497
		Department Stores (0.4%)
	1,157	Dillard's, Inc. (Class A)		41,571
	5,991	Kohl's Corp.*		425,541
	8,568	Macy's, Inc.		340,835
	4,194	Penney (J.C.) Co., Inc.		303,562
				1,111,509
		Discount Stores (1.7%)
	2,041	Big Lots, Inc.*		60,046
	8,294	Costco Wholesale Corp.		485,365
	5,816	Dollar General Corp.		127,487
	2,827	Family Dollar Stores, Inc.		97,023
	1,549	Sears Holdings Corp.*		262,555
	15,813	Target Corp.		1,005,707
	45,019	Wal-Mart Stores, Inc.		2,165,864
				4,204,047

NUMBER OF SHARES			VALUE
		Drugstore Chains (0.7%)
	28,711	CVS Caremark Corp.	$	1,046,516
	18,656	Walgreen Co.		812,282
				1,858,798
		Electric Utilities (3.2%)
	12,381	AES Corp. (The)*		270,896
	3,065	Allegheny Energy, Inc.*		158,583
	3,851	Ameren Corp.		188,738
	7,394	American Electric Power Co., Inc.		333,026
	5,966	CenterPoint Energy, Inc.		103,808
	4,162	CMS Energy Corp.		71,586
	5,024	Consolidated Edison, Inc.		226,683
	3,368	Constellation Energy Group, Inc.		293,589
	6,505	Dominion Resources, Inc.		561,447
	3,302	DTE Energy Co.		159,222
	23,433	Duke Energy Corp.		428,824
	6,073	Edison International		340,817
	3,697	Entergy Corp.		396,873
	12,492	Exelon Corp.		906,919
	5,661	FirstEnergy Corp.		366,437
	7,560	FPL Group, Inc.		428,954
	1,429	Integrys Energy Group, Inc.		72,493
	6,539	PG&E Corp.		296,217
	1,864	Pinnacle West Capital Corp.		74,280
	7,178	PPL Corp.		335,859
	4,793	Progress Energy, Inc.		218,513
	4,712	Public Service Enterprise Group, Inc.		413,619
	13,954	Southern Co. (The)		478,483
	3,907	TECO Energy, Inc.		67,122
	8,560	TXU Corp.		576,088
	7,601	Xcel Energy, Inc.		155,592
				7,924,668
		Electrical Products (0.4%)
	3,402	Cooper Industries Ltd. (Class A) (Bermuda)		194,220
	14,769	Emerson Electric Co.		691,189
	2,643	Molex Inc.		79,316
				964,725

See Notes to Financial Statements
97

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Electronic Components (0.2%)
	3,328	Jabil Circuit, Inc.	$	73,449
	4,167	MEMC Electronic Materials, Inc.*		254,687
	4,238	SanDisk Corp.*		207,408
	5,481	Sanmina-SCI Corp.*		17,156
	16,852	Solectron Corp.*		62,015
				614,715
		Electronic Equipment/ Instruments (0.4%)
	7,353	Agilent Technologies, Inc.*		282,649
	3,937	JDS Uniphase Corp.*		52,874
	2,930	Rockwell Automation, Inc.		203,459
	1,553	Tektronix, Inc.		52,398
	17,407	Xerox Corp.*		321,681
				913,061
		Electronic Production Equipment (0.3%)
	25,664	Applied Materials, Inc.		509,944
	3,559	KLA-Tencor Corp.		195,567
	2,344	Novellus Systems, Inc.*		66,499
	3,537	Teradyne, Inc.*		62,180
				834,190
		Electronics/Appliance Stores (0.2%)
	7,546	Best Buy Co., Inc.		352,172
	2,568	Circuit City Stores - Circuit City Group		38,725
	2,539	RadioShack Corp.		84,142
				475,039
		Electronics/Appliances (0.2%)
	5,359	Eastman Kodak Co.		149,141
	1,245	Harman International Industries, Inc.		145,416
	1,496	Whirlpool Corp.		166,355
				460,912
		Engineering & Construction (0.1%)
	1,639	Fluor Corp.		182,535

NUMBER OF SHARES			VALUE
		Environmental Services (0.2%)
	4,753	Allied Waste Industries, Inc.*	$	63,975
	9,609	Waste Management, Inc.		375,231
				439,206
		Finance/Rental/Leasing (1.4%)
	7,654	Capital One Financial Corp.		600,380
	3,607	CIT Group, Inc.		197,772
	10,994	Countrywide Financial Corp.		399,632
	18,042	Fannie Mae		1,178,684
	12,285	Freddie Mac		745,699
	1,154	Ryder System, Inc.		62,085
	7,651	SLM Corp.		440,545
				3,624,797
		Financial Conglomerates (4.1%)
	22,073	American Express Co.		1,350,426
	91,858	Citigroup, Inc. (Note 4)		4,711,397
	63,439	JPMorgan Chase & Co.		3,073,619
	4,993	Principal Financial Group, Inc.		291,042
	8,742	Prudential Financial, Inc.		849,985
				10,276,469
		Financial Publishing/ Services (0.3%)
	2,701	Equifax, Inc.		119,978
	6,373	McGraw-Hill Companies, Inc. (The)		433,874
	4,271	Moody's Corp.		265,656
				819,508
		Food Distributors (0.1%)
	11,501	SYSCO Corp.		379,418
		Food Retail (0.4%)
	13,197	Kroger Co. (The)		371,232
	8,211	Safeway Inc.		279,420
	3,874	SUPERVALU, Inc.		179,444
	2,620	Whole Foods Market, Inc.		100,346
				930,442
		Food: Major Diversified (1.0%)
	4,071	Campbell Soup Co.		157,996
	9,250	ConAgra Foods Inc.		248,455

See Notes to Financial Statements
98

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
	6,434	General Mills, Inc.	$	375,874
	6,055	Heinz (H.J.) Co.		287,431
	4,674	Kellogg Co.		242,066
	29,789	Kraft Foods Inc. (Class A)		1,050,062
	13,672	Sara Lee Corp.		237,893
				2,599,777
		Food: Meat/Fish/Dairy (0.1%)
	2,404	Dean Foods Co.		76,615
	4,702	Tyson Foods, Inc. (Class A)		108,334
				184,949
		Food: Specialty/Candy (0.2%)
	3,226	Hershey Co. (The)		163,300
	2,427	McCormick & Co., Inc. (Non-Voting)		92,663
	4,066	Wrigley (Wm.) Jr. Co.		224,890
				480,853
		Forest Products (0.1%)
	3,937	Weyerhaeuser Co.		310,747
		Gas Distributors (0.4%)
	7,499	Dynegy, Inc. (Class A)*		70,791
	3,273	KeySpan Corp.		137,401
	854	Nicor Inc.		36,654
	5,105	NiSource, Inc.		105,724
	3,204	Questar Corp.		169,331
	4,901	Sempra Energy		290,286
	11,704	Spectra Energy Corp.		303,836
				1,114,023
		Home Building (0.2%)
	2,226	Centex Corp.		89,263
	5,089	D.R. Horton, Inc.		101,424
	1,461	KB Home		57,520
	2,571	Lennar Corp. (Class A)		93,996
	3,961	Pulte Homes, Inc.		88,924
				431,127
		Home Furnishings (0.1%)
	3,307	Leggett & Platt, Inc.		72,919
	5,175	Newell Rubbermaid, Inc.		152,300
				225,219

NUMBER OF SHARES			VALUE
		Home Improvement Chains (1.0%)
	36,661	Home Depot, Inc. (The)	$	1,442,610
	27,949	Lowe's Companies, Inc.		857,755
	2,080	Sherwin-Williams Co.		138,258
				2,438,623
		Hospital/Nursing Management (0.1%)
	1,385	Manor Care, Inc.		90,427
	8,791	Tenet Healthcare Corp.*		57,229
				147,656
		Hotels/Resorts/ Cruiselines (0.5%)
	8,247	Carnival Corp # (Units) (Panama)		402,206
	7,250	Hilton Hotels Corp.		242,658
	6,147	Marriott International, Inc. (Class A)		265,796
	4,005	Starwood Hotels & Resorts Worldwide, Inc.		268,615
	3,385	Wyndham Worldwide Corp.*		122,740
				1,302,015
		Household/Personal Care (2.2%)
	8,222	Avon Products, Inc.		302,159
	2,819	Clorox Co. (The)		175,060
	9,570	Colgate-Palmolive Co.		620,615
	2,167	Estee Lauder Companies, Inc. (The) (Class A)		98,620
	1,485	International Flavors & Fragrances, Inc.		77,428
	8,508	Kimberly-Clark Corp.		569,100
	58,477	Procter & Gamble Co. (The)		3,578,208
				5,421,190
		Industrial Conglomerates (5.2%)
	13,375	3M Co.		1,160,816
	4,437	Danaher Corp.		334,994
	191,057	General Electric Co.**		7,313,662
	14,480	Honeywell International, Inc.		814,934

See Notes to Financial Statements
99

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
	5,601	Ingersoll-Rand Co. Ltd. (Class A) (Bermuda)	$	307,047
	3,389	ITT Corp.		231,401
	2,335	Textron, Inc.		257,107
	36,856	Tyco International Ltd. (Bermuda)		1,245,364
	18,467	United Technologies Corp.		1,309,864
				12,975,189
		Industrial Machinery (0.2%)
	7,708	Illinois Tool Works Inc.		417,696
	2,158	Parker Hannifin Corp.		211,290
				628,986
		Industrial Specialties (0.1%)
	3,317	Ecolab Inc.		141,636
	3,057	PPG Industries, Inc.		232,668
				374,304
		Information Technology Services (1.3%)
	3,366	Citrix Systems, Inc.*		113,333
	2,660	Cognizant Technology Solutions Corp. (Class A)*		199,739
	9,450	Electronic Data Systems Corp.		262,049
	25,368	International Business Machines Corp.		2,669,982
	6,436	Unisys Corp.*		58,825
				3,303,928
		Insurance Brokers/ Services (0.2%)
	5,453	AON Corp.		232,352
	10,304	Marsh & McLennan Companies, Inc.		318,188
				550,540
		Integrated Oil (6.0%)
	39,913	Chevron Corp.		3,362,271
	30,352	ConocoPhillips		2,382,632
	104,613	Exxon Mobil Corp.		8,774,938
	5,036	Hess Corp.		296,923
	3,498	Murphy Oil Corp.		207,921
				15,024,685

NUMBER OF SHARES			VALUE
		Internet Retail (0.2%)
	5,797	Amazon.com, Inc.*	$	396,573
	4,048	IAC/InterActiveCorp*		140,101
				536,674
		Internet Software/ Services (1.1%)
	4,057	Google, Inc. (Class A)*		2,123,353
	4,570	VeriSign, Inc.*		145,006
	22,461	Yahoo!, Inc.*		609,367
				2,877,726
		Investment Banks/ Brokers (2.8%)
	4,369	Ameriprise Financial, Inc.		277,737
	2,233	Bear Stearns Companies, Inc. (The)		312,620
	18,790	Charles Schwab Corp. (The)		385,571
	662	Chicago Mercantile Exchange Holdings Inc. (Class A)		353,746
	7,963	ETRADE Group, Inc.		175,903
	7,586	Goldman Sachs Group, Inc. (The)		1,644,265
	9,807	Lehman Brothers Holdings Inc.		730,818
	16,171	Merrill Lynch & Co., Inc.		1,351,572
	21,160	Morgan Stanley (Note 4)		1,774,901
				7,007,133
		Investment Managers (0.7%)
	1,660	Federated Investors, Inc. (Class B)		63,628
	3,121	Franklin Resources, Inc.		413,439
	3,443	Janus Capital Group, Inc.		95,853
	2,451	Legg Mason, Inc.		241,129
	7,754	Mellon Financial Corp.		341,176
	4,945	Price (T.) Rowe Group, Inc.		256,596
	6,223	State Street Corp.		425,653
				1,837,474
		Life/Health Insurance (0.9%)
	9,084	AFLAC, Inc.		466,918
	7,769	Genworth Financial Inc. (Class A)		267,254

See Notes to Financial Statements
100

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
	5,028	Lincoln National Corp.	$	356,737
	13,772	MetLife, Inc. (Note 4)		888,018
	1,827	Torchmark Corp.		122,409
	6,387	UnumProvident Corp.		166,765
				2,268,101
		Major Banks (5.0%)
	82,412	Bank of America Corp.		4,029,123
	14,091	Bank of New York Co., Inc. (The)		583,931
	10,103	BB&T Corp.		410,990
	2,939	Comerica, Inc.		174,782
	4,390	Huntington Bancshares, Inc.		99,829
	7,285	KeyCorp		250,094
	10,692	National City Corp.		356,257
	6,453	PNC Financial Services Group, Inc.		461,906
	13,087	Regions Financial Corp.		433,180
	6,622	SunTrust Banks, Inc.		567,770
	32,289	U.S. Bancorp		1,063,923
	35,524	Wachovia Corp.		1,820,605
	62,021	Wells Fargo & Co.		2,181,279
				12,433,669
		Major Telecommunications (3.5%)
	6,416	ALLTEL Corp.		433,401
	114,498	AT&T Inc.		4,751,667
	2,806	Embarq Corp.		177,816
	53,737	Sprint Nextel Corp.		1,112,893
	53,917	Verizon Communications, Inc.		2,219,763
				8,695,540
		Managed Health Care (1.3%)
	9,626	Aetna, Inc.		475,524
	5,345	CIGNA Corp.		279,116
	2,973	Coventry Health Care, Inc.*		171,393
	3,108	Humana, Inc.*		189,308
	24,886	UnitedHealth Group Inc.		1,272,670
	11,416	WellPoint Inc.*		911,339
				3,299,350

NUMBER OF SHARES			VALUE
		Media Conglomerates (1.9%)
	13,604	CBS Corp. (Class B)	$	453,285
	36,800	Disney (Walt) Co. (The)		1,256,352
	43,255	News Corp. (Class A)		917,439
	70,298	Time Warner, Inc.		1,479,070
	12,798	Viacom, Inc. (Class B)*		532,781
				4,638,927
		Medical Distributors (0.4%)
	3,532	AmerisourceBergen Corp.		174,728
	7,143	Cardinal Health, Inc.		504,582
	5,506	McKesson Corp.		328,378
	2,594	Patterson Companies, Inc.*		96,678
				1,104,366
		Medical Specialties (2.0%)
	3,421	Applera Corp. - Applied Biosystems Group		104,477
	1,925	Bard (C.R.), Inc.		159,063
	1,033	Bausch & Lomb, Inc.		71,732
	12,113	Baxter International, Inc.		682,446
	4,559	Becton, Dickinson & Co.		339,646
	4,565	Biomet, Inc.		208,712
	22,075	Boston Scientific Corp.*		338,631
	2,907	Hospira, Inc.*		113,489
	21,385	Medtronic, Inc.		1,109,026
	2,293	Pall Corp.		105,455
	2,271	PerkinElmer, Inc.		59,182
	6,283	St. Jude Medical, Inc.*		260,682
	5,558	Stryker Corp.		350,654
	7,830	Thermo Fisher Scientific, Inc.*		404,968
	2,394	Varian Medical Systems, Inc.*		101,769
	1,893	Waters Corp.*		112,368
	4,421	Zimmer Holdings, Inc.*		375,299
				4,897,599
		Miscellaneous Commercial Services (0.0%)
	2,530	Cintas Corp.		99,758

See Notes to Financial Statements
101

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Miscellaneous Manufacturing (0.1%)
	3,816	Dover Corp.	$	195,188
		Motor Vehicles (0.4%)
	34,916	Ford Motor Co.*		328,909
	10,543	General Motors Corp.		398,525
	4,801	Harley-Davidson, Inc.		286,188
				1,013,622
		Multi-Line Insurance (1.8%)
	48,177	American International Group, Inc.		3,373,835
	5,881	Hartford Financial Services Group, Inc. (The)		579,337
	8,278	Loews Corp.		422,012
	1,968	SAFECO Corp.		122,528
				4,497,712
		Office Equipment/ Supplies (0.1%)
	1,708	Avery Dennison Corp.		113,548
	4,106	Pitney Bowes, Inc.		192,243
				305,791
		Oil & Gas Pipelines (0.2%)
	13,017	El Paso Corp.		224,283
	11,144	Williams Companies, Inc. (The)		352,373
				576,656
		Oil & Gas Production (1.4%)
	8,632	Anadarko Petroleum Corp.		448,778
	6,169	Apache Corp.		503,329
	7,633	Chesapeake Energy Corp.		264,102
	8,285	Devon Energy Corp.		648,633
	4,548	EOG Resources, Inc.		332,277
	15,484	Occidental Petroleum Corp.		896,214
	7,119	XTO Energy Inc.		427,852
				3,521,185
		Oil Refining/Marketing (0.7%)
	12,894	Marathon Oil Corp.		773,124
	2,262	Sunoco, Inc.		180,236
	10,195	Valero Energy Corp.		753,003
				1,706,363

NUMBER OF SHARES			VALUE
		Oilfield Services/ Equipment (1.6%)
	5,969	Baker Hughes Inc.	$	502,172
	5,466	BJ Services Co.		155,453
	17,035	Halliburton Co.		587,708
	3,277	National Oilwell-Varco, Inc.*		341,594
	21,887	Schlumberger Ltd. (Netherlands Antilles)		1,859,082
	3,717	Smith International, Inc.		217,965
	6,303	Weatherford International Ltd. (Bermuda)*		348,178
				4,012,152
		Other Consumer Services (0.4%)
	2,609	Apollo Group, Inc.(Class A)*		152,444
	6,008	Block (H&R), Inc.		140,407
	21,022	eBay, Inc.*		676,488
				969,339
		Other Consumer Specialties (0.1%)
	2,842	Fortune Brands, Inc.		234,096
		Packaged Software (3.1%)
	10,969	Adobe Systems, Inc.*		440,405
	4,319	Autodesk, Inc.*		203,339
	3,802	BMC Software, Inc.*		115,201
	7,668	CA Inc.		198,064
	5,593	Compuware Corp.*		66,333
	6,386	Intuit Inc.*		192,091
	156,342	Microsoft Corp.		4,607,399
	6,468	Novell, Inc.*		50,386
	73,511	Oracle Corp.*		1,448,902
	16,732	Symantec Corp.*		337,986
				7,660,106
		Personnel Services (0.1%)
	2,395	Monster Worldwide, Inc.*		98,435
	3,131	Robert Half International, Inc.		114,282
				212,717
		Pharmaceuticals: Generic Drugs (0.1%)
	1,988	Barr Pharmaceuticals Inc.*		99,857
	4,562	Mylan Laboratories, Inc.		82,983
	1,911	Watson Pharmaceuticals, Inc.*		62,165
				245,005

See Notes to Financial Statements
102

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Pharmaceuticals: Major (5.8%)
	28,605	Abbott Laboratories	$	1,531,798
	36,548	Bristol-Myers Squibb Co.		1,153,455
	18,391	Eli Lilly & Co.		1,027,689
	53,791	Johnson & Johnson		3,314,601
	40,248	Merck & Co., Inc.		2,004,350
	130,333	Pfizer, Inc.		3,332,615
	27,732	Schering-Plough Corp.		844,162
	24,980	Wyeth		1,432,353
				14,641,023
		Pharmaceuticals: Other (0.3%)
	5,732	Allergan, Inc.		330,392
	5,925	Forest Laboratories, Inc.*		270,476
	4,533	King Pharmaceuticals, Inc.*		92,745
				693,613
		Precious Metals (0.4%)
	6,987	Freeport-McMoRan Copper & Gold, Inc. (Class B)		578,663
	8,406	Newmont Mining Corp.		328,338
				907,001
		Property - Casualty Insurers (1.2%)
	6,090	ACE Ltd. (Cayman Islands)		380,747
	11,280	Allstate Corp. (The) (Note 4)		693,833
	7,456	Chubb Corp. (The)		403,668
	3,222	Cincinnati Financial Corp.		139,835
	13,672	Progressive Corp. (The)		327,171
	12,331	Travelers Companies, Inc. (The)		659,709
	3,375	XL Capital Ltd. (Class A) (Cayman Islands)		284,479
				2,889,442
		Publishing: Books/ Magazines (0.0%)
	740	Meredith Corp.		45,584
		Publishing: Newspapers (0.2%)
	1,242	Dow Jones & Co., Inc.		71,353
	4,377	Gannett Co., Inc.		240,516

NUMBER OF SHARES			VALUE
	2,683	New York Times Co. (The) (Class A)	$	68,148
	1,556	Scripps (E.W.) Co. (Class A)		71,094
	1,569	Tribune Co.		46,129
				497,240
		Pulp & Paper (0.2%)
	8,089	International Paper Co.		315,875
	3,401	MeadWestvaco Corp.		120,123
				435,998
		Railroads (0.8%)
	6,691	Burlington Northern Santa Fe Corp.		569,672
	8,142	CSX Corp.		367,041
	7,302	Norfolk Southern Corp.		383,866
	5,047	Union Pacific Corp.		581,162
				1,901,741
		Real Estate Development (0.0%)
	3,482	CB Richard Ellis Group, Inc. (Class A)*		127,093
		Real Estate Investment Trusts (1.1%)
	1,819	Apartment Investment & Management Co. (Class A)		91,714
	4,108	Archstone-Smith Trust		242,824
	1,508	AvalonBay Communities, Inc.		179,271
	2,217	Boston Properties, Inc.		226,422
	2,363	Developers Diversified Realty Corp.		124,554
	5,399	Equity Residential		246,356
	9,708	Host Hotels & Resorts Inc.		224,449
	4,214	Kimco Realty Corp.		160,427
	3,305	Plum Creek Timber Co., Inc.		137,686
	4,776	ProLogis		271,754
	2,287	Public Storage, Inc.		175,687
	4,130	Simon Property Group, Inc.		384,255
	2,430	Vornado Realty Trust		266,911
				2,732,310

See Notes to Financial Statements
103

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Recreational Products (0.2%)
	1,691	Brunswick Corp.	$	55,177
	5,779	Electronic Arts Inc.*		273,462
	2,998	Hasbro, Inc.		94,167
	7,329	Mattel, Inc.		185,350
				608,156
		Regional Banks (0.7%)
	3,496	Commerce Bancorp, Inc.		129,317
	2,430	Compass Bancshares, Inc.		167,621
	10,215	Fifth Third Bancorp		406,251
	2,336	First Horizon National Corp.		91,104
	1,460	M&T Bank Corp.		156,074
	4,767	Marshall & Ilsley Corp.		227,052
	3,515	Northern Trust Corp.		225,804
	6,088	Synovus Financial Corp.		186,902
	2,050	Zions Bancorporation		157,666
				1,747,791
		Restaurants (0.8%)
	2,626	Darden Restaurants, Inc.		115,518
	22,171	McDonald's Corp.		1,125,400
	13,757	Starbucks Corp.*		360,984
	1,648	Wendy's International, Inc.		60,564
	9,828	Yum! Brands, Inc.		321,572
				1,984,038
		Savings Banks (0.4%)
	8,998	Hudson City Bancorp, Inc.		109,956
	6,731	Sovereign Bancorp, Inc.		142,293
	16,572	Washington Mutual, Inc.		706,630
				958,879
		Semiconductors (2.2%)
	10,222	Advanced Micro Devices, Inc.*		146,175
	6,646	Altera Corp.		147,076
	6,074	Analog Devices, Inc.		228,625
	8,640	Broadcom Corp. (Class A)*		252,720
	107,895	Intel Corp.		2,563,585
	4,714	Linear Technology Corp.		170,553
	14,306	LSI Logic Corp.*		107,438
	5,978	Maxim Integrated Products, Inc.		199,725

NUMBER OF SHARES			VALUE
	14,070	Micron Technology, Inc.*	$	176,297
	5,181	National Semiconductor Corp.		146,467
	6,628	NVIDIA Corp.*		273,803
	2,259	PMC - Sierra, Inc.*		17,462
	26,625	Texas Instruments Inc.		1,001,899
	5,532	Xilinx, Inc.		148,092
				5,579,917
		Services to the Health Industry (0.4%)
	5,056	Express Scripts, Inc.*		252,851
	3,638	IMS Health Inc.		116,889
	2,184	Laboratory Corp. of America Holdings*		170,920
	5,202	Medco Health Solutions Inc.*		405,704
	2,960	Quest Diagnostics Inc.		152,884
				1,099,248
		Specialty Insurance (0.2%)
	1,908	Ambac Financial Group, Inc.		166,359
	1,870	Assurant, Inc.		110,180
	2,429	MBIA Inc.		151,132
	1,578	MGIC Investment Corp.		89,725
				517,396
		Specialty Stores (0.4%)
	2,806	AutoNation, Inc.*		62,967
	944	AutoZone, Inc.*		128,969
	5,086	Bed Bath & Beyond Inc.*		183,045
	5,154	Office Depot, Inc.*		156,166
	1,425	OfficeMax Inc.		56,003
	13,282	Staples, Inc.		315,182
	2,523	Tiffany & Co.		133,870
				1,036,202
		Specialty Telecommunications (0.2%)
	2,076	CenturyTel, Inc.		101,828
	6,314	Citizens Communications Co.		96,415
	28,846	Qwest Communications International, Inc.*		279,806
	8,887	Windstream Corp.		131,172
				609,221

See Notes to Financial Statements
104

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Steel (0.3%)
	1,901	Allegheny Technologies, Inc.	$	199,377
	5,613	Nucor Corp.		329,202
	2,209	United States Steel Corp.		240,229
				768,808
		Telecommunication Equipment (1.2%)
	586	ADC Telecommunications, Inc.*		10,741
	1,587	Ciena Corp.*		57,338
	29,260	Corning, Inc.*		747,593
	42,984	Motorola, Inc.		760,817
	30,878	QUALCOMM, Inc.		1,339,796
	8,152	Tellabs, Inc.*		87,716
				3,004,001
		Tobacco (1.2%)
	39,119	Altria Group, Inc.		2,743,807
	3,196	Reynolds American, Inc.		208,379
	2,994	UST, Inc.		160,808
				3,112,994
		Tools/Hardware (0.1%)
	1,247	Black & Decker Corp.		110,123
	1,120	Snap-On, Inc.		56,571
	1,574	Stanley Works (The)		95,542
				262,236
		Trucks/Construction/ Farm Machinery (0.9%)
	11,893	Caterpillar Inc.		931,222
	1,942	Cummins Inc.		196,550
	4,229	Deere & Co.		510,609
	4,628	PACCAR, Inc.		402,821
	1,913	Terex Corp.*		155,527
				2,196,729
		Wholesale Distributors (0.1%)
	3,178	Genuine Parts Co.		157,629
	1,361	Grainger (W.W.), Inc.		126,641
				284,270
		Total Common Stocks (Cost $160,297,677)		248,384,441

PRINCIPAL AMOUNT IN THOUSANDS					VALUE
		Short-Term Investment (b) (0.9%)
		Investment Company
$	2,236	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $2,236,314)			$	2,236,314
Total Investments (Cost $162,533,991) (c)(d)			100.2	%		250,620,755
Liabilities in Excess of Other Assets			(0.2	)		(403,720	)
Net Assets			100.0	%	$	250,217,035

* Non-income producing security.

** A portion of this security has been physically segregated in connection with open futures contracts in the amount of $84,000.

# Consists of one or more class of securities traded together as a unit. Stocks with attached paired trust shares.

(a) A security with total market value equal to $0 has been valued at its fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Trustees.

(b) See Note 4 to the financial statements regarding Investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(c) Securities have been designated as collateral in an amount equal to $2,199,825 in connection with open futures contracts.

(d) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $93,795,498 and the aggregate gross unrealized depreciation is $5,708,734, resulting in net unrealized appreciation of $88,086,764.

FUTURES CONTRACTS OPEN AT JUNE 30, 2007:

NUMBER OF
CONTRACTS

LONG/
SHORT

DESCRIPTION,
DELIVERY
MONTH AND
YEAR

UNDERLYING
FACE AMOUNT
AT VALUE

UNREALIZED
DEPRECIATION

Long

S&P 500
Index
September
2007

$2,273,100

$(10,744)

See Notes to Financial Statements
105

Morgan Stanley Variable Investment Series - S&P 500 Index

Summary of Investments n June 30, 2007 (unaudited)

SECTOR	VALUE		PERCENT OF TOTAL INVESTMENTS
Finance	$	51,468,806		20.5	%
Electronic Technology		25,859,950		10.3
Health Technology		23,477,776		9.4
Energy Minerals		20,647,806		8.2
Producer Manufacturing		18,335,885		7.3
Consumer Non-Durables		18,071,851		7.2
Technology Services		16,047,257		6.4
Retail Trade		13,520,358		5.4
Consumer Services		12,303,268		4.9
Communications		9,304,761		3.7
Utilities		9,038,691		3.6
Industrial Services		6,451,446		2.6
Process Industries		5,230,555		2.1

SECTOR	VALUE			PERCENT OF TOTAL INVESTMENTS
Health Services	$	4,546,254			1.8	%
Transportation		4,358,427			1.8
Consumer Durables		3,368,534			1.4
Non-Energy Minerals		2,846,357			1.1
Investment Company		2,236,314			0.9
Distribution Services		1,768,054			0.7
Commercial Services		1,738,405			0.7
	$	250,620,755	*		100.0	%

* Does not include open futures contracts with an underlying face amount of $2,273,100 with unrealized depreciation of $10,744.

See Notes to Financial Statements
106

Morgan Stanley Variable Investment Series - Global Advantage

Portfolio of Investments n June 30, 2007 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (97.6%)
		Australia (2.9%)
		Data Processing Services
	45,000	Computershare Ltd.	$	430,623
		Other Consumer Services
	57,000	A.B.C. Learning Centres Ltd.		334,327
		Total Australia		764,950
		Bermuda (1.6%)
		Multi-Line Insurance
	10,502	Axis Capital Holdings Ltd.		426,906
		Canada (1.2%)
		Food: Specialty/Candy
	27,900	SunOpta Inc.*		311,085
		France (1.2%)
		Pharmaceuticals: Other
	6,200	Ipsen S.A.		318,838
		Germany (5.0%)
		Apparel/Footwear
	8,808	Adidas AG		557,611
		Financial Conglomerates
	5,554	Hypo Real Estate Holding AG		360,854
		Medical Specialties
	5,400	Fresenius AG		415,961
		Total Germany		1,334,426
		Greece (3.2%)
		Regional Banks
	14,376	EFG Eurobank Ergasias		470,812
		Wireless Telecommunications
	11,900	Cosmote Mobile Telecommunications S.A.		368,466
		Total Greece		839,278
		Hong Kong (4.6%)
		Apparel/Footwear Retail
	55,500	Esprit Holdings Ltd.		704,122

NUMBER OF SHARES			VALUE
		Wholesale Distributors
	146,200	Li & Fung Ltd.	$	526,343
		Total Hong Kong		1,230,465
		Israel (2.0%)
		Pharmaceuticals: Other
	13,200	Teva Pharmaceutical Industries Ltd. (ADR)		544,500
		Italy (2.7%)
		Major Banks
	79,800	UniCredito Italiano SpA		715,996
		Japan (3.1%)
		Home Building
	9,900	Daito Trust Construction Co., Ltd.		472,502
		Industrial Machinery
	25,500	OSG Corp.		352,053
		Total Japan		824,555
		Mexico (1.2%)
		Beverages: Non-Alcoholic
	7,800	Fomento Economico Mexicano, S.A.B. de C.V. (ADR) (Units) †		306,696
		Singapore (5.5%)
		Airlines
	37,000	Singapore Airlines Ltd.		454,551
		Electronic Components
	25,900	Flextronics International Ltd.*		279,720
		Marine Shipping
	293,000	Cosco Corp (Singapore) Ltd.		716,082
		Total Singapore		1,450,353
		South Africa (1.2%)
		Pharmaceuticals: Generic Drugs
	61,700	Aspen Pharmacare Holdings Ltd.*		321,744

See Notes to Financial Statements
107

Morgan Stanley Variable Investment Series - Global Advantage

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Spain (6.9%)
		Apparel/Footwear Retail
	5,500	Industria de Diseno Textil, S.A. (Inditex)	$	325,787
		Major Banks
	15,331	Banco Bilbao Vizcaya Argentaria, S.A.		377,603
	30,384	Banco Santander Central Hispano S.A.		562,915
				940,518
		Major Telecommunications
	24,938	Telefonica S.A.		558,202
		Total Spain		1,824,507
		Switzerland (2.5%)
		Chemicals: Specialty
	2,800	Lonza Group AG (Registered Shares)		258,151
		Financial Conglomerates
	6,866	UBS AG (Registered Shares)		413,770
		Total Switzerland		671,921
		Taiwan (1.1%)
		Semiconductors
	25,641	Taiwan Semiconductor Manufacturing Co. Ltd. (ADR)		285,380
		United Kingdom (11.1%)
		Beverages: Alcoholic
	27,400	SABMiller PLC		696,439
		Investment Managers
	26,400	Bluebay Asset Management PLC		262,366
	29,626	Man Group PLC		362,234
	121,800	RAB Capital PLC		246,372
				870,972
		Major Banks
	19,169	Standard Chartered PLC		627,315

NUMBER OF SHARES			VALUE
		Miscellaneous Commercial Services
	21,321	Intertek Group PLC	$	421,213
		Pharmaceuticals: Other
	13,487	Shire PLC		336,036
		Total United Kingdom		2,951,975
		United States (40.6%)
		Apparel/Footwear
	6,660	Under Armour, Inc. (Class A)*		304,029
		Beverages: Non-Alcoholic
	5,300	PepsiCo, Inc.		343,705
		Biotechnology
	5,141	Genentech, Inc.*		388,968
	9,400	Gilead Sciences, Inc.*		364,438
				753,406
		Computer Processing Hardware
	6,779	Apple Inc.*		827,309
		Data Processing Services
	19,800	Western Union Co.		412,434
		Electric Utilities
	6,800	Constellation Energy Group, Inc.		592,756
		Electronic Components
	17,000	Amphenol Corporation (Class A)		606,050
		Financial Conglomerates
	5,950	Prudential Financial, Inc.		578,519
		Insurance Brokers/Services
	13,500	Willis Group Holdings Ltd.		594,810
		Investment Banks/Brokers
	1,700	Goldman Sachs Group, Inc. (The)		368,475
	4,709	Merrill Lynch & Co., Inc.		393,578
				762,053
		Life/Health Insurance
	9,700	AFLAC Inc.		498,580

See Notes to Financial Statements
108

Morgan Stanley Variable Investment Series - Global Advantage

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Media Conglomerates
	32,316	News Corp. (Class A)	$	685,422
		Medical Specialties
	5,200	Bard (C.R.), Inc.		429,676
	9,800	Thermo Fisher Scientific, Inc.*		506,856
	8,600	West Pharmaceutical Services, Inc.		405,490
				1,342,022
		Miscellaneous Commercial Services
	10,700	FTI Consulting Inc.*		406,921
		Real Estate Development
	11,800	CB Richard Ellis Group, Inc. (Class A)*		430,700
		Specialty Stores
	12,640	Staples, Inc.		299,947
		Telecommunication Equipment
	11,741	Corning, Inc.*		299,983
		Wireless Telecommunications
	13,300	Metropcs Communications Inc.*		439,432
	7,300	NII Holdings Inc.*		589,402
				1,028,834
		Total United States		10,767,480
		Total Common Stocks (Cost $19,757,293)		25,891,055
		Investment Companies (1.3%) United States
		Investment Trusts/Mutual Funds
	14,900	KKR Private Equity Investors LP (Cost $367,807)		335,250

PRINCIPAL AMOUNT IN THOUSANDS					VALUE
		Short-Term Investment (a) (1.1%) Investment Company
$	295	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $295,103)			$	295,103
Total Investments (Cost $20,420,203) (b)			100.0	%		26,521,408
Liabilities in Excess of Other Assets			0.0			(10,280	)
Net Assets			100.0	%	$	26,511,128

ADR American Depositary Receipt.

* Non-income producing security.

† Consists of one or more class of securities traded together as a unit; stocks with attached warrants.

(a) See Note 4 to the financial statements regarding investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(b) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $6,366,753 and the aggregate gross unrealized depreciation is $265,548, resulting in net unrealized appreciation of $6,101,205.

See Notes to Financial Statements
109

Morgan Stanley Variable Investment Series - Global Advantage

Summary of Investments n June 30, 2007 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Major Banks	$	2,283,829		8.6	%
Medical Specialties		1,757,983		6.6
Wireless Telecommunications		1,397,300		5.3
Financial Conglomerates		1,353,143		5.1
Pharmaceuticals: Other		1,199,374		4.5
Apparel/Footwear Retail		1,029,909		3.9
Electronic Components		885,770		3.3
Investment Managers		870,972		3.3
Apparel/Footwear		861,640		3.3
Data Processing Services		843,057		3.2
Miscellaneous Commercial Services		828,134		3.1
Computer Processing Hardware		827,309		3.1
Investment Banks/Brokers		762,053		2.9
Biotechnology		753,406		2.8
Marine Shipping		716,082		2.7
Beverages: Alcoholic		696,439		2.6
Media Conglomerates		685,422		2.6
Beverages: Non-Alcoholic		650,401		2.5
Insurance Brokers/Services		594,810		2.2

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Electric Utilities	$	592,756		2.2	%
Major Telecommunications		558,202		2.1
Wholesale Distributors		526,343		2.0
Life/Health Insurance		498,580		1.9
Home Building		472,502		1.8
Regional Banks		470,812		1.8
Airlines		454,551		1.7
Real Estate Development		430,700		1.6
Multi-Line Insurance		426,906		1.6
Industrial Machinery		352,053		1.3
Investment Trusts/Mutual Funds		335,250		1.3
Other Consumer Services		334,327		1.3
Pharmaceuticals: Generic Drugs		321,744		1.2
Food: Specialty/Candy		311,085		1.2
Telecommunication Equipment		299,983		1.1
Specialty Stores		299,947		1.1
Investment Company		295,103		1.1
Semiconductors		285,380		1.1
Chemicals: Specialty		258,151		1.0
	$	26,521,408		100.0	%

See Notes to Financial Statements
110

Morgan Stanley Variable Investment Series - Aggressive Equity

Portfolio of Investments n June 30, 2007 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (96.5%)
		Air Freight/Couriers (5.3%)
	33,773	C.H. Robinson Worldwide, Inc.	$	1,773,758
	31,261	Expeditors International of Washington, Inc.		1,291,079
				3,064,837
		Apparel/Footwear Retail (2.6%)
	20,988	Abercrombie & Fitch Co. (Class A)		1,531,704
		Biotechnology (2.2%)
	21,995	Techne Corp.*		1,258,334
		Broadcasting (3.0%)
	62,618	Grupo Televisa S.A. (ADR) (Mexico)		1,728,883
		Casino/Gaming (2.5%)
	16,009	Wynn Resorts, Ltd.*		1,435,847
		Chemicals: Agricultural (6.1%)
	52,655	Monsanto Co.		3,556,319
		Discount Stores (7.6%)
	29,412	Costco Wholesale Corp.		1,721,190
	15,931	Sears Holdings Corp.*		2,700,305
				4,421,495
		Financial Conglomerates (10.2%)
	40,559	American Express Co.		2,481,400
	87,085	Brookfield Asset Management Inc. (Class A) (Canada)		3,474,692
				5,956,092
		Financial Publishing/ Services (3.7%)
	35,034	Moody's Corp.		2,179,115
		Hotels/Resorts/ Cruiselines (2.6%)
	16,811	Accor S.A. (France)		1,495,151
		Internet Retail (4.8%)
	40,916	Amazon.com, Inc.*		2,799,063

NUMBER OF SHARES			VALUE
		Internet Software/ Services (9.1%)
	7,276	Google, Inc. (Class A)*	$	3,808,113
	53,865	Yahoo!, Inc.*		1,461,357
				5,269,470
		Investment Banks/ Brokers (2.4%)
	20,564	Greenhill & Co., Inc.		1,412,952
		Investment Trusts/ Mutual Funds (3.0%)
	88,252	Aeroplan Income Fund† (Units) (Canada)		1,760,562
		Medical Specialties (3.1%)
	33,396	Dade Behring Holdings, Inc.		1,773,996
		Miscellaneous Commercial Services (2.8%)
	24,759	Corporate Executive Board Co. (The)		1,607,107
		Oil & Gas Production (4.2%)
	44,408	Ultra Petroleum Corp. (Canada)*		2,453,098
		Other Consumer Services (4.8%)
	86,347	eBay, Inc.*		2,778,646
		Personnel Services (2.3%)
	32,801	Monster Worldwide, Inc.*		1,348,121
		Property - Casualty Insurers (2.7%)
	441	Berkshire Hathaway, Inc. (Class B)*		1,589,805
		Specialty Telecommunications (2.0%)
	38,877	Cogent Communications Group, Inc.*		1,161,256
		Steel (2.2%)
	21,598	Nucor Corp.		1,266,723
		Water Utilities (1.9%)
	39,829	Nalco Holding Co.*		1,093,306

See Notes to Financial Statements
111

Morgan Stanley Variable Investment Series - Aggressive Equity

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES					VALUE
		Wholesale Distributors (2.0%)
	328,000	Li & Fung Ltd. (Hong Kong)			$	1,180,852
		Wireless Telecommunications (3.4%)
	31,922	America Movil SAB de C.V. (Series L) (ADR) (Mexico)				1,976,930
		Total Common Stocks (Cost $44,339,773)				56,099,664
PRINCIPAL AMOUNT IN THOUSANDS
		Short-Term Investment (a) (3.6%) Investment Company
$	2,126	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $2,125,944)			$	2,125,944
Total Investments (Cost $46,465,717) (b)			100.1	%		58,225,608
Liabilities in Excess of Other Assets			(0.1	)		(79,353	)
Net Assets			100.0	%	$	58,146,255

ADR American Depositary Receipt.

† Consists of one or more class of securities traded together as a unit; stocks with attached warrants.

* Non-income producing security.

(a) See Note 4 to the financial statements regarding Investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(b) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $13,539,581 and the aggregate gross unrealized depreciation is $1,779,690, resulting in net unrealized appreciation of $11,759,891.

See Notes to Financial Statements
112

Morgan Stanley Variable Investment Series - Aggressive Equity

Summary of Investments n June 30, 2007 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Financial Conglomerates	$	5,956,092		10.2	%
Internet Software/ Services		5,269,470		9.0
Discount Stores		4,421,495		7.6
Chemicals: Agricultural		3,556,319		6.1
Air Freight/Couriers		3,064,837		5.3
Internet Retail		2,799,063		4.8
Other Consumer Services		2,778,646		4.8
Oil & Gas Production		2,453,098		4.2
Financial Publishing/ Services		2,179,115		3.7
Investment Company		2,125,944		3.7
Wireless Telecommunications		1,976,930		3.4
Medical Specialties		1,773,996		3.0
Investment Trusts/ Mutual Funds		1,760,562		3.0
Broadcasting		1,728,883		3.0

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Miscellaneous Commercial Services	$	1,607,107		2.8	%
Property - Casualty Insurers		1,589,805		2.7
Apparel/Footwear Retail		1,531,704		2.6
Hotels/Resorts/ Cruiselines		1,495,151		2.6
Casino/Gaming		1,435,847		2.5
Investment Banks/ Brokers		1,412,952		2.4
Personnel Services		1,348,121		2.3
Steel		1,266,723		2.2
Biotechnology		1,258,334		2.2
Wholesale Distributors		1,180,852		2.0
Specialty Telecommunications		1,161,256		2.0
Water Utilities		1,093,306		1.9
	$	58,225,608		100.0	%

See Notes to Financial Statements
113

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (67.8%)
		Advertising/Marketing Services (0.9%)
	58,710	Omnicom Group, Inc.	$	3,106,933
		Aerospace & Defense (2.1%)
	51,060	Northrop Grumman Corp. (c)		3,976,042
	58,965	Raytheon Co.		3,177,624
				7,153,666
		Biotechnology (2.9%)
	61,030	Celgene Corp.* (c)		3,498,850
	81,120	Gilead Sciences, Inc.*		3,145,022
	109,630	Vertex Pharmaceuticals Inc.* (c)		3,131,033
				9,774,905
		Broadcasting (0.0%)
	4,390	Citadel Broadcasting Corp.		28,309
		Chemicals: Major Diversified (0.7%)
	56,755	Dow Chemical Co. (The)		2,509,706
		Computer Communications (0.9%)
	103,970	Cisco Systems, Inc.*		2,895,564
		Computer Peripherals (0.8%)
	152,865	EMC Corp.* (c)		2,766,857
		Computer Processing Hardware (2.7%)
	37,957	Apple Computer Inc.*		4,632,272
	157,490	Dell Inc.*		4,496,339
				9,128,611
		Department Stores (0.6%)
	30,485	Kohl's Corp.*		2,165,350
		Discount Stores (0.6%)
	37,085	Costco Wholesale Corp.		2,170,214
		Electrical Products (0.6%)
	43,010	Emerson Electric Co.		2,012,868
		Electronics/Appliances (1.3%)
	84,650	Sony Corp. (ADR) (Japan)		4,348,471
		Environmental Services (0.2%)
	14,165	Waste Management, Inc.		553,143
		Financial Conglomerates (3.8%)
	74,105	American Express Co.		4,533,744
	73,380	Citigroup, Inc.		3,763,660
	95,935	JPMorgan Chase & Co.		4,648,051
				12,945,455

See Notes to Financial Statements
114

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Food: Major Diversified (2.8%)
	79,730	Kellogg Co.	$	4,129,217
	149,245	Kraft Foods Inc. (Class A)		5,260,886
				9,390,103
		Forest Products (2.0%)
	84,640	Weyerhaeuser Co.		6,680,635
		Household/Personal Care (1.0%)
	52,835	Colgate-Palmolive Co.		3,426,350
		Industrial Conglomerates (0.6%)
	51,620	General Electric Co.		1,976,014
		Information Technology Services (1.4%)
	44,647	International Business Machines Corp. (c)		4,699,097
		Integrated Oil (2.2%)
	43,480	Exxon Mobil Corp.		3,647,102
	62,224	Hess Corp.		3,668,727
				7,315,829
		Internet Software/Services (1.4%)
	3,670	Google, Inc. (Class A)*		1,920,805
	99,676	Yahoo!, Inc.* (c)		2,704,210
				4,625,015
		Investment Banks/Brokers (1.4%)
	233,465	Schwab (Charles) Corp. (The)		4,790,702
		Major Banks (2.2%)
	82,420	Bank of America Corp.		4,029,514
	96,785	Wells Fargo & Co.		3,403,928
				7,433,442
		Marine Shipping (1.1%)
	53,355	Tidewater, Inc. (c)		3,781,802
		Media Conglomerates (1.3%)
	57,160	Disney (Walt) Co. (The)		1,951,442
	116,165	Time Warner, Inc.		2,444,112
				4,395,554
		Medical Specialties (4.0%)
	207,190	Applera Corp. - Celera Genomics Group*		2,569,156
	41,280	Bard (C.R.), Inc.		3,410,966
	95,180	St. Jude Medical, Inc.* (c)		3,949,018
	67,055	Thermo Fisher Scientific, Inc.*		3,468,085
				13,397,225

See Notes to Financial Statements
115

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Motor Vehicles (0.9%)
	82,035	Honda Motor Co., Ltd. (ADR) (Japan)	$	2,977,050
		Oilfield Services/Equipment (1.7%)
	72,575	Halliburton Co.		2,503,838
	53,460	Smith International, Inc.		3,134,894
				5,638,732
		Other Metals/Minerals (1.2%)
	44,830	Southern Copper Corp. (c)		4,225,676
		Packaged Software (3.9%)
	155,730	Microsoft Corp.		4,589,363
	322,235	Oracle Corp.*		6,351,252
	98,560	Sybase, Inc.*		2,354,598
				13,295,213
		Pharmaceuticals: Major (2.4%)
	56,680	Johnson & Johnson		3,492,622
	78,285	Wyeth		4,488,862
				7,981,484
		Property - Casualty Insurers (1.3%)
	69,580	Allstate Corp. (The) (Note 4)		4,279,866
		Pulp & Paper (1.0%)
	96,900	MeadWestvaco Corp. (c)		3,422,508
		Recreational Products (0.8%)
	108,365	Mattel, Inc.		2,740,551
		Restaurants (0.8%)
	54,770	McDonald's Corp.		2,780,125
		Semiconductors (1.7%)
	142,235	Intel Corp.		3,379,504
	213,858	Taiwan Semiconductor Manufacturing Company Ltd. (ADR) (Taiwan)		2,380,239
				5,759,743
		Specialty Telecommunications (4.2%)
	372,320	Citizens Communications Co. (c)		5,685,326
	144,430	Fairpoint Communications, Inc.		2,563,632
	398,105	Windstream Corp.		5,876,030
				14,124,988
		Steel (3.3%)
	66,170	Nucor Corp.		3,880,870
	67,590	United States Steel Corp. (c)		7,350,413
				11,231,283

See Notes to Financial Statements
116

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF SHARES			VALUE
		Telecommunication Equipment (2.0%)
	138,230	Motorola, Inc.	$	2,446,671
	152,010	Nokia Corp. (ADR) (Finland)		4,273,001
				6,719,672
		Tobacco (2.6%)
	57,370	Altria Group, Inc.		4,023,932
	87,760	UST, Inc. (c)		4,713,590
				8,737,522
		Trucks/Construction/Farm Machinery (0.5%)
	23,660	Caterpillar Inc.		1,852,578
		Total Common Stocks (Cost $151,162,887)		229,238,811

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE
		Coporate Bonds (5.2%)
		Aerospace & Defense (0.1%)
$	259	Systems 2001 Asset Trust - 144A** (Cayman Islands)		6.664	%	09/15/13	268,364
		Airlines (0.1%)
	334	America West Airlines, Inc. (Series 01-1)		7.10		04/02/21	352,969
		Beverages: Alcoholic (0.1%)
	205	FBG Finance Ltd. - 144A** (Australia)		5.125		06/15/15	192,432
	195	Miller Brewing Co. - 144A**		4.25		08/15/08	192,107
							384,539
		Cable/Satellite TV (0.0%)
	110	Comcast Cable Communications, Inc.		6.75		01/30/11	113,946
	25	Comcast Corp.		7.625		02/15/08	25,293
							139,239
		Chemicals: Major Diversified (0.0%)
	105	ICI Wilmington Inc.		4.375		12/01/08	103,266
		Department Stores (0.1%)
	275	May Department Stores Co.		5.95		11/01/08	275,409
	175	May Department Stores Co.		6.70		07/15/34	163,168
							438,577
		Drugstore Chains (0.1%)
	100	CVS Caremark Corp.		5.75		06/01/17	96,661
	55	CVS Corp.		5.75		08/15/11	55,046
	163	CVS Lease Pass Through - 144A**		6.036		12/10/28	158,904
							310,611

See Notes to Financial Statements
117

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Electric Utilities (0.4%)
$	175	Arizona Public Service Co.		5.80	%	06/30/14	$	172,926
	185	Carolina Power & Light Co.		5.125		09/15/13		179,404
	55	CenterPoint Energy Resource		6.25		02/01/37		53,144
	65	Consolidated Natural Gas Co. (Series C)		6.25		11/01/11		66,458
	125	Consumers Energy Co. (Series H)		4.80		02/17/09		123,534
	100	Detroit Edison Co. (The)		6.125		10/01/10		101,857
	85	Entergy Gulf States, Inc.		3.60		06/01/08		83,502
	130	Entergy Gulf States, Inc.		5.76	††	12/01/09		130,008
	170	Ohio Power Company (Series K)		6.00		06/01/16		170,453
	125	Public Service Electric & Gas Co. (Series MTN B)		5.00		01/01/13		121,010
	100	Texas Eastern Transmission, LP (c)		7.00		07/15/32		110,033
	145	Wisconsin Electric Power Co.		3.50		12/01/07		143,831
								1,456,160
		Electrical Products (0.1%)
	215	Cooper Industries, Inc.		5.25		07/01/07		215,000
	175	Cooper Industries, Inc.		5.25		11/15/12		171,809
								386,809
		Electronics/Appliances (0.0%)
	130	LG Electronics Inc. - 144A** (South Korea)		5.00		06/17/10		127,093
		Finance/Rental/Leasing (0.5%)
	155	Capmark Financial Group - 144A**		5.875		05/10/12		153,128
	65	Capmark Financial Group - 144A**		6.30		05/10/17		64,079
	125	CIT Group Inc. (Series MTN)		4.75		08/15/08		123,973
	260	Countrywide Home Loans, Inc. (Series MTN L)		3.25		05/21/08		254,875
	260	Nationwide Building Society - 144A** (United Kingdom)		4.25		02/01/10		252,301
	355	Residential Capital Corp.		6.375		06/30/10		350,652
	235	Residential Capital LLC		5.86		06/09/08		232,670
	170	SLM Corp.		4.00		01/15/10		158,300
								1,589,978
		Financial Conglomerates (0.1%)
	85	Brookfield Asset Management Inc. (Canada)		5.80		04/25/17		82,265
	295	Chase Manhattan Corp. (c)		6.00		02/15/09		297,608
	125	General Electric Capital Corp. (Series MTN A) (c)		4.25		12/01/10		120,703
								500,576
		Food Retail (0.0%)
	150	Fred Meyer, Inc.		7.45		03/01/08		151,895

See Notes to Financial Statements
118

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Food: Major Diversified (0.1%)
$	65	ConAgra Foods, Inc.		7.00	%	10/01/28	$	67,900
	90	ConAgra Foods, Inc.		8.25		09/15/30		106,831
	130	Sara Lee Corp.		6.125		11/01/32		116,651
								291,382
		Gas Distributors (0.0%)
	130	NiSource Finance Corp.		5.93	††	11/23/09		130,274
		Home Improvement Chains (0.1%)
	250	Home Depot Inc.		5.485	††	12/16/09		249,753
		Household/Personal Care (0.1%)
	240	Clorox Co. (The)		5.485	††	12/14/07		240,147
		Industrial Conglomerates (0.1%)
	135	Textron Financial Corp. (MTN E)		4.125		03/03/08		133,928
	160	Textron Financial Corp. (Series MTN)		5.125		02/03/11		158,471
								292,399
		Insurance Brokers/Services (0.2%)
	210	Catlin Insurance Co., Ltd. - 144A** (Bermuda) (c)		7.249	††	#		200,153
	375	Farmers Exchange Capital - 144A**		7.05		07/15/28		380,928
								581,081
		Investment Banks/Brokers (0.1%)
	280	Goldman Sachs Capital Trust II		5.793	††	# #		273,552
		Major Banks (0.5%)
	75	Bank of New York Co., Inc. (The)		5.20		07/01/07		75,000
	115	HSBC Finance Corp.		6.75		05/15/11		119,474
	255	MBNA Corp. (Series MTN F)		5.786	††	05/05/08		256,017
	125	Popular North America, Inc. (Series MTN F)		5.65		04/15/09		124,972
	360	Unicredit Luxembourg Finance S.A. - 144A**		5.405	††	10/24/08		360,214
	295	USB Capital IX		6.189	††	†††		297,425
	590	Wachovia Capital Trust III		5.80	††	†††		587,911
								1,821,013
		Major Telecommunications (0.3%)
	190	France Telecom S.A. (France)		8.50		03/01/31		239,421
	125	SBC Communications, Inc.		6.15		09/15/34		120,237
	60	Sprint Capital Corp.		8.75		03/15/32		67,570
	110	Telecom Italia Capital SA (Luxembourg)		4.00		11/15/08		107,697
	165	Telecom Italia Capital SA (Luxembourg)		4.00		01/15/10		158,712
	200	Telefonica Europe BV (Netherlands)		8.25		09/15/30		233,103
								926,740

See Notes to Financial Statements
119

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Managed Health Care (0.1%)
$	125	United Healthcare Group		5.44	%	03/02/09	$	125,071
	90	UnitedHealth Group Inc.		4.125		08/15/09		87,861
	40	WellPoint Inc.		3.75		12/14/07		39,691
								252,623
		Media Conglomerates (0.2%)
	325	Time Warner, Inc.		5.59	††	11/13/09		325,491
	190	Viacom,Inc.		6.875		04/30/36		184,126
								509,617
		Motor Vehicles (0.0%)
	100	DaimlerChrysler North American Holdings Co.		8.50		01/18/31		126,733
		Multi-Line Insurance (0.4%)
	490	AIG SunAmerica Global Financing VI - 144A**		6.30		05/10/11		502,269
	250	American General Finance Corp. (Series MTN H)		4.625		09/01/10		243,526
	325	Equitable Co.		6.50		04/01/08		327,340
	45	International Lease Finance Corp.		3.75		08/01/07		44,946
	225	Two-Rock Pass Through - 144A** (Bahamas)		6.30	††	#		221,681
								1,339,762
		Oil & Gas Pipelines (0.0%)
	170	Plains All American Pipeline LP/PAA Finance Corp		6.70		05/15/36		170,740
		Oil Refining/Marketing (0.0%)
	135	Valero Energy Corp.		3.50		04/01/09		130,950
		Other Metals/Minerals (0.1%)
	185	Brascan Corp. (Canada)		7.125		06/15/12		194,548
		Property - Casualty Insurers (0.3%)
	300	Mantis Reef Ltd. - 144A** (Cayman Islands)		4.692		11/14/08		296,599
	85	Platinum Underwriters Finance Inc. (Series B)		7.50		06/01/17		87,655
	150	Platinum Underwriters Holdings, Ltd. (Series B) (Bermuda)		6.371		11/16/07		149,568
	210	St. Paul Travelers Companies, Inc. (The)		5.01		08/16/07		209,915
	260	XLLIAC Global Funding - 144A**		4.80		08/10/10		254,465
								998,202
		Railroads (0.1%)
	105	Burlington North Santa Fe Railway Co.		6.125		03/15/09		106,152
	45	Union Pacific Corp.		6.625		02/01/08		45,295
	60	Union Pacific Corp. (Series MTN E)		6.79		11/09/07		60,223
								211,670
		Real Estate Development (0.1%)
	417	World Financial Properties - 144A**		6.91		09/01/13		431,036

See Notes to Financial Statements
120

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Real Estate Investment Trusts (0.1%)
$	260	iStar Financial Inc.		5.71	%	03/09/10	$	260,456
		Regional Banks (0.1%)
	300	Marshall & Ilsley Bank (Series BKN T)		3.80		02/08/08		297,284
		Restaurants (0.0%)
	105	Tricon Global Restaurants, Inc.		8.875		04/15/11		115,616
		Savings Banks (0.4%)
	170	Household Finance Corp.		4.125		12/15/08		166,999
	95	Household Finance Corp.		5.875		02/01/09		95,683
	75	Household Finance Corp.		6.375		10/15/11		77,135
	75	Household Finance Corp. (c)		6.40		06/17/08		75,671
	320	Sovereign BanCorp Inc. (c)		5.59		03/23/10		320,295
	100	Sovereign Bank (Series CD)		4.00		02/01/08		99,166
	165	Washington Mutual Bank		5.50		01/15/13		161,436
	120	Washington Mutual Inc.		8.25		04/01/10		127,766
	100	Washington Mutual Preferred Funding II (c)		6.665	††	# #		95,628
								1,219,779
		Trucks/Construction/Farm Machinery (0.1%)
	55	Caterpillar Financial Services Corp. (Series MTN F)		3.625		11/15/07		54,647
	220	Caterpillar Financial Services Corp. (Series MTN F)		5.43	††	08/20/07		220,033
								274,680
		Wireless Telecommunications (0.1%)
	195	Vodafone Group PLC (United Kingdom)		5.45	††	12/28/07		195,105
		Total Corporate Bonds (Cost $17,863,386)						17,745,218
		U.S. Government Obligations (3.7%)
		U.S.Treasury Bonds
	3,850	(c)		6.125		08/15/29		4,319,823
	200	(c)		6.375		08/15/27		228,688
	2,375			8.125		08/15/19		3,004,005
	3,250	(c)		8.125		08/15/21		4,189,708
	805	U.S. Treasury Note †		4.25		08/15/13		777,776
		Total U.S. Government Obligations (Cost $12,575,303)						12,520,000
		U.S. Government Agency-Mortgage-Backed Securities (4.3%)
		Federal Home Loan Mortgage Corp.
	71			7.50		01/01/30 - 04/01/31		73,554

See Notes to Financial Statements
121

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Federal Home Loan Mortgage Corp. ARM
$	334			5.64	%	04/01/37	$	332,693
	499			5.758		01/01/37		498,963
		Federal Home Loan Mortgage Corp. PC Gold
	4			6.50		05/01/29 - 12/01/31		4,095
	171			8.00		11/01/30		180,030
		Federal National Mortgage Assoc.
	3			6.50		11/01/29		3,182
	559			6.99		03/01/36		573,964
	1,222			7.00		10/01/27 - 11/01/34		1,262,641
	1,177			7.013		01/01/36		1,207,877
	546			7.037		03/01/36		560,319
	636			7.457		05/01/36		654,264
	622			7.469		05/01/36		636,908
	916			7.50		10/01/29 -09/01/35		956,717
	665			8.00		11/01/29 -05/01/31		700,354
		Federal National Mortgage Assoc. ARM
	332			6.08		04/01/37		334,657
	131			6.539		07/01/33		132,900
	673			6.945		10/01/35		695,532
	673			6.948		11/01/35		695,694
	673			6.977		12/01/35		696,099
	1,092			7.025		01/01/36		1,120,851
	414			7.481		07/01/36		425,658
	720			7.495		04/01/36		739,959
	666			7.498		07/01/36		682,228
	1,156			7.509		04/01/36		1,200,943
		Total U.S. Government Agency-Mortgage-Backed Securities (Cost $14,395,985)						14,370,082
		Asset-Backed Securities (3.3%)
		Finance/Rental/Leasing
	321	Banc of America Securities Auto Trust 2005-WF1 A3		3.99		08/18/09		319,425
	326	Capital Auto Receivables Asset Trust 2005-1 A4		4.05		07/15/09		324,161
	525	Capital Auto Receivables Asset Trust 2006-2 A3A		4.98		05/15/11		522,994
	425	Capital Auto Receivables Asset Trust 2006-SN1A A3		5.31		10/20/09		424,821
	475	Capital Auto Receivables Asset Trust 2007-SN1 A3B		5.38		07/15/10		475,126
	275	Capital One Auto Finance Trust - 2006-C A3A		5.07		07/15/11		274,207
	152	Caterpillar Financial Asset Trust 2005-A A3		3.90		02/25/09		151,559
	475	Caterpillar Financial Asset Trust 2006-A A3		5.57		05/25/10		476,546
	375	CIT Equipment Collateral - 2006-VT2 A3		5.07		02/20/10		373,824

See Notes to Financial Statements
122

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	36	CIT Equipment Collateral 2004-EF1 A3		3.50	%	09/20/08	$	35,729
	450	Citibank Credit Card Issuance Trust 2007 - A1 A1		5.345	††	03/22/12		450,272
	134	CNH Equipment Trust 2005-A A3		4.02		04/15/09		133,222
	191	DaimlerChrysler Auto Trust 2005-B A3		4.04		09/08/09		190,090
	97	Ford Credit Auto Owner Trust 2005-B A3		4.02		01/15/09		97,142
	300	Ford Credit Auto Owner Trust 2006-A A3		5.05		03/15/10		299,451
	400	GE Capital Credit Card Master Note Trust 2004-2 A		5.37	††	09/15/10		400,285
	475	GS Auto Loan Trust 2006-1 A3		5.37		12/15/10		475,261
	200	Harley-Davidson Motorcycle Trust 2005-3 A2		4.41		06/15/12		197,568
	600	Harley-Davidson Motorcycle Trust 2005-1 A2		3.76		12/17/12		587,433
	350	Harley-Davidson Motorcycle Trust 2005-2 A2		4.07		02/15/12		345,330
	300	Hertz Vehicle Financing LLC 2005-2A - 144A**		4.93		02/25/10		298,089
	101	Honda Auto Receivables Owner Trust 2005-2 A3		3.93		01/15/09		100,663
	243	Honda Auto Receivables Owner Trust 2005-3 A3		3.87		04/20/09		241,640
	400	Honda Auto Receivables Owner Trust 2005-6 A3		4.85		10/19/09		399,162
	223	Hyundai Auto Receivables Trust 2005-A A3		3.98		11/16/09		221,019
	575	MBNA Credit Card Master Note Trust 2003-A3 A3		5.489	††	08/16/10		575,930
	320	Merrill Auto Trust Securitization 2005-1 A3		4.10		08/25/09		318,375
	264	National City Auto Receivables Trust 2004-A A4		2.88		05/15/11		259,879
	309	Nissan Auto Receivables Owner Trust 2005-B A3		3.99		07/15/09		307,194
	125	TXU Electric Delivery Transition Bond Co. LLC 2004-1 A2		4.81		11/17/14		122,486
	505	USAA Auto Owner Trust 2004-2 A4		3.58		02/15/11		501,608
	70	USAA Auto Owner Trust 2004-3 A3		3.16		02/17/09		69,659
	141	USAA Auto Owner Trust 2005-1 A3		3.90		07/15/09		140,315
	49	Volkswagen Auto Lease Trust 2005-A A3		3.82		05/20/08		48,655
	258	Volkswagen Auto Loan Enhanced Trust 2005-1 A3		4.80		07/20/09		257,485
	26	Wachovia Auto Owner Trust 2004-B A3		2.91		04/20/09		26,400
	141	Wachovia Auto Owner Trust 2005-A A3		4.06		09/21/09		140,167
	400	Wachovia Auto Owner Trust 2005-B A3		4.79		04/20/10		399,102
		Total Asset-Backed Securities (Cost $11,022,820)						10,982,274
		Collateralized Mortgage Obligations (3.5%)
		U.S. Government Agencies (0.6%)
	321	Federal Home Loan Mortgage Corp. Whole Loan 2005-S001 2A2		5.47	††	09/25/45		320,784
	487	Federal National Mortgage Assoc. 2006 - 28 1A1		5.43	††	03/25/36		487,647
	613	Federal National Mortgage Assoc. 2006 - 118 A2		5.38	††	12/25/36		611,110
	5,681	Federal National Mortgage Assoc. 2006 - 28 1P (IO)		1.566	††	03/25/36		117,179
	1,000	Federal National Mortgage Assoc. 2005 - 68 XI (IO)		6.00		08/25/35		407,797
		Total U.S. Government Agencies						1,944,517

See Notes to Financial Statements
123

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Private Issues (2.9%)
$	312	Adjustable Rate Mortgage Trust - 2005-6A 2A1		5.63	†† %	11/25/35	$	313,180
	550	American Home Mortgage Assets		5.56	††	06/25/47		550,000
	492	American Home Mortgage Investment Trust - 2007-1 GA1C		5.51	††	05/25/47		492,388
	345	Bear Stearns Mortgage Funding Trust 2006-AR5 1A1		5.48	††	12/25/36		345,276
	343	Bear Stearns Mortgage Funding Trust 2007-AR1 1A2		5.53	††	01/25/37		343,416
	2,698	Countrywide Alternative Loan Trust 2007-0A3 (IO)		2.00		04/25/47		110,429
	550	Countrywide Alternative Loan Trust		5.52	††	06/25/47		549,828
	352	Countrywide Alternative Loan Trust - 2006-0A2 A3		5.59	††	05/20/46		352,218
	348	Countrywide Alternative Loan Trust 2006-OA1 2A2		5.63	††	03/20/46		348,398
	482	Greenpoint Mortgage Funding Trust 2006-0H1		5.55	††	01/25/37		482,041
	531	Harborview Mortgage Loan Trust - 2006-AR1 2A1A		5.50	††	11/19/36		528,991
	479	Harborview Mortgage Loan Trust 2006-14 2A1A		5.47	††	03/19/38		479,645
	412	Harborview Mortgage Loan Trust 2006-8		5.57	††	08/21/46		413,203
	438	Luminent Mortgage Trust 2006-4, A1B		5.55	††	05/25/46		438,289
	706	Residential Accredit Loans, Inc. 2006-Q010 A1		5.48	††	01/25/37		705,038
	369	Residential Accredit Loans, Inc. 2007-Q03 A3		5.58	††	03/25/47		369,026
	581	Residential Accredit Loans, Inc. 2007-QH1 A2		5.51	††	02/25/37		581,005
	559	Structured Asset Mortgage Investments Inc. 2007-AR1 2A2		5.53	††	01/25/37		559,674
	8,178	Wamu Mortgage Pass-Through Certificates 2005-AR6 X (IO)		1.166	††	04/25/45		117,555
	507	Wamu Mortgage Pass-Through Certificates 2007-0A1 A1B		5.52	††	02/25/47		507,917
	600	Wamu Mortgage Pass-Through Certificates 2007-OA6 CA1B		5.55	††	07/25/47		600,492
	428	Washington Mutual Mortgage Pass-Through Certificates 2007-0A1 CA1B		5.52	††	12/25/46		428,350
	15,744	Washington Mutual 2007-OA2 1XPP (IO)		0.646	††	03/25/47		238,288
		Total Private Issues						9,854,647
		Total Collateralized Mortgage Obligations (Cost $11,577,482)						11,799,164

See Notes to Financial Statements
124

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

NUMBER OF CONTRACTS									VALUE
		Put Options Purchased (0.0%)
		90 day Euro $
	21	September/2007 @ 94.75							$	5,512
	19	December/2007 @ $94.75								6,650
	39	March/2008 @ 94.75								16,088
		Total Put Options Purchased (Cost $19,130)								28,250
PRINCIPAL AMOUNT IN THOUSANDS
		Short-Term Investments (26.6%) Investment Company (b) (12.3%)
$	41,704	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $41,704,276)							$	41,704,276
		Security Purchased From Securities Lending Collateral (14.3%)
	48,243	The Bank of New York Institutional Cash Reserve Fund (Cost $48,243,135)								48,243,135
			COUPON RATE			MATURITY DATE
		U.S. Government Obligations (a) (0.0%)
	50	U.S. Treasury Bill***		4.865	%	07/12/07				49,926
	10	U.S. Treasury Bill***		4.875		07/12/07				9,985
	100	U.S. Treasury Bill***		4.915		07/12/07				99,850
		Total U.S. Government Obligations (Cost $159,761)								159,761
		Total Short-Term Investments (Cost $90,107,172)								90,107,172
		Total Investments (Cost $308,724,165) (d) (e)					114.4	%		386,790,971
		Liabilities in Excess of Other Assets					(14.4	)		(48,646,552	)
		Net Assets					100.0	%	$	338,144,419

ADR American Depositary Receipt.

ARM Adjustable Rate Mortgage.

BKN Bank Note.

IO Interest Only Security.

See Notes to Financial Statements
125

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

MTN Medium Term Note.

PC Participation Certificate.

* Non-income producing security.

** Resale is restricted to qualified institutional investors.

*** A portion of this security has been physically segregated in connection with open futures.

† Security was purchased on a forward commitment basis.

†† Variable rate security. Rate shown is the rate in effect at June 30, 2007.

††† Securities represent beneficial interest in the Trusts. The corresponding assets of Trust are Junior Subordinated notes due 2042 and a stock purchase contract to purchase preferred stock on March 15, 2011 for Wachovia Capital Trust III and on April 15, 2011 for UBS Captal IX. Security issued have a perpetual maturity and the trust will redeem them only to the extent the preferred stock is redeemed.

# Foreign issued with perpetual maturity.

# # Security issued with perpetual maturity.

(a) Purchased on a discount basis. The interest rate shown has been adjusted to reflect a money market equivalent yield.

(b) See Note 4 to the financial statements regarding Investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class.

(c) All or a portion of this security was on loan as of June 30, 2007.

(d) Securities have been designated as collateral in a amount equal to $41,373,041 in connection with securities purchased on a forward commitment basis and open futures contracts.

(e) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $82,339,803 and the aggregate gross unrealized depreciation is $4,272,997, resulting in net unrealized appreciation of $78,066,806.

FUTURES CONTRACTS OPEN AT JUNE 30, 2007:

NUMBER OF CONTRACTS		LONG/SHORT	DESCRIPTION, DELIVERY MONTH AND YEAR	UNDERLYING FACE AMOUNT AT VALUE			UNREALIZED APPRECIATION (DEPRECIATION)
	81	Long	U.S. Treasury Notes 2 Year, September 2007	$	16,506,282		$	(12,909	)
	99	Long	U.S. Treasury Notes 5 Year, September 2007		10,303,735			(74,271	)
	37	Long	U.S. Treasury Notes 10 Year, September 2007		3,911,016			20,289
	87	Short	U.S. Treasury Bond 20 Year, September 2007		(8,835,500	)		74,149
Net Unrealized Appreciation							$	7,258

See Notes to Financial Statements
126

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2007 (unaudited) continued

CREDIT DEFAULT SWAP CONTRACTS OPEN AT JUNE 30, 2007:

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		PAY/RECEIVE FIXED RATE		TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Goldman Sachs International Hartford Financial Services Group, Inc.	Buy		$350		0.12 %	December 20, 2011		$0
Goldman Sachs International Motorola Inc	Buy		120		0.15	December 20, 2011		624
Goldman Sachs International Motorola Inc	Buy		240		0.157	December 20, 2011		1,200
Goldman Sachs International Union Pacific	Buy		175		0.20	December 20, 2011		333
Goldman Sachs International Southwest Airlines Co.	Buy		370		0.22	December 20, 2011		1,998
Goldman Sachs International Chubb Corp	Buy		350		0.10	March 20, 2012		385
Goldman Sachs International Dell Inc	Buy		180		0.22	March 20, 2012		(126	)
Goldman Sachs International Tyco International	Buy		420		0.43	March 20, 2012		0
Goldman Sachs International Tyco International	Buy		200		0.43	March 20, 2012		0
Goldman Sachs International SLM Corp	Sell		285		0.737	June 20, 2012		(20,976	)
Goldman Sachs International Belo Corp	Buy		170		1.3	June 20, 2014		204
Goldman Sachs International Belo Corp	Buy		65		1.18	June 20, 2014		514
Goldman Sachs International Residential Capital	Sell		290		2.00	March 20, 2017		(10,904	)
Net Unrealized Depreciation							$(26,748)

INTEREST RATE SWAP CONTRACTS OPEN AT JUNE 30, 2007:

COUNTERPARTY

NOTIONAL
AMOUNT
(000'S)

PAYMENTS
MADE BY
PORTFOLIO

PAYMENTS
RECEIVED BY
PORTFOLIO

TERMINATION
DATE

UNREALIZED
(DEPRECIATION)

Citibank

4,600

Fixed Rate 5.337%

Floating Rate 5.36%

5/24/17

(114,724

)

JPMorgan Chase & Co.

4,600

Fixed Rate 5.34

Floating Rate 5.36

5/24/17

(113,850

)

Deutsche Bank

1,950

Fixed Rate 5.388

Floating Rate 5.36

5/25/17

(41,125

)

JPMorgan Chase & Co.

2,450

Fixed Rate 5.448

Floating Rate 5.36

5/29/17

(40,817

)

Total Unrealized Depreciation

$(310,516)

See Notes to Financial Statements
127

Morgan Stanley Variable Investment Series - Strategist

Summary of Investments n June 30, 2007 (unaudited) continued

PORTFOLIO COMPOSITION*	VALUE		PERCENT OF TOTAL INVESTMENTS
Common Stocks	$	229,238,811		59.3	%
Short-Term Investments		90,107,172		23.3
U.S. Government Agencies and Obligations		26,890,082		7.0
Corporate Bonds		17,745,218		4.6
Collateralized Mortgage Obligations		11,799,164		3.0
Asset-Backed Securities		10,982,274		2.8
Put Options Purchased		28,250		0.0
TOTAL INVESTMENTS	$	386,790,971		100.00	%

* Does not include open long futures contracts with an underlying face amount of $30,721,033 with net unrealized depreciation of $66,891, open short futures contracts with an underlying face amount of $8,835,500 with unrealized appreciation of $74,149 and open swap contracts with net unrealized depreciation of $337,264.

See Notes to Financial Statements
128

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129

Morgan Stanley Variable Investment Series

Financial Statements

Statements of Assets and Liabilities
For the six months ended June 30, 2007 (unaudited)

	Money Market		Limited Duration			Income Plus			High Yield			Utilities
Assets:
Investments in securities, at value*	$	224,850,040	$	129,194,441		$	381,384,957		$	55,396,208	††	$	218,074,500	††
Investments in affiliates		—		10,051,537	**		2,289,651	**		1,378,127	**		4,306,267	**
Cash		6,483		—			—			—			—
Receivable for:
Investments sold		—		—			—			501,174			370,202
Shares of beneficial interest sold		647,375		337,081			2,842,735			81,625			3,492
Dividends		—		—			—			—			324,863
Interest		409,479		750,093			4,833,996			1,016,175			—
Foreign withholding taxes reclaimed		—		—			—			—			—
Principal paydowns		—		50,754			29			—			—
Periodic interest receivables on swap contracts		—		—			666,717			—			—
Dividends from affiliates		—		7,440			9,506			680			3,094
Interest from affiliates				—			12,967			—
Unrealized appreciation on open forward foreign currency contracts		—		—			—			3,114			—
Unrealized appreciation on open swap contracts		—		12,185			199,216			1,126			—
Prepaid expenses and other assets		12,410		24,394			19,029			72,826			8,051
Premiums paid for swap contracts		—		—			920			—			—
Swap contract collateral due from brokers		—		—			1,080,000			—			—
Total Assets		225,925,787		140,440,892			393,326,756			58,451,055			223,090,469
Liabilities:
Collateral on securities loaned at value		—		—			—			4,821,713			46,807,923
Unrealized depreciation on open swap contracts		—		255			3,113,192			—			—
Payable for:
Investments purchased		—		802,500			17,129,578			800,810			96,031
Shares of beneficial interest redeemed		597,940		92,605			481,173			37,124			208,868
Variation margin		—		—			—			—			—
Distribution fee (Class Y)		21,180		22,420			41,442			5,866			7,127
Investment advisory fee		81,257		34,421			127,487			18,600			84,193
Administration fee		9,029		9,179			24,283			3,543			11,817
Periodic interest payments on swap contracts		—		17,260			679,762			207			—
Transfer agent fee		250		250			250			250			250
Accrued expenses and other payables		54,224		76,716			602,006			37,006			51,097
Total Liabilities		763,880		1,055,606			22,199,173			5,725,119			47,267,306
Net Assets	$	225,161,907	$	139,385,286		$	371,127,583		$	52,725,936		$	175,823,163
Composition of Net Assets:
Paid-in-capital	$	225,161,822	$	151,747,896		$	394,823,361		$	367,325,489		$	77,900,807
Accumulated undistributed net investment income (loss)		85		(984,213	)		(2,162,835	)		131,950			1,324
Accumulated undistributed net realized gain (loss)		—		(9,675,349	)		(16,531,624	)		(256,223,117	)		11,357,340
Net unrealized appreciation (depreciation)		—		(1,703,048	)		(5,001,319	)		(58,508,386	)		86,563,692
Net Assets	$	225,161,907	$	139,385,286		$	371,127,583		$	52,725,936		$	175,823,163
* Cost	$	224,850,040	$	130,715,107		$	383,981,642		$	113,909,024		$	131,510,808
Class X Shares:
Net Assets	$	119,042,116	$	30,185,007		$	167,215,197		$	24,687,686		$	142,020,337
Shares Outstanding (unlimited authorized shares of $.01 par value)		119,042,049		3,191,979			16,269,146			21,352,046			7,293,564
Net Asset Value Per Share	$	1.00	$	9.46		$	10.28		$	1.16		$	19.47
Class Y Shares:
Net Assets	$	106,119,791	$	109,200,279		$	203,912,386		$	28,038,250		$	33,802,826
Shares Outstanding (unlimited authorized shares of $.01 par value)		106,119,772		11,563,940			19,871,122			24,221,543			1,737,043
Net Asset Value Per Share	$	1.00	$	9.44		$	10.26		$	1.16		$	19.46

† Includes foreign currency at value of $40,184 with cost of $39,702.

** Cost of $10,061,298, $2,289,651, $1,378,127, $4,306,267, $4,574,696, $33,112,352, $1,362,972, $2,622,192 and $7,530,354, respectively.

†† Includes securities loaned at value of $4,610,336, $45,766,921, $28,629,631 and $22,926,543, respectively.

See Notes to Financial Statements
130

	Income Builder			Dividend Growth			Global Dividend Growth			European Equity			Equity
Assets:
Investments in securities, at value*	$	69,575,364		$	532,885,707		$	264,395,639	††	$	205,828,388	††	$	455,919,189
Investments in affiliates		4,898,536	**		33,844,866	**		1,362,972	**		2,622,192	**		7,530,354	**
Cash		—			—			40,286	†		—			—
Receivable for:
Investments sold		89,257			723,652			—			1,011,874			34,160
Shares of beneficial interest sold		6,782			58,900			25,187			103,078			186,873
Dividends		93,884			429,414			310,816			317,726			196,312
Interest		240,158			—			—			—			—
Foreign withholding taxes reclaimed		—			82,655			24,390			198,184			56,302
Principal paydowns		—			—			—			—			—
Periodic interest receivables on swap contracts		—			—			—			—			—
Dividends from affiliates		2,672			5,525			4,728			3,408			5,891
Interest from affiliates		—												—
Unrealized appreciation on open forward foreign currency contracts		—			—			—			1,938			—
Unrealized appreciation on open swap contracts		—			—			—			—			—
Prepaid expenses and other assets		4,170			26,434			12,584			10,189			42,002
Premiums paid for swap contracts		—			—			—			—			—
Swap contract collateral due from brokers		—			—			—			—			—
Total Assets		74,910,823			568,057,153			266,176,602			210,096,977			463,971,083
Liabilities:
Collateral on securities loaned at value		—			—			29,576,149			23,862,530			—
Unrealized depreciation on open swap contracts		—			—			—			—			—
Payable for:
Investments purchased		—			—			—			1,014,530			23,595
Shares of beneficial interest redeemed		448,159			1,122,314			208,953			393,353			1,251,755
Variation margin		—			—			—			—			—
Distribution fee (Class Y)		8,914			27,682			15,621			9,350			23,505
Investment advisory fee		42,257			224,870			130,724			127,615			163,172
Administration fee		5,046			37,940			15,625			12,159			31,080
Periodic interest payments on swap contracts		—			—			—			—			—
Transfer agent fee		250			250			250			250			250
Accrued expenses and other payables		28,500			86,813			64,366			76,553			66,469
Total Liabilities		533,126			1,499,869			30,011,688			25,496,340			1,559,826
Net Assets	$	74,377,697		$	566,557,284		$	236,164,914		$	184,600,637		$	462,411,257
Composition of Net Assets:
Paid-in-capital	$	58,505,334		$	644,112,343		$	136,276,020		$	115,888,859		$	745,639,971
Accumulated undistributed net investment income (loss)		(600,052	)		3,307			2,494,124			2,625,464			198,706
Accumulated undistributed net realized gain (loss)		4,830,623			(164,483,957	)		13,582,238			14,554,724			(354,818,937	)
Net unrealized appreciation (depreciation)		11,641,792			86,925,591			83,812,532			51,531,590			71,391,517
Net Assets	$	74,377,697		$	566,557,284		$	236,164,914		$	184,600,637		$	462,411,257
* Cost	$	58,257,412		$	446,692,630		$	180,585,584		$	154,303,837		$	384,527,646
Class X Shares:
Net Assets	$	32,563,460		$	434,124,869		$	160,450,330		$	139,267,785		$	350,635,186
Shares Outstanding (unlimited authorized shares of $.01 par value)		2,438,432			24,812,969			9,211,473			4,954,704			10,824,260
Net Asset Value Per Share	$	13.35		$	17.50		$	17.42		$	28.11		$	32.39
Class Y Shares:
Net Assets	$	41,814,237		$	132,432,415		$	75,714,584		$	45,332,852		$	111,776,071
Shares Outstanding (unlimited authorized shares of $.01 par value)		3,139,022			7,579,865			4,384,160			1,620,968			3,467,490
Net Asset Value Per Share	$	13.32		$	17.47		$	17.27		$	27.97		$	32.24

131

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Assets and Liabilities continued
For the six months ended June 30, 2007 (unaudited)

	S&P 500 Index			Global Advantage			Aggressive Equity			Strategist
Assets:
Investments in securities, at value*	$	240,316,292		$	26,226,305		$	56,099,664		$	340,806,829	††
Investments in affiliates		10,304,463	**		295,103	**		2,125,944	**		45,984,142	**
Cash		—			19,157	†		—			—
Receivable for:
Investments sold		56,312			—			4,300			—
Shares of beneficial interest sold		77,812			7,085			—			96,158
Dividends		264,739			19,795			24,466			467,393
Interest		—			—			—			658,636
Foreign withholding taxes reclaimed		—			12,717			—			—
Principal paydowns		—			—			—			18,522
Periodic interest receivables on swap contracts		—			—			—			73,494
Dividends from affiliates		6,226			229			1,613			57,132
Unrealized appreciation on open swap contracts		—			—			—			5,258
Prepaid expenses and other assets		12,782			3,663			3,074			19,983
Swap contract collateral due from brokers		—			—			—			260,000
Total Assets		251,038,626			26,584,054			58,259,061			388,447,547
Liabilities:
Collateral on securities loaned at value		—			—			—			48,243,135
Unrealized depreciation on open swap contracts		—			—			—			342,522
Payable for:
Investments purchased		—			—			2,970			783,208
Shares of beneficial interest redeemed		686,375			27,617			39,464			574,210
Variation margin		2,700			—			—			10,030
Distribution fee (Class Y)		36,125			2,204			6,422			20,285
Investment advisory fee		25,181			12,614			32,709			118,465
Administration fee		16,787			1,770			3,906			22,565
Periodic interest payments on swap contracts		—			—			—			75,130
Transfer agent fee		250			250			250			250
Payable to bank		2,880			—			—			28,807
Accrued expenses and other payables		51,293			28,471			27,085			84,521
Total Liabilities		821,591			72,926			112,806			50,303,128
Net Assets	$	250,217,035		$	26,511,128		$	58,146,255		$	338,144,419
Composition of Net Assets:
Paid-in-capital	$	199,748,476		$	38,671,390		$	78,149,338		$	250,866,083
Accumulated undistributed net investment income (loss)		1,943,274			89,890			32,820			(555,270	)
Accumulated undistributed net realized gain (loss)		(39,550,735	)		(18,351,366	)		(31,795,819	)		10,096,806
Net unrealized appreciation		88,076,020			6,101,214			11,759,916			77,736,800
Net Assets	$	250,217,035		$	26,511,128		$	58,146,255		$	338,144,419
* Cost	$	155,553,007		$	20,125,100		$	44,339,773		$	265,234,468
Class X Shares:
Net Assets	$	77,870,206		$	15,888,830		$	27,555,676		$	240,894,642
Shares Outstanding (unlimited authorized shares of $.01 par value)		5,700,146			1,413,242			1,695,202			15,624,515
Net Asset Value Per Share	$	13.66		$	11.24		$	16.26		$	15.42
Class Y Shares:
Net Assets	$	172,346,829		$	10,622,298		$	30,590,579		$	97,249,777
Shares Outstanding (unlimited authorized shares of $.01 par value)		12,697,485			948,777			1,910,114			6,317,747
Net Asset Value Per Share	$	13.57		$	11.20		$	16.02		$	15.39

† Includes foreign currency at value of $19,157 with cost of $19,037.

** Cost of $6,980,984, $295,103, $2,125,944, and $43,489,697, respectively.

†† Includes securities loaned at value of $47,204,868.

See Notes to Financial Statements
132

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Operations
For the six months ended June 30, 2007 (unaudited)

	Money Market		Limited Duration			Income Plus			High Yield
Investment Income:
Income
Interest	$	6,176,132	$	3,806,069		$	10,647,332		$	2,144,472
Interest and dividends from affiliates		—		22,606			9,506			680
Income from securities loaned – net		—		—			—			4,676
Total Income		6,176,132		3,828,675			10,656,838			2,149,828
Expenses
Investment advisory fee		518,340		213,543			802,603			117,357
Administration fee		57,593		56,945			152,877			22,938
Distribution fee (Class Y shares)		129,609		137,947			257,310			36,857
Professional fees		17,399		18,235			21,727			116,470
Transfer agent fees and expenses		250		250			250			250
Shareholder reports and notices		14,551		10,940			19,705			12,354
Trustees' fees and expenses		2,018		1,254			3,318			525
Custodian fees		12,177		18,983			23,144			2,963
Other		8,297		12,792			20,002			10,085
Total Expenses		760,234		470,889			1,300,936			319,799
Less: amounts waived/reimbursed		—		—			—			—
Net Expenses		760,234		470,889			1,300,936			319,799
Net Investment Income		5,415,898		3,357,786			9,355,902			1,830,029
Net Realized and Unrealized Gain (Loss):
Net Realized Gain (Loss) on:
Investments		—		(27,431	)		1,149,416			423,330
Investments in affiliates		—		(4,536	)		—			—
Futures contracts		—		23,145			(1,330,741	)		—
Swap contracts		—		(3,093	)		(73,693	)		(207	)
Foreign exchange transactions		—		—			5,896			(28,229	)
Net Realized Gain (Loss)		—		(11,915	)		(249,122	)		394,894
Net Change in Unrealized Appreciation/Depreciation on:
Investments		—		(109,633	)		(5,750,538	)		(598,588	)
Investments in affiliates		—		517			—			—
Futures contracts		—		(130,927	)		1,190,724			—
Swap contracts		—		9,859			(2,903,607	)		1,126
Translation of forward foreign currency contracts, other assets and liabilities denominated in foreign currencies		—		—			146			21,406
Net Depreciation		—		(230,184	)		(7,463,275	)		(576,056	)
Net Loss		—		(242,099	)		(7,712,397	)		(181,162	)
Net Increase	$	5,415,898	$	3,115,687		$	1,643,505		$	1,648,867

See Notes to Financial Statements
133

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Operations continued
For the six months ended June 30, 2007 (unaudited)

	Utilities			Income Builder			Dividend Growth			Global Dividend Growth			European Equity
Investment Income:
Income
Interest	$	93,800		$	490,479		$	339,604		$	44,527		$	21,233
Interest and dividends from affiliates		3,094			37,735			482,718			14,225			12,049
Income from securities loaned - net		11,883			—			—			79,167			99,459
Dividends		2,205,774	*		719,704	*		4,615,362	*		3,428,807	*		3,473,515	*
Total Income		2,314,551			1,247,918			5,437,684			3,566,726			3,606,256
Expenses
Investment advisory fee		512,118			260,024			1,380,787			791,388			801,965
Administration fee		71,876			31,048			233,490			94,494			73,744
Distribution fee (Class Y shares)		42,949			54,982			167,488			93,005			56,336
Professional fees		19,486			13,640			19,469			19,856			20,534
Transfer agent fees and expenses		250			250			250			250			250
Shareholder reports and notices		16,481			6,951			29,287			14,128			13,410
Trustees' fees and expenses		1,480			658			5,198			1,961			1,540
Custodian fees		6,911			10,106			19,680			30,186			40,791
Other		8,399			3,287			19,816			12,533			11,675
Total Expenses		679,950			380,946			1,875,465			1,057,801			1,020,245
Less: amounts waived/reimbursed		—			—			—			(195	)		(42,115	)
Net Expenses		679,950			380,946			1,875,465			1,057,606			978,130
Net Investment Income		1,634,601			866,972			3,562,219			2,509,120			2,628,126
Net Realized and Unrealized Gain (Loss):
Net Realized Gain (Loss) on:
Investments		12,654,005			4,894,077			28,490,582			14,100,143			17,039,703
Investments in affiliates		—			—			546,376			83,477			—
Futures contracts		—			—			—			—			—
Option contracts		—			—			—			—			—
Swap contracts		—			—			—			—			—
Foreign exchange transactions		—			—			—			(28,978	)		(6,975	)
Net Realized Gain		12,654,005			4,894,077			29,036,958			14,154,642			17,032,728
Net Change in Unrealized Appreciation/Depreciation on:
Investments		6,815,235			(1,293,819	)		3,697,995			7,055,512			2,484,618
Investments in affiliates		—			—			732,515			—			—
Futures contracts		—			—			—			—			—
Swap contracts		—			—			—			—			—
Option contracts		—			—			—			—			—
Translation of forward foreign currency contracts, other assets and liabilities denominated in foreign currencies		—			—			—			(3,476	)		(372	)
Net Appreciation (Depreciation)		6,815,235			(1,293,819	)		4,430,510			7,052,036			2,484,246
Net Gain		19,469,240			3,600,258			33,467,468			21,206,678			19,516,974
Net Increase	$	21,103,841		$	4,467,230		$	37,029,687		$	23,715,798		$	22,145,100

* Net of foreign withholding tax of $9,669, $27,815, $38,071, $218,263, $436,556, $152,180, $19,593, $19,027 and $15,168, respectively.

See Notes to Financial Statements
134

	Equity			S&P 500 Index			Global Advantage			Aggressive Equity			Strategist
Investment Income:
Income
Interest	$	241,111		$	83,131		$	7,508		$	32,273		$	3,278,064
Interest and dividends from affiliates		5,891			126,285			229			1,613			83,573
Income from securities loaned - net		—			—			—			—			118,739
Dividends		2,364,068	*		2,272,777			217,779	*		298,564	*		2,371,462	*
Total Income		2,611,070			2,482,193			225,516			332,450			5,851,838
Expenses
Investment advisory fee		1,002,853			153,249			77,784			203,693			733,091
Administration fee		191,020			102,166			10,917			24,322			139,636
Distribution fee (Class Y shares)		142,369			218,160			13,391			39,532			124,572
Professional fees		19,208			14,825			12,789			14,056			24,831
Transfer agent fees and expenses		250			250			250			250			250
Shareholder reports and notices		26,426			19,492			4,236			6,923			29,155
Trustees' fees and expenses		1,895			2,149			262			539			2,960
Custodian fees		19,819			27,242			4,626			6,308			26,466
Other		8,616			21,216			5,372			2,813			15,429
Total Expenses		1,412,456			558,749			129,627			298,436			1,096,390
Less: amounts waived/reimbursed		—			—			—			—			—
Net Expenses		1,412,456			558,749			129,627			298,436			1,096,390
Net Investment Income		1,198,614			1,923,444			95,889			34,014			4,755,448
Net Realized and Unrealized Gain (Loss):
Net Realized Gain (Loss) on:
Investments		42,876,885			3,319,758			297,049			7,784,318			10,494,918
Investments in affiliates		—			191,508			—			—			—
Futures contracts		—			199,119			—			—			(198,765	)
Option contracts		—			—			—			—			(53,409	)
Swap contracts		—			—			—			—			639
Foreign exchange transactions		(21,808	)		—			5,885			(2,918	)		—
Net Realized Gain		42,855,077			3,710,385			302,934			7,781,400			10,243,383
Net Change in Unrealized Appreciation/Depreciation on:
Investments		415,944			11,783,852			2,429,546			(2,228,490	)		6,392,612
Investments in affiliates		—			(522,219	)		—			—			250,488
Futures contracts		—			(20,065	)		—			—			81,560
Swap contracts		—			—			—			—			(339,382	)
Option contracts		—			—			—			—			65,257
Translation of forward foreign currency contracts, other assets and liabilities denominated in foreign currencies		(1,076	)		—			(1,401	)		(108	)		—
Net Appreciation (Depreciation)		414,868			11,241,568			2,428,145			(2,228,598	)		6,450,535
Net Gain		43,269,945			14,951,953			2,731,079			5,552,802			16,693,918
Net Increase	$	44,468,559		$	16,875,397		$	2,826,968		$	5,586,816		$	21,449,366

135

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Changes in Net Assets

	Money Market						Limited Duration						Income Plus
	For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006
	(unaudited)						(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	5,415,898		$	10,871,727		$	3,357,786		$	6,376,847		$	9,355,902		$	19,658,577
Net realized gain (loss)		—			—			(11,915	)		(531,114	)		(249,122	)		7,006,789
Net change in unrealized appreciation/depreciation		—			—			(230,184	)		529,782			(7,463,275	)		(5,827,709	)
Net Increase		5,415,898			10,871,727			3,115,687			6,375,515			1,643,505			20,837,657
Dividends and Distributions to Shareholders from:
Net investment income
Class X Shares		(3,049,809	)		(6,425,257	)		(828,540	)		(1,792,986	)		(4,697,652	)		(10,526,033	)
Class Y Shares		(2,366,193	)		(4,446,503	)		(2,741,944	)		(5,393,378	)		(5,248,534	)		(10,245,949	)
Net realized gain
Class X Shares		—			—			—			—			—			—
Class Y Shares		—			—			—			—			—			—
Total Dividends and Distributions		(5,416,002	)		(10,871,760	)		(3,570,484	)		(7,186,364	)		(9,946,186	)		(20,771,982	)
Net decrease from transactions in shares of beneficial interest		(9,824,000	)		(7,302,059	)		(9,024,422	)		(19,216,585	)		(14,844,283	)		(39,015,940	)
Total Decrease		(9,824,104	)		(7,302,092	)		(9,479,219	)		(20,027,434	)		(23,146,964	)		(38,950,265	)
Net Assets:
Beginning of period		234,986,011			242,288,103			148,864,505			168,891,939			394,274,547			433,224,812
End of Period	$	225,161,907		$	234,986,011		$	139,385,286		$	148,864,505		$	371,127,583		$	394,274,547
Accumulated Undistributed Net Investment Income (Loss)	$	85		$	189		$	(984,213	)	$	(771,515	)	$	(2,162,835	)	$	(1,572,551	)

See Notes to Financial Statements
136

	High Yield						Utilities
	For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006
	(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	1,830,029		$	4,226,504		$	1,634,601		$	3,559,044
Net realized gain (loss)		394,894			(5,740,707	)		12,654,005			20,592,662
Net change in unrealized appreciation/depreciation		(576,056	)		7,184,042			6,815,235			8,312,994
Net Increase		1,648,867			5,669,839			21,103,841			32,464,700
Dividends and Distributions to Shareholders from:
Net investment income
Class X Shares		(893,196	)		(2,186,136	)		(1,364,944	)		(2,967,100	)
Class Y Shares		(951,414	)		(2,227,621	)		(279,338	)		(602,490	)
Net realized gain
Class X Shares		—			—			(14,149,868	)		—
Class Y Shares		—			—			(3,381,848	)		—
Total Dividends and Distributions		(1,844,610	)		(4,413,757	)		(19,175,998	)		(3,569,590	)
Net decrease from transactions in shares of beneficial interest		(5,749,849	)		(13,360,805	)		(3,130,730	)		(39,349,557	)
Total Decrease		(5,945,592	)		(12,104,723	)		(1,202,887	)		(10,454,447	)
Net Assets:
Beginning of period		58,671,528			70,776,251			177,026,050			187,480,497
End of Period	$	52,725,936		$	58,671,528		$	175,823,163		$	177,026,050
Accumulated Undistributed Net Investment Income (Loss)	$	131,950		$	146,531		$	1,324		$	11,005

137

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Changes in Net Assets continued

	Income Builder						Dividend Growth						Global Dividend Growth
	For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006
	(unaudited)						(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	866,972		$	1,879,693		$	3,562,219		$	8,645,845		$	2,509,120		$	4,180,502
Net realized gain		4,894,077			5,189,455			29,036,958			158,673,711			14,154,642			22,878,082
Net change in unrealized appreciation/depreciation		(1,293,819	)		3,621,449			4,430,510			(101,175,319	)		7,052,036			20,256,749
Net Increase		4,467,230			10,690,597			37,029,687			66,144,237			23,715,798			47,315,333
Dividends and Distributions to Shareholders from:
Net investment income
Class X Shares		(536,171	)		(967,031	)		(2,882,334	)		(7,037,672	)		(2,969,637	)		(3,431,090	)
Class Y Shares		(650,422	)		(1,084,514	)		(703,228	)		(1,568,570	)		(1,237,653	)		(1,269,031	)
Net realized gain
Class X Shares		(1,841,395	)		—			—			—			(15,488,004	)		(2,186,354	)
Class Y Shares		(2,391,744	)		—			—			—			(7,383,445	)		(919,279	)
Total Dividends and Distributions		(5,419,732	)		(2,051,545	)		(3,585,562	)		(8,606,242	)		(27,078,739	)		(7,805,754	)
Net decrease from transactions in shares of beneficial interest		(5,235,961	)		(13,552,202	)		(75,477,647	)		(174,783,350	)		(1,084,873	)		(51,495,097	)
Total Increase (Decrease)		(6,188,463	)		(4,913,150	)		(42,033,522	)		(117,245,355	)		(4,447,814	)		(11,985,518	)
Net Assets:
Beginning of period		80,566,160			85,479,310			608,590,806			725,836,161			240,612,728			252,598,246
End of Period	$	74,377,697		$	80,566,160		$	566,557,284		$	608,590,806		$	236,164,914		$	240,612,728
Accumulated Undistributed Net Investment Income (Loss)	$	(600,052	)	$	(280,431	)	$	3,307		$	26,650		$	2,494,124		$	4,192,294

See Notes to Financial Statements
138

	European Equity						Equity
	For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006
	(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	2,628,126		$	2,847,897		$	1,198,614		$	13,548
Net realized gain		17,032,728			36,596,753			42,855,077			105,582,591
Net change in unrealized appreciation/depreciation		2,484,246			9,383,869			414,868			(87,240,446	)
Net Increase		22,145,100			48,828,519			44,468,559			18,355,693
Dividends and Distributions to Shareholders from:
Net investment income
Class X Shares		(2,252,570	)		(2,468,499	)		(1,010,269	)		—
Class Y Shares		(633,844	)		(635,684	)		—			—
Net realized gain
Class X Shares		—			—			—			—
Class Y Shares		—			—			—			—
Total Dividends and Distributions		(2,886,414	)		(3,104,183	)		(1,010,269	)		—
Net decrease from transactions in shares of beneficial interest		(22,295,314	)		(42,459,254	)		(65,511,698	)		(143,355,879	)
Total Increase (Decrease)		(3,036,628	)		3,265,082			(22,053,408	)		(125,000,186	)
Net Assets:
Beginning of period		187,637,265			184,372,183			484,464,665			609,464,851
End of Period	$	184,600,637		$	187,637,265		$	462,411,257		$	484,464,665
Accumulated Undistributed Net Investment Income (Loss)	$	2,625,464		$	2,883,752		$	198,706		$	10,361

139

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Changes in Net Assets continued

	S&P 500 Index						Global Advantage
	For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006
	(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income (loss)	$	1,923,444		$	4,050,507		$	95,889		$	188,319
Net realized gain (loss)		3,710,385			(4,649,566	)		302,934			3,843,961
Net change in unrealized appreciation/depreciation		11,241,568			38,491,642			2,428,145			745,957
Net Increase		16,875,397			37,892,583			2,826,968			4,778,237
Dividends and Distributions to Shareholders from:
Net investment income
Class X Shares		(1,371,058	)		(1,518,687	)		(145,628	)		(141,736	)
Class Y Shares		(2,631,171	)		(2,500,973	)		(71,553	)		(58,622	)
Net realized gain
Class X Shares		—			—			—			—
Class Y Shares		—			—			—			—
Total Dividends and Distributions		(4,002,229	)		(4,019,660	)		(217,181	)		(200,358	)
Net decrease from transactions in shares of beneficial interest		(24,084,174	)		(48,888,393	)		(4,005,953	)		(6,514,946	)
Total Decrease		(11,211,006	)		(15,015,470	)		(1,396,166	)		(1,937,067	)
Net Assets:
Beginning of period		261,428,041			276,443,511			27,907,294			29,844,361
End of Period	$	250,217,035		$	261,428,041		$	26,511,128		$	27,907,294
Accumulated Undistributed Net Investment Income (Loss)	$	1,943,274		$	4,022,059		$	89,890		$	211,182

See Notes to Financial Statements
140

	Aggressive Equity						Strategist
	For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006
	(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income (loss)	$	34,014		$	(257,183	)	$	4,755,448		$	9,166,369
Net realized gain (loss)		7,781,400			5,756,107			10,243,383			37,588,386
Net change in unrealized appreciation/depreciation		(2,228,598	)		(702,766	)		6,450,535			5,100,717
Net Increase		5,586,816			4,796,158			21,449,366			51,855,472
Dividends and Distributions to Shareholders from:
Net investment income
Class X Shares		—			—			(3,580,949	)		(7,035,514	)
Class Y Shares		—			—			(1,319,244	)		(2,401,634	)
Net realized gain
Class X Shares		—			—			(26,214,451	)		(21,363,709	)
Class Y Shares		—			—			(10,622,254	)		(7,921,211	)
Total Dividends and Distributions		—			—			(41,736,898	)		(38,722,068	)
Net decrease from transactions in shares of beneficial interest		(10,199,293	)		(9,450,216	)		(1,610,033	)		(41,033,345	)
Total Decrease		(4,612,477	)		(4,654,058	)		(21,897,565	)		(27,899,941	)
Net Assets:
Beginning of period		62,758,732			67,412,790			360,041,984			387,941,925
End of Period	$	58,146,255		$	62,758,732		$	338,144,419		$	360,041,984
Accumulated Undistributed Net Investment Income (Loss)	$	32,820		$	(1,194	)	$	(555,270	)	$	(410,525	)

141

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Changes in Net Assets continued
Summary of Transactions in Shares of Beneficial Interest

	Money Market						Limited Duration						Income Plus
	For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006
	(unaudited)						(unaudited)						(unaudited)
Class X Shares
Shares
Sold		41,542,680			109,246,644			271,614			665,672			1,346,286			1,343,320
Reinvestment of dividends and distributions		3,049,809			6,425,257			87,411			188,884			448,755			1,019,274
Redeemed		(58,240,524	)		(127,333,937	)		(755,074	)		(1,762,052	)		(2,994,301	)		(7,329,366	)
Net Decrease - Class X		(13,648,035	)		(11,662,036	)		(396,049	)		(907,496	)		(1,199,260	)		(4,966,772	)
Amount
Sold	$	41,542,680		$	109,246,644		$	2,581,217		$	6,329,126		$	14,130,040		$	13,895,567
Reinvestment of dividends and distributions		3,049,809			6,425,257			828,540			1,792,986			4,697,652			10,526,033
Redeemed		(58,240,524	)		(127,333,937	)		(7,176,555	)		(16,752,031	)		(31,442,428	)		(75,585,703	)
Net Decrease - Class X	$	(13,648,035	)	$	(11,662,036	)	$	(3,766,798	)	$	(8,629,919	)	$	(12,614,736	)	$	(51,164,103	)
Class Y Shares
Shares
Sold		44,064,330			76,887,209			639,056			1,629,699			1,289,794			3,964,215
Reinvestment of dividends and distributions		2,366,193			4,446,503			289,639			569,030			502,176			993,332
Redeemed		(42,606,488	)		(76,973,735	)		(1,481,914	)		(3,313,425	)		(1,997,627	)		(3,787,698	)
Net Increase (Decrease) - Class Y		3,824,035			4,359,977			(553,219	)		(1,114,696	)		(205,657	)		1,169,849
Amount
Sold	$	44,064,330		$	76,887,209		$	6,060,728		$	15,487,495		$	13,458,978		$	40,971,454
Reinvestment of dividends and distributions		2,366,193			4,446,503			2,741,944			5,393,378			5,248,534			10,245,949
Redeemed		(42,606,488	)		(76,973,735	)		(14,060,296	)		(31,467,539	)		(20,937,059	)		(39,069,240	)
Net Increase (Decrease) - Class Y	$	3,824,035		$	4,359,977		$	(5,257,624	)	$	(10,586,666	)	$	(2,229,547	)	$	12,148,163

See Notes to Financial Statements
142

	High Yield						Utilities
	For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006
	(unaudited)						(unaudited)
Class X Shares
Shares
Sold		1,752,551			1,952,259			214,980			586,135
Reinvestment of dividends and distributions		763,513			1,912,342			793,988			168,646
Redeemed		(5,180,634	)		(10,783,191	)		(1,056,240	)		(2,772,944	)
Net Decrease - Class X		(2,664,570	)		(6,918,590	)		(47,272	)		(2,018,163	)
Amount
Sold	$	2,060,124		$	2,235,982		$	4,589,008		$	10,237,686
Reinvestment of dividends and distributions		893,196			2,186,136			15,514,812			2,967,100
Redeemed		(6,085,784	)		(12,343,831	)		(22,455,497	)		(48,359,557	)
Net Decrease - Class X	$	(3,132,464	)	$	(7,921,713	)	$	(2,351,677	)	$	(35,154,771	)
Class Y Shares
Shares
Sold		685,820			1,457,028			90,370			140,360
Reinvestment of dividends and distributions		811,914			1,945,922			187,554			34,212
Redeemed		(3,721,053	)		(8,143,950	)		(306,386	)		(414,489	)
Net Increase (Decrease) - Class Y		(2,223,319	)		(4,741,000	)		(28,462	)		(239,917	)
Amount
Sold	$	804,043		$	1,672,591		$	1,886,238		$	2,414,602
Reinvestment of dividends and distributions		951,414			2,227,621			3,661,186			602,490
Redeemed		(4,372,842	)		(9,339,304	)		(6,326,477	)		(7,211,878	)
Net Increase (Decrease) - Class Y	$	(2,617,385	)	$	(5,439,092	)	$	(779,053	)	$	(4,194,786	)

143

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Changes in Net Assets continued
Summary of Transactions in Shares of Beneficial Interest continued

	Income Builder						Dividend Growth						Global Dividend Growth
	For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006
	(unaudited)						(unaudited)						(unaudited)
Class X Shares
Shares
Sold		102,170			357,728			781,598			1,779,979			293,402			827,891
Reinvestment of dividends and distributions		177,765			75,653			169,561			454,831			1,059,566			365,957
Redeemed		(430,735	)		(1,080,550	)		(4,680,333	)		(12,284,130	)		(1,455,094	)		(3,879,861	)
Net Decrease - Class X		(150,800	)		(647,169	)		(3,729,174	)		(10,049,320	)		(102,126	)		(2,686,013	)
Amount
Sold	$	1,423,838		$	4,519,054		$	13,307,774		$	27,526,029		$	5,467,132		$	13,309,522
Reinvestment of dividends and distributions		2,377,566			967,031			2,882,334			7,037,672			18,457,641			5,617,444
Redeemed		(6,003,341	)		(13,695,332	)		(79,754,562	)		(189,968,236	)		(27,191,143	)		(62,256,793	)
Net Decrease - Class X	$	(2,201,937	)	$	(8,209,247	)	$	(63,564,454	)	$	(155,404,535	)	$	(3,266,370	)	$	(43,329,827	)
Class Y Shares
Shares
Sold		110,269			363,909			190,308			536,789			257,742			448,676
Reinvestment of dividends and distributions		227,980			84,940			41,410			101,496			499,195			143,590
Redeemed		(545,097	)		(868,154	)		(928,630	)		(1,890,964	)		(606,642	)		(1,101,133	)
Net Increase (Decrease) - Class Y		(206,848	)		(419,305	)		(696,912	)		(1,252,679	)		150,295			(508,867	)
Amount
Sold	$	1,524,545		$	4,612,483		$	3,227,015		$	8,270,594		$	4,733,251		$	7,221,398
Reinvestment of dividends and distributions		3,042,166			1,084,514			703,228			1,568,570			8,621,098			2,188,310
Redeemed		(7,600,735	)		(11,039,952	)		(15,843,436	)		(29,217,979	)		(11,172,852	)		(17,574,978	)
Net Increase (Decrease) - Class Y	$	(3,034,024	)	$	(5,342,955	)	$	(11,913,193	)	$	(19,378,815	)	$	2,181,497		$	(8,165,270	)

See Notes to Financial Statements
144

	European Equity						Equity
	For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006
	(unaudited)						(unaudited)
Class X Shares
Shares
Sold		206,488			416,488			286,623			757,873
Reinvestment of dividends and distributions		80,134			113,651			31,191			—
Redeemed		(934,885	)		(2,241,650	)		(2,007,461	)		(5,310,192	)
Net Decrease - Class X		(648,263	)		(1,711,511	)		(1,689,647	)		(4,552,319	)
Amount
Sold	$	5,546,610		$	9,269,376		$	9,039,998		$	21,489,639
Reinvestment of dividends and distributions		2,252,570			2,468,499			1,010,269			—
Redeemed		(25,068,952	)		(50,025,518	)		(63,204,395	)		(150,535,011	)
Net Decrease - Class X	$	(17,269,772	)	$	(38,287,643	)	$	(53,154,128	)	$	(129,045,372	)
Class Y Shares
Shares
Sold		64,107			157,955			97,179			440,434
Reinvestment of dividends and distributions		22,662			29,416			—			—
Redeemed		(277,459	)		(375,571	)		(492,725	)		(945,510	)
Net Increase (Decrease) - Class Y		(190,690	)		(188,200	)		(395,546	)		(505,076	)
Amount
Sold	$	1,737,500		$	3,520,364		$	3,030,203		$	12,444,856
Reinvestment of dividends and distributions		633,844			635,684			—			—
Redeemed		(7,396,886	)		(8,327,659	)		(15,387,773	)		(26,755,363	)
Net Increase (Decrease) - Class Y	$	(5,025,542	)	$	(4,171,611	)	$	(12,357,570	)	$	(14,310,507	)

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Financial Statements continued

Statements of Changes in Net Assets continued
Summary of Transactions in Shares of Beneficial Interest continued

	S&P 500 Index						Global Advantage
	For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006
	(unaudited)						(unaudited)
Class X Shares
Shares
Sold		302,441			642,185			61,922			170,833
Reinvestment of dividends and distributions		100,370			131,374			12,956			15,908
Redeemed		(1,198,034	)		(3,343,367	)		(335,032	)		(720,544	)
Net Increase (Decrease) - Class X		(795,223	)		(2,569,808	)		(260,154	)		(533,803	)
Amount
Sold	$	4,069,053		$	7,714,656		$	677,861		$	1,568,635
Reinvestment of dividends and distributions		1,371,058			1,518,687			145,628			141,736
Redeemed		(16,149,605	)		(40,271,797	)		(3,662,437	)		(6,669,546	)
Net Decrease - Class X	$	(10,709,494	)	$	(31,038,454	)	$	(2,838,948	)	$	(4,959,175	)
Class Y Shares
Shares
Sold		421,228			1,577,433			22,049			68,199
Reinvestment of dividends and distributions		193,896			217,665			6,389			6,609
Redeemed		(1,611,059	)		(3,268,404	)		(136,512	)		(243,567	)
Net Increase (Decrease) - Class Y		(995,935	)		(1,473,306	)		(108,074	)		(168,759	)
Amount
Sold	$	5,583,229		$	18,740,921		$	238,669		$	626,138
Reinvestment of dividends and distributions		2,631,171			2,500,973			71,553			58,622
Redeemed		(21,589,080	)		(39,091,833	)		(1,477,227	)		(2,240,531	)
Net Increase (Decrease) - Class Y	$	(13,374,680	)	$	(17,849,939	)	$	(1,167,005	)	$	(1,555,771	)

See Notes to Financial Statements
146

	Aggressive Equity						Strategist
	For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006			For The Six Months Ended June 30, 2007			For The Year Ended December 31, 2006
	(unaudited)						(unaudited)
Class X Shares
Shares
Sold		61,311			314,499			591,086			1,002,717
Reinvestment of dividends and distributions		—			—			1,923,280			1,826,116
Redeemed		(434,386	)		(943,211	)		(2,506,005	)		(5,270,272	)
Net Increase (Decrease) - Class X		(373,075	)		(628,712	)		8,361			(2,441,439	)
Amount
Sold	$	976,011		$	4,474,299		$	10,099,367		$	16,261,262
Reinvestment of dividends and distributions		—			—			29,795,400			28,399,223
Redeemed		(6,859,465	)		(13,406,950	)		(42,786,285	)		(86,096,128	)
Net Decrease - Class X	$	(5,883,454	)	$	(8,932,651	)	$	(2,891,518	)	$	(41,435,643	)
Class Y Shares
Shares
Sold		88,560			379,729			242,519			667,001
Reinvestment of dividends and distributions		—			—			772,605			665,111
Redeemed		(365,173	)		(417,328	)		(868,470	)		(1,277,578	)
Net Increase (Decrease) - Class Y		(276,613	)		(37,599	)		146,654			54,534
Amount
Sold	$	1,365,546		$	5,309,981		$	4,128,444		$	10,938,732
Reinvestment of dividends and distributions		—			—			11,941,498			10,322,845
Redeemed		(5,681,385	)		(5,827,546	)		(14,788,457	)		(20,859,279	)
Net Increase (Decrease) - Class Y	$	(4,315,839	)	$	(517,565	)	$	1,281,485		$	402,298

147

Morgan Stanley Variable Investment Series

Notes to Financial Statements n June 30, 2007 (unaudited)

1. Organization and Accounting Policies

Morgan Stanley Variable Investment Series (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as a diversified, open-end management investment company. The Fund is offered exclusively to life insurance companies in connection with particular life insurance and/or annuity contracts they offer.

The Fund, organized on February 25, 1983 as a Massachusetts business trust, consists of fourteen Portfolios ("Portfolios") which commenced operations as follows:

PORTFOLIO

COMMENCEMENT OF
OPERATIONS

PORTFOLIO

COMMENCEMENT OF
OPERATIONS

Money Market

March 9, 1984

Global Dividend Growth

February 23, 1994

Limited Duration

May 4, 1999

European Equity

March 1, 1991

Income Plus

March 1, 1987

Equity

March 9, 1984

High Yield

March 9, 1984

S&P 500 Index

May 18, 1998

Utilities

March 1, 1990

Global Advantage

May 18, 1998

Income Builder

January 21, 1997

Aggressive Equity

May 4, 1999

Dividend Growth

March 1, 1990

Strategist

March 1, 1987

On June 5, 2000, the Fund commenced offering one additional class of shares (Class Y shares). The two classes are identical except that Class Y shares incur distribution expenses. Class X shares are generally available to holders of contracts offered by Metropolitan Life Insurance Company and other contracts offered before May 1, 2000. Class Y shares are available to holders of contracts offered on or after June 5, 2000.

The investment objectives of each Portfolio are as follows:

PORTFOLIO				INVESTMENT OBJECTIVE
Money Market				Seeks high current income, preservation of capital and liquidity.

Limited Duration				Seeks to provide a high level of current income consistent with the preservation of capital.

Income Plus				Seeks, as its primary objective, to provide a high level of current income and, as a secondary objective, capital appreciation, but only when consistent with its primary objective.

High Yield				Seeks, as its primary objective, to provide a high level of current income by investing in a diversified portfolio consisting principally of fixed-income securities, which may include both non-convertible and convertible debt securities and preferred stocks and, as a secondary objective, capital appreciation, but only when consistent with its primary objective.

Utilities				Seeks both capital appreciation and current income.

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PORTFOLIO				INVESTMENT OBJECTIVE
Income Builder				Seeks, as its primary objective, to earn reasonable income and, as a secondary objective, growth of capital.

Dividend Growth				Seeks to provide reasonable current income and long-term growth of income and capital.

Global Dividend Growth				Seeks to provide reasonable current income and long-term growth of income and capital.

European Equity				Seeks to maximize the capital appreciation of its investments.

Equity				Seeks, as a primary objective, growth of capital, through investments in common stocks of companies believed by the Investment Adviser, to have the potential for superior growth. As a secondary objective, the portfolio seeks income but only when consistent with its primary objective.

S&P 500 Index				Seeks to provide investment results that, before expenses, correspond to the total return of the Standard & Poor's 500^® Composite Stock Price Index.

Global Advantage				Seeks long-term capital growth.

Aggressive Equity				Seeks long-term capital growth.

Strategist				Seeks a high total investment return.

The following is a summary of significant accounting policies:

A. Valuation of Investments — Money Market: Portfolio securities are valued at amortized cost which approximates market value, in accordance with Rule 2a-7 under the Act. All remaining Portfolios: (1) 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 asked price; (2) 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 asked price; (3) 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 asked 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; (4) credit default/interest rate swaps are marked-to-market daily based upon quotations from market makers and the change, if any, is recorded as unrealized appreciation or depreciation in the Statements of Operations; (5) 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; (6) listed options are valued at the latest sale price on the exchange on which they are listed unless no sales of such options have taken place that day, in which case they are

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valued at the mean between their latest bid and asked price; (7) futures are valued at the latest price published by the commodities exchange on which they trade; (8) when market quotations are not readily available, Morgan Stanley Investment Advisors Inc. (the "Investment Adviser") (and/or, in the case of Global Dividend Growth and European Equity, Morgan Stanley Investment Management Limited, (the "Sub Adviser")) determines that the latest sale price, the bid price or the mean between the last reported bid and asked 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 valuation 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 valuation 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; (9) certain of the Fund's portfolio securities may be valued by an outside pricing service approved by the Trustees and; (10) short-term debt securities having a maturity date of more than sixty days at the 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.

B. Accounting for Investments — Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on security transactions are determined by the identified cost method. Dividend income and other distributions are recorded on the ex-dividend date except for certain dividends on foreign securities which are recorded as soon as the Fund is informed after the ex-dividend date. Interest income is accrued daily except where collection is not expected. The Fund amortizes premiums and accretes discounts over the life of the respective securities.

C. Repurchase Agreements — The Fund may invest directly with institutions in repurchase agreements. The Fund's custodian receives the collateral, which is marked-to-market daily to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest.

D. Multiple Class Allocations — Investment income, expenses (other than distribution fees), and realized and unrealized gains and losses are allocated to each class of shares based upon the relative net asset value on the date such items are recognized. Distribution fees are charged directly to the respective class.

E. Options — When the Fund writes a call or put option, an amount equal to the premium received is included in the Fund's Statements of Assets and Liabilities as a liability which is subsequently marked-to-

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market to reflect the current market value of the option written. If a written option either expires or the Fund enters into a closing purchase transaction, the Fund realizes a gain or loss without regard to any unrealized gain or loss on the underlying security or currency and the liability related to such option is extinguished. If a written call option is exercised, the Fund realizes a gain or loss from the sale of the underlying security or currency and the proceeds from such sale are increased by the premium originally received. If a written put option is exercised, the amount of the premium originally received reduces the cost of the security which the Fund purchases upon exercise of the option.

When the Fund purchases a call or put option, the premium paid is recorded as an investment which is subsequently marked-to-market to reflect the current market value. If a purchased option expires, the Fund will realize a loss to the extent of the premium paid. If the Fund enters into a closing sale transaction, a gain or loss is realized for the difference between the proceeds from the sale and the cost of the option. If a put option is exercised, the cost of the security or currency sold upon exercise will be increased by the premium originally paid. If a call option is exercised, the cost of the security purchased upon exercise will be increased by the premium originally paid.

F. Futures Contracts — A futures contract is an agreement between two parties to buy and sell financial instruments or contracts based on financial indices at a set price on a future date. Upon entering into such a contract, the Fund is required to pledge to the broker cash, U.S. Government securities or other liquid portfolio securities equal to the minimum initial margin requirements of the applicable futures exchange. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments known as variation margin are recorded by the Fund as unrealized gains or losses. Upon closing of the contract, the Fund realizes a gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

G. Foreign Currency Translation and Forward Foreign Currency Contracts — The books and records of the Fund are maintained in U.S. dollars as follows: (1) the foreign currency market value of investment securities, other assets and liabilities and forward foreign currency contracts ("forward contracts") are translated at the exchange rates prevailing at the end of the period; and (2) purchases, sales, income and expenses are translated at the exchange rates prevailing on the respective dates of such transactions. The resultant exchange gains and losses are recorded as realized and unrealized gain/loss on foreign exchange transactions. Pursuant to U.S. federal income tax regulations, certain foreign exchange gains/losses included in realized and unrealized gain/loss are included in or are a reduction of ordinary income for federal income tax purposes. The Fund does not isolate that portion of the results of operations

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arising as a result of changes in the foreign exchange rates from the changes in the market prices of the securities held. Forward contracts are valued daily at the appropriate exchange rates. The resultant unrealized exchange gains and losses are recorded as unrealized foreign currency gain or loss. The Fund records realized gains or losses on delivery of the currency or at the time the forward contract is extinguished (compensated) by entering into a closing transaction prior to delivery.

H. Security Lending — The Fund may lend 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 receives 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 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 high-quality short-term investments. 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.

PORTFOLIO	VALUE OF LOANED SECURITIES		VALUE OF COLLATERAL CASH
High Yield	$	4,610,336	$	4,821,713	⁽¹⁾
Utilities		45,766,921		46,807,923	⁽¹⁾
Global Dividend Growth		28,629,631		29,576,149
European Equity		22,926,543		23,862,530
Strategist		47,204,868		48,243,135	⁽¹⁾

⁽¹⁾ The Portfolios received cash collateral which was subsequently invested in the Bank of New York Institutional Cash Reserve Fund as reported in the Portfolio of Investments.

The Portfolios have the right under the lending agreement to recover the securities from the borrower on demand.

I. Credit Default Swaps — A credit default swap is an agreement between two parties to exchange the credit risk of an issuer. The Fund may purchase credit protection on the referenced obligation of the credit default swap ("Buy Contract"), or provide credit protection on the referenced obligation of the credit default swap ("Sale Contract"). A buyer of a credit default swap is said to buy protection by paying periodic fees in return for a contingent payment from the seller if the issuer has a credit event such as bankruptcy, failure to pay outstanding obligations or deteriorating credit while the swap is outstanding. A seller of a credit default

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swap is said to sell protection and thus collects the periodic fees and profits if the credit of the issuer remains stable or improves while the swap is outstanding. If a credit event occurs, the seller pays to the buyer the maximum payout amount limited to the notional amount of the swap contract as disclosed in the table following the Portfolio of Investments. During the term of the swap agreement, the Fund receives or pays periodic fixed payments from or to the respective counterparty calculated at the agreed upon interest rate applied to the notional amount. These periodic payments are accrued daily and recorded as realized gains or losses in the Statements of Operations. In addition, upon termination of the swap contract, gains and losses are also realized. Any upfront payment received or paid by the Fund is recorded as assets/liabilities on the Fund's books.

J. Interest Rate Swaps — Interest rate swaps involve the exchange of commitments to pay and receive interest based on a notional principal amount. Net periodic interest payments to be received or paid are accrued daily and are recorded as realized gains or losses in the Statements of Operations.

K. Federal Income Tax Policy — It is the Fund's policy to comply individually for each Portfolio with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no provision for federal income taxes is required. The Fund files tax returns with the U.S. Internal Revenue Service and various states. Generally, the tax authorities can examine all tax returns filed for the last three years. The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation, as applicable, as the income is earned or capital gains are recorded. 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 adopted the provisions of the Financial Accounting Standards Board's (FASB) Interpretation number 48 Accounting for Uncertainty in Income Taxes, on June 30, 2007. As of June 30, 2007, this did not result in an impact to the Fund's financial statements.

L. Dividends and Distributions to Shareholders — The Fund records dividends and distributions to its shareholders on the ex-dividend date.

M. Expenses — Direct expenses are charged to the respective Portfolio and general Fund expenses are allocated on the basis of relative net assets or equally among the Portfolios.

153

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N. Use of Estimates — The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.

2. Investment Advisory/Administration and Sub-Advisory Agreements

Pursuant to an Investment Advisory Agreement, the Fund pays the Investment Adviser an advisory fee, accrued daily and payable monthly, by applying the annual rates listed below to each Portfolios' net assets determined at the close of each business day.

Money Market — 0.45% to the portion of the daily net assets not exceeding $250 million; 0.375% to the portion of the daily net assets exceeding $250 million but not exceeding $750 million; 0.325% to the portion of the daily net assets exceeding $750 million but not exceeding $1.25 billion; 0.30% to the portion of the daily net assets exceeding $1.25 billion but not exceeding $1.5 billion and 0.275% to the portion of the daily net assets in excess of $1.5 billion.

Limited Duration — 0.30%.

Income Plus — 0.42% to the portion of the daily net assets not exceeding $500 million; 0.35% to the portion of the daily net assets exceeding $500 million but not exceeding $1.25 billion and 0.22% to the portion of the daily net assets in excess of $1.25 billion.

High Yield — 0.42% to the portion of the daily net assets not exceeding $500 million; 0.345% to the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.295% to the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.27% to the portion of the daily net assets exceeding $1 billion but not exceeding $2 billion; 0.245% to the portion of the daily net assets exceeding $2 billion but not exceeding $3 billion and 0.22% to the portion of the daily net assets in excess of $3 billion.

Utilities — 0.57% to the portion of the daily net assets not exceeding $500 million; 0.47% to the portion of the daily net assets exceeding $500 million but not exceeding $1 billion; 0.445% to the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.42% to the portion of the daily net assets exceeding $1.5 billion but not exceeding $2.5 billion; 0.395% to the portion of the daily net assets exceeding $2.5 billion but not exceeding $3.5 billion; 0.37% to the portion of the daily net assets exceeding $3.5 billion but not exceeding $5 billion and 0.345% to the portion of the daily net assets in excess of $5 billion.

Income Builder — 0.67% to the portion of the daily net assets not exceeding $500 million and 0.645% to the portion of the daily net assets in excess of $500 million.

154

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Dividend Growth — 0.545% to the portion of the daily net assets not exceeding $250 million; 0.42% to the portion of the daily net assets exceeding $250 million but not exceeding $1 billion; 0.395% to the portion of the daily net assets exceeding $1 billion but not exceeding $2 billion and 0.37% to the portion of the daily net assets in excess of $2 billion.

Global Dividend Growth — 0.67% to the portion of the daily net assets not exceeding $1 billion; 0.645% to the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.62% to the portion of the daily net assets exceeding $1.5 billion but not exceeding $2.5 billion; 0.595% to the portion of the daily net assets exceeding $2.5 billion but not exceeding $3.5 billion; 0.57% to the portion of the daily net assets exceeding $3.5 billion but not exceeding $4.5 billion and 0.545% to the portion of the daily net assets in excess of $4.5 billion

European Equity — 0.87% to the portion of the daily net assets not exceeding $500 million; 0.82% to the portion of the daily net assets exceeding $500 million but not exceeding $2 billion; 0.77% to the portion of the daily net assets exceeding $2 billion but not exceeding $3 billion and 0.745% to the portion of the daily net assets in excess of $3 billion.

Equity — 0.42% to the portion of the daily net assets not exceeding $1 billion; 0.395% to the portion of the daily net assets exceeding $1 billion but not exceeding $2 billion and 0.37% to the portion of the daily net assets in excess of $2 billion.

S&P 500 Index — 0.12% to the portion of the daily net assets not exceeding $2 billion and 0.10% to the portion of the daily net assets in excess of $2 billion.

Global Advantage — 0.57% to the portion of the daily net assets not exceeding $1.5 billion and 0.545% to the portion of the daily net assets in excess of $1.5 billion.

Aggressive Equity — 0.67% to the portion of the daily net assets not exceeding $500 million; 0.645% to the portion of the daily net assets exceeding $500 million but not exceeding $2 billion; 0.62% to the portion of the daily net assets exceeding $2 billion but not exceeding $3 billion and 0.595% to the portion of the daily net assets in excess of $3 billion.

Strategist — 0.42% to the portion of the daily net assets not exceeding $1.5 billion and 0.395% to the portion of the daily net assets in excess of $1.5 billion.

Under the Sub-Advisory Agreements between the Investment Adviser and the Sub-Adviser, the Sub-Adviser provides Global Dividend Growth and European Equity with investment advice and portfolio management relating to the Portfolios' investments in securities, subject to the overall supervision of the

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Investment Adviser. As compensation for its services provided pursuant to the Sub-Advisory Agreements, the Investment Adviser paid the Sub-Adviser compensation in the amounts of $371,538 and $356,856, respectively, for the six months ended June 30, 2007.

The Investment Adviser has agreed to cap European Equity and S&P 500 Index's operating expenses (except for distribution fees) by assuming the Portfolio's "other expenses" and/or waiving the Portfolio's advisory fees, and Morgan Stanley Services Company Inc. (the "Administrator") has agreed to waive the Portfolio's administrative fees, to the extent such operating expenses exceed 1.00% and 0.40%, respectively, of the average daily net assets of the Portfolio on an annualized basis.

Pursuant to an Administration Agreement with the Administrator, an affiliate of the Investment Adviser and Sub-Adviser, each Portfolio pays an administration fee, accrued daily and payable monthly, by applying the annual rate of 0.08% (Money Market 0.05%) to the Portfolio's daily net assets.

3. Plan of Distribution

Shares of the Fund are distributed by Morgan Stanley Distributors Inc. (the "Distributor"), an affiliate of the Investment Adviser, Administrator and Sub-Adviser. The Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. Under the Plan, Class Y shares of each Portfolio bear a distribution fee which is accrued daily and paid monthly at the annual rate of 0.25% of the average daily net assets of the class.

4. Security Transactions and Transactions with Affiliates

Each Portfolio may invest in Morgan Stanley Institutional Liquidity Money Market Portfolio – Institutional Class, an open-end management investment company managed by the Investment Adviser or Sub-Adviser. Investment advisory fees paid by the Portfolio are reduced by an amount equal to the advisory and administrative services fees paid by Morgan Stanley Institutional Liquidity Money Market Portfolio – Institutional Class with respect to assets invested by the Portfolio in Morgan Stanley Institutional Liquidity Money Market Portfolio – Institutional Class. For the six months ended June 30, 2007, the tables below identifies, for each Portfolio that invested in Morgan Stanley Institutional Liquidity Money Market Portfolio – Institutional Class, the amount by which that Portfolio's advisory fees was reduced in relation to that Portfolio's investment in Morgan Stanley Institutional Liquidity Money Market Portfolio – Institutional Class. In addition, the table also identifies the income distributions earned, if any, by each Portfolio for that Portfolio's investment in Morgan Stanley Institutional Liquidity Money Market Portfolio – Institutional Class. Income distributions are recorded as dividends from affiliates in the Statements of Operations.

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PORTFOLIO	INCOME DISTRIBUTION EARNED		INVESTMENT ADVISORY FEE WAIVED
Limited Duration	$	7,440		—
Income Plus		9,506		—
High Yield		680		—
Utilities		3,094		—
Income Builder		2,672		—
Dividend Growth		5,525		—
Global Dividend Growth		14,225	$	195
European Equity		12,049		177
Equity		5,891		—
S&P 500 Index		1,843		—
Global Advantage		229		—
Aggressive Equity		1,613		—
Strategist		30,692		—

During the six months ended June 30, 2007, each Portfolio's cost of purchases and proceeds from sales of investments in Morgan Stanley Institutional Liquidity Money Market Portfolio – Institutional Class were as follows:

PORTFOLIO	PURCHASES		SALES
Limited Duration	$	12,506,648	$	3,203,307
Income Plus		51,097,566		48,807,915
High Yield		1,447,452		69,325
Utilities		4,646,131		339,864
Income Builder		3,872,985		398,289
Dividend Growth		11,642,852		425,575
Global Dividend Growth		12,373,492		11,010,520
European Equity		10,874,972		8,252,780
Equity		9,432,863		1,902,509
S&P 500 Index		3,070,535		834,221
Global Advantage		362,136		67,033
Aggressive Equity		2,421,522		295,578
Strategist		43,631,656		1,927,380

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Purchases and sales/prepayments/maturities of portfolio securities, excluding short-term investments (except Money Market), for the six months ended June 30, 2007 were as follows:

	U.S. GOVERNMENT SECURITIES				OTHER
	PURCHASES		SALES/PREPAYMENTS/ MATURITIES		PURCHASES		SALES/PREPAYMENTS/ MATURITIES
Money Market	$	5,588,715	$	5,588,715	$	1,097,801,358	$	1,111,492,000
Limited Duration		13,896,086		36,923,678		31,989,489		24,539,753
Income Plus		128,431,017		113,006,357		58,059,962		51,177,467
High Yield		—		—		8,698,460		12,662,316
Utilities		—		—		6,767,395		27,856,948
Income Builder		—		—		11,696,800		23,302,464
Dividend Growth		—		—		156,236,323		205,129,683
Global Dividend Growth		—		—		36,380,131		58,253,454
European Equity		—		—		56,418,557		80,000,462
Equity		—		—		108,560,940		162,387,311
S&P 500 Index		—		—		2,837,439		26,269,925
Global Advantage		—		—		2,468,668		6,184,193
Aggressive Equity		—		—		14,665,310		25,026,831
Strategist		19,522,959		29,681,013		31,083,582		42,894,833

The following Portfolios had transactions with the following affiliates of the Fund:

PORTFOLIO	ISSUER	PURCHASES		SALES/ MATURITIES		NET REALIZED GAINS (LOSS)			INCOME		VALUE
Limited Duration	MetLife, Inc.	$	757,957	$	687,522	$	(4,536	)	$	15,166	$	748,196
Income Builder	MetLife, Inc.		—		—		—			35,063		1,423,840
Dividend Growth	Citigroup Inc.*		2,279,169		5,067,923		476,841			477,193		19,200,155
	MetLife, Inc.		195,871		295,258		69,535			—		3,427,434
S&P 500 Index	Allstate Corp. (The)		—		84,286		32,232			9,034		693,833
	MetLife, Inc.		—		104,156		45,707			—		888,018
	Morgan Stanley		—		107,281		32,844			11,426		1,774,901
	Citigroup Inc.*		25,609		425,736		80,725			103,982		4,711,397
Strategist	Allstate Corp. (The)		—		—		—			52,881		4,279,866

* Citigroup Inc. is an affiliate of Dividend Growth and S&P 500 Index only.

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The following Portfolios had transactions with other Morgan Stanley funds during the six months ended June 30, 2007:

	PURCHASES		SALES		NET REALIZED GAINS (LOSSES)
Dividend Growth	$	3,847,003		—		—
Global Dividend Growth		—	$	3,919,524	$	83,477
Equity		6,754,292		1,875,329		(562,568	)
European Equity		—		529,619		18,763
Global Advantage		9,899		—		—
Aggressive Equity		1,480,504		1,794,706		520,303
Income Builder		80,465		—		—
S&P 500 Index		—		37,400		8,901

For the six months ended June 30, 2007, Dividend Growth had open receivables of $723,652 with Morgan Stanley & Co., an affiliate of the Investment Adviser, Sub-Adviser, Administrator and Distributor.

For the six months ended June 30, 2007, the following Portfolios incurred brokerage commissions with Morgan Stanley & Co., Inc., an affiliate of the Investment Adviser, Sub-Adviser, Administrator and Distributor, for portfolio transactions executed on behalf of the Portfolio:

UTILITIES				DIVIDEND GROWTH				EQUITY				GLOBAL ADVANTAGE				INCOME BUILDER				STRATEGIST
$	3,048			$	53,795			$	8			$	334			$	405			$	12,698

Morgan Stanley Trust, an affiliate of the Investment Adviser, Sub-Adviser, Administrator and Distributor, is the Fund's transfer agent.

The Fund has an unfunded noncontributory defined benefit pension plan covering certain independent Trustees of the Fund who will have served as independent Trustees for at least five years at the time of retirement. Benefits under this plan are based on factors which include years of service and compensation. The Trustees voted to close the plan to new participants and eliminate the future benefits growth due to increases to compensation after July 31, 2003.

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Aggregate pension costs for the six months ended June 30, 2007, included in Trustees' fees and expenses in the Statements of Operations and the accrued pension liability included in accrued expenses in the Statements of Assets and Liabilities are as follows:

		AGGREGATE PENSION COSTS
MONEY MARKET		LIMITED DURATION		INCOME PLUS		HIGH YIELD		UTILITIES		INCOME BUILDER		DIVIDEND GROWTH		GLOBAL DIVIDEND GROWTH
$	238	$	156	$	400	$	74	$	161	$	47	$	780	$	226
		EUROPEAN EQUITY		EQUITY		S&P 500 INDEX		GLOBAL ADVANTAGE		AGGRESSIVE EQUITY		STRATEGIST
		$	185	$	576	$	228	$	29	$	56	$	300
		ACCRUED PENSION LIABILITY
MONEY MARKET		LIMITED DURATION		INCOME PLUS		HIGH YIELD		UTILITIES		INCOME BUILDER		DIVIDEND GROWTH		GLOBAL DIVIDEND GROWTH
$	11,924	$	153	$	7,615	$	3,942	$	5,989	$	958	$	11,818	$	1,368
		EUROPEAN EQUITY		EQUITY		S&P 500 INDEX		GLOBAL ADVANTAGE		AGGRESSIVE EQUITY		STRATEGIST
		$	1,764	$	7,081	$	242	$	528	$	981	$	8,592

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan") which allows each independent Trustee to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Trustees. Each eligible Trustee 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 net asset value of the Fund.

5. Federal Income Tax Status

The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the

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capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. Dividends and distributions which exceed net investment income and net realized capital gains for tax purposes are reported as distributions of paid-in-capital.

As of December 31, 2006, the following Portfolios had a net capital loss carryforward which may be used to offset future capital gains to the extent provided by regulations:

	AMOUNTS IN THOUSANDS
AVAILABLE THROUGH DECEMBER 31,	2007		2008		2009		2010		2011		2012		2013		2014		TOTAL
Limited Duration		—		—		—	$	328	$	1,546	$	4,026	$	1,267	$	2,196	$	9,363
Income Plus		—		—		—		16,776		—		—		—		—		16,776
High Yield	$	10,786	$	7,524	$	47,273		63,495		81,458		24,098		15,736		6,247		256,617
Dividend Growth		—		—		7,425		134,941		48,222		—		—		—		190,588
European Equity		—		—		—		—		2,234		—		—		—		2,234
Equity		—		—		266,780		130,806		—		—		—		—		397,586
S&P 500 Index		—		—		6,878		14,114		—		3,450		9,726		5,449		39,617
Global Advantage		—		—		4,482		14,172		—		—		—		—		18,654
Aggressive Equity		—		—		26,482		13,085		—		—		—		—		39,567

At December 31, 2006, the primary reason(s) for significant temporary book/tax differences were as follows:

	TEMPORARY DIFFERENCES
	POST- OCTOBER LOSSES	LOSS DEFERRALS FROM WASH SALES
Limited Duration	•
Income Plus		•
High Yield	•	•
Utilities		•
Income Builder		•
Dividend Growth		•
Global Dividend Growth	•	•
European Equity		•
Equity		•
S&P 500 Index	•	•
Global Advantage		•
Aggressive Equity		•
Strategist		•

Additionally, the following Portfolios had other temporary differences: High Yield, European Equity, — income from the mark-to-market of forward foreign currency contracts; Limited Duration, Income Plus,

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S&P 500 Index, Strategist — capital gain/loss from the mark-to-market of futures contracts; High Yield — income on bonds in default; Income Plus, Strategist — capital loss deferral on straddles.

6. Purposes of and Risks Relating to Certain Financial Instruments

Certain Portfolios may enter into forward contracts to facilitate settlement of foreign currency denominated foreign securities.

Forward contracts involve elements of market risk in excess of the amounts reflected in the Statements of Assets and Liabilities. The respective Portfolios bear the risk of an unfavorable change in the foreign exchange rates underlying the forward contracts. Risks may also arise upon entering into these forward contracts from the potential inability of the counterparties to meet the terms of their contracts.

Certain Portfolios may invest in futures contracts. Futures contracts involve elements of market risk in excess of the amount reflected in the Statements of Assets and Liabilities. The respective Portfolios bear the risk of an unfavorable change in the value of the underlying securities. Risks may also arise upon entering into these futures contracts from the potential inability of the counterparties to meet the terms of their contracts.

Certain Portfolios may enter into credit default swaps for hedging purposes to add leverage to its portfolio or to gain exposure to a credit in which the Portfolios may otherwise invest. Credit default swaps may involve greater risks than if a Portfolio had invested in the issuer directly. Credit default swaps are subject to general market risk, counterparty risk and credit risk. If certain Portfolios are buyers and no credit events occur, they will lose their investment. In addition, if certain Portfolios are sellers and a credit event occurs, the value of the referenced obligation received by these Portfolios coupled with the periodic payments previously received may be less than the maximum payout amount they pay to the buyer, resulting in a loss to the Portfolio.

Certain Portfolios may enter into interest rate swaps and may purchase or sell interest rate caps, floors and collars. These Portfolios expect to enter into these transactions primarily to manage interest rate risk, hedge portfolio positions and preserve a return or spread on a particular investment or portion of the overall portfolio. The Portfolios may also enter into these transactions to protect against any increase in the price of securities these Portfolios anticipate purchasing at a later date. Interest rate swap transactions are subject to market risk, risk of default by the other party to the transaction, risk of imperfect correlation and manager risk. Such risks may exceed the related amounts shown in the Statements of Assets and Liabilities

Certain Portfolios may lend securities to qualified financial institutions, such as broker-dealers, to earn additional income. Risks in securities lending transactions are that a borrower may not provide additional

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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.

At June 30, 2007, European Equity's investments in securities of issuers in the United Kingdom and Switzerland represented 28.1% and 16.3%, respectively, of the Portfolio's net assets. Global Dividend Growth's investments in securities of issuers in the United Kingdom represented 21.3% of the Portfolio's net assets. These investments, as well as other non-U.S. investments, which involve risks and considerations not present with respect to U.S. securities, may be affected by economic or political developments in these regions.

At June 30, 2007, Global Dividend Growth and European Equity cash balances consisted principally of interest bearing deposits with JPMorgan Chase & Co., the custodian of each Portfolio.

7. Accounting Pronouncements

In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.

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Financial Highlights


FOR THE YEAR ENDED DECEMBER 31,			NET ASSET VALUE BEGINNING OF PERIOD		NET INVESTMENT INCOME*		NET REALIZED AND UNREALIZED GAIN (LOSS)			TOTAL FROM INVESTMENT OPERATIONS		DIVIDENDS TO SHAREHOLDERS			DISTRIBUTIONS TO SHAREHOLDERS			TOTAL DIVIDENDS AND DISTRIBUTIONS
MONEY MARKET CLASS X SHARES
	2002		$	1.00	$	0.013		—		$	0.013	$	(0.013	)**		—		$	(0.013	)**
	2003			1.00		0.007		—			0.007		(0.007	)**		—			(0.007	)**
	2004			1.00		0.009		—			0.009		(0.009	)**		—			(0.009	)**
	2005			1.00		0.030		—			0.030		(0.030	)		—			(0.030	)
	2006			1.00		0.045	$	0.005			0.050		(0.050	)		—			(0.050	)
	2007	(a)		1.00		0.025		(0.005	)		0.020		(0.020	)		—			(0.020	)
CLASS Y SHARES
	2002			1.00		0.011		—			0.011		(0.011	)**		—			(0.011	)**
	2003			1.00		0.004		—			0.004		(0.004	)**		—			(0.004	)**
	2004			1.00		0.006		—			0.006		(0.006	)**		—			(0.006	)**
	2005			1.00		0.030		—			0.030		(0.030	)		—			(0.030	)
	2006			1.00		0.043		(0.003	)		0.040		(0.040	)		—			(0.040	)
	2007	(a)		1.00		0.023		(0.003	)		0.020		(0.020	)		—			(0.020	)
LIMITED DURATION CLASS X SHARES
	2002			10.17		0.27		0.13			0.40		(0.36	)	$	(0.04	)		(0.40	)
	2003			10.17		0.21		0.01			0.22		(0.38	)		—			(0.38	)
	2004			10.01		0.28		(0.14	)		0.14		(0.41	)		—			(0.41	)
	2005			9.74		0.31		(0.13	)		0.18		(0.38	)		—			(0.38	)
	2006			9.54		0.40		0.00			0.40		(0.45	)		—			(0.45	)
	2007	(a)		9.49		0.23		(0.01	)		0.22		(0.25	)		—			(0.25	)
CLASS Y SHARES
	2002			10.16		0.24		0.14			0.38		(0.34	)		(0.04	)		(0.38	)
	2003			10.16		0.18		0.02			0.20		(0.36	)		—			(0.36	)
	2004			10.00		0.25		(0.14	)		0.11		(0.38	)		—			(0.38	)
	2005			9.73		0.28		(0.14	)		0.14		(0.35	)		—			(0.35	)
	2006			9.52		0.37		0.01			0.38		(0.42	)		—			(0.42	)
	2007	(a)		9.48		0.22		(0.02	)		0.20		(0.24	)		—			(0.24	)
INCOME PLUS CLASS X SHARES
	2002			10.55		0.58		(0.02	)		0.56		(0.64	)		—			(0.64	)
	2003			10.47		0.56		0.30			0.86		(0.60	)		—			(0.60	)
	2004			10.73		0.55		(0.01	)		0.54		(0.59	)		—			(0.59	)
	2005			10.68		0.51		(0.15	)		0.36		(0.55	)		—			(0.55	)
	2006			10.49		0.51		0.05			0.56		(0.54	)		—			(0.54	)
	2007	(a)		10.51		0.26		(0.21	)		0.05		(0.28	)		—			(0.28	)

See Notes to Financial Statements
164

										RATIOS TO AVERAGE NET ASSETS***
FOR THE YEAR ENDED DECEMBER 31,			NET ASSET VALUE END OF PERIOD		TOTAL RETURN†			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME			PORTFOLIO TURNOVER RATE
MONEY MARKET CLASS X SHARES
	2002		$	1.00		1.34	%	$	432,817		0.51	%		1.32	%		N/A
	2003			1.00		0.67			251,779		0.52			0.69			N/A
	2004			1.00		0.87			178,600		0.53			0.85			N/A
	2005			1.00		2.79			144,352		0.54			2.74			N/A
	2006			1.00		4.61			132,690		0.55			4.53			N/A
	2007	(a)		1.00		2.43	(1)		119,042		0.55	(2)		4.81	(2)		N/A
CLASS Y SHARES
	2002			1.00		1.08			133,506		0.76			1.07			N/A
	2003			1.00		0.42			93,808		0.77			0.44			N/A
	2004			1.00		0.62			89,917		0.78			0.60			N/A
	2005			1.00		2.53			97,936		0.79			2.49			N/A
	2006			1.00		4.35			102,296		0.80			4.28			N/A
	2007	(a)		1.00		2.30	(1)		106,120		0.80	(2)		4.56	(2)		N/A
LIMITED DURATION CLASS X SHARES
	2002			10.17		4.06			73,476		0.48			2.65			58	%
	2003			10.01		2.23			64,576		0.51			2.02			215
	2004			9.74		1.42			52,784		0.49			2.77			128
	2005			9.54		1.87			42,872		0.45			3.17			56
	2006			9.49		4.28			34,047		0.47			4.18			51
	2007	(a)		9.46		2.31	(1)		30,185		0.47	(2)		4.91	(2)		33	(1)
CLASS Y SHARES
	2002			10.16		3.81			72,800		0.73			2.40			58
	2003			10.00		1.98			125,616		0.76			1.77			215
	2004			9.73		1.17			125,764		0.74			2.52			128
	2005			9.52		1.51			126,020		0.70			2.92			56
	2006			9.48		4.03			114,818		0.72			3.93			51
	2007	(a)		9.44		2.19	(1)		109,200		0.72	(2)		4.66	(2)		33	(1)
INCOME PLUS CLASS X SHARES
	2002			10.47		5.51			423,685		0.52			5.57			106
	2003			10.73		8.45			363,555		0.53			5.30			72
	2004			10.68		5.23			296,246		0.54			5.18			28
	2005			10.49		3.33			235,256		0.54			4.80			57
	2006			10.51		5.69			183,594		0.56			4.95			38
	2007	(a)		10.28		0.45	(1)		167,215		0.55	(2)		5.03	(2)		56	(1)

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FOR THE YEAR ENDED DECEMBER 31,			NET ASSET VALUE BEGINNING OF PERIOD		NET INVESTMENT INCOME*		NET REALIZED AND UNREALIZED GAIN (LOSS)			TOTAL FROM INVESTMENT OPERATIONS			DIVIDENDS TO SHAREHOLDERS			DISTRIBUTIONS TO SHAREHOLDERS			TOTAL DIVIDENDS AND DISTRIBUTIONS
INCOME PLUS CLASS Y SHARES
	2002		$	10.54	$	0.54	$	(0.01	)	$	0.53		$	(0.61	)		—		$	(0.61	)
	2003			10.46		0.54		0.29			0.83			(0.58	)		—			(0.58	)
	2004			10.71		0.52		0.01			0.53			(0.57	)		—			(0.57	)
	2005			10.67		0.48		(0.16	)		0.32			(0.52	)		—			(0.52	)
	2006			10.47		0.49		0.05			0.54			(0.52	)		—			(0.52	)
	2007	(a)		10.49		0.25		(0.21	)		0.04			(0.27	)		—			(0.27	)
HIGH YIELD CLASS X SHARES
	2002			1.33		0.26		(0.34	)		(0.08	)		(0.22	)		—			(0.22	)
	2003			1.03		0.16		0.10			0.26			(0.11	)		—			(0.11	)
	2004			1.18		0.09		0.02			0.11			(0.09	)		—			(0.09	)
	2005			1.20		0.08		(0.06	)		0.02			(0.08	)		—			(0.08	)
	2006			1.14		0.08		0.02			0.10			(0.08	)		—			(0.08	)
	2007	(a)		1.16		0.04		0.00			0.04			(0.04	)		—			(0.04	)
CLASS Y SHARES
	2002			1.33		0.24		(0.32	)		(0.08	)		(0.22	)		—			(0.22	)
	2003			1.03		0.15		0.11			0.26			(0.11	)		—			(0.11	)
	2004			1.18		0.09		0.02			0.11			(0.09	)		—			(0.09	)
	2005			1.20		0.08		(0.06	)		0.02			(0.08	)		—			(0.08	)
	2006			1.14		0.08		0.02			0.10			(0.08	)		—			(0.08	)
	2007	(a)		1.16		0.04		0.00			0.04			(0.04	)		—			(0.04	)
UTILITIES CLASS X SHARES
	2002			14.73		0.37		(3.72	)		(3.35	)		(0.38	)		—			(0.38	)
	2003			11.00		0.34		1.54			1.88			(0.35	)		—			(0.35	)
	2004			12.53		0.34		2.21			2.55			(0.35	)		—			(0.35	)
	2005			14.73		0.37		1.77			2.14			(0.37	)		—			(0.37	)
	2006			16.50		0.36		2.95			3.31			(0.37	)		—			(0.37	)
	2007	(a)				19.44		0.20			2.19			2.39			(2.36	)		(2.36	)
CLASS Y SHARES
	2002			14.72		0.34		(3.72	)		(3.38	)		(0.35	)		—			(0.35	)
	2003			10.99		0.31		1.55			1.86			(0.32	)		—			(0.32	)
	2004			12.53		0.31		2.20			2.51			(0.32	)		—			(0.32	)
	2005			14.72		0.33		1.77			2.10			(0.33	)		—			(0.33	)
	2006			16.49		0.32		2.95			3.27			(0.33	)		—			(0.33	)
	2007	(a)				19.43		0.17			2.20			2.37			(2.34	)		(2.34	)

See Notes to Financial Statements
166

										RATIOS TO AVERAGE NET ASSETS***
FOR THE YEAR ENDED DECEMBER 31,			NET ASSET VALUE END OF PERIOD		TOTAL RETURN†			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME			PORTFOLIO TURNOVER RATE
INCOME PLUS CLASS Y SHARES
	2002		$	10.46		5.26	%	$	102,262		0.77	%		5.32	%		106	%
	2003			10.71		8.09			140,629		0.78			5.05			72
	2004			10.67		5.07			176,054		0.79			4.93			28
	2005			10.47		3.08			197,968		0.79			4.55			57
	2006			10.49		5.34			210,681		0.81			4.70			38
	2007	(a)		10.26		0.32	(1)		203,912		0.80	(2)		4.78	(2)		56	(1)
HIGH YIELD CLASS X SHARES
	2002			1.03		(7.14	)		45,503		0.73			21.71			48
	2003			1.18		27.73			56,162		0.70			14.09			59
	2004			1.20		9.84			48,990		0.66			7.60			55
	2005			1.14		2.18			35,226		0.87			6.81			48
	2006			1.16		9.29			27,907		0.95			6.78			23
	2007	(a)		1.16		3.42	(1)		24,688		1.01	(2)		6.65	(2)		16	(1)
CLASS Y SHARES
	2002			1.03		(7.36	)		10,797		0.98			21.46			48
	2003			1.18		27.43			35,306		0.95			13.84			59
	2004			1.20		9.56			39,547		0.91			7.35			55
	2005			1.14		1.92			35,551		1.12			6.56			48
	2006			1.16		9.01			30,764		1.20			6.53			23
	2007	(a)		1.16		3.29	(1)		28,038		1.26	(2)		6.40	(2)		16	(1)
UTILITIES CLASS X SHARES
	2002			11.00		(22.87	)		189,936		0.68			2.99			51
	2003			12.53		17.34			175,191		0.70			2.94			35
	2004			14.73		20.66			168,148		0.69			2.59			13
	2005			16.50		14.62			154,413		0.70			2.31			29
	2006			19.44		20.32			142,721		0.71			2.05			19
	2007	(a)		19.47		12.34	(1)		142,020		0.71	(2)		1.87	(2)		4	(1)
CLASS Y SHARES
	2002			10.99		(23.08	)		20,157		0.93			2.74			51
	2003			12.53		17.17			25,933		0.95			2.69			35
	2004			14.72		20.28			30,289		0.94			2.34			13
	2005			16.49		14.35			33,068		0.95			2.06			29
	2006			19.43		20.03			34,305		0.96			1.80			19
	2007	(a)		19.46		12.21	(1)		33,803		0.96	(2)		1.62	(2)		4	(1)

167

Morgan Stanley Variable Investment Series

Financial Highlights continued


FOR THE YEAR ENDED DECEMBER 31,			NET ASSET VALUE BEGINNING OF PERIOD		NET INVESTMENT INCOME*		NET REALIZED AND UNREALIZED GAIN (LOSS)			TOTAL FROM INVESTMENT OPERATIONS			DIVIDENDS TO SHAREHOLDERS			DISTRIBUTIONS TO SHAREHOLDERS			TOTAL DIVIDENDS AND DISTRIBUTIONS
INCOME BUILDER CLASS X SHARES
	2002		$	10.61	$	0.42	$	(1.22	)	$	(0.80	)	$	(0.42	)	$	(0.01	)††	$	(0.43	)
	2003			9.38		0.32		1.60			1.92			(0.32	)		—			(0.32	)
	2004			10.98		0.34		0.84			1.18			(0.42	)		—			(0.42	)
	2005			11.74		0.29		0.52			0.81			(0.33	)		—			(0.33	)
	2006			12.22		0.31		1.40			1.71			(0.34	)		—			(0.34	)
	2007	(a)		13.59		0.16		0.64			0.80			(0.23	)		(0.81	)		(1.04	)
CLASS Y SHARES
	2002			10.60		0.39		(1.22	)		(0.83	)		(0.40	)		(0.01	)††		(0.41	)
	2003			9.36		0.31		1.58			1.89			(0.30	)		—			(0.30	)
	2004			10.95		0.32		0.83			1.15			(0.39	)		—			(0.39	)
	2005			11.71		0.26		0.53			0.79			(0.30	)		—			(0.30	)
	2006			12.20		0.28		1.39			1.67			(0.31	)		—			(0.31	)
	2007	(a)		13.56		0.15		0.63			0.78			(0.21	)		(0.81	)		(1.02	)
DIVIDEND GROWTH CLASS X SHARES
	2002			13.48		0.25		(2.66	)		(2.41	)		(0.25	)		—			(0.25	)
	2003			10.82		0.22		2.76			2.98			(0.23	)		—			(0.23	)
	2004			13.57		0.22		0.92			1.14			(0.23	)		—			(0.23	)
	2005			14.48		0.19		0.61			0.80			(0.19	)		—			(0.19	)
	2006			15.09		0.21		1.45			1.66			(0.22	)		—			(0.22	)
	2007	(a)		16.53		0.11		0.97			1.08			(0.11	)		—			(0.11	)
CLASS Y SHARES
	2002			13.47		0.22		(2.66	)		(2.44	)		(0.22	)		—			(0.22	)
	2003			10.81		0.19		2.75			2.94			(0.20	)		—			(0.20	)
	2004			13.55		0.19		0.92			1.11			(0.20	)		—			(0.20	)
	2005			14.46		0.15		0.62			0.77			(0.16	)		—			(0.16	)
	2006			15.07		0.17		1.45			1.62			(0.18	)		—			(0.18	)
	2007	(a)		16.51		0.09		0.96			1.05			(0.09	)		—			(0.09	)
GLOBAL DIVIDEND GROWTH CLASS X SHARES
	2002			11.47		0.21		(1.62	)		(1.41	)		(0.19	)		—			(0.19	)
	2003			9.87		0.18		2.94			3.12			(0.22	)		—			(0.22	)
	2004			12.77		0.21		1.68			1.89			(0.20	)		—			(0.20	)
	2005			14.46		0.27		0.63			0.90			(0.24	)		—			(0.24	)
	2006			15.12		0.29		2.94			3.23			(0.33	)		(0.21	)		(0.54	)
	2007	(a)		17.81		0.20		1.67			1.87			(0.36	)		(1.90	)		(2.26	)

See Notes to Financial Statements
168

										RATIOS TO AVERAGE NET ASSETS***
FOR THE YEAR ENDED DECEMBER 31,			NET ASSET VALUE END OF PERIOD		TOTAL RETURN†			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME			PORTFOLIO TURNOVER RATE
INCOME BUILDER CLASS X SHARES
	2002		$	9.38		(7.64	)%	$	49,505		0.80	%		4.20	%		75	%
	2003			10.98		20.84			51,890		0.84			3.26			62
	2004			11.74		10.96			49,126		0.82			3.07			38
	2005			12.22		6.96			39,562		0.84			2.47			27
	2006			13.59		14.21			35,195		0.83			2.43			19
	2007	(a)		13.35		5.88	(1)		32,563		0.84	(2)		2.38	(2)		15	(1)
CLASS Y SHARES
	2002			9.36		(7.96	)		13,930		1.05			3.95			75
	2003			10.95		20.51			42,443		1.09			3.04			62
	2004			11.71		10.72			48,493		1.07			2.82			38
	2005			12.20		6.71			45,918		1.09			2.22			27
	2006			13.56		13.96			45,371		1.08			2.18			19
	2007	(a)		13.32		5.75	(1)		41,814		1.09	(2)		2.13	(2)		15	(1)
DIVIDEND GROWTH CLASS X SHARES
	2002			10.82		(18.01	)		819,935		0.57			1.98			21
	2003			13.57		27.89			865,039		0.59			1.92			42
	2004			14.48		8.46			737,801		0.58			1.60			43
	2005			15.09		5.61			582,259		0.57			1.30			38
	2006			16.53		11.09			471,931		0.59			1.37			114
	2007	(a)		17.50		6.57	(1)		434,125		0.59	(2)		1.27	(2)		27	(1)
CLASS Y SHARES
	2002			10.81		(18.23	)		70,844		0.82			1.73			21
	2003			13.55		27.52			118,445		0.84			1.67			42
	2004			14.46		8.21			139,777		0.83			1.35			43
	2005			15.07		5.35			143,577		0.82			1.05			38
	2006			16.51		10.83			136,660		0.84			1.12			114
	2007	(a)		17.47		6.38	(1)		132,432		0.84	(2)		1.02	(2)		27	(1)
GLOBAL DIVIDEND GROWTH CLASS X SHARES
	2002			9.87		(12.52	)		201,022		0.81			1.96			17
	2003			12.77		32.07			221,971		0.82			1.73			103
	2004			14.46		14.93			213,836		0.81			1.58			21
	2005			15.12		6.34			181,475		0.82			1.88			20
	2006			17.81		21.94			165,864		0.83			1.80			24
	2007	(a)		17.42		10.51	(1)		160,450		0.82	(2)(6)		2.20	(2)(6)		16	(1)

169

Morgan Stanley Variable Investment Series

Financial Highlights continued


FOR THE YEAR ENDED DECEMBER 31,			NET ASSET VALUE BEGINNING OF PERIOD		NET INVESTMENT INCOME*			NET REALIZED AND UNREALIZED GAIN (LOSS)			TOTAL FROM INVESTMENT OPERATIONS			DIVIDENDS TO SHAREHOLDERS			DISTRIBUTIONS TO SHAREHOLDERS			TOTAL DIVIDENDS AND DISTRIBUTIONS
GLOBAL DIVIDEND GROWTH CLASS Y SHARES
	2002		$	11.43	$	0.18		$	(1.61	)	$	(1.43	)	$	(0.18	)		—		$	(0.18	)
	2003			9.82		0.15			2.91			3.06			(0.20	)		—			(0.20	)
	2004			12.68		0.18			1.66			1.84			(0.18	)		—			(0.18	)
	2005			14.34		0.23			0.64			0.87			(0.21	)		—			(0.21	)
	2006			15.00		0.25			2.91			3.16			(0.29	)	$	(0.21	)		(0.50	)
	2007	(a)		17.66		0.18			1.65			1.83			(0.32	)		(1.90	)		(2.22	)
EUROPEAN EQUITY CLASS X SHARES
	2002			16.71		0.12			(3.66	)		(3.54	)		(0.20	)		—			(0.20	)
	2003			12.97		0.17			3.57			3.74			(0.13	)		—			(0.13	)
	2004			16.58		0.21			1.88			2.09			(0.20	)		—			(0.20	)
	2005			18.47		0.30			1.28			1.58			(0.23	)		—			(0.23	)
	2006			19.82		0.36			5.55			5.91			(0.39	)		—			(0.39	)
	2007	(a)		25.34		0.39			2.84			3.23			(0.46	)		—			(0.46	)
CLASS Y SHARES
	2002			16.65		0.08			(3.63	)		(3.55	)		(0.19	)		—			(0.19	)
	2003			12.91		0.13			3.56			3.69			(0.10	)		—			(0.10	)
	2004			16.50		0.16			1.88			2.04			(0.17	)		—			(0.17	)
	2005			18.37		0.25			1.26			1.51			(0.18	)		—			(0.18	)
	2006			19.70		0.29			5.54			5.83			(0.34	)		—			(0.34	)
	2007	(a)		25.19		0.35			2.83			3.18			(0.40	)		—			(0.40	)
EQUITY CLASS X SHARES
	2002			22.66		0.07			(4.87	)		(4.80	)		(0.08	)		—			(0.08	)
	2003			17.78		0.07			3.97			4.04			(0.07	)		—			(0.07	)
	2004			21.75		0.09			2.33			2.42			(0.10	)		—			(0.10	)
	2005			24.07		—			4.39			4.39			—			—			—
	2006			28.46		0.02			1.15			1.17			—			—			—
	2007	(a)		29.63		0.09			2.76			2.85			(0.09	)		—			(0.09	)
CLASS Y SHARES
	2002			22.64		0.03			(4.89	)		(4.86	)		(0.03	)		—			(0.03	)
	2003			17.75		0.02			3.98			4.00			(0.03	)		—			(0.03	)
	2004			21.72		0.05			2.31			2.36			(0.05	)		—			(0.05	)
	2005			24.03		(0.06	)		4.37			4.31			—			—			—
	2006			28.34		(0.05	)		1.14			1.09			—			—			—
	2007	(a)		29.43		0.05			2.76			2.81			—			—			—

See Notes to Financial Statements
170

										RATIOS TO AVERAGE NET ASSETS***
FOR THE YEAR ENDED DECEMBER 31,			NET ASSET VALUE END OF PERIOD		TOTAL RETURN†			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME (LOSS)			PORTFOLIO TURNOVER RATE
GLOBAL DIVIDEND GROWTH CLASS Y SHARES
	2002		$	9.82		(12.72	)%	$	20,981		1.06	%		1.71	%		17	%
	2003			12.68		31.64			47,524		1.07			1.48			103
	2004			14.34		14.65			67,522		1.05			1.34			21
	2005			15.00		6.17			71,123		1.07			1.63			20
	2006			17.66		21.60			74,749		1.08			1.55			24
	2007	(a)		17.27		10.34	(1)		75,715		1.07	(2)(6)		1.95	(2)(6)		16	(1)
EUROPEAN EQUITY CLASS X SHARES
	2002			12.97		(21.36	)		193,153		1.05			0.82			92
	2003			16.58		29.03			198,424		1.04			1.26			95
	2004			18.47		12.74			178,683		1.04			1.24			103
	2005			19.82		8.69			144,969		1.02	(3)		1.60	(3)		61
	2006			25.34		30.21			142,000		1.00	(4)		1.59	(4)		62
	2007	(a)		28.11		12.71	(1)		139,268		1.00	(2)(5)(6)		2.91	(2)(5)(6)		31	(1)
CLASS Y SHARES
	2002			12.91		(21.53	)		22,133		1.30			0.57			92
	2003			16.50		28.70			36,568		1.29			1.01			95
	2004			18.37		12.48			42,333		1.29			0.99			103
	2005			19.70		8.36			39,404		1.27	(3)		1.35	(3)		61
	2006			25.19		29.88			45,637		1.25	(4)		1.34	(4)		62
	2007	(a)		27.97		12.61	(1)		45,333		1.25	(2)(5)(6)		2.66	(2)(5)(6)		31	(1)
EQUITY CLASS X SHARES
	2002			17.78		(21.21	)		622,133		0.51			0.36			223
	2003			21.75		22.80			616,027		0.52			0.38			210
	2004			24.07		11.14			537,086		0.53			0.41			137
	2005			28.46		18.16			485,662		0.53			0.02			72
	2006			29.63		4.18			370,757		0.54			0.06			111
	2007	(a)		32.39		9.63	(1)		350,635		0.53	(2)		0.56	(2)		23	(1)
CLASS Y SHARES
	2002			17.75		(21.45	)		64,829		0.76			0.11			223
	2003			21.72		22.55			100,400		0.77			0.13			210
	2004			24.03		10.86			115,741		0.78			0.16			137
	2005			28.34		17.89			123,803		0.78			(0.23	)		72
	2006			29.43		3.92			113,707		0.79			(0.19	)		111
	2007	(a)		32.24		9.51	(1)		111,776		0.78	(2)		0.31	(2)		23	(1)

171

Morgan Stanley Variable Investment Series

Financial Highlights continued


FOR THE YEAR ENDED DECEMBER 31,			NET ASSET VALUE BEGINNING OF PERIOD		NET INVESTMENT INCOME (LOSS)*			NET REALIZED AND UNREALIZED GAIN (LOSS)			TOTAL FROM INVESTMENT OPERATIONS			DIVIDENDS TO SHAREHOLDERS			DISTRIBUTIONS TO SHAREHOLDERS		TOTAL DIVIDENDS AND DISTRIBUTIONS
S&P 500 INDEX CLASS X SHARES
	2002		$	10.48	$	0.10		$	(2.45	)	$	(2.35	)	$	(0.09	)		—	$	(0.09	)
	2003			8.04		0.12			2.11			2.23			(0.10	)		—		(0.10	)
	2004			10.17		0.17			0.90			1.07			(0.10	)		—		(0.10	)
	2005			11.14		0.18			0.33			0.51			(0.19	)		—		(0.19	)
	2006			11.46		0.20			1.56			1.76			(0.20	)		—		(0.20	)
	2007	(a)		13.02		0.11			0.77			0.88			(0.24	)		—		(0.24	)
CLASS Y SHARES
	2002			10.44		0.08			(2.44	)		(2.36	)		(0.08	)		—		(0.08	)
	2003			8.00		0.09			2.10			2.19			(0.08	)		—		(0.08	)
	2004			10.11		0.15			0.88			1.03			(0.08	)		—		(0.08	)
	2005			11.06		0.15			0.33			0.48			(0.16	)		—		(0.16	)
	2006			11.38		0.17			1.54			1.71			(0.17	)		—		(0.17	)
	2007	(a)		12.92		0.09			0.77			0.86			(0.21	)		—		(0.21	)
GLOBAL ADVANTAGE CLASS X SHARES
	2002			7.17		0.05			(1.53	)		(1.48	)		(0.06	)		—		(0.06	)
	2003			5.63		0.05			1.69			1.74			(0.07	)		—		(0.07	)
	2004			7.30		0.06			0.85			0.91			(0.03	)		—		(0.03	)
	2005			8.18		0.09			0.46			0.55			(0.02	)		—		(0.02	)
	2006			8.71		0.07			1.53			1.60			(0.07	)		—		(0.07	)
	2007	(a)		10.24		0.04			1.06			1.10			(0.10	)		—		(0.10	)
CLASS Y SHARES
	2002			7.14		0.03			(1.52	)		(1.49	)		(0.04	)		—		(0.04	)
	2003			5.61		0.04			1.67			1.71			(0.05	)		—		(0.05	)
	2004			7.27		0.04			0.85			0.89			(0.02	)		—		(0.02	)
	2005			8.14		0.07			0.45			0.52			—			—		—
	2006			8.66		0.05			1.53			1.58			(0.05	)		—		(0.05	)
	2007	(a)		10.19		0.03			1.06			1.09			(0.08	)		—		(0.08	)
AGGRESSIVE EQUITY CLASS X SHARES
	2002			10.20		0.01			(2.31	)		(2.30	)		(0.03	)		—		(0.03	)
	2003			7.87		0.01			2.04			2.05			0.00	#		—		—
	2004			9.92		(0.02	)		1.28			1.26			0.00	##		—		—
	2005			11.18		(0.03	)		2.62			2.59			—			—		—
	2006			13.77		(0.04	)		1.12			1.08			—			—		—
	2007	(a)		14.85		0.02			1.39			1.41			—			—		—

See Notes to Financial Statements
172

										RATIOS TO AVERAGE NET ASSETS***
FOR THE YEAR ENDED DECEMBER 31,			NET ASSET VALUE END OF PERIOD		TOTAL RETURN†			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME (LOSS)			PORTFOLIO TURNOVER RATE
S&P 500 INDEX CLASS X SHARES
	2002		$	8.04		(22.48	)%	$	110,789		0.46	%		1.15	%		5	%
	2003			10.17		27.85			135,767		0.46			1.31			0
	2004			11.14		10.59			130,944		0.33			1.69			4
	2005			11.46		4.64			103,899		0.28			1.59			5
	2006			13.02		15.56			84,545		0.28			1.67			4
	2007	(a)		13.66		6.79	(1)		77,870		0.27	(2)		1.68	(2)		1	(1)
CLASS Y SHARES
	2002			8.00		(22.67	)		62,977		0.71			0.90			5
	2003			10.11		27.54			133,144		0.71			1.06			0
	2004			11.06		10.29			166,085		0.58			1.44			4
	2005			11.38		4.43			172,544		0.53			1.34			5
	2006			12.92		15.21			176,883		0.53			1.42			4
	2007	(a)		13.57		6.65	(1)		172,347		0.52	(2)		1.43	(2)		1	(1)
GLOBAL ADVANTAGE CLASS X SHARES
	2002			5.63		(20.81	)		22,866		0.80			0.72			119
	2003			7.30		31.12			25,598		0.93			0.87			98
	2004			8.18		12.54			23,620		0.84			0.79			111
	2005			8.71		6.80			19,227		0.92			1.09			89
	2006			10.24		18.55			17,141		0.94			0.76			96
	2007	(a)		11.24		10.78	(1)		15,889		0.85	(2)		0.80	(2)		9	(1)
CLASS Y SHARES
	2002			5.61		(20.94	)		5,229		1.05			0.47			119
	2003			7.27		30.75			9,308		1.18			0.62			98
	2004			8.14		12.29			11,032		1.09			0.54			111
	2005			8.66		6.44			10,618		1.17			0.84			89
	2006			10.19		18.35			10,767		1.19			0.51			96
	2007	(a)		11.20		10.66	(1)		10,622		1.10	(2)		0.55	(2)		9	(1)
AGGRESSIVE EQUITY CLASS X SHARES
	2002			7.87		(22.60	)		39,724		0.84			0.07			268
	2003			9.92		26.06			42,363		0.87			0.10			195
	2004			11.18		12.71			38,347		0.85			(0.16	)		185
	2005			13.77		23.17			37,130		0.86			(0.29	)		85
	2006			14.85		7.84			30,720		0.85			(0.27	)		59
	2007	(a)		16.26		9.49	(1)		27,556		0.85	(2)		0.24	(2)		25	(1)

173

Morgan Stanley Variable Investment Series

Financial Highlights continued


FOR THE YEAR ENDED DECEMBER 31,			NET ASSET VALUE BEGINNING OF PERIOD		NET INVESTMENT INCOME (LOSS)*			NET REALIZED AND UNREALIZED GAIN (LOSS)			TOTAL FROM INVESTMENT OPERATIONS			DIVIDENDS TO SHAREHOLDERS			DISTRIBUTIONS TO SHAREHOLDERS			TOTAL DIVIDENDS AND DISTRIBUTIONS
AGGRESSIVE EQUITY CLASS Y SHARES
	2002		$	10.17	$	(0.01	)	$	(2.31	)	$	(2.32	)	$	(0.01	)		—		$	(0.01	)
	2003			7.84		(0.01	)		2.03			2.02			—			—			—
	2004			9.86		(0.04	)		1.27			1.23			—			—			—
	2005			11.09		(0.06	)		2.58			2.52			—			—			—
	2006			13.61		(0.07	)		1.11			1.04			—			—			—
	2007	(a)		14.65		0.00			1.37			1.37			—			—			—
STRATEGIST CLASS X SHARES
	2002			13.94		0.19			(1.56	)		(1.37	)		(0.21	)		—			(0.21	)
	2003			12.36		0.18			3.03			3.21			(0.23	)		—			(0.23	)
	2004			15.34		0.28			1.30			1.58			(0.32	)‡‡		—			(0.32	)
	2005			16.60		0.30			0.96			1.26			(0.32	)	$	(1.49	)		(1.81	)
	2006			16.05		0.41			1.86			2.27			(0.44	)		(1.35	)		(1.79	)
	2007	(a)		16.53		0.24			0.80			1.04			(0.25	)		(1.90	)		(2.15	)
CLASS Y SHARES
	2002			13.93		0.16			(1.56	)		(1.40	)		(0.18	)		—			(0.18	)
	2003			12.35		0.14			3.03			3.17			(0.20	)		—			(0.20	)
	2004			15.32		0.24			1.30			1.54			(0.28	)‡‡		—			(0.28	)
	2005			16.58		0.26			0.96			1.22			(0.28	)		(1.49	)		(1.77	)
	2006			16.03		0.37			1.86			2.23			(0.40	)		(1.35	)		(1.75	)
	2007	(a)		16.51		0.22			0.79			1.01			(0.23	)		(1.90	)		(2.13	)

(a) For the six months ended June 30, 2007 (unaudited)

* The per share amounts were computed using an average number of shares outstanding during the period.

** Includes capital gain distribution of less than $0.001.

*** Reflects overall Portfolio ratios for investment income (loss) and non - class specific expenses.

† Calculated based on the net asset value as of the last business day of the period.

†† Distribution from paid-in-capital.

‡‡ Includes distributions from paid-in-capital of $0.002.

# Distribution of investment income of less than $0.001.

## Distribution of investment income of $0.001.

See Notes to Financial Statements
174

										RATIOS TO AVERAGE NET ASSETS***
FOR THE YEAR ENDED DECEMBER 31,			NET ASSET VALUE END OF PERIOD		TOTAL RETURN†			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME (LOSS)			PORTFOLIO TURNOVER RATE
AGGRESSIVE EQUITY CLASS Y SHARES
	2002		$	7.84		(22.83	)%	$	17,575		1.09	%		(0.18	)%		268	%
	2003			9.86		25.77			26,519		1.12			(0.15	)		195
	2004			11.09		12.47			27,793		1.10			(0.41	)		185
	2005			13.61		22.72			30,283		1.11			(0.54	)		85
	2006			14.65		7.64			32,039		1.10			(0.52	)		59
	2007	(a)		16.02		9.35	(1)		30,591		1.10	(2)		(0.01	)(2)		25	(1)
STRATEGIST CLASS X SHARES
	2002			12.36		(9.89	)		372,254		0.52			1.47			124
	2003			15.34		26.24			388,356		0.52			1.31			93
	2004			16.60		10.37			345,215		0.53			1.79			55
	2005			16.05		8.32			289,876		0.54			1.84			46
	2006			16.53		15.01			258,164		0.55			2.53			36
	2007	(a)		15.42		6.31	(1)		240,895		0.56	(2)		2.79	(2)		17	(1)
CLASS Y SHARES
	2002			12.35		(10.11	)		57,651		0.77			1.22			124
	2003			15.32		25.88			89,935		0.77			1.06			93
	2004			16.58		10.12			99,165		0.78			1.54			55
	2005			16.03		8.06			98,066		0.79			1.59			46
	2006			16.51		14.75			101,878		0.80			2.28			36
	2007	(a)		15.39		6.12	(1)		97,250		0.81	(2)		2.54	(2)		17	(1)

(1) Not annualized.

(2) Annualized.

(3) If the Investment Adviser had not "capped" all expenses (except for distribution fees) for European Equity, at 1.0% of its daily net assets for the period June 1, 2005 through December 31, 2005, the ratios of expenses and net investment income to average net assets would have been 1.06% and 1.56%, respectively, for Class X shares and 1.31% and 1.31%, respectively, for Class Y Shares.

(4) If the Investment Adviser had not "capped" all expenses (except for distribution fees) for European Equity, at 1.0% of its daily net assets for the year ended December 31, 2006, the ratios of expenses and net investment income to average net assets would have been 1.07% and 1.52%, respectively, for Class X shares and 1.32% and 1.27%, respectively, for Class Y Shares.

(5) If the Investment Adviser had not "capped" all expenses (except for distribution fees) for European Equity, at 1.0% of its daily net assets for the six months ended June 30, 2007, the ratios of expenses and net investment income to average net assets would have been 1.05% and 2 .86%, respectively, for Class X shares and 1.30% and 2.61%, respectively, for Class Y Shares.

(6) Reflects waivers of certain Portfolio expenses in connection with the Investments in Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class during the period. As a result of such waivers the expenses as a percentage of its net assets had an effect of less than 0.005%.

175

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Trustees

Frank L. Bowman				Joseph J. Kearns

Michael Bozic				Michael F. Klein

Kathleen A. Dennis				Michael E. Nugent

James F. Higgins				W. Allen Reed

Dr. Manuel H. Johnson				Fergus Reid

Officers

Michael E. Nugent
Chairperson of the Board

Ronald E. Robison
President and
Principal Executive Officer

J. David Germany
Vice President

Dennis F. Shea
Vice President

Amy R. Doberman
Vice President

Carsten Otto
Chief Compliance Officer

Stefanie V. Chang Yu
Vice President

Francis J. Smith
Treasurer and Chief Financial Officer

Mary E. Mullin
Secretary

Transfer Agent				Independent Registered Public Accounting Firm
Morgan Stanley Trust Harborside Financial Center, Plaza Two Jersey City, New Jersey 07311				Deloitte & Touche LLP Two World Financial Center New York, New York 10281

Legal Counsel				Counsel to the Independent Trustees
Clifford Chance US LLP 31 West 52nd Street New York, New York 10019				Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, New York 10036

Investment Adviser				Sub-Adviser (Global Dividend Growth and European Equity)
Morgan Stanley Investment Advisors Inc. 522 Fifth Avenue New York, New York 10036				Morgan Stanley Investment Management Limited 25 Cabot Square, Canary Wharf London, United Kingdom E14 4QA

The financial statements included herein have been taken from the records of the Fund without examination by the independent auditors and accordingly they do not express an opinion thereon.

This report is submitted for the general information of shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Fund, including its trustees. It is available, without charge, by calling (800) 869-NEWS.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

Morgan Stanley Funds are distributed by Morgan Stanley Distributors Inc.

Morgan Stanley Distributors Inc., member NASD.

VARINSAN-IU07-03023P-Y06/07

#40113A

Item 2. Code of Ethics.

Not applicable for semiannual reports.

Item 3. Audit Committee Financial Expert.

Not applicable for semiannual reports.

Item 4. Principal Accountant Fees and Services

Not applicable for semiannual reports.

Item 5. Audit Committee of Listed Registrants.

Not applicable for semiannual reports.

Item 6.

Refer to Item 1.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable for semiannual reports.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Applicable only to reports filed by closed-end funds.

Item 9. Closed-End Fund Repurchases

Applicable to reports filed by closed-end funds.

Item 10. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 11. 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-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. Exhibits

(a) Code of Ethics – Not applicable for semiannual reports.

(b) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto as part of EX-99.CERT.

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 Variable Investment Series

/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
August 9, 2007

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/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
August 9, 2007

/s/ Francis Smith
Francis Smith
Principal Financial Officer
August 9, 2007