N-CSRS 1 a08-20715_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, 2008

Date of reporting period:		June 30, 2008

Item 1 - Report to Shareholders

MORGAN STANLEY
VARIABLE INVESTMENT SERIES

Semi-Annual Report

JUNE 30, 2008

Morgan Stanley Variable Investment Series

Table of Contents

Letter to the Shareholders					1

Fund Performance					20

Expense Example					22

Investment Advisory Agreement Approval					28

Portfolio of Investments:

Money Market					33

Limited Duration					36

Income Plus					49

High Yield					65

Utilities					81

Income Builder					85

Dividend Growth					93

Global Dividend Growth					97

European Equity					103

Capital Opportunities					108

S&P 500 Index					111

Global Advantage					124

Aggressive Equity					128

Strategist					131

Financial Statements:

Statements of Assets and Liabilities					152

Statements of Operations					155

Statements of Changes in Net Assets					158

Notes to Financial Statements					170

Financial Highlights					190

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2008

Dear Shareholder,

The global financial markets remained volatile throughout the six-month reporting period. In the first quarter of 2008, credit and liquidity remained constrained, the U.S. housing market continued to weaken and fears of an economic recession emerged, all of which took a toll on investor confidence. The U.S. Federal Reserve (the "Fed") stepped in several times during the quarter to help boost liquidity and the economy, reducing the target federal funds rate by 200 basis points while also taking the unprecedented steps of granting primary brokerage firms access to its discount window, loosening its collateral requirements, and extending loans of Treasury securities in exchange for lower quality, less liquid securities. In what was decidedly the biggest headline event, the Fed facilitated JPMorgan Chase's purchase of troubled Bear Stearns — once the country's fifth largest investment bank — in mid-March, which was viewed by many as necessary to avoid serious market repercussions had the firm failed.

Early in the second quarter, market liquidity began to improve and investor appetite for risk returned, spurring a rebound in fixed income spread sectors and global equities alike. In April, the Fed reduced the target federal funds rate another 25 basis points to 2.0 percent but held the rate steady at its next meeting in June, citing the need to maintain a balance between supporting the economy while limiting inflationary pressures. By that time, inflation had become a significant global concern as food and particularly oil prices continued to escalate. A deteriorating outlook for global economic growth also began to weigh more heavily on the markets. As the period was coming to a close, new credit concerns emerged in the U.S. market, prompting expectations of further writedowns in the financial sector while questions remained as to when the still-weak housing market might begin to recover. Overall, given the uncertain environment throughout the six-month period, all but the high-quality government bond markets generally declined.

Domestic Equity Overview

The turbulence in global capital markets was reflected in the U.S. equity market. As measured by the S&P 500^®, U.S. equities fell by 11.91 percent during the first six months of 2008, with the majority of sectors in the red. Financials continued to suffer as the credit crisis and related writedowns undermined both reported earnings as well as investor confidence in any near-term improvement. With declining housing prices and falling employment in the broader economy, consumer-related sectors and stocks also performed poorly on investor fears of declining spending. Telecommunications services rounded out the worst performing sectors for the period, as troubles at several high-profile and alternative wireless carriers combined with the weak outlook for consumers in general to drag down performance.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2008 continued

Not all segments of the market performed poorly, however. Commodity prices remained high, with many reaching new records during the period. As a result, the materials sector was one of two in the broader market to gain during the period. The other — energy — was similarly bolstered by rising prices.

In terms of market capitalization and style, performance differed only in the degree of negative returns during the period. Small-capitalization stocks (as measured by the Russell 2000^® Index) fell by less than their large-capitalization peers. Value generally fell by more than growth, owing largely to the effect of poorly performing financials.

Fixed Income Overview

The credit and liquidity issues plaguing the market during much of the period led investors to shun risky assets in favor of the relatively safe haven of U.S. Treasury securities, boosting their performance while driving spreads in other sectors considerably wider. Although most spread sectors enjoyed a rebound from April through mid-June, they subsequently retreated again as investors paused to reassess the outlook for the economy and the markets. As a result, Treasuries outperformed all other sectors of the fixed income market for the six-month period.

The mortgage sector saw some relief in April and May but overall posted disappointing returns. Non-agency mortgages continued to suffer the most as the availability of these non-traditional mortgages with more lenient terms has sharply diminished in the wake of the subprime market crisis.

In the corporate bond market, credit spreads tightened in the second quarter of the year after widening considerably in the first quarter. In fact, the investment grade corporate sector posted its best monthly return on record in April. As the period was coming to a close, however, investors began demanding additional compensation for owning riskier assets, causing credit spreads to widen again. Overall, investment grade credit outperformed high yield for the six-month period as the flight to quality led higher rated securities to outperform those with lower ratings. Within the investment grade sector, industrial and utilities were the top performers, while financials continued to lag as many financial institutions recognized significant losses on mortgage-related securities.

International Equity Overview

With concerns about slowing global growth and rising inflation intensifying over the six-month period, all major regional equity markets declined.

In Europe, economic growth was lackluster but remained above recessionary levels. That said, the European Central Bank viewed inflation as the predominant near-term threat and, unlike the Fed, held

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2008 continued

interest rates steady during the period. Business sentiment continued to deteriorate and the housing markets in the U.K. and Spain continued to decline. Although European equities saw a recovery in the second quarter of 2008, the markets retreated in June on renewed speculation that central banks may raise interest rates, a worsening housing market and languishing earnings for retailers.

Although Japan remained out of favor with investors early in the period amid weak housing data and political noise, Japanese equities advanced strongly beginning in mid-March along with the global equity rally. Driving investors' renewed confidence were attractive valuations both on a historically relative and absolute basis, and the healthier balance sheets of Japanese banks (given their low exposure to the U.S. credit crisis). However, during the last three weeks of the period, stocks declined sharply on fears of global inflation, renewed credit concerns and most importantly a rapidly slowing global economy.

Emerging market equities' decline was in line with that of developed markets during the period (as measured by the MSCI Emerging Markets Index and the MSCI World Index, respectively). Overall, investors continued to worry about inflation leading to monetary tightening policies and slower economic growth across the global emerging markets. Despite the broad group's decline, Latin America performed well, while all major Asian markets fell during the period.

Aggressive Equity Portfolio

For the six-month period ended June 30, 2008, Aggressive Equity Portfolio Class X shares produced a total return of – 6.52% outperforming the Russell 3000^® Growth Index¹, which returned – 9.04%. For the same period, the Portfolio's Class Y shares returned – 6.63%. 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 of the Russell 3000^® Growth Index was attributable to both stock selection decisions and the resulting sector allocations.

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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2008 continued

services stocks also benefited returns. Further contributing to positive relative performance were stock selection and an overweight allocation in the other energy sector, with the strong returns solely due to two large holdings in the Portfolio. Within the materials and processing sector, the Portfolio held a large position in a leading agriculture chemicals and seed company which added to relative return, as did an overweight allocation in the sector overall.

Elsewhere, the Portfolio had a few positions with disappointing results over the six-month period. The main detractors from relative performance were stock selection and an overweight allocation in the consumer discretionary sector, with weakness in commercial services, consumer electronics, and retail holdings. Stock selection and an underweight position in the technology sector also diminished relative gains, primarily due to selection in communications technology stocks. Although an overweight allocation in the utilities sector was advantageous, the positive contribution was more than offset by unfavorable stock selection in a single telecommunications company.

At the end of the period, consumer discretionary represented the largest sector weight in the Portfolio, followed by the materials and processing sector and the technology sector. Relative to the Russell 3000^® Growth Index, the Portfolio held overweights in the consumer discretionary and materials and processing sectors, and an underweight in the technology sector.

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.

Capital Opportunities (formerly Equity) Portfolio

For the six-month period ended June 30, 2008, Capital Opportunities (formerly Equity) Portfolio Class X shares produced a total return of – 6.23% outperforming the Russell 3000^® Growth Index², which returned – 9.04%. For the same period, the Portfolio's Class Y shares returned – 6.35%. Past performance is no guarantee of future results.

2 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, 2008 continued

The Portfolio's outperformance relative to the Russell 3000^® Growth Index was attributable to both stock selection decisions and the resulting sector allocations.

Stock selection and an underweight allocation in the health care sector had the largest positive effect on relative returns for the six-month period. Here, the main areas of strength were holdings in medical systems stocks and drugs and pharmaceuticals stocks. An avoidance of weak-performing health care management services stocks also benefited returns. Further contributing to positive relative performance were stock selection and an overweight allocation in the other energy sector, with the strong returns solely due to two large holdings in the Portfolio. Within the materials and processing sector, the Portfolio held a large position in a leading agriculture chemicals and seed company which added to relative return, as did an overweight allocation in the sector overall.

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, 2008, Dividend Growth Portfolio Class X shares produced a total return of – 11.43% outperforming the S&P 500^®³, which returned – 11.91%. For the same period, the Portfolio's Class Y shares returned – 11.51%. Past performance is no guarantee of future results.

3 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, 2008 continued

The main contributors to relative performance were in the energy, health care, and utilities sectors. Soaring energy prices led to stronger-than-expected earnings for the energy holdings in the Portfolio. In addition, overweight positions in the energy and technology sectors further added value to the Portfolio's relative performance.

The main detractors from relative performance were in the financial services sector. Although the Portfolio benefited from a relative underweight in the financial services sector, holdings in companies that lowered their earnings growth projections for 2008 were the primary sources of weakness within the sector. The Portfolio was also negatively affected by unfavorable stock selection in the consumer staples sector.

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.

European Equity Portfolio

For the six-month period ended June 30, 2008, European Equity Portfolio Class X shares produced a total return of – 13.54% underperforming the MSCI Europe Index⁴, which returned – 12.41%. For the same period, the Portfolio's Class Y shares returned – 13.62%. Past performance is no guarantee of future results.

The majority of the Portfolio's underperformance relative to the MSCI Europe Index occurred in the first quarter of 2008, mostly in January, as the European market had one of its worst starts in recent history. Although the market stabilized somewhat in April and May — and the Portfolio advanced strongly relative to the Index in the second quarter — June was another difficult month, marked by volatility and declining performance amid renewed concerns about the sagging economy and speculation that the European Central Bank may raise interest rates.

4 The Morgan Stanley Capital International (MSCI) Europe Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe. 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. 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, 2008 continued

As expected with our fundamental, bottom-up investment approach, performance relative to the MSCI Europe Index was driven largely by stock selection. On a sector basis, the Portfolio had positive contributions from the financials and consumer staples sectors, in which underweight positions in certain banks and diversified financials, together with a food, beverage and tobacco holding all benefited relative performance. An underweight allocation in the information technology sector also added to relative return. In terms of country level performance, stock selection in the U.K., Italy and Belgium bolstered relative gains, as did an underweight allocation in Finland.

However, other investments detracted from relative performance. Stock selection in the industrials sector, especially exposure to selected capital goods and automobile stocks, had a negative effect on relative results. Further dampening relative performance were stock selection and an underweight position in the materials sector. Here, the Portfolio had less exposure to a steel stock that was one of the only stocks with a positive return in the MSCI Europe Index during the period under review. Within countries, stock selection in Germany and France were areas of weakness, and both stock selection and an overweight allocation in Greece cost the Portfolio relative performance.

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, 2008, Global Advantage Portfolio Class X shares produced a total return of – 17.28% underperforming the MSCI World Index⁵, which returned – 10.57%. For the same period, the Portfolio's Class Y shares returned – 17.43%. Past performance is no guarantee of future results.

The Portfolio is constructed in a bottom-up fashion, in which the portfolio management team selects companies which they believe have the potential to deliver long-term outperformance. While the Portfolio's country and sector allocations are simply a consequence of where the team finds attractive opportunities, differences in country and sector allocations versus the MSCI World Index can have a notable impact on the

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 performance of the Index is listed in U.S. dollars and assumes the reinvestment of net dividends. 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, 2008 continued

Portfolio's short-term performance relative to its benchmark. That was certainly the case during the period under review, in which the Portfolio's sector allocations were particularly detrimental to relative returns. In particular, the Portfolio's underweight positions in the energy and materials sectors were significant drivers of relative underperformance, as these sectors were the two best performing groups in the MSCI World Index during the period. This weakness was partially offset by an underweight position in the financials sector, which helped dampen the negative influence of the sector's slide. At a country level, the negative influences of overweight allocations in Hong Kong and Greece overwhelmed the positive contribution of an overweight position in Mexico.

Security selection within sectors and countries was also hurtful to relative performance. Although selections in the health care and telecommunication services sectors were beneficial, the lost value from security selection in the financials and consumer staples sectors weighed on relative performance. From a country perspective, stock selections in Canada, Singapore and Australia were unfavorable to relative performance, despite modestly helpful selection in Greece.

Additionally, several other factors contributed to performance relative to the MSCI World Index during the period. Given that the Portfolio has typically owned a considerable proportion of small- and mid-cap stocks, the Portfolio was hurt by the underperformance of those segments relative to large-cap stocks during the period. However, the Portfolio received a boost from its emerging markets exposure, as emerging markets outpaced developed markets during the period. In contrast, the MSCI World Index does not include representation from emerging markets stocks and therefore did not receive the same benefit. Finally, the stronger performance of growth stocks relative to value stocks was additive in that most stocks in the Portfolio are characterized as growth 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.

Global Dividend Growth Portfolio

For the six-month period ended June 30, 2008, Global Dividend Growth Portfolio Class X shares produced a total return of – 15.14% underperforming the MSCI World Index⁶, which returned – 10.57%. For the same period, the Portfolio's Class Y shares returned – 15.24%. Past performance is no guarantee of future results.

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 performance of the Index is listed in U.S. dollars and assumes the reinvestment of net dividends. 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, 2008 continued

In a difficult environment, the Portfolio underperformed the MSCI World Index for the six-month period ending June 30, 2008, particularly within the financials, health care and materials sectors. Although an underweight position in the financials sector was beneficial to relative performance, returns were hampered by investments in banks and diversified financials stocks. These groups suffered from the deteriorating outlook for the U.S. housing market that impacted credit markets. We had underestimated the degree to which capital market companies had accumulated subprime mortgage-related exposure on their balance sheets, rather than securitizing the loans, and the resulting writedowns had a significant effect on these companies' stock prices.

Stock selection in the health care sector had a negative impact on relative performance, mainly within the pharmaceutical industry. The sector has experienced continuing pressures from aggressive generic production, new drug failures and an increasingly conservative regulatory environment. We repositioned the Portfolio during the period to favor companies with a stronger fundamental outlook and more diversified business models.

In addition, the Portfolio's positioning within the industrials and materials sectors was a detractor from performance. These stocks were the primary beneficiaries of the commodity boom and as such, performed strongly over the period. But the Portfolio's exposure to industrials and material stocks remained limited, based on our valuation criteria, and this hampered relative returns. We have further reduced the Portfolio's exposure to both sectors by taking profits out of some investments that we believed had become overvalued.

In contrast, the Portfolio added relative value in the information technology (IT), telecommunication services and energy sectors. In IT, gains came from strong stock selection within technology hardware and equipment services and an overall underweight position in the sector. In the telecom services sector, holdings were well diversified between North America, Europe and Asia, and stock selection here was a positive contributor to performance, particularly in Asia. Finally, security selection within energy stocks boosted relative gains, as the group continued to be a strong performer for both the MSCI World Index and the Portfolio.

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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2008 continued

High Yield Portfolio

For the six-month period ended June 30, 2008, High Yield Portfolio Class X shares produced a total return of – 1.42% underperforming the Lehman Brothers U.S. Corporate High Yield – 2% Issuer Cap Index⁷, which returned – 1.08%. For the same period, the Portfolio's Class Y shares returned – 1.51%. Past performance is no guarantee of future results.

Holdings in mortgage-backed securities (MBS) detracted from the Portfolio's performance during the period. Although MBS rebounded somewhat in the second quarter of the year, the sector's performance declined for the overall period. Given that the Lehman Brothers U.S. Corporate High Yield – 2% Issuer Cap Index does not contain MBS, the Portfolio's holdings in these securities were the primary contributor to its relative underperformance.

We positioned the Portfolio defensively in terms of its credit quality profile during the six-month review period. In the risk-averse environment that persisted throughout much of the period, investors generally favored higher-quality issues, causing the higher-rated segment of the market to outperform the lower-rated segment. As such, our greater relative emphasis on higher-quality securities enhanced returns.

The Portfolio maintained an overweight relative to the Lehman Brothers U.S. Corporate High Yield – 2% Issuer Cap Index in the health care sector, which was additive to returns as the sector performed well during the period. Additionally, the Portfolio held no investments in the airline sector, which was beneficial as the sector struggled amid rising fuel prices.

We continued to seek to maintain a balanced and well-diversified portfolio, while allowing for strategic overweights in securities and sectors with the most attractive risk profiles. In terms of issuer size, we focused on larger companies because of their financial flexibility, their ability to withstand less favorable financial conditions, and their superior access to capital markets. As of the end of the period, the Portfolio's major sector overweights included health care, energy, and chemicals. Key sector underweights included technology, buildings products/home builders, and manufacturing.

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 high-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, 2008 continued

Although credit spreads narrowed somewhat during the quarter, they still remain much wider than long-term averages. As such, we are seeking opportunities to increase the Portfolio's risk profile to a more neutral, rather than defensive, stance.

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, 2008, Income Builder Portfolio Class X shares produced a total return of – 8.97% outperforming the Russell 1000^® Value Index⁸, which returned – 13.57% and underperforming the Lehman Brothers U.S. Government/Credit Index⁹, which returned 0.98%. For the same period, the Portfolio's Class Y shares returned – 8.98%. Past performance is no guarantee of future results.

The financials sector, in which the Portfolio was well positioned, was a key area of outperformance for the Portfolio relative to the Russell 1000^® Value Index. Although the sector lost value on an absolute basis, holdings in insurance stocks declined less than those in the Russell 1000^® Value Index. Further, the Portfolio had lower exposure to banks and regional banks, which were some of the worst performing segments in the financials sector. The consumer staples sector also added to relative results, due to stock selection and the resulting overweight allocation in the sector. In particular, a large holding in a food and staples retailer performed well because the retailer effectively positioned itself for an economic downturn and saw an increase in consumers shopping at its stores. Finally, the technology sector was the third strongest contributor to relative performance. Within the sector, stock selection was particularly beneficial, as the Portfolio held an internet company that rallied following an announcement of a potential acquisition bid and a software and services company that began to turn around after lagging for some time.

However, the Portfolio did not fare so well in other areas. An underweight allocation in the energy sector hampered relative performance. As energy continued to be the top performing sector in the Russell 1000^® Value Index, the Portfolio's minimal exposure produced proportionately less gain than that of the Index.

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.

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2008 continued

Stock selection in the industrials sector was disadvantageous due to the poor performance of an electrical engineering company that announced a large writedown early in 2008. In the materials sector, the Portfolio's lack of exposure to the strong performing metals and mining industry held back relative performance.

In the fixed income portion of the Portfolio, the primary detractor from performance was an allocation to non-agency mortgage securities, a group of securities not represented in the Lehman Brothers U.S. Government/Credit Index. These securities in the Portfolio are CMOs (collateralized mortgage obligations) backed by pools of option adjustable-rate mortgages (ARMs), also known as MTA (moving treasury average) floaters, made primarily to Alt-A borrowers — those who have relatively strong credit but are not considered "prime" borrowers. Unfortunately, as a result of defaults in the subprime market, spreads on all residential and commercial mortgage-backed products widened during the period, hindering performance.

The Portfolio's yield-curve positioning, however, was beneficial to performance. We underweighted longer-dated issues and overweighted intermediate-dated issues through the use of interest rate swaps. This strategy helped enhance returns as the spread between intermediate- and long-dated yields widened in the first quarter of the year. Additionally, an underweight position in investment-grade corporate bonds was beneficial given the corporate sector's underperformance amid ongoing writedowns by many financial institutions during the period. This corporate bond positioning led to an overweight allocation to Treasury securities, which was also beneficial given the flight to quality that persisted throughout much of the period.

Within the Portfolio's convertible securities allocation, consumer staples, metals, and technology securities added to performance. On the other hand, auto-related convertibles detracted from performance.

At the end of the period, the Portfolio held 57.9% in stocks, 33.4% in fixed income, and 6.6% in convertible securities.

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, 2008, Income Plus Portfolio Class X shares produced a total return of – 2.37% underperforming the Lehman Brothers U.S. Corporate Index¹⁰, which returned – 0.84%.For the same period, the Portfolio's Class Y shares returned – 2.45%. Past performance is no guarantee of future results.

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, 2008 continued

The Portfolio's allocations to mortgage-backed securities (MBS), commercial mortgage-backed securities (CMBS) and asset-backed securities (ABS), none of which are included in the Lehman Brothers U.S. Corporate Index, detracted from performance during the period as these sectors continued to suffer from the spillover effects of the subprime mortgage crisis.

With regard to corporate bond holdings, the Portfolio was underweighted relative to the Lehman Brothers U.S. Corporate Index in investment-grade securities. This positioning was beneficial as the investment-grade sector continued to struggle amid ongoing writedowns by many financial institutions during the period. However, this was slightly offset by a small allocation to high-yield corporate bonds. The flight to quality that took place throughout much of the period led higher-yielding, lower-rated issues to underperform higher-rated issues. The Lehman Brothers U.S. Corporate Index does not include high-yield securities and therefore, the Portfolio's position in the sector slightly dampened relative returns.

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, 2008, Limited Duration Portfolio Class X shares produced a total return of – 8.22% underperforming the Lehman Brothers U.S. Credit Index (1-5 Year)¹¹, which returned 1.13%. For the same period, the Portfolio's Class Y shares returned – 8.42%. Past performance is no guarantee of future results.

The primary detractors from the Portfolio's performance were positions in non-agency mortgage securities, which are not included in the Lehman Brothers U.S. Credit Index (1-5 Year), and asset-backed securities (ABS), which were overweighted relative to the Index. The Portfolio's non-agency mortgage securities are CMOs (collateralized mortgage obligations) backed by pools of option adjustable-rate mortgages (ARMs), also

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, 2008 continued

known as MTA (moving treasury average) floaters, made primarily to Alt-A borrowers — those who have relatively strong credit but are not considered "prime" borrowers. The majority of the Portfolio's holdings in ABS are concentrated in high-quality AAA-rated securities. Unfortunately, as a result of defaults in the subprime market, spreads on all residential and commercial mortgage-backed products as well as ABS widened during the period, hindering performance.

The Portfolio's holdings in corporate bonds, particularly an overweight in the financial sector, also held back returns as ongoing writedowns by many financial institutions caused credit spreads to widen. The Portfolio's yield-curve positioning, however, was modestly additive to performance. We positioned the Portfolio to benefit from a steepening of the yield curve, which materialized early in the period as short terms yields declined dramatically in response to interest rate reductions by the Federal Reserve.

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, 2008, the Money Market Portfolio had net assets of more than $216 million with an average portfolio maturity of 55 days. For the seven-day period ended June 30, 2008, the Portfolio's Class X shares provided an effective annualized yield of 2.29% and a current yield of 2.27%, while its 30-day moving average yield for June was 2.31%. For the six-month period ended June 30, 2008, the Portfolio's Class X shares returned 1.57%. Past performance is no guarantee of future results.

For the seven-day period ended June 30, 2008, the Portfolio's Class Y shares provided an effective annualized yield of 2.05% and a current yield of 2.03%, while its 30-day moving average yield for June was 2.06%. For the six-month period ended June 30, 2008, the Portfolio's Class Y shares returned 1.45%. Past performance is no guarantee of future results.

Throughout the reporting period, the Portfolio continued to seek high liquidity and preservation of capital while generating a yield reflecting prevailing money market conditions. To do this, the management team

Morgan Stanley Variable Investment Series

Letter to the Shareholders n June 30, 2008 continued

continued its long-standing policy of purchasing only high quality, liquid, money market securities. Reflecting this conservative approach, the Portfolio did not contain any derivative securities during the reporting period.

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, 2008, S&P 500 Index Portfolio Class X shares produced a total return of – 11.95% underperforming the S&P 500^®¹², which returned – 11.91%. For the same period, the Portfolio's Class Y shares returned – 12.05%. Past performance is no guarantee of future results.

As market turmoil continued, eight out of ten sectors in the S&P 500^® (the "Index"), and therefore the Portfolio, had negative returns in the first six months of 2008. Particularly hard hit were the financials and telecommunications services sectors, as well as industrials, consumer discretionary and information technology. The credit crunch and ongoing downgrades of financial companies continued to impact the financial sector, where the full extent of losses is still unclear. At the same time, higher unemployment and declining consumer confidence with no sign of stabilization in the U.S. housing market led to the negative performance of consumer-oriented stocks.

However, high commodity prices provided a boost for materials. The energy sector benefited from this trend as well, as the demand for energy resources propelled the price of oil to $140 per barrel as of June 30.

Since the Index and the Portfolio are market capitalization weighted, the overall contribution of each sector depends on its relative size within the Index and the Portfolio. As such, energy, as one of the largest sectors, contributed the most to the Portfolio's return, while financials and information technology were the largest detractors.

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, 2008 continued

Strategist Portfolio

For the six-month period ended June 30, 2008, Strategist Portfolio Class X shares produced a total return of – 7.20% outperforming the S&P 500^®¹³, which returned – 11.91% and underperforming the Lehman Brothers U.S. Government/Credit Index¹⁴, which returned 0.98%. For further comparison, the median Lipper Variable Flexible Portfolio Index total return was – 5.76% and U.S. Treasury bills returned 2.44%. For the same period, the Portfolio's Class Y shares returned – 7.33%. Past performance is no guarantee of future results.

The Portfolio's flexible investment approach allows for investment across stocks, bonds, cash and other investment classes. To determine the specific allocation among asset classes throughout the period, we 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.

Based on our process output, a consistent target allocation was maintained throughout the six-month period under review. Approximately 60% of assets were allocated to equities (a slightly higher weight than the average balanced fund) while 20% of assets were allocated to long-term credit markets (a significantly lower allocation than the average balanced fund). The balance (20%) of assets remained in short-term credits and cash-equivalent investments. This target allocation has remained unchanged since May 2006.

In general terms, the first six months of 2008 produced losses for equity investors and positive returns for fixed-income and cash investors. The combined impact of falling residential property values (and their subsequent impact on the financial services industry) and rising commodity prices (highlighted by the sharp run-up in oil prices) created significant market volatility and uncertainty for investors in both the U.S. and abroad. The trends that appear to be driving investor behavior have for the most part provided little relief, as both lower housing values and higher commodity prices led to reduced expectations for corporate

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, 2008 continued

profitability, tighter credit and lending conditions, and an unwillingness to take risk in most asset classes around the globe. Although U.S. gross domestic product (GDP) continues to track in positive territory and employment has held up better than forecasters' expectations for the first six months of 2008, investors appear more eager to discount potentially worse news than the potential for stabilization or recovery.

Although this year's volatility has been alarming, our expectations for an economic slowdown tied to declines in residential property values have been met. The sharp escalation of energy and agricultural commodity prices in light of a global macroeconomic slowdown was unanticipated, but appears to us to have limited long-term staying power. Evidence is clearly pointing to reduced demand for a number of commodities, which moved most dramatically in this last wave of inflationary pressures. We have, therefore, maintained the Portfolio's asset allocation stance and believe that future trends should prove supportive of our macroeconomic views.

At June month-end, the Portfolio's largest equity sector exposures included information technology, health care, consumer staples and consumer cyclicals. Relative to the equity index (S&P 500^®), the Portfolio's greatest overweights included materials, telecommunication services and information technology, while its most significant underweights included energy, financial services and industrials.

The fixed income component of the Portfolio underperformed the Lehman U.S. Government/Credit Index due to above-average exposure to the mortgage markets and lower exposure to U.S. government bonds. At period end, the Portfolio held just over half of its fixed income assets in short-term debt and approximately a quarter of its assets in corporate credits. The balance of the fixed income portion of the Portfolio was comprised of mortgage securities and long-dated government-issued bonds.

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, 2008, Utilities Portfolio Class X shares produced a total return of – 4.51% underperforming the S&P 500^® Utilities Index¹⁵, which returned – 2.76% and outperformed the S&P 500¹⁶, which returned – 11.91%. For the same period, the Portfolio's Class Y shares returned – 4.63%. Past performance is no guarantee of future results.

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, 2008 continued

The primary driver of the Portfolio's performance relative to the S&P 500^® Utilities Index was its out-of-benchmark holdings in the telecommunications sector. The sector's returns were dragged down by poor results at several wireless companies, some of which carried high debt loads. While the Portfolio's stock selection was relatively strong in the sector due to its avoidance of these troubled companies, its exposure to telecommunications in general suffered from generally negative investor sentiment toward the sector.

Stock selection was weaker in the electric utilities sector, where we focused on more conservative and highly regulated companies. During the period, investors preferred companies with greater pricing power from either nuclear generation capabilities or other means, leading these more aggressive names to outperform. The Portfolio also had modest emerging markets exposure, which underperformed during the period.

Other positions were more positive for performance. The Portfolio was overweight in gas utilities, with an emphasis on storage and pipeline companies. Both the overweight and stock selection added to relative returns. The Portfolio also benefited from a modest overweight position in independent power producers, which were boosted by an increase in pricing in tandem with rising prices for natural gas.

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.

The Portfolios discussed in this report are only available through the purchase of a variable insurance product.

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, 2008 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, 2008

Average Annual Total Returns—Period Ended June 30, 2008⁽¹⁾
Class X	1 Year			5 Years			10 Years			Since Inception			Date of Inception
Aggressive Equity		2.17	%		14.24	%		N/A			5.81	%	5/4/1999
Capital Opportunities		2.25			11.72			5.26	%		11.75		3/9/1984
Dividend Growth		(13.38	)		6.14			2.21			8.00		3/1/1990
European Equity		(11.32	)		14.05			4.84			11.09		3/1/1991
Global Advantage		(12.57	)		10.37			1.37			1.21		5/18/1998
Global Dividend Growth		(17.82	)		10.31			5.33			7.89		2/23/1994
High Yield		(0.71	)		6.74			(5.04	)		3.65		3/9/1984
Income Builder		(11.27	)		7.23			4.37			6.10		1/21/1997
Income Plus		3.01			3.96			5.13			7.13		3/1/1987
Limited Duration		(7.65	)		0.56			N/A			2.40		5/4/1999
Money Market		4.05			3.00			3.39			4.95		3/9/1984
S&P 500 Index		(13.24	)		7.30			2.52			2.76		5/18/1998
Strategist		(5.17	)		9.55			6.23			8.93		3/1/1987
Utilities		2.28			15.23			5.29			9.06		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, 2008

Average Annual Total Returns—Period Ended June 30, 2008⁽¹⁾
Class Y	1 Year			5 Years			10 Years	Since Inception			Date of Inception
Aggressive Equity		1.94	%		13.98	%	N/A		1.40	%	6/5/2000
Capital Opportunities		1.97			11.44		N/A		0.27		6/5/2000
Dividend Growth		(13.57	)		5.88		N/A		2.63		6/5/2000
European Equity		(11.52	)		13.78		N/A		2.40		6/5/2000
Global Advantage		(12.93	)		10.08		N/A		(1.12	)	6/5/2000
Global Dividend Growth		(17.99	)		10.05		N/A		4.63		6/5/2000
High Yield		(0.93	)		6.47		N/A		(4.67	)	6/5/2000
Income Builder		(11.47	)		6.97		N/A		4.65		6/5/2000
Income Plus		2.80			3.71		N/A		5.88		6/5/2000
Limited Duration		(7.87	)		0.29		N/A		2.04		6/5/2000
Money Market		3.79			2.74		N/A		2.74		6/5/2000
S&P 500 Index		(13.41	)		7.03		N/A		(0.58	)	6/5/2000
Strategist		(5.37	)		9.28		N/A		4.17		6/5/2000
Utilities		2.03			14.96		N/A		3.18		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.

⁽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

Expense Example n June 30, 2008

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 01/01/08 – 06/30/08.

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any 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, 2008 continued

Money Market

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (1.57% return)	$	1,000.00	$	1,015.70	$	2.81
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.08	$	2.82
Class Y
Actual (1.45% return)	$	1,000.00	$	1,014.50	$	4.06
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.84	$	4.07

@ 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 182/366 (to reflect the one-half year period).

Limited Duration

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (-8.22% return)	$	1,000.00	$	917.80	$	2.24
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.53	$	2.36
Class Y
Actual (-8.42% return)	$	1,000.00	$	915.80	$	3.43
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,021.28	$	3.62

@ 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 182/366 (to reflect the one-half year period). If the Portfolio had borne all its expenses, the annualized expense ratios would have been 0.48% and 0.73% for Class X and Class Y shares, respectively.

Income Plus

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (-2.37% return)	$	1,000.00	$	976.30	$	2.70
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.13	$	2.77
Class Y
Actual (-2.45% return)	$	1,000.00	$	975.50	$	3.93
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.89	$	4.02

@ 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 182/366 (to reflect the one-half year period).

Morgan Stanley Variable Investment Series

Expense Example n June 30, 2008 continued

High Yield

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/30/08 – 06/30/08
Class X
Actual (-1.42% return)	$	1,000.00	$	985.80	$	8.20
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,016.61	$	8.32
Class Y
Actual (-1.51% return)	$	1,000.00	$	984.90	$	9.43
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,015.37	$	9.57

@ Expenses are equal to the Portfolio's annualized expense ratios of 1.66% and 1.91% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).

Utilities

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (-4.51% return)	$	1,000.00	$	954.90	$	3.40
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,021.38	$	3.52
Class Y
Actual (-4.63% return)	$	1,000.00	$	953.70	$	4.61
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.14	$	4.77

@ Expenses are equal to the Portfolio's annualized expense ratios of 0.70% and 0.95% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).

Income Builder

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (-8.97% return)	$	1,000.00	$	910.30	$	4.13
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.54	$	4.37
Class Y
Actual (-8.98% return)	$	1,000.00	$	910.20	$	5.32
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.29	$	5.62

@ Expenses are equal to the Portfolio's annualized expense ratios of 0.87% and 1.12% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).

Morgan Stanley Variable Investment Series

Expense Example n June 30, 2008 continued

Dividend Growth

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (-11.43% return)	$	1,000.00	$	885.70	$	2.86
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,021.83	$	3.07
Class Y
Actual (-11.51% return)	$	1,000.00	$	884.90	$	4.03
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.59	$	4.32

@ Expenses are equal to the Portfolio's annualized expense ratios of 0.61% and 0.86% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).

Global Dividend Growth

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (-15.14% return)	$	1,000.00	$	848.60	$	3.86
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.69	$	4.22
Class Y
Actual (-15.24% return)	$	1,000.00	$	847.60	$	5.01
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.44	$	5.47

@ 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 182/366 (to reflect the one-half year period).

European Equity

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (-13.54% return)	$	1,000.00	$	864.60	$	4.64
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.89	$	5.02
Class Y
Actual (-13.62% return)	$	1,000.00	$	863.80	$	5.79
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,018.65	$	6.27

@ 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 182/366 (to reflect the one-half year period). If the Portfolio had borne all of its expenses, the annualized expense ratios would have been 1.06% and 1.31% for Class X and Class Y shares, respectively.

Morgan Stanley Variable Investment Series

Expense Example n June 30, 2008 continued

Capital Opportunities (formerly Equity)

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (-6.23% return)	$	1,000.00	$	937.70	$	2.55
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.23	$	2.66
Class Y
Actual (-6.35% return)	$	1,000.00	$	936.50	$	3.76
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.98	$	3.92

@ 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 182/366 (to reflect the one-half year period). If the Portfolio had borne all of its expenses, the annualized expense ratios would have been 0.54% and 0.79% for Class X and Class Y shares, respectively.

S&P 500 Index

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (-11.95% return)	$	1,000.00	$	880.50	$	1.36
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,023.42	$	1.46
Class Y
Actual (-12.05% return)	$	1,000.00	$	879.50	$	2.52
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.18	$	2.72

@ Expenses are equal to the Portfolio's annualized expense ratios of 0.29% and 0.54% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). If the Portfolio had borne all its expenses, the annualized expense ratios would have been 0.30% and 0.55% for Class X and Class Y, respectively.

Global Advantage

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (-17.28% return)	$	1,000.00	$	827.20	$	4.23
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.24	$	4.67
Class Y
Actual (-17.43% return)	$	1,000.00	$	825.70	$	5.36
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.00	$	5.92

@ Expenses are equal to the Portfolio's annualized expense ratios of 0.93% and 1.18% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).

Morgan Stanley Variable Investment Series

Expense Example n June 30, 2008 continued

Aggressive Equity

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (-6.52% return)	$	1,000.00	$	934.80	$	4.14
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.59	$	4.32
Class Y
Actual (-6.63% return)	$	1,000.00	$	933.70	$	5.34
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.34	$	5.57

@ Expenses are equal to the Portfolio's annualized expense ratios of 0.86% and 1.11% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).

Strategist

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/08		06/30/08		01/01/08 – 06/30/08
Class X
Actual (-7.20% return)	$	1,000.00	$	928.00	$	2.59
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.18	$	2.72
Class Y
Actual (-7.33% return)	$	1,000.00	$	926.70	$	3.78
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.93	$	3.97

@ Expenses are equal to the Portfolio's annualized expense ratios of 0.54% and 0.79% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). If the Portfolio had borne all of its expenses, the annualized expense ratios would have been 0.56% and 0.81% for Class X and Class Y shares, respectively.

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval n June 30, 2008

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 December 31, 2007, 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 Plus, European Equity, High Yield, Aggressive Equity, Capital Opportunities (formerly Equity), Global Dividend Growth and Global Advantage Portfolios, the Board concluded that each Portfolio's performance was competitive with that of its performance peer group.

With respect to the Income Builder and Global Dividend Growth Portfolios, the Board concluded that each Portfolio's performance was acceptable.

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval n June 30, 2008 continued

With respect to the Money Market and S&P 500 Index 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 Dividend Growth Portfolios, the Board noted recent action taken with each Portfolio's investment personnel. With respect to the Utilities Portfolio, the Board noted that portfolio management will change on June 30, 2008. The Board concluded it would give the new portfolio management teams time to improve performance and would continue to monitor performance.

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, Global Dividend Growth, High Yield, Income Plus, Limited Duration, Capital Opportunities (formerly Equity) and Money Market 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 Income Builder Portfolio, the Board noted that the Adviser did not manage any other funds with investment strategies 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, Global Dividend Growth, Global Advantage, Utilities, S&P 500 Index, Aggressive Equity, Capital Opportunities (formerly 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.

With respect to the Money Market, Income Builder and European Equity Portfolios, the Board concluded that the Portfolios' management fee rates were acceptable as the total expense ratios were competitive with their expense peer groups.

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval n June 30, 2008 continued

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 and Global Advantage Portfolios, 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 concluded that the Portfolio's management fee was sufficiently low that it did not need to consider adding breakpoints. With respect to the Global Advantage 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 Portfolios 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, from time to time, the Adviser may, directly or indirectly, effect trades on behalf of certain Morgan Stanley Funds through various electronic communications networks or other alternative trading systems in which the Adviser's affiliates have ownership interests and/or board seats. 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 fall-out benefits, including float benefits were relatively small and the 12b-1 fees were competitive with those of other broker-dealers.

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval n June 30, 2008 continued

With respect to the Dividend Growth, Strategist, Income Builder, European Equity, Global Dividend Growth, Global Advantage, Utilities, S&P 500 Index, Aggressive Equity and Capital Opportunities (formerly 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 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 Capital Opportunities (formerly 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 noted that the Adviser's operations remain profitable, although increased expense in recent years have reduced the Adviser's profitability. 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.

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval n June 30, 2008 continued

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

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 (or, in the case of the Sub-Advisory Agreement for the Utilities Portfolio, initially approved for a year).

Morgan Stanley Variable Investment Series - Money Market

Portfolio of Investments n June 30, 2008 (unaudited)

PRINCIPAL AMOUNT IN THOUSANDS			ANNUALIZED YIELD ON DATE OF PURCHASE			MATURITY DATE	VALUE
		Commercial Paper (44.5%)
		Asset-Backed - Auto (1.0%)
$	2,000	New Center Asset Trust		3.37	%	07/31/08	$	1,994,400
		Asset-Backed - Consumer (5.7%)
	3,000	Barton Capital LLC*		2.80		07/03/08		2,999,533
	2,000	Cafco LLC*		2.71		08/15/08		1,993,275
	1,350	CRC Funding LLC.*		2.61		07/30/08		1,347,173
	1,000	Old Line Funding LLC*		2.63		07/23/08		998,399
	5,000	Park Avenue Rec Co LLC*		2.70		07/02/08		4,999,625
								12,338,005
		Asset-Backed - Corporate (2.3%)
	5,000	Tulip Funding Corp*		2.86		07/28/08		4,989,313
		Asset-Backed - Diversified (6.0%)
	8,000	Alpine Securitization*		2.83		07/08/08		7,995,598
	5,000	Falcon Asset Securitization Co., LLC*		2.85		07/01/08		5,000,000
								12,995,598
		Asset-Backed - Securities (1.8%)
	3,000	Cancara Asset Securitisation LTD & Cancara Asset*		3.07 - 3.09		07/24/08 - 08/29/08		2,988,074
	1,000	Solitaire Funding LLC*		2.88		09/30/08		992,796
								3,980,870
		Banking (8.7%)
	7,000	Bank of America Corp		2.85 - 2.90		10/22/08 - 10/23/08		6,937,312
	10,000	Citigroup Funding Inc.		2.83 - 3.02		08/04/08 - 08/18/08		9,964,360
	2,000	HSBC USA Inc.		2.65		07/07/08		1,999,124
								18,900,796
		Finance-Auto (1.0%)
	2,000	Toyota Motor Credit Corp.		2.79		10/22/08		1,982,736
		Financial Conglomerates (3.4%)
	7,500	General Electric Capital Corp.		2.50 - 4.08		07/07/08 - 12/08/08		7,450,863
		International Banks (14.6%)
	4,000	Bank of Ireland*		2.78		09/29/08		3,972,500
	2,000	Barclays U.S. Funding LLC		2.83 - 3.05		07/16/08 - 08/27/08		1,994,071
	2,000	CBA Delaware Finance Inc.		2.73		07/09/08		1,998,796
	3,000	DnB Norway Bank ASA*		2.75		08/05/08		2,992,067
	1,000	Natexis Banques POP US		2.94		11/03/08		989,931
	7,500	Royal Bank of Scotland GP*		2.88 - 4.57		07/02/08 - 11/14/08		7,449,619

See Notes to Financial Statements
33

Morgan Stanley Variable Investment Series - Money Market

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			ANNUALIZED YIELD ON DATE OF PURCHASE			MATURITY DATE	VALUE
$	5,500	Societe General N.A., Inc.		3.05 - 4.58	%	07/02/08 - 09/30/08	$	5,479,867
	4,500	Swedbank Mortgage AB		3.05 - 3.08		07/29/08 - 11/14/08		4,466,225
	2,325	UBS Finance (Delaware) LLC		3.23 - 4.08		07/10/08 - 07/18/08		2,321,670
								31,664,746
		Total Commercial Paper (Cost $96,297,327)						96,297,327
		Certificate of Deposit (34.7%)
		Domestic Banks (3.7%)
	2,500	Bank of the West		2.85		07/29/08		2,500,000
	3,500	Branch BKG & Trust Co. NC		2.76		11/25/08		3,500,000
	2,000	Wachovia Bank, NA		3.03		07/11/08		2,000,638
								8,000,638
		International Banks (31.0%)
	5,000	Banco Santander SA - NY		3.00 - 3.05		07/31/08 - 08/22/08		5,000,033
	4,000	Bank of Montreal - Chicago		3.00 - 3.10		07/07/08 - 07/17/08		4,000,642
	6,000	Bank of Scotland HBOS		2.65 - 3.04		09/05/08 - 11/12/08		6,000,046
	5,000	Barclays Bank plc		2.95 - 3.05		10/21/08 - 11/24/08		5,000,000
	3,000	BNP Paribas		2.98		07/09/08		3,000,830
	8,000	Calyon - NY		2.72 - 3.03		07/08/08 - 10/14/08		8,000,000
	3,000	Canadian Imperial Bank of Commerce		2.82		08/06/08		3,000,000
	2,000	Dexia Credit Local		2.75		07/11/08		2,000,000
	6,000	Fortis Bank - NY		2.61 - 2.71		07/21/08 - 07/28/08		6,000,000
	3,000	Intesa Sanpaolo SpA		2.92		10/08/08		3,000,000
	7,000	NATIXIS		2.72 - 3.00		07/24/08 - 08/04/08		6,999,923
	1,500	Royal Bank of Scotland plc		2.88		11/03/08		1,500,379
	1,000	Societe Generale		2.70		08/22/08		1,000,000
	8,500	Toronto - Dominion Bank		2.73 - 2.92		08/13/08 - 09/15/08		8,500,000
	4,000	UBS AG		2.97 - 2.90		07/14/08 - 09/19/08		4,000,000
								67,001,853
		Total Certificate of Deposit (Cost $75,002,491)						75,002,491
		Floating Rate Notes (9.8%)
		Asset-Backed - Structured Investment Vehicles (1.0%)
	2,000	Mazarin Funding Corp*		2.07	†	07/10/08‡		2,000,000
		Finance-Auto (4.1%)
	4,000	American Honda Finance Corp.*		2.78	†	08/06/08‡		4,000,000
	5,000	Toyota Motor Credit Corp		2.48	†	07/10/09‡		5,000,000
								9,000,000

See Notes to Financial Statements
34

Morgan Stanley Variable Investment Series - Money Market

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			ANNUALIZED YIELD ON DATE OF PURCHASE			MATURITY DATE			VALUE
		Financial Conglomerates (1.1%)
$	2,265	General Electric Capital Corp.		2.88	† %	06/15/09‡			$	2,266,386
		International Banks (3.6%)
	1,000	Bank of Nova Scotia - NY		3.17	†	05/06/09‡				1,000,000
	2,500	Barclays Bank plc		2.93 - 3.13	†	05/20/09 - 06/09/09‡				2,500,000
	2,000	Deutsche Bank - AG		3.01	†	01/21/09‡				2,000,000
	2,000	KBC Bank NV - NY		2.82	†	12/16/08‡				2,000,000
	400	Skandinaviska Enskilda		3.05	†	08/21/08‡				399,596
										7,899,596
		Total Floating Rate Notes (Cost $21,165,982)								21,165,982
		Repurchase Agreement (9.2%)
	20,025	BNP Paribas, 2.40% dated 06/30/08, due 07/01/08, repurchase price $20,026,317; fully collateralized by Federal National Mortgage Association 6.00%, due 12/01/36, valued at $20,625,750								20,025,000
		U.S. Government Agency (2.1%)
	4,500	Federal Home Loan Mortgage Corp. (Cost $4,482,758)		2.08 - 2.17		07/21/08 - 09/29/08				4,482,758
		Total Investments (Cost $216,973,558) (a)					100.3	%		216,973,558
		Liabilities in Excess of Other Assets					(0.3	)		(707,062	)
		Net Assets					100.0	%	$	216,266,496

* Resale is restricted to qualified institutional investors

† Rate shown is the rate in effect at June 30, 2008.

‡ Date of next interest rate reset.

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

MATURITY SCHEDULE**

1 - 30 Days	48	%
31 - 60 Days	23
61 - 90 Days	6
91 - 120 Days	15
121 - 180 Days	8
	100	%

** As a percentage of total market value.

See Notes to Financial Statements
35

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited)

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Corporate Bonds (30.6%)
		Aerospace & Defense (0.4%)
$	400	Bae Systems Holdings Inc. - 144A (b)		4.75	%	08/15/10	$	405,001
		Air Freight/Couriers (0.3%)
	330	FedEx Corp.		5.50		08/15/09		331,930
		Beverages: Alcoholic (0.4%)
	415	Miller Brewing Co. 144A (b)		4.25		08/15/08		415,579
		Biotechnology (0.3%)
	280	Amgen Inc.		4.00		11/18/09		280,396
		Cable/Satellite TV (0.7%)
	490	Comcast Cable Communications, Inc.		6.875		06/15/09		503,336
	70	Comcast Corp.		5.85		01/15/10		71,099
	190	Cox Communications, Inc. - 144A (b)		4.625		01/15/10		189,021
								763,456
		Chemicals: Major Diversified (0.2%)
	170	ICI Wilmington Inc.		4.375		12/01/08		170,266
		Containers/Packaging (0.1%)
	90	Sealed Air Corp. - 144A (b)		6.95		05/15/09		91,261
		Department Stores (0.6%)
	230	Federated Department Stores, Inc.		6.625		09/01/08		230,272
	370	JC Penney Corp., Inc.		7.375		08/15/08		371,006
								601,278
		Drugstore Chains (0.4%)
	390	CVS Corp.		4.00		09/15/09		387,996
		Electric Utilities (2.5%)
	248	Columbus Southern Power Co.		4.40		12/01/10		246,341
	380	Consumers Energy Co. (Series H)		4.80		02/17/09		381,148
	355	Detroit Edison Co. (The)		6.125		10/01/10		369,658
	220	Entergy Gulf States, Inc.		3.082	(c)	12/01/09		217,541
	21	Entergy Gulf States, Inc. - 144A (b)		3.427	(c)	12/08/08		20,989
	405	Ohio Power Co.		2.908	(c)	04/05/10		397,183
	365	Pacific Gas & Electric Co.		3.60		03/01/09		364,762
	235	Public Service Co. of Colorado (Series A)		6.875		07/15/09		241,299
	330	Southwestern Public Service Co. (Series A)		6.20		03/01/09		335,004
								2,573,925

See Notes to Financial Statements
36

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Finance/Rental/Leasing (0.8%)
$	365	American Honda Finance Corp. - 144A (b)		3.85	%	11/06/08	$	364,997
	90	CIT Group Inc.		5.00		11/24/08		88,074
	370	CIT Group Inc. (Series MTN)		4.75		08/15/08		368,141
								821,212
		Financial Conglomerates (2.8%)
	95	Bank One Corp. (Series A)		6.00		02/17/09		95,574
	150	Chase Manhattan Corp.		6.00		02/15/09		150,902
	55	Chase Manhattan Corp.		7.00		11/15/09		56,237
	315	Citicorp (Series F)		6.375		11/15/08		317,348
	325	Citigroup Inc.		4.625		08/03/10		323,811
	50	Citigroup Inc.		5.30		10/17/12		48,818
	170	Citigroup Inc.		3.625		02/09/09		169,778
	700	General Electric Capital Corp.		5.45		01/15/13		715,303
	120	General Electric Capital Corp. (Series A)		4.25		12/01/10		121,284
	410	JPMorgan Chase & Co.		6.75		02/01/11		425,797
	205	Pricoa Global Funding I - 144A (b)		3.90		12/15/08		204,064
	325	Principal Life Income Funding Trust		5.15		06/17/11		327,159
								2,956,075
		Food Retail (0.2%)
	230	Safeway, Inc.		7.50		09/15/09		237,592
		Food: Major Diversified (0.5%)
	200	Kraft Foods Inc.		4.00		10/01/08		199,945
	385	Kraft Foods Inc.		4.125		11/12/09		384,548
								584,493
		Gas Distributors (0.6%)
	180	NiSource Finance Corp.		3.208	(c)	11/23/09		175,043
	450	Sempra Energy		4.75		05/15/09		451,701
								626,744
		Home Improvement Chains (0.4%)
	410	Home Depot Inc.		2.901	(c)	12/16/09		399,477
		Industrial Conglomerates (0.3%)
	275	Honeywell International, Inc.		6.125		11/01/11		291,962
		Integrated Oil (0.5%)
	470	Conocophillips		8.75		05/25/10		511,703
		Investment Banks/Brokers (1.1%)
	240	Goldman Sachs Group Inc. (The)		5.45		11/01/12		239,626
	455	Goldman Sachs Group Inc. (The)		6.875		01/15/11		472,602

See Notes to Financial Statements
37

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	210	Lehman Brothers Holdings Inc. (Series H)		3.011	(c)%	12/23/10	$	196,853
	275	Lehman Brothers Holdings Inc. (Series I)		2.851	(c)	12/23/08		269,767
								1,178,848
		Investment Managers (0.3%)
	305	Mellon Funding Corp.		6.40		05/14/11		315,938
		Life/Health Insurance (1.7%)
	545	John Hancock Financial Services, Inc.		5.625		12/01/08		549,783
	765	Met Life Global Funding I - 144A (b) (Note 4)		4.625		08/19/10		770,332
	450	Monumental Global Funding II - 144A (b)		4.375		07/30/09		446,373
								1,766,488
		Major Banks (5.8%)
	700	Banco Santander Central Hispano Issuances Ltd. (Cayman Islands)		7.625		11/03/09		717,997
	575	Bank of America Corp.		3.375		02/17/09		572,739
	130	Bank of America Corp.		4.875		09/15/12		127,791
	200	Credit Suisse USA Inc. (Switzeland)		6.125		11/15/11		205,490
	800	HBOS Treasury Services PLC - 144A (United Kingdom) (b)		5.625		07/20/09		806,014
	980	HSBC Finance Corp.		6.75		05/15/11		1,019,104
	380	Popular North America, Inc. (Series F)		5.65		04/15/09		376,394
	715	Unicredit Luxembourg Finance S.A. - 144A (Luxembourg) (b)		2.97	(c)	10/24/08		714,558
	810	Wachovia Corp.		5.35		03/15/11		793,022
	390	Wells Fargo & Co.		3.12		08/15/08		389,497
	300	Wells Fargo Bank NA		6.45		02/01/11		313,684
								6,036,290
		Major Telecommunications (2.3%)
	590	AT&T Inc.		2.884	(c)	02/05/10		587,572
	395	Bellsouth Corp.		6.00		10/15/11		407,139
	175	British Telecommunications PLC (United Kingdom)		8.625		12/15/10		188,010
	300	Deutsche Telekom International Finance BV (Netherlands)		8.00		06/15/10		317,510
	295	France Telecom SA		7.75		03/01/11		312,606
	505	Telecom Italia Capital SA (Luxembourg)		4.875		10/01/10		501,052
	150	Verizon Global Funding Corp.		7.25		12/01/10		159,335
								2,473,224

See Notes to Financial Statements
38

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Managed Health Care (0.3%)
$	210	Unitedhealth Group Inc.		2.762	(c)%	03/02/09	$	208,284
	175	Unitedhealth Group Inc.		4.125		08/15/09		173,462
								381,746
		Media Conglomerates (0.9%)
	480	Time Warner, Inc.		2.915	(c)	11/13/09		466,609
	160	Viacom Inc.		3.15	(c)	06/16/09		158,349
	300	Viacom Inc.		5.75		04/30/11		300,893
								925,851
		Medical Specialties (0.3%)
	375	Hospira, Inc.		3.176	(c)	03/30/10		363,723
		Motor Vehicles (0.3%)
	335	DaimlerChrysler North American Holdings Co.		3.298	(c)	03/13/09		334,473
		Multi-Line Insurance (1.1%)
	690	American General Finance Corp. (Series H)		4.625		09/01/10		668,886
	500	Hartford Financial Services Group, Inc. (The)		5.55		08/16/08		500,908
								1,169,794
		Oil & Gas Pipelines (0.5%)
	500	Enbridge Energy Partners, LP		4.00		01/15/09		497,535
		Oil Refining/Marketing (0.7%)
	180	Enterprise Products Operating L.P.		7.50		02/01/11		188,670
	600	Valero Energy Corp.		3.50		04/01/09		598,469
								787,139
		Other Metals/Minerals (0.4%)
	445	Brascan Corp. (Canada)		8.125		12/15/08		448,234
		Packaged Software (0.2%)
	185	Oracle Corp.		5.00		01/15/11		188,714
		Property - Casualty Insurers (0.9%)
	595	Mantis Reef Ltd. - 144A (Cayman Islands) (b)		4.692		11/14/08		592,774
	375	Xlliac Global Funding - 144A (b)		4.80		08/10/10		372,197
								964,971
		Railroads (0.5%)
	535	Burlington Santa Fe Corp.		6.125		03/15/09		540,000
		Real Estate Development (0.6%)
	488	World Financial Properties - 144A (b)		6.91		09/01/13		487,555
	144	World Financial Properties - 144A (b)		6.95		09/01/13		143,323
								630,878

See Notes to Financial Statements
39

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Savings Banks (0.7%)
$	575	Sovereign Bancorp, Inc.		2.829	(c)%	03/23/10	$	514,292
	200	Washington Mutual Inc.		4.00		01/15/09		194,025
								708,317
		Total Corporate Bonds (Cost $32,320,269)						32,162,509
		Collateralized Mortgage Obligations (23.4%)
		U.S. Government Agencies (1.2%)
	152	Fannie Mae 2005-27 NA		5.50		01/25/24		152,295
	327	Fannie Mae 2005-52 PA		6.50		06/25/35		340,761
	541	Freddie Mac 2182 ZC		7.50		09/15/29		569,849
	210	Freddie Mac 2644 AU		3.50		05/15/22		209,915
		Total U.S. Government Agencies						1,272,820
		Private Issues (22.2%)
		American Home Mortgage Assets
	325	2007-5 A3		2.783	(c)	06/25/47		125,863
	376	2006-3 1A3		2.803	(c)	10/25/46		135,036
	995	2007-1 GA1C		2.673	(c)	05/25/47		715,101
	340	Bear Stearns Alt-A Trust 2003-3 3A		2.833	(c)	10/25/33		299,323
		Bear Stearns Mortgage Funding Trust
	758	2007-AR1 1A2		2.693	(c)	01/25/37		380,587
	762	2006-AR3 1A1		2.663	(c)	10/25/36		534,824
	651	2006-AR5 1A2		2.693	(c)	12/25/36		364,032
		Countrywide Alternative Loan Trust
	573	2006-0A1 1A2		2.782	(c)	03/20/46		318,564
	895	2006-OA10		2.713	(c)	08/25/46		496,388
	689	2005-56 2A3		5.028	(c)	11/25/35		509,107
	3	2005-76 2A2		5.494	(c)	02/25/36		2,043
	591	2006-0A22 A2		2.693	(c)	02/25/47		346,220
	266	2005-J2 1A12		2.793	(c)	04/25/35		208,209
	262	2005-J2 5A1		2.793	(c)	02/25/35		203,467
	3,111	2006-0A12X (IO)		3.752	(c)	03/20/46		102,041
	2,688	2005-81 X1 (IO)		3.573	(c)	02/25/37		94,087
	593	2006-0A16 A3		2.733	(c)	10/25/46		346,969
	620	2006-0A2 A3		2.752	(c)	05/20/46		333,462
	513	2006-0A14 2A1		2.673	(c)	11/25/46		365,844
		Countrywide Home Loan Trust
	2,727	2004-25 1X (IO)		1.784	(c)	02/25/35		66,450
	467	2006-0A4 A2		2.753	(c)	04/25/46		257,770

See Notes to Financial Statements
40

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	792	DSLA Mortgage Loan Trust 2006-AR2 2A1A		2.683	(c)%	11/19/37	$	555,454
	730	First Horizon Alternative Mortgage Securities 2006-FA8 1A7 144A (b)		6.00		02/25/37		654,008
		Greenpoint Mortgage Funding Trust
	559	2006-AR2 4A1		5.528	(c)	03/25/36		410,675
	1,482	2005-AR3 X1 (IO)		3.629	(c)	08/25/45		47,925
	2,341	2005-AR4 X4 (IO)		3.482	(c)	10/25/45		85,588
		Harborview Mortgage Loan Trust
	973	2006-10 2A1B		2.723	(c)	11/19/36		523,962
	605	2006-7 2A1B		2.733	(c)	10/19/37		328,007
	834	2006-9 2AB2		2.763	(c)	11/19/36		488,303
	1,243	2005-16 4A1A		5.794	(c)	01/19/36		977,894
	556	2006-1 2A1A		2.723	(c)	03/19/37		392,358
	745	2006-8 2A1B		2.731	(c)	08/21/36		427,185
	708	2006-14 2A1B		2.683	(c)	03/19/38		397,390
	658	2005-9 2A1C		2.932	(c)	06/20/35		414,458
	206	2005-9 B1		3.082	(c)	06/20/35		90,461
	1,091	2006-12 2A2B		2.733	(c)	01/19/38		577,871
	483	2005-12 2A11		6.662	(c)	10/19/35		360,999
	2,389	2005-2 X (IO)		2.916	(c)	05/19/35		48,903
	1,632	2005-16 X1 (IO)		3.216	(c)	01/19/36		51,780
	3,758	2005-16 X3 (IO)		1.700	(c)	01/19/36		105,101
	2,554	2005-3 X2 (IO)		2.676	(c)	06/19/35		56,266
	3,252	2006-1 X1 (IO)		3.286	(c)	03/19/37		104,170
	5,241	2006-5 X2 (IO)		3.392	(c)	07/19/47		161,323
	3	2006-1 PO1 (PO)		—		03/19/37		374
	(a)	2006-5 PO2 (PO)		—		07/19/47		3
		Indymac Index Mortgage Loan Trust
	147	2004-R3 B1		3.233	(c)	07/25/34		67,640
	2,147	2005-AR12		1.057	(c)	07/25/35		46,621
		Luminent Mortgage Trust
	727	2006-4 A1B		2.713	(c)	05/25/46		425,455
	702	2006-6 A1		2.683	(c)	10/25/46		505,029
	462	2006-1 A1		2.723	(c)	04/25/36		319,508
	521	2006-2 A1B		2.763	(c)	02/25/46		291,250
	425	Master Adjustable Rate Mortgage Trust 2007-3 1M2		3.583	(c)	05/25/47		77,002
	622	Mortgageit Trust 2006-1 2A1B		2.763	(c)	04/25/36		353,097
		Residential Accredit Loans Inc.
	222	2006-Q01 2A1		2.753	(c)	02/25/46		156,663
	324	2007-QO4 A3		2.783	(c)	05/25/47		120,451

See Notes to Financial Statements
41

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	923	2006-Q06 A2		2.713	(c)%	06/25/46	$	500,247
	654	2007-Q03 A3		2.743	(c)	03/25/47		254,566
	1,130	2007-QH1 A2		2.673	(c)	02/25/37		592,801
	801	2006-QO2 A2		2.753	(c)	02/25/46		435,886
	1	Sharps SP I LLC Net Interest Margin Trust 2006-AHM3 N1 - 144A (b)		7.00		10/25/46		691
		Structured Asset Mortgage Investments Inc.
	738	2007-AR1 2A2		2.693	(c)	01/25/37		425,109
	830	2007-AR2 1A2		2.673	(c)	02/25/37		456,002
	611	2006-AR2 A2		2.793	(c)	02/25/36		337,231
	371	2006-AR1 2A2		2.793	(c)	02/25/36		207,069
		Washington Mutual Mortgage Pass-Through Certificates
	758	2007-0A1 A1B		2.683	(c)	02/25/47		525,384
	426	2005-AR13 A1A2		4.978	(c)	10/25/45		333,435
	614	2006-AR4 1A1B		4.734	(c)	05/25/46		394,288
	432	2005-AR15 A1B3		2.823	(c)	11/25/45		278,659
	659	2006-AR6 2A		4.488	(c)	08/25/46		475,659
	961	2006-AR9 1A		4.528	(c)	08/25/46		735,493
	400	2005-AR13 A1B3		2.843	(c)	10/25/45		251,234
	346	2005-AR8 2AB3		2.843	(c)	07/25/45		223,359
	730	2006-AR2 A1A		4.468	(c)	04/25/46		526,812
	777	2007-0A1 CA1B		2.683	(c)	12/25/46		432,080
	1,851	2004-AR10 X (IO)		2.588	(c)	07/25/44		30,648
	2,645	2004-AR12 X (IO)		2.598	(c)	10/25/44		42,981
	1,064	2004-AR8 X (IO)		2.647	(c)	06/25/44		18,626
		Total Private Issues						23,306,821
		Total Collateralized Mortgage Obligations (Cost $38,995,569)						24,579,641
		Commercial Mortage-Backed Securities (0.9%)
	265	Citigroup Commercial Mortgage Trust 2007-C6 A1		5.622	(c)	12/10/49		262,761
	684	JPMorgan Chase 2007-LD11 A1		5.651	(c)	06/15/49		684,171
		Total Commercial Mortage-Backed Securities (Cost $951,059)						946,932
		Asset-Backed Securities (16.0%)
	275	Ameriquest Mortgage Securities Inc. 2004-R7 M5		3.633	(c)	08/25/34		142,401
	1,475	Bank of America Credit Card Trust 2007-A13 A13		2.691	(c)	04/16/12		1,470,113
	1,011	Capital Auto Receivables Asset Trust 2006-2 A3A		4.98		05/15/11		1,022,382
	1,400	Capital Auto Receivables Asset Trust 2007-SN1 A3A		5.38		07/15/10		1,421,263

See Notes to Financial Statements
42

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	700	Capital Auto Receivables Asset Trust 2007-3 A3A		5.02	%	09/15/11	$	710,791
	469	Caterpillar Financial Asset Trust 2006-A A3		5.57		05/25/10		472,750
	550	CNH Equipment Trust 2007-B A3A		5.40		10/17/11		557,413
	282	CNH Equipment Trust 2006-B A3		5.20		06/15/10		283,724
	164	Credit-Based Asset Servicing 2006-CB6 A21		2.433	(c)	07/25/36		162,211
	975	DaimlerChrysler Auto Trust 2007-A A3A		5.00		02/08/12		988,299
	1,019	Ford Credit Auto Owner Trust 2006-B A3		5.26		10/15/10		1,028,974
	1,175	Ford Credit Auto Owner Trust 2007-A A3A		5.40		08/15/11		1,194,200
	257	GE Equipment Small Ticket LLC 2005-2A A3 - 144A (b)		4.88		10/22/09		258,096
	838	GS Auto Loan Trust 2006-1 A3		5.37		12/15/10		846,114
	710	Harley-Davidson Motorcycle Trust 2005-3 A2		4.41		06/15/12		715,994
	413	Harley-Davidson Motorcycle Trust 2004-2 A2		3.56		02/15/12		409,590
	553	Harley-Davidson Motorcycle Trust 2005-2 A2		4.07		02/15/12		555,644
	625	Hertz Vehicle Financing LLC 2005-2A A2 - 144A (b)		4.93		02/25/10		622,038
	118	Honda Auto Receivables Owner Trust 2005-5 A3		4.61		08/17/09		117,882
	218	Honda Auto Receivables Owner Trust 2005-6 A3		4.85		10/19/09		218,669
	975	Hyundai Auto Receivables Trust 2007-A A3A		5.04		01/17/12		992,796
	186	National City Auto Receivables Trust 2004-A A4		2.88		05/15/11		185,974
	418	Nationstar Home Equity Loan Trust 2007-C 2AV1		2.543	(c)	06/25/37		394,099
	850	Nissan Auto Receivable Owner Trust 2007-B A3		5.03		05/16/11		864,107
	207	USAA Auto Owner Trust 2005-3 A3		4.55		02/16/10		207,760
	900	USAA Auto Owner Trust 2007-2 A3		4.90		02/15/12		912,079
	17	Wachovia Auto Owner Trust 2005-A A3		4.06		09/21/09		16,583
		Total Asset-Backed Securities (Cost $16,770,514)						16,771,946
		U.S. Government Agencies (7.8%)
	5,400	Federal National Mortgage Assoc.		4.375		03/15/13		5,463,261
	2,650	Federal Home Loan Mortgage Corp.		5.125		11/17/17		2,727,566
		Total U.S. Government Agencies (Cost $8,405,680)						8,190,827
		U.S. Government Agencies - Mortgage-Backed Securities (7.6%)
	354	Federal Home Loan Mortgage Corp.		7.50		02/01/27 - 08/01/32		382,329
	577	Federal Home Loan Mortgage Corp. ARM		4.348		10/01/33		580,216
	555	Federal Home Loan Mortgage Corp. ARM		4.359		07/01/35		555,585
	155	Federal Home Loan Mortgage Corp. ARM		5.395		07/01/34		157,364
	232	Federal Home Loan Mortgage Corp. ARM		6.006		08/01/34		236,912
	633	Federal National Mortgage Assoc.		6.50		01/01/32 - 11/01/33		656,768

See Notes to Financial Statements
43

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	896	Federal National Mortgage Assoc.		7.00	%	11/01/24 - 01/01/34	$	946,669
	1,002	Federal National Mortgage Assoc.		7.50		03/01/24 - 08/01/32		1,078,990
	600	Federal National Mortgage Assoc.		7.00		(d)		629,063
	274	Federal National Mortgage Assoc. ARM		4.093		05/01/35		275,644
	562	Federal National Mortgage Assoc. ARM		4.602		05/01/35		569,839
	558	Federal National Mortgage Assoc. ARM		4.766		07/01/35		564,489
	522	Federal National Mortgage Assoc. ARM		5.075		04/01/35		524,525
	129	Federal National Mortgage Assoc. ARM		5.142		07/01/34		128,800
	63	Federal National Mortgage Assoc. ARM		5.301		06/01/34		63,225
	370	Federal National Mortgage Assoc. ARM		5.343		05/01/35		378,010
	162	Federal National Mortgage Assoc. ARM		5.679		04/01/35		162,760
	103	Federal National Mortgage Assoc. ARM		6.221		09/01/34		104,476
		Total U.S. Government Agencies - Mortgage-Backed Securities (Cost $7,949,989)						7,995,664
NUMBER OF CONTRACTS
		Call Options Purchased (0.1%)
	107	90 day Euro $ Futures September/2009 @ $96.75 (Cost $92,571)						98,306
PRINCIPAL AMOUNT IN THOUSANDS
		Short-Term Investments (13.8%)
		U.S. Government Obligations (g) (0.2%)
$	160	U.S. Treasury Bills (e) (Cost $159,281)		1.57 - 1.896		10/09/08		159,294

See Notes to Financial Statements
44

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES (000)					VALUE
		Investment Company (h) (13.6%)
	14,271	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (f) (Cost $14,270,088)			$	14,270,088
		Total Short-Term Investments (Cost $14,429,369)				14,429,382
		Total Investments (Cost $119,915,020) (i)(j)	100.2	%		105,175,207
		Liabilities in Excess of Other Assets	(0.1	)		(153,958	)
		Total Written Options Outstanding	(0.1	)		(59,519	)
		Net Assets	100.0	%	$	104,961,730

ARM Adjustable Rate Mortgage. Interest rate in effect as of June 30, 2008.

IO Interest Only Security.

MTN Medium Term Note.

PC Participation Certificate.

PO Principal Only Security. No rate exists for a principal only security.

(a) Amount is less than one thousand.

(b) Resale is restricted to qualified institutional investors.

(c) Floating rate security, rate shown is the rate in effect at June 30, 2008.

(d) Security was purchased on a forward commitment basis with an approximate principal amount and no definite maturity date; the actual principal amount and maturity date will be determined upon settlement.

(e) A portion of this security has been physically segregated in connection with open futures contracts in an amount equal to $137,124.

(f) May include cash designated as collateral in connection with open swap contracts.

(g) Purchased on a discount basis. The interest rates shown have been adjusted to reflect a money market equivalent yield.

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

(i) Securities have been designated as collateral in an amount equal to $56,383,409 in connection with securities purchased on a forward commitment basis, open futures and swap contracts.

(j) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $419,822 and the aggregate gross unrealized depreciation is $15,159,635 resulting in net unrealized depreciation of $14,739,813.

See Notes to Financial Statements
45

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited) continued

Options Written at June 30, 2008:

NUMBER OF CONTRACTS				DESCRIPTION				EXERCISE PRICE				EXPIRATION DATE				PREMIUM				VALUE
	107			Call Options on 90 DAY EURO$ FUTURE				$	97.25			September 2009				$	53,217			$	59,519

Futures Contracts Open at June 30, 2008:

NUMBER OF CONTRACTS		LONG/SHORT	DESCRIPTION, DELIVERY MONTH AND YEAR	UNDERLYING FACE AMOUNT AT VALUE			UNREALIZED APPRECIATION (DEPRECIATION)
	42	Long	U.S. Treasury Notes 10 Year, September 2008	$	4,784,719		$	5,151
	2	Long	U.S. Treasury Bonds 20 Year, September 2008		231,188			3,201
	39	Short	U.S. Treasury Notes 5 Year, September 2008		(4,311,633	)		(13,699	)
	204	Short	U.S. Treasury Notes 2 Year, September 2008		(43,085,437	)		(4,046	)
Net Unrealized Depreciation							$	(9,393	)

See Notes to Financial Statements
46

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited) continued

Interest Rate Swap Contracts Open at June 30, 2008:

COUNTERPARTY

NOTIONAL
AMOUNT
(000'S)

PAYMENTS
RECEIVED
BY FUND

PAYMENTS
MADE
BY FUND

TERMINATION
DATE

UNREALIZED
APPRECIATION
(DEPRECIATION)

Bank of America, N.A. New York

9,300

Fixed Rate 4.211%

Floating Rate 2.68%#

June 3, 2013

(17,484

)

Bank of America, N.A. New York

963

Fixed Rate 5.56

Floating Rate 0.00#

February 19, 2018

13,212

Bank of America, N.A. New York

800

Fixed Rate 5.07

Floating Rate 0.00#

April 14, 2018

(3,456

)

Bank of America, N.A. New York

890

Fixed Rate 4.983

Floating Rate 0.00#

April 15, 2018

(6,613

)

Citigroup Inc.

2,600

Fixed Rate 2.90

Floating Rate 2.646#

February 28, 2010

(22,386

)

Deutsche Bank AG, New York

EUR

4,645

Fixed Rate 5.268

Floating Rate 5.13†

July 3, 2023

(11,263

)

Deutsche Bank AG, New York

36,685

Fixed Rate 2.075

Floating Rate 0.00#

June 17, 2009

(71,132

)

Deutsche Bank AG, New York

2,700

Fixed Rate 4.55

Floating Rate 2.92#

October 23, 2009

41,418

Deutsche Bank AG, New York

2,700

Fixed Rate 4.427

Floating Rate 2.758#

November 8, 2009

37,692

Goldman Sachs Group Inc,

2,700

Fixed Rate 4.642

Floating Rate 2.691#

September 11, 2009

42,498

Goldman Sachs Group Inc,

2,770

Fixed Rate 5.63

Floating Rate 0.00#

February 28, 2018

44,708

JPMorgan Chase N.A. New York

2,800

Fixed Rate 5.391

Floating Rate 2.672#

June 6, 2009

56,028

JPMorgan Chase N.A. New York

2,800

Fixed Rate 5.486

Floating Rate 2.776#

June 14, 2009

59,136

JPMorgan Chase N.A. New York

2,800

Fixed Rate 5.365

Floating Rate 2.671#

June 28, 2009

58,128

JPMorgan Chase N.A. New York

2,800

Fixed Rate 5.358

Floating Rate 2.71#

July 13, 2009

59,808

JPMorgan Chase N.A. New York

2,800

Fixed Rate 5.078

Floating Rate 2.873#

August 1, 2009

53,144

JPMorgan Chase N.A. New York

2,700

Fixed Rate 4.794

Floating Rate 2.803#

September 20, 2009

47,655

JPMorgan Chase N.A. New York

2,700

Fixed Rate 4.783

Floating Rate 2.734#

October 18, 2009

49,518

JPMorgan Chase N.A. New York

2,700

Fixed Rate 4.385

Floating Rate 2.913#

October 29, 2009

35,721

JPMorgan Chase N.A. New York

2,600

Fixed Rate 4.139

Floating Rate 2.786#

December 12, 2009

27,872

JPMorgan Chase N.A. New York

2,600

Fixed Rate 3.989

Floating Rate 2.776#

December 14, 2009

22,490

JPMorgan Chase N.A. New York

2,600

Fixed Rate 2.785

Floating Rate 2.784#

February 4, 2010

(26,338

)

JPMorgan Chase N.A. New York

7,000

Fixed Rate 3.292

Floating Rate 2.644#

May 29, 2010

(30,520

)

JPMorgan Chase N.A. New York

2,700

Fixed Rate 4.184

Floating Rate 2.677#

June 9, 2013

(8,532

)

Bank of America, N.A. New York

1,256

Floating Rate 0.00#

Fixed Rate 5.995

February 19, 2023

(21,880

)

Bank of America, N.A. New York

1,025

Floating Rate 0.00#

Fixed Rate 5.47

April 14, 2023

(2,880

)

Bank of America, N.A. New York

965

Floating Rate 0.00#

Fixed Rate 5.38

April 15, 2023

(328

)

Deutsche Bank AG, New York

36,685

Floating Rate 0.00##

Fixed Rate 2.41

June 17, 2009

85,586

Deutsche Bank AG, New York

EUR

3,710

Floating Rate 5.13†

Fixed Rate 4.934

July 1, 2018

(3,154

)

Goldman Sachs Group Inc,

3,590

Floating Rate 0.00#

Fixed Rate 6.035

February 28, 2023

(66,415

)

Net Unrealized Appreciation

442,233

EUR Euro.

# Floating rate represents USD-3 Months LIBOR.

## Floating rate represents USD-1 Day OIS.

† Floating rate represents EUR-3 Months EURIBOR.

See Notes to Financial Statements
47

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2008 (unaudited) continued

Credit Default Swap Contracts Open at June 30, 2008:

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Goldman Sachs International Dow Jones Index	Sell	$	1,400		0.35	%	June 20, 2012	$	(42,666	)
Barclays Bank Plc Dow Jones Index	Sell		1,000		0.60		December 20, 2012		(522	)
Citibank, N.A., New York Tyco Electronics Ltd.	Buy		53		0.43		March 20, 2012		575
Citibank, N.A., New York Tyco Electronics Ltd.	Buy		130		0.43		March 20, 2012		1,403
Net Unrealized Depreciation								$	(41,210	)

LONG-TERM CREDIT ANALYSIS
AAA	68.7	%
AA	12.0
A	9.8
BBB	9.5
	100.0	%*

* Does not include open long/short futures contracts with an underlying face amount of $52,412,977 with net unrealized depreciation of $9,393. Also does not include open swap contracts with unrealized appreciation of $401,023.

See Notes to Financial Statements
48

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited)

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Corporate Bonds (87.3%)
		Accident & Health Insurance (0.3%)
$	945	Travelers Co. Inc.		5.80	%	05/15/18	$	921,143
		Advertising/Marketing Services (0.2%)
	730	Interpublic Group of Companies, Inc. (The)		6.25		11/15/14		635,100
		Air Freight/Couriers (1.3%)
	3,969	FedEx Corp. (Series 97-A)		7.50		01/15/18		4,137,424
		Airlines (0.6%)
	583	America West Airlines, Inc. (Class A)		6.85		07/02/09		577,648
	1,374	America West Airlines, Inc. (Series 01-1)		7.10		04/02/21		1,250,332
								1,827,980
		Auto Parts: O.E.M. (0.2%)
	855	ArvinMeritor, Inc.		8.75		03/01/12		756,675
		Beverages: Alcoholic (0.7%)
	470	Anheuser-Busch Companies, Inc.		5.50		01/15/18		441,575
	1,680	FBG Finance Ltd. - 144A (Australia) (a)		5.125		06/15/15		1,588,000
								2,029,575
		Biotechnology (1.2%)
	1,625	Amgen Inc.		5.85		06/01/17		1,603,311
	1,970	Biogen Idec Inc.		6.875		03/01/18		2,021,454
								3,624,765
		Broadcasting (0.4%)
	1,180	Grupo Televisa S.A. - 144A (Mexico) (a)		6.00		05/15/18		1,153,498
		Cable/Satellite TV (2.2%)
	1,090	Comcast Cable Communications, Inc.		6.75		01/30/11		1,129,879
	995	Comcast Cable Communications, Inc.		7.125		06/15/13		1,050,066
	1,880	Comcast Corp.		6.50		01/15/15		1,911,578
	275	DIRECTV Holdings/Finance		6.375		06/15/15		259,188
	1,230	DIRECTV Holdings/Finance - 144A (a)		7.625		05/15/16		1,217,700
	895	EchoStar DBS Corp.		6.375		10/01/11		865,913
	425	EchoStar DBS Corp.		6.625		10/01/14		394,188
								6,828,512
		Chemicals: Agricultural (0.2%)
	480	Monsanto Co.		5.125		04/15/18		471,637

See Notes to Financial Statements
49

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Computer Processing Hardware (0.7%)
$	1,665	Dell Inc. 144A (a)		5.65	%	04/15/18	$	1,609,645
	635	Hewlett-Packard Co.		5.50		03/01/18		623,075
								2,232,720
		Data Processing Services (0.3%)
	1,035	FISERV, Inc.		6.80		11/20/17		1,048,843
		Department Stores (0.5%)
	1,200	Federated Department Stores, Inc.		6.625		09/01/08		1,201,421
	415	General Electrics Cap Corp.		5.625		05/01/18		402,073
								1,603,494
		Discount Stores (0.1%)
	330	Target Corp.		6.50		10/15/37		318,465
		Drugstore Chains (1.1%)
	150	CVS Caremark Corp.		5.75		06/01/17		147,786
	1,180	CVS Corp.		5.75		08/15/11		1,209,895
	2,197	CVS Lease Pass-Through - 144A (a)		6.036		12/10/28		2,046,025
								3,403,706
		Electric Utilities (8.8%)
	1,610	AES Corp. - 144A (a)		8.00		06/01/20		1,561,700
	3,090	Arizona Public Service Co.		5.80		06/30/14		2,939,526
	670	CenterPoint Energy Resources, Corp.		6.25		02/01/37		596,351
	375	CenterPoint Energy Resources, Corp. (Series B)		7.875		04/01/13		401,837
	65	CMS Energy Corp.		6.30		02/01/12		64,737
	1,070	Consolidated Natural Gas Co. (Series C)		6.25		11/01/11		1,105,118
	120	Detroit Edison Co.		5.20		10/15/12		121,039
	2,170	Duquesne Light Co. (Series O)		6.70		04/15/12		2,271,855
	1,650	E.ON International Finance BV (Netherlands)		5.80		04/30/18		1,621,651
	910	Enel Finance International - 144A (a)		5.70		01/15/13		921,155
	1,780	Exelon Corp.		6.75		05/01/11		1,829,813
	365	Florida Power Corp.		5.80		09/15/17		374,299
	1,735	Isreal Electric Corp. Ltd - 144A (Isreal) (a)		7.25		01/15/19		1,774,267
	895	Nevada Power Co.		8.25		06/01/11		966,775
	1,905	Ohio Edison Co.		6.40		07/15/16		1,903,404
	2,205	Ohio Power Company (Series K)		6.00		06/01/16		2,190,771
	1,120	Pacific Gas & Electric Co.		5.625		11/30/17		1,117,670
	1,025	PPL Energy Supply LLC		6.50		05/01/18		1,002,877
	650	Progress Energy Carolinas, Inc.		5.15		04/01/15		649,104

See Notes to Financial Statements
50

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	1,015	Public Service Electric & Gas Co. (Series G)		5.125	%	09/01/12	$	1,026,823
	1,325	Texas Eastern Transmission		7.00		07/15/32		1,331,866
	985	Union Electric Co.		6.40		06/15/17		984,757
	430	Virginia Electric Power Co.		5.95		09/15/17		432,890
								27,190,285
		Electrical Products (0.5%)
	1,580	Cooper Industries, Inc.		5.25		11/15/12		1,588,151
		Electronic Components (0.4%)
	1,400	Philips Electronics		5.75		03/11/18		1,374,122
		Electronic Equipment/Instruments (0.3%)
	855	Xerox Corp.		6.35		05/15/18		845,498
		Electronic Production Equipment (0.5%)
	1,725	KLA-Tencor Corp.		6.90		05/01/18		1,694,102
		Finance/Rental/Leasing (2.4%)
	895	Capital One Financial Corp.		6.75		09/15/17		888,290
	870	Capmark Financial Group		6.30		05/10/17		563,220
	2,990	Capmark Financial Group		5.875		05/10/12		2,110,850
	1,930	CIT Group, Inc.		5.65		02/13/17		1,333,464
	3,000	SLM Corp.		3.08		07/26/10		2,663,580
								7,559,404
		Financial Conglomerates (3.3%)
	1,165	Brookfield Asset Management Inc. (Canada)		5.80		04/25/17		1,042,068
	1,735	Citigroup Inc.		5.875		05/29/37		1,480,030
	1,645	Citigroup Inc. (Series E)		8.40		04/29/49		1,565,810
	1,845	Citigroup Inc.		5.25		02/27/12		1,822,511
	1,745	JPMorgan Chase & Co.		4.75		05/01/13		1,697,700
	2,040	JPMorgan Chase & Co.		6.75		02/01/11		2,118,601
	635	Prudential Financial, Inc.		6.625		12/01/37		601,280
								10,328,000
		Food Retail (0.7%)
	1,400	Delhaize America, Inc.		9.00		04/15/31		1,652,444
	610	Kroger Co.		5.00		04/15/13		600,643
								2,253,087
		Food: Major Diversified (1.3%)
	925	ConAgra Foods, Inc.		7.00		10/01/28		954,855
	1,040	ConAgra Foods, Inc.		8.25		09/15/30		1,208,026

See Notes to Financial Statements
51

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	290	Kraft Foods Inc.		6.125	%	08/23/18	$	281,364
	1,495	Kraft Foods Inc.		6.00		02/11/13		1,511,935
								3,956,180
		Food: Meat/Fish/Dairy (0.3%)
	290	Pilgrim's Pride Corp.		7.625		05/01/15		239,975
	800	Smithfield Foods, Inc. (Series B)		8.00		10/15/09		800,000
								1,039,975
		Foods & Beverages (0.3%)
	975	Dr Pepper Snapple Group - 144A (a)		6.82		05/01/18		980,759
		Gas Distributors (2.5%)
	650	DCP Midstream LLC		6.75		09/15/37		617,611
	1,000	Equitable Resources Inc.		6.50		04/01/18		1,003,232
	965	NiSource Finance Corp		6.80		01/15/19		948,080
	1,870	NiSource Finance Corp.		3.208	(d)	11/23/09		1,818,498
	1,700	NiSource Finance Corp.		7.875		11/15/10		1,763,871
	1,730	Questar Market Resources		6.80		04/01/18		1,693,315
								7,844,607
		Home Building (0.1%)
	290	Pulte Homes, Inc.		6.375		05/15/33		226,200
		Home Improvement Chains (1.6%)
	1,780	Home Depot Inc.		5.40		03/01/16		1,636,986
	3,345	Home Depot Inc.		2.901	(d)	12/16/09		3,259,151
								4,896,137
		Hospital/Nursing Management (0.1%)
	480	Tenet Healthcare Corp.		7.375		02/01/13		453,600
		Hotels/Resorts/Cruiselines (0.3%)
	1,130	Starwood Hotels & Resorts		6.75		05/15/18		1,067,534
		Industrial Conglomerates (3.3%)
	9,930	General Electric Co.		5.25		12/06/17		9,563,464
	785	Honeywell International Inc.		5.30		03/01/18		774,735
								10,338,199
		Industrial Specialties (0.2%)
	640	Cox Communications Inc.		6.25		06/01/18		625,900

See Notes to Financial Statements
52

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Insurance Brokers/Services (1.5%)
$	1,500	Farmers Exchange Capital - 144A (a)		7.05	%	07/15/28	$	1,374,656
	3,105	Farmers Insurance Exchange - 144A (a)		8.625		05/01/24		3,254,624
								4,629,280
		Integrated Oil (0.9%)
	1,450	Marathon Oil Corp.		6.00		10/01/17		1,444,255
	1,590	Petro-Canada (Canada)		5.95		05/15/35		1,401,401
								2,845,656
		Investment Banks/Brokers (6.7%)
	1,060	Bear Stearns Companies Inc. (The)		7.25		02/01/18		1,108,089
	1,310	Bear Stearns Companies Inc. (The)		5.55		01/22/17		1,212,743
	1,215	Bear Stearns Companies Inc. (The)		6.40		10/02/17		1,202,720
	4,165	Goldman Sachs Group Inc. (The)		6.15		04/01/18		4,047,993
	4,950	Goldman Sachs Group Inc. (The)		6.75		10/01/37		4,541,640
	1,260	Lehman Brothers Holdings, Inc.		5.75		01/03/17		1,113,708
	1,485	Lehman Brothers Holdings, Inc.		6.50		07/19/17		1,376,080
	3,730	Lehman Brothers Holdings, Inc.		6.875		07/17/37		3,219,937
	1,195	Merrill Lynch & Co., Inc.		5.45		02/05/13		1,128,245
	1,930	Merrill Lynch & Co., Inc. (Series MTN)		6.875		04/25/18		1,840,031
								20,791,186
		Major Banks (6.1%)
	2,075	Bank of America Corp.		5.65		05/01/18		1,940,756
	1,865	Bank of America Corp.		5.75		12/01/17		1,754,558
	1,500	Bank of America Corp.		4.875		09/15/12		1,474,512
	970	Bank of New York Mellon Corp. (Series MTN)		4.50		04/01/13		946,561
	545	Barclays Bank Plc - 144A (United Kingdom) (a)		6.05		12/04/17		535,151
	3,950	Credit Suisse New York (Switzeland)		6.00		02/15/18		3,810,348
	1,675	HBOS Plc - 144A (a)		6.75		05/21/18		1,604,740
	1,660	HSBC Finance Corp.		6.75		05/15/11		1,726,237
	1,800	Huntington National Bank (Series T)		4.375		01/15/10		1,672,519
	760	PNC Bank NA		6.00		12/07/17		720,701
	1,580	Popular North America, Inc. (Series F)		5.65		04/15/09		1,565,006
	1,370	Wachovia Bank NA		5.85		02/01/37		1,093,859
								18,844,948
		Major Telecommunications (7.0%)
	4,470	AT&T Corp.		8.00		11/15/31		5,146,119
	650	Deutsche Telekom International Finance Corp. NV (Netherlands)		8.75		06/15/30		747,748

See Notes to Financial Statements
53

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	2,335	France Telecom S.A. (France)		8.50	%	03/01/31	$	2,834,200
	2,040	SBC Communications, Inc.		6.15		09/15/34		1,912,086
	2,005	Sprint Capital Corp.		8.75		03/15/32		1,914,374
	520	Sprint Nextel Corp.		6.00		12/01/16		447,906
	3,645	Telecom Italia Capital SA (Luxembourg)		4.00		01/15/10		3,597,312
	2,145	Telefonica Europe BV (Netherlands)		8.25		09/15/30		2,469,075
	2,765	Verizon Communications		5.50		02/15/18		2,635,192
								21,704,012
		Managed Health Care (0.6%)
	2,020	Unitedhealth Group Inc.		6.00		02/15/18		1,957,521
		Media Conglomerates (4.1%)
	1,050	News America Inc.		6.65		11/15/37		1,028,509
	345	Thomson Reutres Corp.		6.50		07/15/18		344,411
	1,410	Time Warner Cable Inc		6.75		07/01/18		1,421,907
	2,690	Time Warner, Inc.		2.915		11/13/09		2,614,954
	1,905	Time Warner, Inc.		5.875		11/15/16		1,799,229
	2,320	Viacom, Inc.		6.875		04/30/36		2,185,171
	3,335	Vivendi - 144A (France) (a)		6.625		04/04/18		3,316,137
								12,710,318
		Medical Specialties (2.1%)
	1,860	Baxter International		5.375		06/01/18		1,841,564
	1,471	Covidien International Finance		6.00		10/15/17		1,491,420
	3,135	Hospira, Inc.		3.176	(d)	03/30/10		3,040,727
								6,373,711
		Miscellaneous (0.6%)
	1,675	Oracle Corp.		5.75		04/15/18		1,676,668
		Motor Vehicles (0.8%)
	1,015	DaimlerChrysler North American Holdings Co.		8.50		01/18/31		1,176,729
	1,135	Harley-Davidson Funding - 144A (a)		6.80		06/15/18		1,123,417
								2,300,146
		Multi-Line Insurance (2.0%)
	2,625	AIG SunAmerica Global Financing VI - 144A (a)		6.30		05/10/11		2,667,567
	3,710	American General Finance Corp. (Series H)		4.625		09/01/10		3,596,474
								6,264,041
		Oil & Gas Pipelines (3.2%)
	1,019	Colorado Interstate Gas Co.		6.80		11/15/15		1,045,958
	1,265	Enterprise Products Operating L.P. (Series B)		5.60		10/15/14		1,240,809
	400	GAZ Capital SA - 144A (Luxembourg) (a)		6.51		03/07/22		360,000

See Notes to Financial Statements
54

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	955	Kinder Morgan Energy Partners, L.P.		5.85	%	09/15/12	$	963,911
	2,465	Kinder Morgan Finance Co. (Canada)		5.70		01/05/16		2,206,175
	2,195	Plains All American Pipeline LP/PAA Finance Corp.		6.70		05/15/36		2,095,169
	1,085	Trans-Canada Pipelines		6.20		10/15/37		997,762
	860	Transcontinental Gas Pipe Line Corp. (Series B)		8.875		07/15/12		956,750
								9,866,534
		Oil & Gas Production (1.2%)
	860	Chesapeake Energy Corp.		7.625		07/15/13		866,450
	1,220	Encana Corp.		6.50		02/01/38		1,210,726
	445	Newfield Exploration Co.		7.125		05/15/18		423,863
	480	Plains Exploration & Production Co.		7.625		06/01/18		482,400
	810	XTO Energy, Inc.		5.50		06/15/18		774,988
								3,758,427
		Oil Refining/Marketing (0.3%)
	995	Marathon Oil Corp.		5.90		03/15/18		985,145
		Oilfield Services/Equipment (0.4%)
	70	Weatherford International Inc.		6.00		03/15/18		69,210
	1,035	Weatherford International Inc.		6.35		06/15/17		1,050,107
								1,119,317
		Other Metals/Minerals (1.1%)
	2,435	Brascan Corp. (Canada)		7.125		06/15/12		2,460,964
	1,050	Rio Tinto Finance (USA) Ltd. (Australia)		6.50		07/15/18		1,055,108
								3,516,072
		Paper & Forest Products (0.5%)
	1,470	Nine Dragons Paper Holdings Ltd. - 144A (a)		7.875		04/29/13		1,444,687
		Pharmaceuticals: Major (1.1%)
	2,205	Glaxosmithkline Cap Inc.		5.65		05/15/18		2,200,694
	990	Wyeth		5.45		04/01/17		978,069
	305	Wyeth		5.50		02/15/16		307,009
								3,485,772
		Property - Casualty Insurers (2.5%)
	1,145	ACE INA Holdings Inc.		5.60		05/15/15		1,104,231
	1,680	Berkshire Hathaway Finance - 144A (a)		5.40		05/15/18		1,682,268
	290	Chubb Corp.		5.75		05/15/18		281,592
	2,500	Mantis Reef Ltd. - 144A (Cayman Islands) (a)		4.692		11/14/08		2,490,648
	2,045	Platinum Underwriters Finance Inc. (Series B)		7.50		06/01/17		1,924,216
								7,482,955

See Notes to Financial Statements
55

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Railroads (0.6%)
$	1,835	Union Pacific Corp.		5.45	%	01/31/13	$	1,841,734
		Real Estate Development (0.4%)
	1,127	World Financial Properties - 144A (a)		6.91		09/01/13		1,127,170
	144	World Financial Properties - 144A (a)		6.95		09/01/13		143,323
								1,270,493
		Restaurants (0.6%)
	1,750	Tricon Global Restaurants, Inc.		8.875		04/15/11		1,892,742
		Savings Banks (3.6%)
	500	Household Finance Corp.		4.125		11/16/09		496,850
	1,140	Household Finance Corp.		6.375		10/15/11		1,166,787
	1,915	Household Finance Corp.		8.00		07/15/10		2,003,454
	4,655	Sovereign Bancorp, Inc.		2.829		03/23/10(d)		4,163,525
	3,630	Washington Mutual Inc.		8.25		04/01/10		3,213,784
								11,044,400
		Services to the Health Industry (0.6%)
	1,830	Medco Health Solutions		7.125		03/15/18		1,903,769
		Steel (0.7%)
	1,400	Arcelormittal - 144A (Luxembourg) (a)		6.125		06/01/18		1,370,662
	710	Evraz Group SA - 144A (Luxembourg) (a)		9.50		04/24/18		715,325
								2,085,987
		Telecommunication Equipment (0.1%)
	290	Corning Inc.		7.25		08/15/36		295,054
		Tobacco (0.9%)
	1,900	Philip Morris International Inc.		5.65		05/16/18		1,850,167
	795	Reynolds American Inc.		6.50		07/15/10		810,900
								2,661,067
		Wireless Telecommunications (0.2%)
	660	VIP Finance (Vimpelcom) - 144A (Ireland) (a)		9.125		04/30/18		650,294
		Total Corporate Bonds (Cost $280,081,851)						270,657,213
		Foreign Government Obligations (0.8%)
MXN	18,385	Mexican Fixed Rate Bonds (Series M20) (Mexico)		9.50		12/18/14		1,825,469
$	659	Republic of Argentina (Argentina)		8.28		12/31/33		505,432
		Total Foreign Government Obligations (Cost $2,378,045)						2,330,901

See Notes to Financial Statements
56

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Asset-Backed Securities (0.8%)
$	1,250	Capital One Multi-Asset Execution 2007-A7 A7		5.75	%	07/15/20	$	1,223,779
	1,375	Discover Master Card Trust 2007-A1 A1		5.65		03/16/20		1,322,523
		Total Asset-Backed Securities (Cost $2,622,110)						2,546,302
NUMBER OF SHARES
		Convertible Preferred Stock (0.1%)
		Finance/Rental/Leasing
	8,500	Fannie Mae 2008-1 $4.375 (Cost $425,000)						325,550
PRINCIPAL AMOUNT IN THOUSANDS
		Collateralized Mortgage Obligations (0.2%)
$	1,066	American Home Mortgage Assets 2007-5 A3		2.783	(d)	06/25/47		413,549
	993	Countrywide Alternative Loan Trust 2005-51 B1		3.482	(d)	11/20/35		59,577
	647	Countrywide Alternative Loan Trust 2005-81 M1		3.183	(d)	02/25/37		49,665
	500	Countrywide Alternative Loan Trust 2006-0A16 M4		3.003	(d)	10/25/46		22,188
	550	Harborview Mortgage Loan Trust 2006-8 B4		3.031	(d)	08/21/36		29,906
	900	Lehman XS Trust 2007-4N M4		3.483	(d)	03/25/47		31,506
	498	Luminent Mortgage Trust 2006-5 B1		2.843	(d)	07/25/36		29,566
	975	Master Adjustable Rate Mortgages Trust 2007-3 1M1		3.333	(d)	05/25/47		24,375
		Total Collateralized Mortgage Obligations (Cost $4,821,318)						660,332
		U.S. Government Agency - Mortgage-Backed Security (0.0%)
	3	Federal Home Loan Mortgage Corp. (Cost $3,096)		6.50		12/01/28		3,104
		Short-Term Investments (9.2%)
		U.S. Government Obligations (e) (1.5%)
	4,710	U.S. Treasury Bills (b) (Cost $4,689,676)		1.545 - 1.60				4,689,216

See Notes to Financial Statements
57

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES (000)					VALUE
		Investment Company (f) (7.7%)
	23,986	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (c) (Cost $23,985,624)			$	23,985,624
Total Short-Term Investments (Cost $28,675,300)						28,674,840
Total Investments (Cost $319,006,720) (g)(h)			98.4	%		305,198,242
Other Assets in Excess of Liabilities			1.6			4,820,589
Net Assets			100.0	%	$	310,018,831

MXM Mexican New Peso

MTN Medium Term Note.

(a) Resale is restricted to qualified institutional investors.

(b) A portion of this security has been physically segregated in connection with open futures contracts in the amount of $1,251,527.

(c) May includes cash designated as collateral in connection with open swap contracts.

(d) Floating rate security. Rate shown is the rate in effect at June 30, 2008.

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

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

(g) Securities have been designated as collateral in an amount equal to $190,684,779 in connection open futures contracts and open swap contracts.

(h) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $891,988 and the aggregate gross unrealized depreciation is $14,700,466, resulting in net unrealized depreciation $13,808,478.

Futures Contracts Open at June 30, 2008:

NUMBER OF CONTRACTS		LONG/SHORT	DESCRIPTION, DELIVERY MONTH AND YEAR	UNDERLYING FACE AMOUNT AT VALUE			UNREALIZED APPRECIATION (DEPRECIATION)
	135	Long	U.S. Treasury Notes 2 Year, September 2008	$	28,512,421		$	(31,210	)
	196	Long	Interest Rate Swap Futures 5 Year, September 2008		21,033,250			186,199
	133	Short	U.S. Treasury Notes 5 Year, September 2008		(14,703,774	)		(201,878	)
	90	Short	U.S. Treasury Bonds 20 Year, September 2008		(10,403,438	)		(11,652	)
	891	Short	U.S. Treasury Notes 10 Year, September 2008		(101,504,395	)		(320,789	)
Net Unrealized Depreciation							$	(379,330	)

See Notes to Financial Statements
58

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

Interest Rate Swap Contracts Open at June 30, 2008:

COUNTERPARTY

NOTIONAL
AMOUNT
(000'S)

PAYMENTS
RECEIVED
BY FUND

PAYMENTS
MADE
BY FUND

TERMINATION
DATE

UNREALIZED
APPRECIATION
(DEPRECIATION)

Bank of America, N.A. New York

55,000

Fixed Rate 4.556%

Floating Rate 2.814%#

June 17, 2013

721,601

Bank of America, N.A. New York

5,600

Fixed Rate 4.429

Floating Rate 2.802#

June 24, 2013

41,552

Bank of America, N.A. New York

6,968

Fixed Rate 5.55

Floating Rate 0.00#

February 22, 2018

92,883

Bank of America, N.A. New York

22,760

Fixed Rate 5.638

Floating Rate 0.00#

March 7, 2018

370,760

Bank of America, N.A. New York

6,590

Fixed Rate 5.07

Floating Rate 0.00#

April 14, 2018

(28,469

)

Bank of America, N.A. New York

4,970

Fixed Rate 4.983

Floating Rate 0.00#

April 15, 2018

(36,927

)

Citibank Capital Market

8,000

Fixed Rate 5.448

Floating Rate 2.734#

August 9, 2017

485,840

Citigroup Inc.

16,500

Fixed Rate 5.275

Floating Rate 2.92#

October 25, 2037

766,260

Deutsche Bank AG, New York

75,550

Fixed Rate 5.389

Floating Rate 2.638#

May 25, 2017

4,273,864

Deutsche Bank AG, New York

11,600

Fixed Rate 5.429

Floating Rate 2.644#

May 29, 2017

690,432

Deutsche Bank AG, New York

EUR

10,230

Fixed Rate 5.268

Floating Rate 5.13##

July 3, 2023

(24,804

)

JPMorgan Chase N.A. New York

7,800

Fixed Rate 5.448

Floating Rate 2.644#

May 29, 2017

475,410

JPMorgan Chase N.A. New York

21,200

Fixed Rate 5.454

Floating Rate 2.676#

June 4, 2017

1,299,984

Merrill Lynch & Co Inc.

6,630

Fixed Rate 5.00

Floating Rate 0.00#

April 15, 2018

(45,150

)

Bank of America, N.A. New York

8,712

Floating Rate 0.00#

Fixed Rate 5.958

February 22, 2023

(142,615

)

Bank of America, N.A. New York

29,260

Floating Rate 0.00#

Fixed Rate 6.04

March 7, 2023

(543,066

)

Bank of America, N.A. New York

8,440

Floating Rate 0.00#

Fixed Rate 5.47

April 14, 2023

(23,716

)

Bank of America, N.A. New York

5,935

Floating Rate 0.00#

Fixed Rate 5.38

April 15, 2023

(2,018

)

Deutsche Bank AG, New York

EUR

8,165

Floating Rate 5.13##

Fixed Rate 4.934

July 1, 2018

(6,942

)

JPMorgan Chase N.A. New York

11,400

Floating Rate 2.676#

Fixed Rate 4.582

December 4, 2017

57,342

JPMorgan Chase N.A. New York

25,500

Floating Rate 2.804#

Fixed Rate 3.966

March 25, 2018

1,399,440

JPMorgan Chase N.A. New York

38,500

Floating Rate 2.804#

Fixed Rate 3.966

March 25, 2018

2,112,880

Merrill Lynch & Co Inc.

8,340

Floating Rate 0.00#

Fixed Rate 5.395

April 15, 2023

(6,255

)

Net Unrealized Appreciation

11,928,286

EUR Euro.

# Floating rate represents USD-3 Months LIBOR.

## Floating rate represents EUR-3 Months EURIBOR.

See Notes to Financial Statements
59

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

Credit Default Swap Contracts Open at June 30, 2008:

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Lehman Brothers Special Financing Inc. ABX He	Buy	$	960		0.18	%	July 25, 2045	$	(77,049	)
Credit Suisse International ABX He	Buy		960		0.18		July 25, 2045		(67,454	)
Goldman Sachs International American Standard, Inc.	Buy		605		0.50		March 20, 2013		(159	)
UBS AG American Standard, Inc.	Buy		1,875		0.50		March 20, 2013		(493	)
Goldman Sachs International American Standard, Inc.	Buy		230		0.60		March 20, 2018		924
UBS AG American Standard, Inc.	Buy		1,970		0.60		March 20, 2018		7,912
Credit Suisse International Arrow Electronics, Inc.	Buy		2,140		1.00		March 20, 2015		(15,845	)
Lehman Brothers Special Financing Inc. Arrow Electronics, Inc.	Buy		325		1.04		March 20, 2018		(2,760	)
Credit Suisse International Arrow Electronics, Inc.	Buy		500		1.11		March 20, 2013		(6,664	)
Lehman Brothers Special Financing Inc. Arrow Electronics, Inc.	Buy		2,225		1.40		March 20, 2013		(57,105	)
Goldman Sachs International Avalonbay Communities Inc.	Buy		3,275		3.05		March 20, 2013		(189,740	)
Merrill Lynch International Carnival Corp.	Buy		1,955		1.50		March 20, 2018		(6,801	)
Merrill Lynch International Carnival Corp.	Buy		1,640		1.57		March 20, 2018		(4,663	)
Bank of America, N.A. Carnival Corp.	Buy		1,985		1.57		March 20, 2018		(5,643	)
Goldman Sachs International Carnival Corp.	Buy		160		1.60		March 20, 2018		(1,224	)
Merrill Lynch International Carnival Corp.	Buy		1,085		1.60		March 20, 2018		(8,299	)
Bank of America, N.A. Centurytel, Inc.	Buy		905		0.88		September 20, 2017		63,260

See Notes to Financial Statements
60

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Goldman Sachs International Coca-Cola Enterprises Inc.	Buy	$	3,395		0.588	%	March 20, 2013	$	(23,578	)
Lehman Brothers Special Financing Inc. Coca-Cola Enterprises Inc.	Buy		1,520		0.64		March 20, 2013		(13,990	)
Goldman Sachs International Chubb Corp.	Buy		3,900		0.10		March 20, 2012		66,374
Goldman Sachs International Dell Inc.	Buy		1,960		0.22		March 20, 2012		21,619
Merrill Lynch International Disney (Walt) Co.	Buy		3,325		0.77		March 20, 2013		(50,866	)
Goldman Sachs International Dow Jones Index	Sell		3,360		1.40		December 20, 2012		(76,716	)
Goldman Sachs International Dow Jones Index	Sell		3,520		1.40		December 20, 2012		(84,597	)
Goldman Sachs International Dow Jones Index	Sell		5,770		1.40		December 20, 2017		(117,871	)
Goldman Sachs International Dow Jones Index	Sell		9,160		1.55		June 20, 2013		(27,431	)
Citibank, N.A., New York Eaton Corp.	Buy		885		0.82		March 20, 2018		3,267
Merrill Lynch International Eaton Corp.	Buy		1,235		0.92		March 20, 2018		(4,792	)
Goldman Sachs International Eaton Corp.	Buy		1,085		0.97		March 20, 2018		(8,317	)
Goldman Sachs International Firstenergy Corp.	Buy		3,260		1.25		March 20, 2013		(57,125	)
Lehman Brothers Special Financing Inc. Goodrich Corp.	Buy		1,130		0.45		March 20, 2018		14,587
Lehman Brothers Special Financing Inc. Goodrich Corp.	Buy		810		0.46		March 20, 2018		9,833
Goldman Sachs International Goodrich Corp.	Buy		1,000		0.47		March 20, 2018		11,371
Bank of America, N.A. Goodrich Corp.	Buy		1,410		0.70		March 20, 2013		(11,621	)
Bank of America, N.A. Goodrich Corp.	Buy		965		0.82		March 20, 2018		(14,990	)

See Notes to Financial Statements
61

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Goldman Sachs International Hartford Financial Services Group, Inc.	Buy	$	3,900		0.12	%	December 20, 2011	$	118,677
UBS AG Martin Marietta Materials, Inc.	Buy		1,570		1.73		March 20, 2018		(20,781	)
UBS AG Martin Marietta Materials, Inc.	Buy		1,570		1.78		March 20, 2013		(18,107	)
Goldman Sachs International Merrill Lynch & Co., Inc.	Buy		645		3.25		March 20, 2013		(16,980	)
Bank of America, N.A. Merrill Lynch & Co., Inc.	Buy		1,075		3.25		March 20, 2013		(28,300	)
Lehman Brothers Special Financing Inc. Metlife, Inc.	Buy		1,840		2.15		March 20, 2013		(69,309	)
Bank of America, N.A. Nordstrom, Inc.	Buy		1,400		1.03		March 20, 2018		17,486
JPMorgan Chase N.A. New York Nordstrom, Inc.	Buy		1,070		1.07		March 20, 2018		10,204
JPMorgan Chase N.A. New York Nordstrom, Inc.	Buy		1,070		1.15		March 20, 2018		3,881
Deutsche Bank AG Pactiv Corp.	Buy		750		1.34		March 20, 2013		(7,929	)
Credit Suisse International Pactiv Corp	Buy		2,200		1.35		March 20, 2013		(24,182	)
Bank of America, N.A. Pactiv Corp.	Buy		2,200		1.375		March 20, 2013		(26,497	)
JPMorgan Chase N.A. New York Pepsi Bottling Group, Inc.	Buy		855		0.58		March 20, 2013		(4,926	)
JPMorgan Chase N.A. New York Pepsi Bottling Group, Inc.	Buy		1,165		0.63		March 20, 2013		(9,215	)
Citibank, N.A. New York Pitney Bowes Inc.	Buy		2,220		0.48		March 20, 2013		21,165
Goldman Sachs International Prologis	Buy		1,840		2.97		June 20, 2013		(50,298	)
Goldman Sachs International Prologis	Buy		1,435		3.33		March 20, 2013		(58,975	)

See Notes to Financial Statements
62

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Bank of America, N.A. Sealed Air Corp.	Buy	$	650		1.08	%	March 20, 2018	$	29,923
Goldman Sachs International Sealed Air Corp.	Buy		1,205		1.08		March 20, 2018		55,473
Bank of America, N.A. Sealed Air Corp.	Buy		900		1.12		March 20, 2018		38,873
Goldman Sachs International Sealed Air Corp.	Buy		585		1.24		March 20, 2018		20,276
JPMorgan Chase N.A. New York SLM Corp.	Sell		955		4.95		March 20, 2013		17,435
Merrill Lynch International SLM Corp.	Sell		955		5.00		March 20, 2013		19,169
Bank of America, N.A. Textron Financial Corp.	Buy		1,065		0.80		March 20, 2018		33,204
UBS AG Textron Financial Corp.	Buy		935		1.00		March 20, 2013		9,006
UBS AG Textron Financial Corp.	Buy		770		1.01		March 20, 2013		7,418
Goldman Sachs International Textron Financial Corp.	Buy		1,845		1.05		March 20, 2013		13,260
UBS AG Textron Financial Corp	Buy		1,820		1.06		March 20, 2013		(20,337	)
Bank of America, N.A. Toll Brothers, Inc.	Buy		845		2.25		March 20, 2018		16,355
Bank of America, N.A. Toll Brothers, Inc.	Buy		1,695		2.90		March 20, 2013		2,544
Citibank, N.A., New York Tyco Electronics Ltd.	Buy		400		0.43		March 20, 2012		4,314
Citibank, N.A., New York Tyco Electronics Ltd.	Buy		767		0.43		March 20, 2012		8,268
Goldman Sachs International Union Pacific Corp.	Buy		1,950		0.20		December 20, 2011		25,557
Deutsche Bank AG Washington Mutual	Buy		1,745		5.00		March 20, 2013		64,876
Goldman Sachs International Washington Mutual	Buy		135		6.48		March 20, 2013		(1,272	)

See Notes to Financial Statements
63

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2008 (unaudited) continued

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Bank of America, N.A. Yum! Brands, Inc.	Buy	$	235		1.18	%	March 20, 2013	$	(1,694	)
Bank of America, N.A. Yum! Brands, Inc.	Buy		1,515		1.25		March 20, 2013		(15,398	)
Net Unrealized Depreciation								$	(573,482	)

LONG-TERM CREDIT ANALYSIS
AAA	12.2	%
AA	14.9
A	29.9
BBB	38.5
BB	3.8
B or BELOW	0.7
	100.0	%*

* Does not include open long/short futures contracts with an underlying face amount of $176,157,278 with net unrealized depreciation of $379,330. Also does not include open swap contracts with unrealized appreciation of $11,354,804.

See Notes to Financial Statements
64

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2008 (unaudited)

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Corporate Bonds (97.2%)
		Advertising/Marketing Services (2.4%)
$	810	Idearc Inc.		8.00	%	11/15/16	$	513,337
	150	Interpublic Group of Companies, Inc. (The)		6.25		11/15/14		130,500
	310	Valassis Communications, Inc. (l)		8.25		03/01/15		282,875
								926,712
		Aluminum (1.1%)
	440	Novelis, Inc. - (Canada)		7.25		02/15/15		418,000
		Apparel/Footwear (1.4%)
	225	Oxford Industries, Inc.		8.875		06/01/11		218,250
	330	Phillips-Van Heusen Corp.		7.25		02/15/11		332,475
								550,725
		Apparel/Footwear Retail (0.8%)
	330	Brown Shoe Co., Inc.		8.75		05/01/12		330,000
		Auto Parts: O.E.M. (1.0%)
	445	ArvinMeritor, Inc. (l)		8.75		03/01/12		393,825
		Beverages: Alcoholic (0.5%)
	210	Constellation Brands, Inc.		7.25		05/15/17		197,400
		Broadcasting (1.0%)
	260	LIN Television Corp. (l)		6.50		05/15/13		239,200
	190	Univision Communications - 144A (a)		9.75		03/15/15		140,600
								379,800
		Building Products (1.9%)
	275	Interface Inc.		9.50		02/01/14		286,000
	145	Interface Inc.		10.375		02/01/10		152,975
	505	Nortek Inc. (l)		8.50		09/01/14		325,725
								764,700
		Cable/Satellite TV (4.0%)
	410	Cablevision Systems Corp. (Series B)		7.133	(j)	04/01/09		412,050
	125	CCH II/CCH II (l)		10.25		09/15/10		121,562
	182	CCH I LLC/CCH I Cap Co. (l)		11.00		10/01/15		135,818
	105	CSC Holdings Inc - 144A (a)		8.50		06/15/15		103,687
	35	DIRECTV Holdings/Finance		6.375		06/15/15		32,988
	300	DIRECTV Holdings/Finance - 144A (a)		7.625		05/15/16		297,000
	100	Echostar DBS Corp.		6.375		10/01/11		96,750
	330	Echostar DBS Corp.		6.625		10/01/14		306,075
	65	Virgin Media Finance plc (United Kingdom)		8.75		04/15/14		61,425
								1,567,355

See Notes to Financial Statements
65

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Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Casino/Gaming (5.1%)
$	4,485	Aladdin Gaming Holdings/Capital Corp. LLC (Series B) (b)(c)(f)		13.50	%	03/01/10	$	0
	800	Harrah's Operating Co., Inc		5.375		12/15/13		494,000
	765	Isle of Capri Casinos (l)		7.00		03/01/14		543,150
	555	Las Vegas Sands Corp. (l)		6.375		02/15/15		474,525
	7,210	Resort At Summerlin LP/Ras Co. (Series B) (b)(c)(f)		13.00		12/15/07		0
	530	Station Casinos, Inc. (l)		6.00		04/01/12		424,000
	85	Station Casinos, Inc. (l)		7.75		08/15/16		65,450
								2,001,125
		Chemicals: Agricultural (0.7%)
	295	Terra Capital Inc. (Series B)		7.00		02/01/17		290,575
		Chemicals: Major Diversified (0.6%)
	290	Westlake Chemical Corp.		6.625		01/15/16		245,050
		Chemicals: Specialty (2.1%)
	160	Innophos Holdings Inc. - 144A (a)		9.50		04/15/12		159,200
	270	Innophos, Inc.		8.875		08/15/14		271,350
	250	Koppers Holdings, Inc.		9.875	(k)	11/15/14		227,500
	175	Koppers Industry Inc.		9.875		10/15/13		184,625
								842,675
		Coal (1.5%)
	140	Foundation PA Coal Co.		7.25		08/01/14		140,700
	460	Massey Energy Co.		6.875		12/15/13		450,800
								591,500
		Containers/Packaging (4.4%)
	405	Berry Plastics Holding Corp. (l)		8.875		09/15/14		352,350
	160	Berry Plastics Holdings Corp.		10.25		03/01/16		120,800
	155	Graham Packaging Company Inc.		8.50		10/15/12		147,638
	280	Graham Packaging Company Inc.		9.875		10/15/14		249,200
	430	Graphic Packaging International Corp. (l)		9.50		08/15/13		412,800
	430	Owens-Illinois, Inc. (l)		7.50		05/15/10		439,675
								1,722,463
		Data Processing Services (0.9%)
	345	Sungard Data Systems Inc. (l)		9.125		08/15/13		350,175
		Drugstore Chains (1.5%)
	410	Rite Aid Corp.		8.125		05/01/10		416,150
	270	Rite Aid Corp.		8.625		03/01/15		180,225
								596,375

See Notes to Financial Statements
66

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Electric Utilities (5.7%)
$	270	AES Corp. (The)		7.75	%	03/01/14	$	267,637
	425	AES Corp. (The) - 144A (a)		8.00		06/01/20		412,250
	285	Intergen - 144A (a)		9.00		06/30/17		296,400
	115	IPALCO Enterprises, Inc.		8.625		11/14/11		120,175
	230	Israel Electric Corporation Ltd. - 144A (a)		7.25		01/15/19		235,205
	265	Reliant Energy Inc. (l)		7.875		06/15/17		260,363
	235	Texas Competitive Electric Holdings LLC - 144A (a)		10.25		11/01/15		231,475
	435	Texas Competitive Electric Holdings LLC - 144A (a)		10.25		11/01/15		428,475
								2,251,980
		Electrical Products (1.6%)
	120	Balder Electric Co. (l)		8.625		02/15/17		121,200
	512	Ormat Funding Corp.		8.25		12/30/20		506,803
								628,003
		Electronic Production Equipment (0.6%)
	230	KLA Instruments Corp.		6.90		05/01/18		225,880
		Finance/Rental/Leasing (4.6%)
	775	Capmark Financial Group Inc.		5.875		05/10/12		547,127
	35	Capmark Financial Group Inc.		6.30		05/10/17		22,658
	640	Ford Motor Credit Corp. (l)		7.00		10/01/13		471,780
	755	Ford Motor Credit Corp. (l)		7.25		10/25/11		585,496
	89	Residential Capital LLC - 144A (a)		8.50		05/15/10		75,205
	184	Residential Capital LLC - 144A (a)(l)		9.625		05/15/15		90,160
								1,792,426
		Financial Conglomerates (2.1%)
	600	General Motors Acceptance Corp.		6.875		09/15/11		431,426
	605	General Motors Acceptance Corp.		6.75		12/01/14		400,034
								831,460
		Financial Services (0.1%)
	30	Lender Processing Services, Inc. - 144A (a)		8.125		07/01/16		30,187
		Food Retail (1.3%)
	157	CA FM Lease Trust - 144A (a)		8.50		07/15/17		173,533
	210	Supervalu Inc. (l)		7.50		05/15/12		213,215
	120	Supervalu Inc.		7.50		11/15/14		120,750
								507,498
		Food: Meat/Fish/Dairy (1.7%)
	290	Michael Foods Inc. (Series B)		8.00		11/15/13		287,100
	480	Pilgrim's Pride Corp. (l)		7.625		05/01/15		397,200
								684,300

See Notes to Financial Statements
67

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Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Forest Products (1.1%)
$	120	Crown Americas, Inc.		7.625	%	11/15/13	$	120,300
EUR	200	Crown Euro Holdings SA (France)		6.25		09/01/11		300,721
								421,021
		Gas Distributors (1.0%)
$	285	DYNEGY Holdings Inc.		7.75		06/01/19		260,775
	130	Equitable Resources, Inc.		6.50		04/01/18		130,420
								391,195
		Home Building (0.1%)
	40	Pulte Homes, Inc.		6.375		05/15/33		31,200
		Home Furnishings (0.8%)
	355	Jarden Corp. (l)		7.50		05/01/17		310,625
		Hospital/Nursing Management (4.7%)
	200	Community Health Systems (l)		8.875		07/15/15		202,250
	255	HCA, Inc. (l)		5.75		03/15/14		213,562
	250	HCA, Inc.		6.25		02/15/13		218,125
	150	HCA, Inc. (l)		6.50		02/15/16		125,625
	200	HCA, Inc.		8.70		02/10/10		204,960
	35	HCA, Inc.		8.75		09/01/10		35,613
	15	HCA, Inc.		9.125		11/15/14		15,375
	210	Sun Healthcare Group Inc.		9.125		04/15/15		211,050
	505	Tenet Healthcare Corp. (l)		7.375		02/01/13		477,225
	130	Tenet Healthcare Corp. (l)		9.875		07/01/14		131,300
								1,835,085
		Industrial Specialties (1.6%)
	560	Johnsondiversy, Inc. (l)		9.625		05/15/12		568,400
	68	UCAR Finance, Inc.		10.25		02/15/12		70,720
								639,120
		Information Technology Services (0.5%)
	215	VANGENT INC		9.625		02/15/15		188,125
		Integrated Oil (0.2%)
	90	Cimarex Energy Co.		7.125		05/01/17		88,875
		Major Telecommunications (1.7%)
	385	Sprint Capital Corp.		6.90		05/01/19		338,451
	370	Sprint Nextel Corp.		6.00		12/01/16		318,702
								657,153
		Media Conglomerates (1.1%)
	491	Canwest Media Inc. (Canada) (l)		8.00		09/15/12		439,446

See Notes to Financial Statements
68

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Medical Specialties (1.4%)
$	475	Fisher Scientific International, Inc.		6.125	%	07/01/15	$	471,556
	65	Invacare Corp.		9.75		02/15/15		65,325
								536,881
		Medical/Nursing Services (3.1%)
	330	DaVita Inc.		6.625		03/15/13		318,450
	370	FMC Finance III SA		6.875		07/15/17		365,375
	505	Fresenius Medical Care Capital Trust		7.875		06/15/11		525,200
								1,209,025
		Miscellaneous (0.4%)
	150	Alfa MTN Invest Ltd. - 144A (a)(l)		9.25		06/24/13		150,187
		Miscellaneous Commercial Services (1.3%)
	505	Iron Mountain Inc.		8.625		04/01/13		510,050
		Miscellaneous Manufacturing (0.0%)
	320	Propex Fabrics Inc.		10.00		12/01/12		4,800
		Motor Vehicles (0.3%)
	215	General Motors Corp. (l)		8.375		07/15/33		128,463
		Oil & Gas Pipelines (3.2%)
	100	Gaz Capital Sa - 144A (a)		6.51		03/07/22		90,000
	375	Pacific Energy Partners/Finance		7.125		06/15/14		378,479
	735	Williams Companies, Inc. (The)		7.875		09/01/21		782,775
								1,251,254
		Oil & Gas Production (4.7%)
	70	Chaparral Energy Inc.		8.875		02/01/17		61,075
	445	Chaparral Energy, Inc.		8.50		12/01/15		388,263
	230	Chesapeake Energy Corp.		7.50		09/15/13		231,150
	28	Chesapeake Energy Corp.		7.75		01/15/15		29,190
	525	Hilcorp Energy/Finance - 144A (a)		7.75		11/01/15		506,625
	60	Newfield Exploration Co. (l)		7.125		05/15/18		57,150
	250	Opti Canada Inc.		8.25		12/15/14		250,000
	65	Plains Exploration & Production Co. (l)		7.625		06/01/18		65,325
	265	Sandridge Energy - 144A (a)		8.625		04/01/15		272,950
								1,861,728
		Oilfield Services/Equipment (1.2%)
	205	CIE Gener de Geophysique S.A. (France)		7.50		05/15/15		205,513
	250	Helix Energy Solutions - 144A (a)		9.50		01/15/16		257,500
								463,013

See Notes to Financial Statements
69

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Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Other Consumer Services (0.3%)
$	130	EXPEDIA Inc. - 144A (a)(l)		8.50	%	07/01/16	$	127,725
		Other Transportation (1.6%)
	610	CHC Helicopter Corp. (Canada)		7.375		05/01/14		635,925
		Pharmaceuticals: Major (0.7%)
	260	Warner Chilcott Corp.		8.75		02/01/15		265,200
		Pharmaceuticals: Other (0.3%)
	110	Axcan Intermediate Holdings - 144A (a)		12.75		03/01/16		110,550
		Precious Metals (0.6%)
	240	Freeport-McMoran C & G		8.375		04/01/17		253,594
		Publishing: Books/Magazines (0.7%)
	327	Dex Media West/Finance		9.875		08/15/13		295,117
		Pulp & Paper (1.1%)
	340	Georgia Pacific Corp. - 144A (a)		7.125		01/15/17		321,300
	110	Glatfelter P.H.		7.125		05/01/16		108,350
								429,650
		Real Estate Development (0.6%)
	315	Realogy Corp. (l)		10.50		04/15/14		220,500
		Real Estate Investment Trusts (1.5%)
	320	Host Marriott LP		6.375		03/15/15		284,800
	255	Host Marriott LP (l)		7.125		11/01/13		238,425
	60	ProLogis		6.625		05/15/18		59,209
								582,434
		Restaurants (0.6%)
	25	Aramark Corp.		6.373	(j)	02/01/15		23,500
	75	Aramark Corp.		8.50		02/01/15		73,875
	165	Aramark Services Inc.		5.00		06/01/12		145,200
								242,575
		Savings Banks (0.6%)
	300	Washington Mutual Pfd - 144A (a)(l)		9.75		10/29/49		236,584
		Semiconductors (0.9%)
	410	Freescale Semiconductor		8.875		12/15/14		335,175
		Services to the Health Industry (2.5%)
	135	LVB Acquisition Merger Sub, Inc. (l)		10.375		10/15/17		143,775
	155	Medco Health Solutions, Inc.		7.125		03/15/18		161,248
	270	National Mentor Holdings Inc.		11.25		07/01/14		278,775
	345	Omnicare Inc.		6.75		12/15/13		326,025
	70	Omnicare Inc.		6.875		12/15/15		65,100
								974,923

See Notes to Financial Statements
70

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Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Specialty Stores (0.9%)
$	145	Sonic Automotive, Inc.		8.625	%	08/15/13	$	134,850
	230	United Auto Group		7.75		12/15/16		202,400
								337,250
		Specialty Telecommunications (2.6%)
	230	American Tower Corp. (l)		7.125		10/15/12		233,450
	310	American Tower Corp. (l)		7.50		05/01/12		314,650
	125	Citizens Communications		6.25		01/15/13		116,562
	98	Panamsat Corp.		9.00		08/15/14		99,348
	148	Qwest Communications International		6.176	(j)	02/15/09		148,000
	125	Windstream Corp. (l)		8.125		08/01/13		125,313
								1,037,323
		Steel (0.5%)
	200	Evraz Group SA - 144A (a)(l)		9.50		04/24/18		201,500
		Telecommunications (1.4%)
	150	Axtel SA (Mexico)		11.00		12/15/13		160,500
	613	Exodus Communications, Inc. (b)(c)(f)		11.625		07/15/10		0
	135	Nordic Tel Company - 144A (a) (Denmark)		8.875		05/01/16		132,975
	4,679	Rhythms Netconnections, Inc. (b)(c)(f)		12.75		04/15/09		0
EUR	110	TDC AS (Denmark)		6.50		04/19/12		166,176
$	100	U.S. West Communications Corp.		5.625		11/15/08		100,250
								559,901
		Water Utilities (0.4%)
	150	Nalco Co. (l)		7.75		11/15/11		150,750
		Wholesale Distributors (1.1%)
	440	RBS Global & Rexnold Corp.		9.50		08/01/14		426,800
		Wireless Telecommunications (1.3%)
	185	VIP Finance (VIMPELCOM) - 144A (a)(l)		9.125		04/30/18		182,283
	300	Wind Acquisition Finance SA - 144A (a) (Luxembourg)		10.75		12/01/15		316,500
								498,783
		Total Corporate Bonds (Cost $57,596,478)						38,159,694
		Government Obligation (0.6%)
MXN	2,360	Mexican Fixed Rate Bonds (Cost $236,562)		9.50		12/18/14		234,327

See Notes to Financial Statements
71

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Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Collateralized Mortgage Obligations (0.3%)
		Finance/Rental/Leasing (0.4%)
$	157	American Home Mortgage Assets - 2006-4 1A3		2.793	%	10/25/46	$	63,367
	152	Countrywide Alternative Loan Trust - 2006-0A21 A3		2.762		03/20/47		59,455
	100	Master Adjustable Rate Mortgage Trust - 2007-3 1M2		3.583		05/25/47		18,118
		Total Collateralized Mortgage Obligations (Cost $345,462)						140,940
		Senior Loans (0.6%)
		Data Processing Services (0.6%)
	118	First Data Corp.		5.231		09/24/14		108,044
	16	First Data Corp.		5.551		09/24/14		14,956
	119	First Data Corp.		5.552		09/24/14		109,524
		Total Senior Loans (Cost $245,811)						232,524

NUMBER OF SHARES
		Common Stocks (0.1%)
		Casino/Gaming (e)(f) (0.0%)
	2,000	Fitzgeralds Gaming Corp. (g)	0
		Food: Specialty/Candy (d)(e)(f) (0.0%)
	2,375	SFAC New Holdings Inc. (h)	0
	436	SFFB Holdings Inc.	0
			0
		Restaurants (d)(e)(f) (0.1%)
	3,374	American Restaurant Group Holdings, Inc.	26,992
	92,158	Catalina Restaurant Group (escrow)	922
			27,914
		Specialty Telecommunications (d)(e) (0.0%)
	12,688	Birch Telecom Inc. (i)(f)	127
	131,683	PFB Telecom NV (Series B) (f)	0
	565	XO Holdings, Inc.	232
			359

See Notes to Financial Statements
72

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Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Telecommunications (d)(e) (0.0%)
	7	Viatel Holdings Bermuda Ltd. (Bermuda)	$	7
		Textiles (d)(e)(f) (0.0%)
	298,461	U.S. Leather, Inc.		0
		Wireless Telecommunications (0.0%)
	521	USA Mobility, Inc. (l)		3,933
		Total Common Stocks (Cost $41,768,430)		32,213
		Convertible Preferred Stocks (0.1%)
		Finance/Rental/Leasing (0.1%)
	1,095	Fannie Mae Ser 2008-1 (Cost $54,750)		41,939

NUMBER OF WARRANTS			EXPIRATION DATE
		Warrants (e) (0.0%)
		Casino/Gaming (f) (0.0%)
	83,500	Aladdin Gaming Enterprises, Inc. - 144A (a)	03/01/10	0
		Personnel Services (f) (0.0%)
	42,250	Comforce Corp. - 144A (a)	12/01/09	0
		Specialty Telecommunications (d) (0.0%)
	1,132	XO Holdings, Inc. (Series A)	01/16/10	34
	849	XO Holdings, Inc. (Series B)	01/16/10	9
	849	XO Holdings, Inc. (Series C)	01/16/10	25
				68
		Total Warrants (Cost $128,405)		68

See Notes to Financial Statements
73

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			VALUE
		Short-Term Investments (27.7%)
		Securities Held as Collateral on Loaned Securities (27.2%)
		Repurchase Agreements (6.5%)
$	515	ABN Amro Bank N.V. (2.70%, dated 06/30/08, due 07/01/08; proceeds $515,143; fully collateralized by U.S. Government Agency security and corporate bond at the date of this Portfolio of Investments as follows: Federal Home Loan Bank 3.0% due 6/11/10; Merck & Co. 4.75% due 03/01/15; valued at $525,687).	$	515,104
	1,134	Bank of America Securities LLC (2.25% - 2.75% dated 06/30/08, due 07/01/08; proceeds $1,133,983; fully collateralized by U.S. Government Agency security and common stocks at the date of this Portfolio of Investments as follows: Freddie Mac Giant 5.50% due 03/01/38; Sempra Energy; Flowserve Corp.; Entergy Corp.; Avnet Inc.; Allied Waste Industries Inc.; Air Products & Chemicals Inc.; Trimble Navigations Ltd.; valued at $1,166,432).		1,133,908
	344	Deutsche Bank (2.75%, dated 06/30/08, due 07/01/08; proceeds $343,765; fully collateralized by CSX Corp. common stock at the date of this Portfolio of Investments; valued at $361,105).		343,739
	412	Lehman Bothers Inc. (2.70%, dated 06/30/08, due 07/01/08; proceeds $412,114; fully collateralized by Municipal Bonds at the date of this Portfolio of Investments as follows: Kansas City, Illinois - School District No. 129 Aurora West 4.0% due 02/01/13; Chicago, Illinois - O'Hare International Airport Rev Ref-Gen Airport Third Lien Ser. B 5.125% due 01/01/14; Metropolitan Transit Authority New York Rev. Series A & Series F 5.0% due 11/15/25 - 11/15/37; Pleasantville New York UN Free School District 5.0% due 11/01/22; Guadalupe-Blanco River Authority Texas Sewer Disposal Facility - EI Du Pont De Nemours & Co. 5.50% due 05/01/29; Lehman Muni Trust Receipts Various States - Louisville & Jefferson County, Rhode Island, TRS - Series 06-F10, 144A,; and Sacramento California Floater Trust - Series P41W Reg. D 4.27% due 08/15/33; Becker Minn Pollution Control Rev., Rhode Island - TRS Series FP13, 144A 0.0% due 04/01/30; University of Massachusetts Building Authority Project Rev SR-Series 2.40% - 5.0% due 05/01/10 - 05/01/27; Puerto Rico Housing Finance Corp. Floater-TRS-Series F8J-Reg. D 2.15% due 06/01/21; valued at $420,548).		412,083
	124	Merrill Lynch & Co., Inc. (2.65%, dated 06/30/08, due 07/01/08; proceeds $123,634; fully collateralized by corporate bond at the date of this Portfolio of Investments; Qwest Corp. 6.50% due 06/01/17; valued at $126,226).		123,625
		Total Repurchase Agreements (Cost $2,528,459)		2,528,459
NUMBER OF SHARES (000)
		Investment Company (m) (20.7%)
	8,139	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (n) (Cost $8,138,969)		8,138,969
		Total Securities Held as Collateral on Loaned Securities (Cost $10,667,428)		10,667,428

See Notes to Financial Statements
74

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE			VALUE
		U.S. Government Obligations (o) (0.5%)
$	70	U.S. Treasury Bill		1.44 - 1.83	%	10/09/08			$	69,699
	120	U.S. Treasury Bill		1.00		10/09/08				119,467
		Total U.S. Government Obligations (Cost $189,154)								189,166
		Total Short-Term Investments (Cost $10,856,582)								10,856,594
		Total Investments (Cost $111,232,480) (p)(q)					126.6	%		49,698,299
		Liabilities In Excess of Other Assets					(26.6	)		(10,457,296	)
		Net Assets					100.0	%	$	39,241,003

(a) Resale is restricted to qualified institutional investors.

(b) Issuer in bankruptcy.

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

(d) Acquired through exchange offer.

(e) Non-income producing security.

(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 general supervision of the Fund's Trustees.

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

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

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

(j) Floating rate security. Rate shown is the rate in effect at June 30, 2008.

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

(l) All or a portion of this security was on loan at June 30, 2008.

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

(n) Includes cash in the amount of $40,000 designated as collateral in connection with open swap contracts.

(o) All or a portion of these securities have been physically segregated in connection with open futures contracts in the amount of $113,960.

(p) Securities have been designated as collateral in the amount equal to $17,882,413 in connection with open forward foreign currency, futures and swap contracts.

(q) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $436,117 and the aggregate gross unrealized depreciation is $61,970,298, resulting in net unrealized depreciation of $61,534,181.

See Notes to Financial Statements
75

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2008 (unaudited) continued

Futures Contracts Open at June 30, 2008:

NUMBER OF CONTRACTS		LONG/SHORT	DESCRIPTION, DELIVERY MONTH AND YEAR	UNDERLYING FACE AMOUNT AT VALUE			UNREALIZED DEPRECIATION
	17	Long	U.S. Treasury Note 2 Year, September 2008	$	3,590,453		$	(3,955	)
	3	Short	U.S. Treasury Note 5 Year, September 2008		(331,664	)		(155	)
	14	Short	U.S. Treasury Bond 20 Year, September 2008		(1,618,313	)		(6,701	)
	70	Short	U.S. Treasury Note 10 Year, September 2008		(7,974,532	)		(466	)
Total Unrealized Depreciation							$	(11,277	)

Credit Default Swap Contracts Open at June 30, 2008:

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Lehman Brothers, Inc. ABX	Buy	$	75		0.18	%	July 25, 2045	$	(6,019	)
Credit Suisse ABX	Buy		75		0.18		July 25, 2045		(5,270	)
UBS Securities American Standard Inc.	Buy		235		0.50		March 20, 2013		(62	)
Goldman Sachs International American Standard Inc.	Buy		80		0.50		March 20, 2013		(21	)
UBS Securities American Standard Inc.	Buy		250		0.60		March 20, 2018		1,004
Goldman Sachs International American Standard Inc.	Buy		40		0.60		March 20, 2018		161
Lehman Brothers, Inc. Arrow Electronics, Inc.	Buy		630		1.40		March 20, 2013		(16,169	)
Credit Suisse Arrow Electronics, Inc.	Buy		330		1.11		March 20, 2013		(4,398	)
Credit Suisse Arrow Electronics, Inc.	Buy		275		1.00		March 20, 2015		(2,036	)
Credit Suisse Arrow Electronics, Inc.	Buy		60		1.04		March 20, 2018		(510	)

See Notes to Financial Statements
76

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2008 (unaudited) continued

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Goldman Sachs International Avalonbay Communities Inc.	Buy	$	415		3.05	%	March 20, 2013	$	(24,043	)
Goldman Sachs International Avalonbay Communities Inc.	Buy		375		2.20		June 20, 2013		(8,596	)
Bank of America N.A. Carnival Corp.	Buy		255		1.57		March 20, 2018		(725	)
Merrill Lynch, Inc. Carnival Corp.	Buy		215		1.57		March 20, 2018		(611	)
Merrill Lynch, Inc. Carnival Corp.	Buy		250		1.50		March 20, 2018		(870	)
Merrill Lynch, Inc. Carnival Corp.	Buy		140		1.60		March 20, 2018		(1,071	)
Goldman Sachs International Coca-Cola Enterprises Inc.	Buy		430		0.587		March 20, 2013		(2,986	)
Lehman Brothers, Inc. Coca-Cola Enterprises Inc.	Buy		385		0.64		March 20, 2013		(3,544	)
Merrill Lynch, Inc. Disney (Walt) Co.	Buy		630		0.77		March 20, 2013		(9,638	)
Goldman Sachs International Dow Jones Index	Sell		240		1.40		December 20, 2012		1,689
Merrill Lynch, Inc. Dow Jones Index	Sell		255		1.40		December 20, 2012		6,668
Lehman Brothers, Inc. Dow Jones Index	Sell		1485		3.75		December 20, 2012		(52,524	)
UBS Securities Dow Jones Index	Sell		610		5.00		June 20, 2013		(17,117	)
Goldman Sachs International Dow Jones Index	Sell		1070		5.00		June 20, 2013		(600	)
Citigroup Global Markets Eaton Corp.	Buy		330		0.82		March 20, 2018		1,218
Goldman Sachs International Eaton Corp.	Buy		145		0.97		March 20, 2018		(1,111	)
Merrill Lynch, Inc. Eaton Corp.	Buy		145		0.92		March 20, 2018		(563	)
Goldman Sachs International Firstenergy Corp.	Buy		410		1.25		March 20, 2013		(7,184	)
Bank of America N.A. Goodrich Corp.	Buy		180		0.70		March 20, 2013		(1,484	)

See Notes to Financial Statements
77

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2008 (unaudited) continued

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Bank of America N.A. Goodrich Corp.	Buy	$	125		0.82	%	March 20, 2018	$	(1,942	)
Lehman Brothers, Inc. Goodrich Corp.	Buy		100		0.46		March 20, 2018		1,214
Lehman Brothers, Inc. Goodrich Corp.	Buy		140		0.45		March 20, 2018		1,807
Goldman Sachs International Goodrich Corp.	Buy		120		0.47		March 20, 2018		1,365
UBS Securities Martin Marietta Materials, Inc.	Buy		100		1.78		March 20, 2013		(1,153	)
UBS Securities Martin Marietta Materials, Inc.	Buy		100		1.73		March 20, 2018		(1,324	)
Goldman Sachs International Merrill Lynch Co.	Buy		230		2.45		March 20, 2013		1,166
J.P. Morgan Securities Merrill Lynch Co.	Buy		220		2.30		March 20, 2013		2,410
Lehman Brothers, Inc. Metlife Inc.	Buy		245		2.15		March 20, 2013		(9,229	)
Bank of America N.A. Nordstrom, Inc.	Buy		170		1.03		March 20, 2018		2,123
J.P. Morgan Securities Nordstrom, Inc.	Buy		135		1.07		March 20, 2018		1,287
J.P. Morgan Securities Nordstrom, Inc.	Buy		135		1.15		June 20, 2018		490
J.P. Morgan Securities Pepsi Bottling Group, Inc.	Buy		150		0.63		March 20, 2013		(1,187	)
J.P. Morgan Securities Pepsi Bottling Group, Inc.	Buy		110		0.58		March 20, 2013		(634	)
Credit Suisse Pactiv Corp.	Buy		375		1.35		March 20, 2013		(4,122	)
Bank of America N.A. Pactiv Corp.	Buy		375		1.375		March 20, 2013		(4,517	)
Deutsche Bank Pactiv Corp.	Buy		125		1.34		March 20, 2013		(1,322	)
Goldman Sachs International Prologis	Buy		185		3.33		March 20, 2013		(7,603	)
Goldman Sachs International Prologis	Buy		235		2.97		June 20, 2013		(6,424	)

See Notes to Financial Statements
78

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2008 (unaudited) continued

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Goldman Sachs International Qwest Capital Funding	Sell	$	110		3.25	%	December 20, 2012	$	(6,619	)
Goldman Sachs International Sealed Air Corp.	Buy		75		1.24		March 20, 2018		2,600
Goldman Sachs International Sealed Air Corp.	Buy		155		1.08		March 20, 2018		7,136
Bank of America N.A. Sealed Air Corp.	Buy		110		1.12		March 20, 2018		4,751
Bank of America N.A. Sealed Air Corp.	Buy		85		1.08		March 20, 2018		3,913
J.P. Morgan Securities SLM Corp.	Sell		120		4.95		March 20, 2013		2,191
Merrill Lynch, Inc. SLM Corp.	Sell		120		5.00		March 20, 2013		2,409
UBS Securities Textron Financial Corp.	Buy		350		1.06		March 20, 2013		(3,911	)
Goldman Sachs International Textron Financial Corp.	Buy		360		1.05		March 20, 2013		2,587
UBS Securities Textron Financial Corp.	Buy		140		1.01		March 20, 2013		1,349
UBS Securities Textron Financial Corp	Buy		180		1.00		March 20, 2013		1,734
Bank of America N.A. Textron Financial Corp	Buy		205		0.80		March 20, 2018		6,391
UBS Securities Toll Brothers, Inc.	Buy		335		2.90		March 20, 2013		503
Bank of America N.A. Toll Brothers, Inc.	Buy		215		2.90		March 20, 2013		323
Bank of America N.A. Toll Brothers, Inc.	Buy		110		2.25		March 20, 2018		2,129
Deutsche Bank Washington Mutual	Buy		225		5.00		June 20, 2013		8,365
Net Unrealized Depreciation								$	(148,156	)

See Notes to Financial Statements
79

Morgan Stanley Variable Investment Series - High Yield

Portfolio of Investments n June 30, 2008 (unaudited) continued

Interest Rate Swap Contracts Open at June 30, 2008:

COUNTERPARTY

NOTIONAL
AMOUNT
(000'S)

PAYMENTS
RECEIVED
BY FUND

PAYMENTS
MADE
BY FUND

TERMINATION
DATE

UNREALIZED
APPRECIATION
(DEPRECIATION)

Bank of America N.A.

857

Fixed Rate 5.550%

Floating Rate 0.000%@

February 22, 2018

11,424

Bank of America N.A.

2,890

Fixed Rate 5.637

Floating Rate 0.000@

March 7, 2018

47,078

Bank of America N.A.

830

Fixed Rate 5.070

Floating Rate 0.000@

April 14, 2018

(3,586

)

Bank of America N.A.

1,525

Fixed Rate 4.982

Floating Rate 0.000@

April 15, 2018

(11,331

)

Bank of America N.A.

1,068

Floating Rate 0.000@

Fixed Rate 5.957

February 22, 2023

(17,483

)

Bank of America N.A.

3,715

Floating Rate 0.000@

Fixed Rate 6.040

March 7, 2023

(68,950

)

Bank of America N.A.

1,065

Floating Rate 0.000@

Fixed Rate 5.470

April 14, 2023

(2,993

)

Bank of America N.A.

1,900

Floating Rate 0.000@

Fixed Rate 5.380

April 15, 2023

(646

)

Citibank N.A.

2,800

Fixed Rate 5.004

Floating Rate 2.899@

October 31, 2017

75,740

Deutsche Bank AG,
New York

EUR

3,945

Fixed Rate 5.268

Floating Rate 5.130©

July 3, 2023

(9,565

)

Deutsche Bank AG,
New York

EUR

3,150

Floating Rate 4.934©

Fixed Rate 5.130

July 1, 2018

(2,678

)

JPMorgan Chase Bank N.A.

7,000

Fixed Rate 4.902

Floating Rate 2.695@

November 20, 2017

135,520

Net Unrealized Appreciation

152,530

@ Floating rate represents USD-3 Months LIBOR.

© Floating rate represents EUR-3 Months EURIBOR.

Forward Foreign Currency Contracts Open at June 30, 2008:

CONTRACTS TO DELIVER				IN EXCHANGE FOR				DELIVERY DATE				UNREALIZED DEPRECIATION
EUR	300,000			$	467,400			July 31, 2008				$	(4,156	)

Currency Abbreviations:

EUR Euro.

MXN Mexican New Peso.

LONG-TERM CREDIT ANALYSIS
A	0.4	%
BBB	6.6
BB	20.6
B	49.5
CCC	21.1
NR	1.8
	100.0	%*

* Does not include open short/long futures contracts with an underlying face amount of $13,514,962 with unrealized depreciation of $11,277, open forward foreign currency contracts with net unrealized depreciation of $4,156 and open swap contracts with unrealized appreciation of $4,374.

See Notes to Financial Statements
80

Morgan Stanley Variable Investment Series - Utilities

Portfolio of Investments n June 30, 2008 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (98.5%)
		Electric Utilities (56.3%)
	204,100	AES Corp. (The) (a)	$	3,920,761
	67,000	Allegheny Energy, Inc. (a)(b)		3,357,370
	41,700	Ameren Corp. (b)		1,760,991
	67,500	American Electric Power Co., Inc. (b)		2,715,525
	197,800	CMS Energy Corp. (b)		2,947,220
	52,900	Consolidated Edison, Inc. (b)		2,067,861
	47,500	Constellation Energy Group (b)		3,899,750
	34,000	Dominion Resources, Inc. (b)		1,614,660
	62,700	DPL, Inc. (b)		1,654,026
	34,000	DTE Energy Co. (b)		1,442,960
	151,032	Duke Energy Corp. (b)		2,624,936
	86,300	Edison International (b)		4,434,094
	12,200	Entergy Corp. (b)		1,469,856
	60,000	Exelon Corp.		5,397,600
	62,500	FirstEnergy Corp.		5,145,625
	70,300	FPL Group, Inc. (b)		4,610,274
	105,200	Northeast Utilities (b)		2,685,756
	70,400	NRG Energy, Inc. (a)		3,020,160
	47,400	NSTAR (b)		1,603,068
	107,300	PG&E Corp. (b)		4,258,737
	92,100	PPL Corp.		4,814,067
	95,300	Public Service Enterprise Group Inc. (b)		4,377,129
	76,900	SCANA Corp. (b)		2,845,300
	111,500	Southern Co. (The) (b)		3,893,580
	67,000	Wisconsin Energy Corp. (b)		3,029,740
				79,591,046
		Energy (19.8%)
	77,600	AGL Resources, Inc. (b)		2,683,408
	213,261	Dynegy, Inc. (Class A) (a)(b)		1,823,382
	55,800	Equitable Resources, Inc. (b)		3,853,548
	85,300	MDU Resources Group, Inc. (b)		2,973,558
	52,550	New Jersey Resources Corp. (b)		1,715,758
	61,400	Questar Corp. (b)		4,361,856
	80,100	Sempra Energy (b)		4,521,645

NUMBER OF SHARES			VALUE
	69,116	Spectra Energy Corp. (b)	$	1,986,394
	100,800	Williams Companies, Inc. (The) (b)		4,063,248
				27,982,797
		Telecommunications (21.3%)
	38,800	America Movil SAB de C.V. (Series L) (ADR) (Mexico)		2,046,700
	27,300	American Tower Corp. (Class A) (a)		1,153,425
	173,921	AT&T Inc.		5,859,398
	6,200	China Mobile Ltd. (ADR) (Hong Kong)		415,090
	66,000	Citizens Communications Co. (b)		748,440
	167,100	Comcast Corp. (Class A) (b)		3,169,887
	41,900	Crown Castle International Corp. (a)(b)		1,622,787
	16,400	NII Holdings Inc. (a)(b)		778,836
	71,400	Rogers Communications, Inc. (Class B) (canada)		2,760,324
	25,600	SBA Communications Corp. (a)(b)		921,856
	49,500	Telefonica S.A. (Spain)		1,315,552
	20,060	Telefonica de Espana S.A. (ADR) (Spain)		1,596,375
	21,300	Telus Corp. (Non-Voting) (Canada)		866,664
	45,100	TW Telecom Inc. (b)		722,953
	151,720	Verizon Communications, Inc.		5,370,888
	63,765	Windstream Corp. (b)		786,860
				30,136,035
		Water Utilities (1.1%)
	68,000	American Waterworks Co. Inc. (b)		1,508,240
		Total Common Stocks (Cost $80,101,034)		139,218,118

See Notes to Financial Statements
81

Morgan Stanley Variable Investment Series - Utilities

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			VALUE
		Short-Term Investments (24.0%)
		Securities Held as Collateral on Loaned Securities (22.5%)
		Repurchase Agreements (5.3%)
$	1,534	ABN Amro Bank N.V. (2.70%, dated 06/30/08, due 07/01/08; proceeds $1,533,766; fully collateralized by U.S. Government Agency security and corporate bond at the date of this Portfolio of Investments as follows: Federal Home Loan Bank 3.0% due 06/11/10; Merck & Co.; 4.75% due 03/01/15 valued at $1,565,162).	$	1,533,651
	3,376	Bank of America Securities LLC (2.25% - 2.75% dated 06/30/08, due 07/01/08; proceeds $3,376,280; fully collateralized by U.S. Government Agency security and common stocks at the date of this Portfolio of Investments as follows: Freddie Mac Giant 5.50% due 03/01/38; Sempra Energy; Flowserve Corp.; Entergy Corp.; Avnet Inc.; Allied Waste Industries Inc.; Air Products & Chemicals Inc.; Trimble Navigations Ltd.; valued at $3,472,893).		3,376,056
	1,023	Deutsche Bank (2.75%, dated 06/30/08, due 07/01/08; proceeds $1,031,168; fully collateralized by CSX Corp. common stock at the date of this Portfolio of Investments; valued at $1,075,140).		1,023,436

PRINCIPAL AMOUNT IN THOUSANDS								VALUE
$	1,227			Lehman Bothers Inc. (2.70%, dated 06/30/08, due 07/01/08; proceeds $1,227,013; fully collateralized by Municipal Bonds at the date of this Portfolio of Investments as follows: Kansas City, Illinois - School District No. 129 Aurora West 4.0% due 02/01/13; Chicago, Illinois - O' Hare International Airport Rev Ref-Gen Airport Third Lien Ser. B 5.125% due 01/01/14; Metropolitan Transit Authority New York Rev. Series A & Series F 5.0% due 11/15/25 - 11/15/37; Pleasantville, New York - UN Free School District 5.0% due 11/01/22; Guadalupe-Blanco River Authority Texas Sewer Disposal Facility - EI Du Pont De Nemours & Co. 5.50% due 05/01/29; Lehman Muni Trust Receipts Various States - Louisville & Jefferson County, Rhode Island, TRS - Series 06-F10, 144A; and Sacramento California Floater Trust - Series P41W Reg. D 4.27% due 08/15/33; Becker Minn Pollution Control Rev., Rhode Island - TRS Series FP13, 144A 0.0% due 04/01/30; University of Massachusetts Building Authority Project Rev SR-Series 2.40% - 5.0% due 05/01/10 - 05/01/27; Puerto Rico Housing Finance Corp. Floater-TRS-Series F8J-Reg.D 2.15% due 06/01/21; valued at $1,252,123).				$	1,226,921

See Notes to Financial Statements
82

Morgan Stanley Variable Investment Series - Utilities

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			VALUE
$	368	Merrill Lynch & Co., Inc. (2.65%, dated 06/30/08, due 07/01/08; proceeds $368,103; fully collateralized by corporate bond at the date of this Portfolio of Investments; Qwest Corp 6.50% due 06/01/17; valued at $375,821).	$	368,075
		Total Repurchase Agreements (Cost $7,528,139)		7,528,139
NUMBER OF SHARES (000)
		Investment Company (c) (17.2%)
	24,233	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $24,232,663)		24,232,663
		Total Securities Held as Collateral on Loaned Securities (Cost $31,760,802)		31,760,802
		Investment Company (c) (1.5%)
	2,100	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $2,100,172)		2,100,172
		Total Short-Term Investments (Cost $33,860,974)		33,860,974

Total Investments (Cost $113,962,008) (d)	122.5	%		173,079,092
Liabilities in Excess of Other Assets	(22.5	)		(31,827,131	)
Net Assets	100.0	%	$	141,251,961

ADR American Depositary Receipt.

(a) Non-income producing security.

(b) A portion of this security was on loan as of June 30, 2008.

(c) See note 4 to the 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 $61,195,102 and the aggregate gross unrealized depreciation is $2,078,018, resulting in net unrealized appreciation of $59,117,084.

See Notes to Financial Statements
83

Morgan Stanley Variable Investment Series - Utilities

Summary of Investments n June 30, 2008 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Electric Utilities	$	79,591,046		46.0	%
Short-Term Investments		33,860,974		19.5
Telecommunications		30,136,035		17.4
Energy		27,982,797		16.2
Water Utilities		1,508,240		0.9
	$	173,079,092		100.0	%

See Notes to Financial Statements
84

Morgan Stanley Variable Investment Series - Income Builder

Portfolio of Investments n June 30, 2008 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (57.9%)
		Aerospace & Defense (1.0%)
	8,550	Raytheon Co.	$	481,194
		Air Freight/Couriers (0.3%)
	1,840	FedEx Corp.		144,974
		Airlines (0.2%)
	6,500	Continental Airlines, Inc. (Class B) (a)		65,715
	3,500	UAL Corp.		18,270
				83,985
		Beverages: Non-Alcoholic (0.8%)
	5,440	Coca-Cola Co. (The)		282,771
	3,912	Dr Pepper Snapple Group Inc.		82,074
				364,845
		Cable/Satellite TV (0.8%)
	20,878	Comcast Corp. (Class A)		396,056
		Chemicals: Major Diversified (2.4%)
	12,150	Bayer AG (ADR) (Germany)		1,021,082
	3,560	Du Pont (E.I.) de Nemours & Co.		152,689
				1,173,771
		Computer Communications (0.6%)
	12,130	Cisco Systems, Inc. (a)		282,144
		Computer Peripherals (0.1%)
	4,190	EMC Corp. (a)		61,551
		Computer Processing Hardware (0.8%)
	8,701	Hewlett-Packard Co.		384,671
		Department Stores (0.4%)
	10,290	MACY*S Inc.		199,832
		Discount Stores (2.7%)
	22,880	Wal-Mart Stores, Inc.		1,285,856
		Drugstore Chains (0.1%)
	26,280	Rite Aid Corp. (a)		41,785
		Electric Utilities (3.3%)
	15,280	American Electric Power Co., Inc.		614,714
	2,642	Entergy Corp.		318,308
	6,260	FirstEnergy Corp.		515,386
	3,780	NRG Energy, Inc. (a)		162,162
				1,610,570

See Notes to Financial Statements
85

Morgan Stanley Variable Investment Series - Income Builder

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Electronics/Appliances (0.5%)
	5,130	Sony Corp. (ADR) (Japan)	$	224,386
		Finance/Rental/Leasing (0.8%)
	4,580	Capital One Financial Corp.		174,086
	11,724	Freddie Mac		192,274
				366,360
		Financial Conglomerates (3.1%)
	20,336	Citigroup, Inc.		340,831
	30,527	JPMorgan Chase & Co.		1,047,381
	10,958	Mizuho Financial Group, Inc. (ADR) (Japan)		101,581
				1,489,793
		Food: Major Diversified (2.0%)
	2,310	ConAgra Foods Inc.		44,537
	11,718	Kraft Foods Inc. (Class A)		333,377
	21,500	Unilever N.V. (NY Registered Shares) (Netherlands)		610,600
				988,514
		Food: Specialty/Candy (1.0%)
	9,180	Cadbury PLC (ADR) (United Kingdom)		461,938
		Home Improvement Chains (0.3%)
	6,910	Home Depot, Inc. (The)		161,832
		Household/Personal Care (1.3%)
	4,620	Estee Lauder Companies, Inc. (The) (Class A)		214,599
	4,330	Kimberly-Clark Corp.		258,847
	2,930	Procter & Gamble Co. (The)		178,173
				651,619
		Industrial Conglomerates (2.5%)
	16,430	General Electric Co.		438,517
	4,510	Siemens AG (ADR) (Germany)		496,686
	6,500	Tyco International Ltd. (Bermuda)		260,260
				1,195,463
		Insurance Brokers/Services (1.7%)
	30,340	Marsh & McLennan Companies, Inc.		805,527
		Integrated Oil (3.5%)
	3,520	BP PLC (ADR) (United Kingdom)		244,886
	2,268	ConocoPhillips		214,077
	4,520	Exxon Mobil Corp.		398,348
	10,430	Royal Dutch Shell PLC (ADR) (Class A) (United Kingdom)		852,235
				1,709,546

See Notes to Financial Statements
86

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Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Investment Banks/Brokers (1.0%)
	14,903	Charles Schwab Corp. (The)	$	306,108
	6,205	Merrill Lynch & Co., Inc.		196,761
				502,869
		Life/Health Insurance (0.4%)
	13,738	Aegon N.V. (NY Registered Shares) (Netherlands)		180,105
		Major Banks (2.1%)
	11,445	Bank of America Corp.		273,192
	6,559	Mitsubishi UFJ Financial Group, Inc. (ADR) (Japan)		57,719
	7,198	PNC Financial Services Group		411,006
	16	Sumitomo Mitsui Financial Group, Inc.		120,394
	4,683	SunTrust Banks, Inc.		169,618
				1,031,929
		Major Telecommunications (1.4%)
	19,762	Verizon Communications, Inc.		699,575
		Media Conglomerates (5.0%)
	35,560	Disney (Walt) Co. (The)		1,109,467
	51,504	Time Warner, Inc.		762,259
	18,945	Viacom Inc. (Class B) (a)		578,580
				2,450,306
		Medical Specialties (1.1%)
	18,950	Boston Scientific Corp. (a)		232,896
	6,110	Covidien Ltd. (Bermuda)		292,608
				525,504
		Motor Vehicles (0.5%)
	2,835	Harley-Davidson, Inc.		102,797
	4,510	Honda Motor Co., Ltd. (ADR) (Japan)		153,475
				256,272
		Multi-Line Insurance (0.4%)
	3,179	Hartford Financial Services Group, Inc. (The)		205,268
		Oil & Gas Pipelines (0.5%)
	6,590	Williams Companies, Inc. (The)		265,643
		Oil & Gas Production (1.8%)
	2,020	Devon Energy Corp.		242,723
	6,750	Occidental Petroleum Corp.		606,555
				849,278
		Oilfield Services/Equipment (0.4%)
	1,840	Schlumberger Ltd. (Netherlands Antilles)		197,671

See Notes to Financial Statements
87

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Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Other Consumer Services (0.9%)
	15,630	eBay Inc. (a)	$	427,168
		Packaged Software (0.5%)
	4,250	Oracle Corp. (a)		89,250
	7,510	Symantec Corp. (a)		145,319
				234,569
		Pharmaceuticals: Major (6.2%)
	11,310	Abbott Laboratories		599,091
	21,410	Bristol-Myers Squibb Co.		439,547
	8,160	Novartis AG (ADR) (Switzerland)		449,126
	4,970	Roche Holdings Ltd. (ADR) (Switzerland)		445,660
	37,520	Schering-Plough Corp.		738,769
	7,060	Wyeth		338,598
				3,010,791
		Precious Metals (0.8%)
	7,320	Newmont Mining Corp.		381,811
		Property - Casualty Insurers (1.9%)
	8,794	Chubb Corp. (The)		430,994
	11,436	St. Paul Travelers Companies, Inc. (The)		496,322
				927,316
		Restaurants (0.4%)
	13,430	Starbucks Corp. (a)		211,388
		Semiconductors (0.5%)
	11,979	Intel Corp.		257,309
		Specialty Stores (0.3%)
	14,062	Office Depot, Inc. (a)		153,838
		Telecommunication Equipment (0.6%)
	50,480	Alcatel-Lucent (ADR) (France)		304,899
		Tobacco (1.0%)
	7,440	Altria Group, Inc.		152,966
	6,410	Philip Morris International Inc.		316,590
				469,556
		Total Common Stocks (Cost $29,084,323)		28,109,277

See Notes to Financial Statements
88

Morgan Stanley Variable Investment Series - Income Builder

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Convertible Bonds (18.6%)
		Beverages: Alcoholic (3.0%)
$	1,200	Molson Coors Brewing Co.		2.50	%	07/30/13	$	1,465,500
		Electric Utilities (1.0%)
	173	PG&E Corp.		9.50		06/30/10		475,966
		Electronic Production Equipment (2.2%)
	1,100	Veeco Instruments, Inc.		4.125		12/21/08		1,094,500
		Household/Personal Care (3.8%)
	1,000	Church & Dwight Co. Inc.		5.25		08/15/33		1,828,750
		Internet Retail (0.9%)
	400	Amazon.com, Inc.		4.75		02/01/09		430,000
		Precious Metals (2.7%)
	1,000	Newmont Mining Corp.		1.25		07/15/14		1,298,750
		Semiconductors (2.9%)
	1,450	Intel Corp. - 144A (b)		2.95		12/15/35		1,419,188
		Wholesale Distributors (2.1%)
	1,200	WESCO International Inc.		1.75		11/15/26		1,009,500
		Total Convertible Bonds (Cost $7,812,132)						9,022,154
		Corporate Bonds (14.8%)
		Broadcasting (2.5%)
	1,200	Clear Channel Communications, Inc.		8.00		11/01/08		1,217,932
		Building Products (2.6%)
	1,200	American Standard, Inc.		8.25		06/01/09		1,238,500
		Home Building (2.4%)
	1,200	Toll Corp.		8.25		02/01/11		1,164,000
		Hotels/Resorts/Cruiselines (4.2%)
	2,000	Starwood Hotels & Resorts Worldwide, Inc.		7.875		05/01/12		2,036,760
		Industrial Specialties (3.1%)
	1,500	Buckeye Technologies Inc.		8.50		10/01/13		1,500,000
		Total Corporate Bonds (Cost $7,273,693)						7,157,192

See Notes to Financial Statements
89

Morgan Stanley Variable Investment Series - Income Builder

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Convertible Preferred Stocks (6.7%)
		Financial Conglomerates (0.5%)
	5,280	Citigroup Inc. (Series T) $3.25	$	229,680
		Life/Health Insurance (0.2%)
	4,100	MetLife, Inc. $1.5938 (Note 4)		107,461
		Major Banks (0.7%)
	260	Bank of America Corp. (Series L) $72.50		230,100
	130	Wachovia Corp. Class A (Series L) $75.00		114,579
				344,679
		Motor Vehicles (1.3%)
	46,000	General Motors Corp. (Series B) $1.3125		630,200
		Pharmaceuticals: Major (1.6%)
	4,000	Schering-Plough Corp. $15.00		766,040
		Real Estate Investment Trusts (0.8%)
	9,000	Equity Residential Properties Trust (Series E) $7.00		385,110
		Telecommunication Equipment (1.6%)
	1,000	Lucent Technologies Capital Trust I $77.50		760,000
		Total Convertible Preferred Stocks (Cost $4,145,560)		3,223,170
		Investment Trusts/Mutual Funds (1.5%)
	21,893	Financial Select Sector SPDR Fund (ETF)		443,552
	23,880	iShares MSCI Japan Index Fund (ETF)		298,023
		Total Investment Trusts/Mutual Funds (Cost $940,510)		741,575
NUMBER OF SHARES (000)
		Short-Term Investment (c) (0.4%)
		Investment Company
	214	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class ($213,850)		213,850

Total Investments (Cost $49,470,068) (d)	99.9	%		48,467,218
Other Assets in Excess of Liabilities	0.1			54,140
Net Assets	100.0	%	$	48,521,358

See Notes to Financial Statements
90

Morgan Stanley Variable Investment Series - Income Builder

Portfolio of Investments n June 30, 2008 (unaudited) continued

ADR American Depositary Receipt.

ETF Exchange Traded Fund.

(a) Non-income producing security.

(b) Resale is restricted to qualified institutional investors.

(c) See Note 4 to the 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 $5,116,507 and the aggregate gross unrealized depreciation is $6,119,457, resulting in net unrealized depreciation of $1,002,950.

See Notes to Financial Statements
91

Morgan Stanley Variable Investment Series - Income Builder

Summary of Investments n June 30, 2008 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Pharmaceuticals: Major	$	3,776,831		7.8	%
Household/Personal Care		2,480,369		5.1
Media Conglomerates		2,450,306		5.1
Electric Utilities		2,086,536		4.3
Hotels/Resorts/Cruiselines		2,036,760		4.2
Financial Conglomerates		1,719,473		3.5
Integrated Oil		1,709,546		3.5
Precious Metals		1,680,561		3.5
Semiconductors		1,676,497		3.5
Industrial Specialties		1,500,000		3.1
Beverages: Alcoholic		1,465,500		3.0
Major Banks		1,376,608		2.8
Discount Stores		1,285,856		2.7
Building Products		1,238,500		2.6
Broadcasting		1,217,932		2.5
Industrial Conglomerates		1,195,463		2.5
Chemicals: Major Diversified		1,173,771		2.4
Home Building		1,164,000		2.4
Electronic Production Equipment		1,094,500		2.2
Telecommunication Equipment		1,064,899		2.2
Wholesale Distributors		1,009,500		2.1
Food: Major Diversified		988,514		2.0
Property - Casualty Insurers		927,316		1.9
Motor Vehicles		886,472		1.8
Oil & Gas Production		849,278		1.8
Insurance Brokers/Services		805,527		1.7
Investment Trusts/Mutual Funds		741,575		1.5
Major Telecommunications		699,575		1.4

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Medical Specialties	$	525,504		1.1	%
Investment Banks/Brokers		502,869		1.0
Aerospace & Defense		481,194		1.0
Tobacco		469,556		1.0
Food: Specialty/Candy		461,938		1.0
Internet Retail		430,000		0.9
Other Consumer Services		427,168		0.9
Cable/Satellite Tv		396,056		0.8
Real Estate Investment Trusts		385,110		0.8
Computer Processing Hardware		384,671		0.8
Finance/Rental/Leasing		366,360		0.8
Beverages: Non-Alcoholic		364,845		0.8
Life/Health Insurance		287,566		0.6
Computer Communications		282,144		0.6
Oil & Gas Pipelines		265,643		0.5
Packaged Software		234,569		0.5
Electronics/Appliances		224,386		0.5
Investment Company		213,850		0.4
Restaurants		211,388		0.4
Multi-Line Insurance		205,268		0.4
Department Stores		199,832		0.4
Oilfield Services/Equipment		197,671		0.4
Home Improvement Chains		161,832		0.3
Specialty Stores		153,838		0.3
Air Freight/Couriers		144,974		0.3
Airlines		83,985		0.2
Computer Peripherals		61,551		0.1
Drugstore Chains		41,785		0.1
	$	48,467,218		100.0	%

See Notes to Financial Statements
92

Morgan Stanley Variable Investment Series - Dividend Growth

Portfolio of Investments n June 30, 2008 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (98.6%)
		Aerospace & Defense (1.8%)
	51,926	Northrop Grumman Corp.	$	3,473,849
	60,100	Raytheon Co.		3,382,428
				6,856,277
		Apparel/Footwear (0.7%)
	39,449	V.F. Corp.		2,807,980
		Apparel/Footwear Retail (0.7%)
	88,680	Nordstrom, Inc.		2,687,004
		Auto Parts: O.E.M. (0.9%)
	39,740	Eaton Corp.		3,376,708
		Beverages: Non-Alcoholic (3.2%)
	191,051	PepsiCo, Inc.		12,148,933
		Biotechnology (1.8%)
	127,070	Gilead Sciences, Inc. (a)		6,728,357
		Chemicals: Agricultural (1.4%)
	41,038	Monsanto Co.		5,188,845
		Computer Communications (2.4%)
	389,367	Cisco Systems, Inc. (a)		9,056,676
		Computer Processing Hardware (1.6%)
	286,629	Dell Inc. (a)		6,271,443
		Contract Drilling (1.8%)
	128,200	Patterson-UTI Energy, Inc.		4,620,328
	13,810	Transocean Inc. (Cayman Islands) (a)		2,104,506
				6,724,834
		Discount Stores (1.8%)
	145,444	Target Corp.		6,761,692
		Drugstore Chains (1.5%)
	145,237	CVS Caremark Corp.		5,747,028
		Electric Utilities (2.6%)
	108,183	Exelon Corp.		9,732,143

NUMBER OF SHARES			VALUE
		Engineering & Construction (0.5%)
	43,600	Chicago Bridge & Iron Company N.V. (Netherlands)	$	1,736,152
		Financial Conglomerates (4.3%)
	213,145	Citigroup, Inc.		3,572,310
	245,512	JPMorgan Chase & Co.		8,423,517
	72,865	Prudential Financial, Inc.		4,352,955
				16,348,782
		Household/ Personal Care (2.7%)
	171,224	Procter & Gamble Co. (The)		10,412,131
		Industrial Conglomerates (8.4%)
	78,900	3M Co.		5,490,651
	444,107	General Electric Co.		11,853,216
	233,979	United Technologies Corp.		14,436,504
				31,780,371
		Information Technology Services (2.5%)
	112,113	Accenture Ltd. (Class A) (Bermuda)		4,565,241
	41,600	International Business Machines Corp.		4,930,848
				9,496,089
		Integrated Oil (6.4%)
	97,100	BP PLC (ADR) (United Kingdom)		6,755,247
	153,973	Exxon Mobil Corp.		13,569,640
	79,520	Marathon Oil Corp.		4,124,702
				24,449,589
		Internet Software/ Services (1.2%)
	8,891	Google Inc. (Class A) (a)		4,680,400
		Investment Banks/ Brokers (1.1%)
	24,288	Goldman Sachs Group, Inc. (The)		4,247,971

See Notes to Financial Statements
93

Morgan Stanley Variable Investment Series - Dividend Growth

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Life/Health Insurance (3.1%)
	86,990	AFLAC, Inc.	$	5,462,972
	39,142	Lincoln National Corp.		1,773,915
	87,655	MetLife, Inc.		4,625,554
				11,862,441
		Major Banks (2.3%)
	134,900	Bank of America Corp.		3,220,063
	144,787	Bank of New York Mellon Corp.		5,477,292
				8,697,355
		Major Telecommunications (1.5%)
	167,600	AT&T Inc.		5,646,444
		Managed Health Care (1.3%)
	144,120	CIGNA Corp.		5,100,407
		Media Conglomerates (1.5%)
	183,630	Disney (Walt) Co. (The)		5,729,256
		Medical Specialties (2.9%)
	19,506	Alcon, Inc. (Switzerland)		3,175,382
	167,300	Covidien Ltd. (Bermuda)		8,011,997
				11,187,379
		Office Equipment/ Supplies (1.1%)
	126,006	Pitney Bowes, Inc.		4,296,805
		Oil & Gas Pipelines (2.0%)
	186,350	Williams Companies, Inc. (The)		7,511,769
		Oil & Gas Production (3.9%)
	30,180	Apache Corp.		4,195,020
	44,370	Occidental Petroleum Corp.		3,987,088
	98,793	XTO Energy, Inc.		6,768,308
				14,950,416

NUMBER OF SHARES			VALUE
		Oilfield Services/ Equipment (4.3%)
	79,876	Cameron International Corp. (a)	$	4,421,137
	135,800	Halliburton Co.		7,206,906
	91,442	Weatherford International Ltd. (Bermuda) (a)		4,534,609
				16,162,652
		Other Consumer Services (1.6%)
	223,303	eBay Inc. (a)		6,102,871
		Packaged Software (3.0%)
	419,687	Microsoft Corp.		11,545,589
		Pharmaceuticals: Major (7.0%)
	128,235	Johnson & Johnson		8,250,640
	517,804	Pfizer, Inc.		9,046,036
	197,252	Wyeth		9,460,206
				26,756,882
		Precious Metals (0.5%)
	17,750	Freeport-McMoRan Copper & Gold, Inc.		2,080,122
		Property - Casualty Insurers (2.7%)
	92,970	ACE Ltd. (Switzerland)		5,121,717
	110,350	Allstate Corp. (The)		5,030,857
				10,152,574
		Restaurants (1.6%)
	105,140	McDonald's Corp.		5,910,971
		Semiconductors (2.5%)
	444,024	Intel Corp.		9,537,636
		Specialty Telecommunications (0.0%)
	1,048	FairPoint Communications, Inc.		7,556

See Notes to Financial Statements
94

Morgan Stanley Variable Investment Series - Dividend Growth

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Steel (1.6%)
	50,300	Nucor Corp.	$	3,755,901
	11,940	United States Steel Corp.		2,206,273
				5,962,174
		Tobacco (3.3%)
	177,968	Altria Group, Inc.		3,659,022
	177,968	Philip Morris International Inc.		8,789,840
				12,448,862
		Trucks/Construction/ Farm Machinery (1.6%)
	81,750	Caterpillar Inc.		6,034,785
		Total Common Stocks (Cost $367,273,820)		374,924,351

NUMBER OF SHARES (000)					VALUE
		Short-Term Investment (b) (1.4%) Investment Company
	5,339	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $5,339,060)			$	5,339,060
Total Investments (Cost $372,612,880) (c)			100.0	%		380,263,411
Other Assets in Excess of Liabilities			0.0			39,095
Net Assets			100.0	%	$	380,302,506

ADR American Depositary Receipt

(a) Non-income producing security.

(b) See Note 4 to the 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 $41,130,326 and the aggregate gross unrealized depreciation is $33,479,795, resulting in net unrealized appreciation of $7,650,531.

See Notes to Financial Statements
95

Morgan Stanley Variable Investment Series - Dividend Growth

Summary of Investments n June 30, 2008 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Industrial Conglomerates	$	31,780,371		8.4	%
Pharmaceuticals: Major		26,756,882		7.0
Integrated Oil		24,449,589		6.4
Financial Conglomerates		16,348,782		4.3
Oilfield Services/ Equipment		16,162,652		4.2
Oil & Gas Production		14,950,416		3.9
Tobacco		12,448,862		3.3
Beverages: Non-Alcoholic		12,148,933		3.2
Life/Health Insurance		11,862,441		3.1
Packaged Software		11,545,589		3.0
Medical Specialties		11,187,379		2.9
Household/Personal Care		10,412,131		2.7
Property - Casualty Insurers		10,152,574		2.7
Electric Utilities		9,732,143		2.6
Semiconductors		9,537,636		2.5
Information Technology Services		9,496,089		2.5
Computer Communications		9,056,676		2.4
Major Banks		8,697,355		2.3
Oil & Gas Pipelines		7,511,769		2.0
Aerospace & Defense		6,856,277		1.8
Discount Stores		6,761,692		1.8
Biotechnology		6,728,357		1.8
Contract Drilling		6,724,834		1.8

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Computer Processing Hardware	$	6,271,443		1.7	%
Other Consumer Services		6,102,871		1.6
Trucks/Construction/ Farm Machinery		6,034,785		1.6
Steel		5,962,174		1.6
Restaurants		5,910,971		1.6
Drugstore Chains		5,747,028		1.5
Media Conglomerates		5,729,256		1.5
Major Telecommunications		5,646,444		1.5
Investment Company		5,339,060		1.4
Chemicals: Agricultural		5,188,845		1.4
Managed Health Care		5,100,407		1.3
Internet Software/Services		4,680,400		1.2
Office Equipment/Supplies		4,296,805		1.1
Investment Banks/ Brokers		4,247,971		1.1
Auto Parts: O.E.M.		3,376,708		0.9
Apparel/Footwear		2,807,980		0.7
Apparel/Footwear Retail		2,687,004		0.7
Precious Metals		2,080,122		0.5
Engineering & Construction		1,736,152		0.5
Specialty Telecommunications		7,556		0.0
	$	380,263,411		100.0	%

See Notes to Financial Statements
96

Morgan Stanley Variable Investment Series - Global Dividend Growth

Portfolio of Investments n June 30, 2008 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (99.0%) Australia (2.5%)
		Beverages: Alcoholic
	192,583	Foster's Group Ltd.	$	936,025
		Construction Materials
	135,102	Boral Ltd. (b)		731,765
		Food: Major Diversified
	1,575,743	Goodman Fielder Ltd.		2,122,381
		Total Australia		3,790,171
		Bermuda (3.8%)
		Industrial Conglomerates
	39,218	Ingersoll - Rand Ltd. (Class A) (b)		1,467,930
	52,450	Tyco International Ltd. (b)		2,100,098
				3,568,028
		Medical Specialties
	44,183	Covidien Ltd.		2,115,924
		Total Bermuda		5,683,952
		France (7.1%)
		Construction Materials
	21,394	Lafarge S.A.		3,280,476
		Integrated Oil
	38,662	Total S.A.		3,299,242
		Major Banks
	27,735	BNP Paribas		2,512,630
		Pharmaceuticals: Major
	23,499	Sanofi-Aventis		1,569,831
		Total France		10,662,179
		Germany (3.0%)
		Motor Vehicles
	31,537	Bayerische Motoren Werke (BMW) AG		1,516,918
	35,925	Daimler AG (Registered Shares)		2,221,768
				3,738,686
		Semiconductors
	316,725	Qimonda AG (ADR) (b)		753,805
		Total Germany		4,492,491

NUMBER OF SHARES			VALUE
		Ireland (2.4%)
		Food: Specialty/Candy
	81,849	Kerry Group PLC (A Shares)	$	2,422,712
		Major Banks
	138,138	Bank of Ireland		1,201,209
		Total Ireland		3,623,921
		Italy (1.4%)
		Integrated Oil
	56,131	Eni S.p.A.		2,094,506
		Japan (12.5%)
		Auto Parts: O.E.M.
	145,300	Keihin Corp.		2,201,702
		Chemicals: Specialty
	71,500	Kuraray Co., Ltd.		852,465
		Electrical Products
	127,000	Sumitomo Electric Industries, Ltd.		1,612,243
		Electronic Equipment/ Instruments
	48,300	Canon Inc.		2,483,571
		Household/Personal Care
	89,000	Kao Corp.		2,334,275
		Motor Vehicles
	186,600	Nissan Motor Co., Ltd.		1,541,161
		Pharmaceuticals: Major
	43,400	Takeda Pharmaceutical Co., Ltd.		2,207,091
		Pharmaceuticals: Other
	30,300	Astellas Pharma Inc.		1,284,080
		Recreational Products
	48,900	Sankyo Co., Ltd.		3,186,778
		Specialty Insurance
	36,700	Mitsui Sumitomo Insurance Group Holdings, Inc. (a)		1,264,981
		Total Japan		18,968,347
		Netherlands (4.5%)
		Food: Major Diversified
	95,280	Unilever N.V. (Share Certificates)		2,704,755

See Notes to Financial Statements
97

Morgan Stanley Variable Investment Series - Global Dividend Growth

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Life/Health Insurance
	152,529	Aegon N.V.	$	2,020,384
		Publishing: Books/Magazines
	87,046	Wolters Kluwer N.V.		2,033,823
		Total Netherlands		6,758,962
		Norway (2.1%)
		Integrated Oil
	84,009	StatoilHydro ASA		3,132,276
		Singapore (1.0%)
		Other Transportation
	1,312,000	ComfortDelGro Corp., Ltd.		1,446,474
		South Korea (0.7%)
		Wireless Telecommunications
	51,846	SK Telecom Co., Ltd. (ADR)		1,076,841
		Spain (3.9%)
		Major Banks
	118,889	Banco Bilbao Vizcaya Argentaria, S.A. (b)		2,278,048
		Major Telecommunications
	135,187	Telefonica S.A.		3,592,840
		Total Spain		5,870,888
		Sweden (1.1%)
		Telecommunication Equipment
	166,315	Telefonaktiebolaget LM Ericsson (B Shares)		1,734,270
		Switzerland (2.8%)
		Financial Conglomerates
	36,374	UBS AG (Registered Shares)		763,405
		Pharmaceuticals: Major
	64,104	Novartis AG (Registered Shares)		3,529,783
		Total Switzerland		4,293,188
		Taiwan (0.9%)
		Major Telecommunications
	56,780	Chunghwa Telecom Co, Ltd (ADR)		1,440,509

NUMBER OF SHARES			VALUE
		United Kingdom (19.0%)
		Advertising/Marketing Services
	251,966	WPP Group PLC	$	2,430,326
		Aerospace & Defense
	184,488	Rolls-Royce Group PLC (a)		1,254,908
	17,565,452	Rolls-Royce Group PLC (B Shares)		34,987
				1,289,895
		Financial Conglomerates
	620,358	Old Mutual PLC		1,146,683
		Food Retail
	479,621	W.M. Morrison Supermarkets PLC		2,543,553
		Food: Specialty/Candy
	241,155	Cadbury PLC		3,038,154
	575,551	Premier Foods PLC		1,091,948
				4,130,102
		Integrated Oil
	43,888	Royal Dutch Shell PLC (ADR) (Class A)		3,586,088
		Major Banks
	422,046	Barclays PLC		2,450,481
	626,159	Royal Bank of Scotland Group PLC		2,681,489
				5,131,970
		Publishing: Books/Magazines
	107,899	Reed Elsevier PLC		1,237,921
		Tobacco
	124,425	Imperial Tobacco Group PLC		4,636,972
		Wireless Telecommunications
	871,753	Vodafone Group PLC		2,589,821
		Total United Kingdom		28,723,331
		United States (30.3%)
		Beverages: Non-Alcoholic
	45,217	DR Pepper Snapple Group (a)		948,651
		Coal
	32,756	Peabody Energy Corp. (b)		2,884,166

See Notes to Financial Statements
98

Morgan Stanley Variable Investment Series - Global Dividend Growth

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Computer Peripherals
	126,018	EMC Corp. (b)(a)	$	1,851,204
		Computer Processing Hardware
	42,494	Hewlett-Packard Co.		1,878,660
		Electric Utilities
	21,017	American Electric Power Co., Inc. (b)		845,514
	33,763	Dominion Resources, Inc. (b)		1,603,405
				2,448,919
		Electronic Distributors
	51,501	Arrow Electronics, Inc. (b)(a)		1,582,111
		Finance/Rental/Leasing
	52,172	American Capital Strategies, Ltd. (b)		1,240,128
	84,859	Freddie Mac (b)		1,391,688
				2,631,816
		Financial Conglomerates
	64,643	Citigroup, Inc.		1,083,417
		Industrial Machinery
	34,152	Illinois Tool Works Inc. (b)		1,622,562
		Information Technology Services
	33,156	International Business Machines Corp.		3,929,981
		Insurance Brokers/Services
	86,298	Marsh & McLennan Companies, Inc. (b)		2,291,212
		Integrated Oil
	40,151	Chevron Corp.		3,980,169
		Investment Banks/Brokers
	93,326	Lehman Brothers Holdings Inc. (b)		1,848,788
		Major Banks
	58,120	Bank of New York Mellon Corp. (b)		2,198,680
		Major Telecommunications
	65,950	Verizon Communications, Inc.		2,334,630
		Managed Health Care
	72,899	UnitedHealth Group Inc.		1,913,599

NUMBER OF SHARES			VALUE
		Multi-Line Insurance
	33,819	American International Group, Inc. (b)	$	894,851
		Pharmaceuticals: Major
	68,141	Schering-Plough Corp.		1,341,696
	76,011	Wyeth		3,645,488
				4,987,184
		Tobacco
	91,315	Philip Morris International Inc.		4,510,048
		Total United States		45,820,648
		Total Common Stocks (Cost $129,477,172)		149,612,954
		Rights (0.0%) United Kingdom
		Major Banks
	90,438	Barclays PLC (Cost $0) (a)		3,667
PRINCIPAL AMOUNT IN THOUSANDS
		Short-Term Investments (13.3%) Securities held as Collateral on Loaned Securities (13.1%)
		Repurchase Agreements (3.1%)
$	951	ABN Amro Bank N.V. (2.70%, dated 06/30/08, due 07/01/08; proceeds $952,032); fully collateralized by U.S. Government Agency security and corporate bond at the date of this Portfolio of Investment as follows: Federal Home Loan Bank 3.00% due 06/11/10; Merck & Co. Inc. 4.75% due 03/01/15; valued at $960,163...		951,961

See Notes to Financial Statements
99

Morgan Stanley Variable Investment Series - Global Dividend Growth

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			VALUE
$	2,096	Banc of America Securities LLC (2.25%-2.75% dated 06/30/08, due 07/01/08; proceeds $2,095,709) fully collateralized by U.S. Government Agency security and common stocks at the date of this Portfolio of Investment as follows: Freddie Mac Giant 5.50%, due 03/01/38; Sempra Energy; Flowserve Corp.; Entergy Corp.; Avnet Inc.; Allied Waste Inds Inc.; Air Products & Chemicals Inc.; Trimble Navigation Ltd.; valued at $2,148,875	$	2,095,570
	635	Deutsche Bank Securities (2.72% dated 06/30/08, due 07/01/08; proceeds $635,310) fully collateralized by common stock at the date of this Portfolio of Investment as follows: CSX Corp. valued at $667,405		635,262

PRINCIPAL AMOUNT IN THOUSANDS								VALUE
$	762			Lehman Brothers Co. (2.70% dated 06/30/08, due 07/01/08; proceeds $761,626) fully collateralized by Municipal Notes/Bonds at the date of this Portfolio of Investment as follows: Kansas City, Illinois - School District No. 129 Aurora West 4.0% due 02/01/13; Chicago, Illinois - O'Hare International Airport Rev Ref-Gen Airport Third Lien Ser. B 5.125% due 01/01/14; Metropolitan Transit Authority New York Rev. Series A & Series F 5.0% due 11/15/25 - 11/15/37; Pleasantville New York UN Free School District 5.0% due 11/01/22; Guadalupe-Blanco River Authority Texas Sewer Disposal Facility - EI Du Pont De Nemours & Co. 5.50% due 05/01/29; Lehman Muni Trust Receipts Various States - Louisville & Jefferson County, Rhode Island, TRS - Series 06-F10, 144A,; and Sacramento California Floater Trust - Series P41W Reg. D 4.27% due 08/15/33; Becker Minn Pollution Control Rev., Rhode Island - TRS Series FP13, 144A 0.0% due 04/01/30; University of Massachusetts Building Authority Project Rev SR-Series 2.40% - 5.0% due 05/01/10 - 05/01/27; Puerto Rico Housing Finance Corp. Floater-TRS-Series F8J-Reg. D 2.15% due 06/01/21; valued at $772,665				$	761,569

See Notes to Financial Statements
100

Morgan Stanley Variable Investment Series - Global Dividend Growth

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS					VALUE
$	228	Merrill Lynch Co., (2.65% dated 06/30/08, due 07/01/08; proceeds $228,487) fully collateralized by corporate bond at the date of this Portfolio of Investment as follows: Qwest Corp.; 6.5% due 06/01/17 valued at $233,009			$	228,471
		Total Repurchase Agreements (Cost $4,672,833)				4,672,833
NUMBER OF SHARES (000)
		Investment Company (c) (10.0%)
	15,042	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $15,041,589)				15,041,589
		Total Securities held as Collateral on Loaned Securities (Cost $19,714,422)				19,714,422
		Investment Company (c) (0.2%)
	361	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $361,305)				361,305
		Total Short-Term Investments				20,075,727
Total Investments (Cost $149,552,899) (d)			112.3	%		169,692,348
Liabilities in Excess of Other Assets			(12.3	)		(18,591,543	)
Net Assets			100.0	%	$	151,100,805

(a) Non-income producing security.

(b) All or portion of this security is on loan as of June 30, 2008.

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

(d) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $39,852,644 and the aggregate gross unrealized depreciation is $19,713,195, resulting in net unrealized appreciation of $20,139,449.

See Notes to Financial Statements
101

Morgan Stanley Variable Investment Series - Global Dividend Growth

Summary of Investments n June 30, 2008 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Short-Term Investments	$	20,075,727		11.8	%
Integrated Oil		16,092,281		9.5
Major Banks		13,326,204		7.9
Pharmaceuticals: Major		12,293,889		7.2
Tobacco		9,147,020		5.4
Major Telecommunications		7,367,979		4.3
Food: Specialty/Candy		6,552,814		3.9
Motor Vehicles		5,279,847		3.1
Food: Major Diversified		4,827,136		2.8
Construction Materials		4,012,241		2.4
Information Technology Services		3,929,981		2.3
Wireless Telecommunications		3,666,662		2.2
Industrial Conglomerates		3,568,028		2.1
Publishing: Books/ Magazines		3,271,744		1.9
Recreational Products		3,186,778		1.9
Financial Conglomerates		2,993,505		1.8
Coal		2,884,166		1.7
Finance/Rental/Leasing		2,631,816		1.6
Food Retail		2,543,553		1.5
Electronic Equipment/ Instruments		2,483,571		1.5
Electric Utilities		2,448,919		1.4
Advertising/Marketing Services		2,430,326		1.4

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Household/Personal Care	$	2,334,275		1.4	%
Insurance Brokers/ Services		2,291,212		1.3
Auto Parts: O.E.M.		2,201,702		1.3
Medical Specialties		2,115,924		1.2
Life/Health Insurance		2,020,384		1.2
Managed Health Care		1,913,599		1.1
Computer Processing Hardware		1,878,660		1.1
Computer Peripherals		1,851,204		1.1
Investment Banks/ Brokers		1,848,788		1.1
Telecommunication Equipment		1,734,270		1.0
Industrial Machinery		1,622,562		1.0
Electrical Products		1,612,243		0.9
Electronic Distributors		1,582,111		0.9
Other Transportation		1,446,474		0.9
Aerospace & Defense		1,289,895		0.8
Pharmaceuticals: Other		1,284,080		0.8
Specialty Insurance		1,264,981		0.7
Beverages: Non-Alcoholic		948,651		0.6
Beverages: Alcoholic		936,025		0.6
Multi-Line Insurance		894,851		0.5
Chemicals: Specialty		852,465		0.5
Semiconductors		753,805		0.4
	$	169,692,348		100.0	%

See Notes to Financial Statements
102

Morgan Stanley Variable Investment Series - European Equity

Portfolio of Investments n June 30, 2008 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (97.4%) Austria (1.1%)
		Major Telecommunications
	67,046	Telekom Austria AG	$	1,454,630
		Belgium (1.7%)
		Other Metals/Minerals
	43,641	Umicore		2,157,520
		France (9.9%)
		Construction Materials
	12,890	Lafarge S.A.		1,976,505
		Electric Utilities
	25,011	Electricite de France (EDF)		2,376,112
	51,837	Suez S.A.		3,529,036
				5,905,148
		Electrical Products
	20,299	Schneider Electric S.A. (d)		2,192,768
		Major Banks
	30,419	BNP Paribas		2,755,785
		Total France		12,830,206
		Germany (14.2%)
		Air Freight/Couriers
	69,677	Deutsche Post AG (Registered Shares)		1,821,076
		Chemicals: Major Diversified
	31,261	Bayer AG		2,631,251
		Industrial Conglomerates
	15,586	MAN AG		1,730,278
	31,070	Siemens AG (Registered Shares)		3,449,722
				5,180,000
		Major Banks
	59,663	Commerzbank AG		1,769,769
		Motor Vehicles
	35,688	Bayerische Motoren Werke (BMW) AG		1,716,580
		Multi-Line Insurance
	15,678	Allianz SE (Registered Shares)		2,762,176

NUMBER OF SHARES			VALUE
	14,209	Muenchener Rueckversicherungs- Gesellschaft AG (Registered Shares)	$	2,489,047
				5,251,223
		Total Germany		18,369,899
		Greece (1.7%)
		Major Banks
	48,882	National Bank of Greece S.A.		2,202,649
		Italy (4.9%)
		Integrated Oil
	108,144	Eni S.p.A.		4,035,351
		Major Banks
	374,000	UniCredito S.p.A.		2,289,141
		Total Italy		6,324,492
		Netherlands (4.3%)
		Air Freight/Couriers
	49,307	TNT N.V.		1,686,161
		Major Telecommunications
	130,592	Koninklijke (Royal) KPN N.V.		2,241,164
		Publishing: Books/Magazines
	67,405	Wolters Kluwer N.V.		1,574,913
		Total Netherlands		5,502,238
		Norway (1.5%)
		Major Telecommunications
	100,921	Telenor ASA		1,898,263
		Spain (4.9%)
		Major Banks
	135,056	Banco Bilbao Vizcaya Argentaria, S.A. (d)		2,587,826
		Major Telecommunications
	139,325	Telefonica S.A.		3,702,815
		Total Spain		6,290,641

See Notes to Financial Statements
103

Morgan Stanley Variable Investment Series - European Equity

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Switzerland (16.6%)
		Financial Conglomerates
	87,608	UBS AG (Registered Shares)	$	1,838,686
		Food: Major Diversified
	131,340	Nestle S.A. (Registered Shares)		5,934,760
		Medical Specialties
	39,790	Nobel Biocare Holding AG (Registered Shares)		1,299,392
		Multi-Line Insurance
	8,541	Zurich Financial Services AG (Registered Shares)		2,186,356
		Other Consumer Specialties
	42,673	Compagnie Financiere Richemont S.A. ("A" Bearer Shares) (Units) ( )		2,376,872
		Pharmaceuticals: Major
	73,603	Novartis AG (Registered Shares)		4,052,830
	21,092	Roche Holding AG		3,799,058
				7,851,888
		Total Switzerland		21,487,954
		United Kingdom (36.6%)
		Aerospace & Defense
	289,527	BAE Systems PLC		2,551,851
	207,783	Rolls-Royce Group PLC (a)		1,413,363
	19,828,659	Rolls-Royce Group PLC (B Shares)		39,495
				4,004,709
		Food Retail
	315,371	Morrison (W.M.) Supermarkets PLC		1,672,493
	367,199	Tesco PLC		2,701,057
				4,373,550
		Integrated Oil
	134,458	BG Group PLC		3,500,381
	175,535	Royal Dutch Shell PLC (A Shares)		7,213,001
				10,713,382

NUMBER OF SHARES			VALUE
		Investment Managers
	148,276	Man Group PLC	$	1,842,928
		Life/Health Insurance
	162,637	Prudential PLC		1,726,631
		Major Banks
	207,400	Barclays PLC		1,204,205
	263,893	HSBC Holdings PLC (Registered Shares)		4,077,582
				5,281,787
		Other Metals/Minerals
	61,764	Anglo American PLC		4,337,812
		Pharmaceuticals: Major
	140,234	GlaxoSmithKline PLC		3,108,862
		Publishing: Books/Magazines
	123,940	Reed Elsevier PLC		1,421,959
		Tobacco
	84,918	British American Tobacco PLC		2,941,388
	76,000	Imperial Tobacco Group PLC		2,832,308
				5,773,696
		Wireless Telecommunications
	1,548,958	Vodafone Group PLC		4,601,675
		Total United Kingdom		47,186,991
		Total Common Stocks (Cost $106,082,194)		125,705,483
		Preferred Stocks (1.2%)
		Germany
		Medical Specialties
	18,590	Fresenius SE (Cost $1,502,057)		1,605,998
		Rights (0.0%)
		United Kingdom
		Major Banks
	45	Blaclays PLC (Cost $0)		1,820

See Notes to Financial Statements
104

Morgan Stanley Variable Investment Series - European Equity

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			VALUE
		Short-Term Investments (2.4%) Securities held as Collateral on Loaned Securities (2.4%)
		Repurchase Agreements (0.6%)
$	150	ABN Amro Bank N.V. (2.70%, dated 06/30/08, due 07/01/08; proceeds $150,127); fully collateralized by U.S. Government Agency security and corporate bond at the date of this Portfolio of Investment as follows: Federal Home Loan Bank 3.00% due 06/11/10; Merck & Co. Inc. 4.75% due 03/01/15; valued at $151,207	$	150,042
	330	Banc of America Securities LLC (2.25%-2.75% dated 06/30/08, due 07/01/08; proceeds $330,476) fully collateralized by U.S. Government Agency security and common stocks at the date of this Portfolio of Investment as follows: Freddie Mac Giant 5.50%, due 03/01/38; Sempra Energy; Flowserve Corp.; Entergy Corp.; Avnet Inc.; Allied Waste Inds Inc.; Air Products & Chemicals Inc.; Trimble Navigation Ltd.; valued at $338,405		330,291
	100	Deutsche Bank Securities (2.72% dated 06/30/08, due 07/01/08; proceeds $100,183) fully collateralized by common stock at the date of this Portfolio of Investment as follows: CSX Corp. valued at $105,103.		100,126

PRINCIPAL AMOUNT IN THOUSANDS								VALUE
$	120			Lehman Brothers Inc. (2.70% dated 06/30/08, due 07/01/08; proceeds $120,102) fully collateralized by Municipal Bonds at the date of this Portfolio of Investment as follows: Kansas City, Illinois - School District No. 129 Aurora West 4.0% due 02/01/13; Chicago, Illinois - O'Hare International Airport Rev Ref-Gen Airport Third Lien Ser. B 5.125% due 01/01/14; Metropolitan Transit Authority New York Rev. Series A & Series F 5.0% due 11/15/25 - 11/15/37; Pleasantville New York UN Free School District 5.0% due 11/01/22; Guadalupe-Blanco River Authority Texas Sewer Disposal Facility - EI Du Pont De Nemours & Co. 5.50% due 05/01/29; Lehman Muni Trust Receipts Various States - Louisville & Jefferson County, Rhode Island, TRS - Series 06-F10, 144A,; and Sacramento California Floater Trust - Series P41W Reg. D 4.27% due 08/15/33; Becker Minn Pollution Control Rev., Rhode Island - TRS Series FP13, 144A 0.0% due 04/01/30; University of Massachusetts Building Authority Project Rev SR-Series 2.40% - 5.0% due 05/01/10 - 05/01/27; Puerto Rico Housing Finance Corp. Floater-TRS-Series F8J-Reg. D 2.15% due 06/01/21; valued at $122,461				$	120,034

See Notes to Financial Statements
105

Morgan Stanley Variable Investment Series - European Equity

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS					VALUE
$	36	Merrill Lynch Co., (2.65% dated 06/30/08, due 07/01/08; proceeds $36,031) fully collateralized by corporate bond at the date of this Portfolio of Investment; Qwest Corp. 6.50% due 06/01/17; valued at $41,580			$	36,010
		Total Repurchase Agreements (Cost $736,503)				736,503
NUMBER OF SHARES (000)
	2,371	Investment Company (c) (1.8%)
		Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $2,370,766)				2,370,766
		Total Securities held as Collateral on Loaned Securities (Cost $3,107,269)				3,107,269
		Investment Company (c) (0.0%)
	23	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $22,861)				22,861
Total Investments (Cost $110,714,381) (e)			101.0	%		130,443,431
Liabilities in Excess of Other Assets			(1.0	)		(1,320,380	)
Net Assets			100.0	%	$	129,123,051

(a) Non-income producing security.

(b) Consist of one or more class of securities traded together as a unit; stocks with attached warrants.

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

(d) All or portion of this security is on loan as of June 30, 2008.

(e) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $27,339,443 and the aggregate gross unrealized depreciation is $7,610,393, resulting in net unrealized appreciation of $19,729,050.

Forward Foreign Currency Contracts Open at June 30, 2008:

CONTRACTS TO DELIVER		IN EXCHANGE FOR		DELIVERY DATE	UNREALIZED APPRECIATION (DEPRECIATION)
EUR 129,261		$	203,844	07/01/08	$	329
CHF 219,568		$	215,558	07/02/08		622
EUR 236,271		$	372,600	07/02/08		601
GBP 233,611		$	465,679	07/02/08		366
NOK	100,059	$	19,677	07/02/08		32
Net Unrealized Appreciation					$	1,950

Currency Abbreviations:

GBP British Pound

EUR Euro.

NOK Norwegian Krona.

CHF Swiss Franc

See Notes to Financial Statements
106

Morgan Stanley Variable Investment Series - European Equity

Summary of Investments n June 30, 2008 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Major Banks	$	16,888,777		13.0	%
Integrated Oil		14,748,732		11.3
Pharmaceuticals: Major		10,960,751		8.4
Major Telecommunications		9,296,871		7.1
Multi-Line Insurance		7,437,579		5.7
Other Metals/Minerals		6,495,332		5.0
Food: Major Diversified		5,934,760		4.6
Electric Utilities		5,905,148		4.5
Tobacco		5,773,696		4.4
Industrial Conglomerates		5,180,000		4.0
Wireless Telecommunications		4,601,675		3.5
Food Retail		4,373,550		3.4
Aerospace & Defense		4,004,709		3.1
Air Freight/Couriers		3,507,237		2.7
Short-term Investments		3,130,131		2.4
Publishing: Books/ Magazines		2,996,872		2.3

INDUSTRY	VALUE			PERCENT OF TOTAL INVESTMENTS
Medical Specialties	$	2,905,390			2.2	%
Chemicals: Major Diversified		2,631,251			2.0
Other Consumer Specialties		2,376,872			1.8
Electrical Products		2,192,768			1.7
Construction Materials		1,976,505			1.5
Investment Managers		1,842,928			1.4
Financial Conglomerates		1,838,686			1.4
Life/Health Insurance		1,726,631			1.3
Motor Vehicles		1,716,580			1.3
	$	130,443,431	^{^}		100.0	%

^{^} Does not include open forward foreign currency contracts with a net unrealized appreciation of $1,950.

See Notes to Financial Statements
107

Morgan Stanley Variable Investment Series - Capital Opportunities

Portfolio of Investments n June 30, 2008 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (95.3%)
		Air Freight/Couriers (4.2%)
	164,649	C.H. Robinson Worldwide, Inc.	$	9,029,351
	152,221	Expeditors International of Washington, Inc.		6,545,503
				15,574,854
		Apparel/Footwear Retail (2.1%)
	125,286	Abercrombie & Fitch Co. (Class A)		7,852,926
		Biotechnology (6.2%)
	141,664	Illumina, Inc. (a)		12,340,351
	132,864	Techne Corp. (a)		10,282,345
				22,622,696
		Casino/Gaming (3.1%)
	140,899	Wynn Resorts, Ltd. (a)		11,462,134
		Chemicals: Agricultural (8.3%)
	240,394	Monsanto Co.		30,395,417
		Computer Processing Hardware (2.7%)
	60,246	Apple Inc. (a)		10,087,590
		Construction Materials (2.9%)
	436,076	Cemex SAB de C.V. (ADR) (Mexico) (a)		10,771,084
		Finance Energy (1.5%)
	272,968	Brookfield Infrastructure Partners LP		5,350,173
		Finance/Rental/Leasing (5.0%)
	40,806	MasterCard Inc. Class A		10,834,809
	403,231	Redecard SA (Brazil)		7,450,379
				18,285,188
		Financial Conglomerates (7.3%)
	508,347	Brookfield Asset Management Inc. (Class A) (Canada)		16,541,611
	216,155	Leucadia National Corp.		10,146,316
				26,687,927

NUMBER OF SHARES			VALUE
		Home Building (0.9%)
	98,160	Gafisa S.A. (ADR) (Brazil)	$	3,373,759
		Internet Retail (5.0%)
	249,225	Amazon.com, Inc. (a)		18,275,669
		Internet Software/ Services (10.7%)
	30,304	Baidu.com, Inc. (ADR) (Cayman Islands) (a)		9,483,940
	40,298	Google Inc. (Class A) (a)		21,213,673
	1,112,400	Tencent Holdings Ltd. (Cayman Islands)		8,602,741
				39,300,354
		Investment Banks/ Brokers (4.8%)
	741,157	Bovespa Holding SA (Brazil)		9,154,082
	156,824	Greenhill & Co., Inc.		8,446,541
				17,600,623
		Miscellaneous Commercial Services (3.7%)
	116,526	Corporate Executive Board Co. (The)		4,899,918
	191,852	CoStar Group, Inc. (a)		8,527,821
				13,427,739
		Oil & Gas Production (12.3%)
	392,609	Southwestern Energy Co. (a)		18,692,115
	268,302	Ultra Petroleum Corp. (Canada) (a)		26,347,256
				45,039,371
		Other Consumer Services (3.4%)
	462,239	eBay Inc. (a)		12,632,992
		Restaurants (1.8%)
	422,011	Starbucks Corp. (a)		6,642,453
		Specialty Telecommunications (1.5%)
	410,734	Cogent Communications Group, Inc. (a)		5,503,836

See Notes to Financial Statements
108

Morgan Stanley Variable Investment Series - Capital Opportunities

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES					VALUE
		Telecommunication Equipment (4.2%)
	8,584	Nortel Networks Corp. (Canada) (a)			$	70,561
	130,620	Research In Motion Ltd. (Canada) (a)				15,269,478
						15,340,039
		Wholesale Distributors (1.7%)
	2,060,000	Li & Fung Ltd. (Hong Kong)				6,208,599
		Wireless Telecommunications (2.0%)
	139,132	America Movil SAB de C.V. (Series L) (ADR) (Mexico)				7,339,213
		Total Common Stocks (Cost $305,039,757)				349,774,636
NUMBER OF SHARES (000)
		Short-Term Investments (b) (5.0%) Investment Company
	18,315	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $18,315,210)				18,315,210
Total Investments (Cost $323,354,967) (c)			100.3	%		368,089,846
Liabilities in Excess of Other Assets			(0.3	)		(1,003,434	)
Net Assets			100.0	%	$	367,086,412

ADR American Depositary Receipt.

(a) Non-income producing security.

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

(c) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $85,043,606 and the aggregate gross unrealized depreciation is $40,308,727, resulting in net unrealized appreciation of $44,734,879.

See Notes to Financial Statements
109

Morgan Stanley Variable Investment Series - Capital Opportunities

Summary of Investments n June 30, 2008 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Oil & Gas Production	$	45,039,371		12.2	%
Internet Software/ Services		39,300,354		10.7
Chemicals: Agricultural		30,395,417		8.3
Financial Conglomerates		26,687,927		7.3
Biotechnology		22,622,696		6.1
Investment Company		18,315,210		5.0
Finance/Rental/Leasing		18,285,188		5.0
Internet Retail		18,275,669		5.0
Investment Banks/Brokers		17,600,623		4.8
Air Freight/Couriers		15,574,854		4.2
Telecommunication Equipment		15,340,039		4.2
Miscellaneous Commercial Services		13,427,739		3.6
Other Consumer Services		12,632,992		3.4

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Casino/Gaming	$	11,462,134		3.1	%
Construction Materials		10,771,084		2.9
Computer Processing Hardware		10,087,590		2.7
Apparel/Footwear Retail		7,852,926		2.1
Wireless Telecommunications		7,339,213		2.0
Restaurants		6,642,453		1.8
Wholesale Distributors		6,208,599		1.7
Specialty Telecommunications		5,503,836		1.5
Finance Energy		5,350,173		1.5
Home Building		3,373,759		0.9
	$	368,089,846		100.0	%

See Notes to Financial Statements
110

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2008 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (99.1%)
		Advertising/Marketing Services (0.2%)
	7,048	Interpublic Group of Companies, Inc. (The) (a)	$	60,613
	4,778	Omnicom Group, Inc.		214,437
				275,050
		Aerospace & Defense (1.8%)
	11,822	Boeing Co.		776,942
	5,943	General Dynamics Corp.		500,401
	1,867	Goodrich Corp.		88,608
	1,837	L-3 Communications Holdings, Inc.		166,928
	5,264	Lockheed Martin Corp.		519,346
	5,107	Northrop Grumman Corp.		341,658
	2,076	Precision Castparts Corp.		200,064
	6,316	Raytheon Co.		355,464
	2,404	Rockwell Collins, Inc.		115,296
				3,064,707
		Agricultural Commodities/ Milling (0.2%)
	9,616	Archer-Daniels-Midland Co.		324,540
		Air Freight/Couriers (0.9%)
	2,554	C.H. Robinson Worldwide, Inc.		140,061
	3,181	Expeditors International of Washington, Inc.		136,783
	4,629	FedEx Corp.		364,719
	16,135	United Parcel Service, Inc. (Class B)		991,818
				1,633,381
		Airlines (0.1%)
	10,930	Southwest Airlines Co.		142,527
		Aluminum (0.3%)
	12,168	Alcoa, Inc.		433,424
		Apparel/Footwear (0.4%)
	5,092	Coach, Inc. (a)		147,057
	1,300	Jones Apparel Group, Inc.		17,875
	1,419	Liz Claiborne, Inc.		20,079

NUMBER OF SHARES			VALUE
	5,913	Nike, Inc. (Class B)	$	352,474
	1,288	Polo Ralph Lauren Corp.		80,861
	1,627	V.F. Corp.		115,810
				734,156
		Apparel/Footwear Retail (0.3%)
	1,300	Abercrombie & Fitch Co. (Class A)		81,484
	6,995	Gap, Inc. (The)		116,607
	5,076	Limited Brands, Inc.		85,531
	3,240	Nordstrom, Inc.		98,172
	6,346	TJX Companies, Inc. (The)		199,709
				581,503
		Auto Parts: O.E.M. (0.3%)
	2,463	Eaton Corp.		209,281
	8,855	Johnson Controls, Inc.		253,961
				463,242
		Automotive Aftermarket (0.0%)
	3,599	Goodyear Tire & Rubber Co. (The) (a)		64,170
		Beverages: Alcoholic (0.6%)
	11,398	Anheuser-Busch Companies, Inc.		708,044
	1,646	Brown-Forman Corp. (Class B)		124,388
	3,240	Constellation Brands Inc. (Class A) (a)		64,346
	2,629	Molson Coors Brewing Co. (Class B)		142,834
				1,039,612
		Beverages: Non-Alcoholic (1.9%)
	31,130	Coca-Cola Co. (The)		1,618,137
	4,483	Coca-Cola Enterprises Inc.		77,556
	3,009	Pepsi Bottling Group, Inc. (The)		84,011
	24,801	PepsiCo, Inc.		1,577,096
				3,356,800

See Notes to Financial Statements
111

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Biotechnology (1.5%)
	16,745	Amgen Inc. (a)	$	789,694
	4,375	Biogen Idec Inc. (a)		244,519
	6,511	Celgene Corp. (a)		415,858
	3,987	Genzyme Corp. (a)		287,144
	13,884	Gilead Sciences, Inc. (a)		735,158
	822	Millipore Corp. (a)		55,781
				2,528,154
		Broadcasting (0.2%)
	7,436	Clear Channel Communications, Inc.		261,747
		Building Products (0.1%)
	5,406	Masco Corp.		85,036
		Cable/Satellite TV (0.7%)
	46,921	Comcast Corp. (Class A) (a)		890,091
	11,937	DirectTv Group, Inc. (The) (a)		309,288
				1,199,379
		Casino/Gaming (0.1%)
	4,629	International Game Technology		115,632
		Chemicals: Agricultural (0.6%)
	8,643	Monsanto Co.		1,092,821
		Chemicals: Major Diversified (0.8%)
	13,886	Dow Chemical Co. (The)		484,760
	14,456	Du Pont (E.I.) de Nemours & Co.		620,018
	1,135	Eastman Chemical Co.		78,156
	1,688	Hercules Inc.		28,578
	1,955	Rohm & Haas Co.		90,790
				1,302,302
		Chemicals: Specialty (0.5%)
	3,151	Air Products & Chemicals, Inc.		311,508
	940	Ashland Inc.		45,308
	4,674	Praxair, Inc.		440,478
	1,927	Sigma-Aldrich Corp.		103,788
				901,082

NUMBER OF SHARES			VALUE
		Coal (0.5%)
	2,732	CONSOL Energy, Inc.	$	306,995
	1,194	Massey Energy Co.		111,938
	4,061	Peabody Energy Corp.		357,571
				776,504
		Commercial Printing/ Forms (0.1%)
	3,166	Donnelley (R.R.) & Sons Co.		93,999
		Computer Communications (1.3%)
	90,853	Cisco Systems, Inc. (a)		2,113,241
	7,839	Juniper Networks, Inc. (a)		173,869
	1,986	QLogic Corp. (a)		28,976
				2,316,086
		Computer Peripherals (0.4%)
	30,863	EMC Corp. (a)		453,377
	1,419	Lexmark International, Inc. (Class A) (a)		47,437
	5,137	NetApp, Inc. (a)		111,267
	4,225	Seagate Technology Inc. (Escrow) #(a)		0
				612,081
		Computer Processing Hardware (2.8%)
	13,710	Apple Inc. (a)		2,295,602
	32,212	Dell Inc. (a)		704,799
	38,514	Hewlett-Packard Co.		1,702,704
	11,677	Sun Microsytems (a)		127,046
				4,830,151
		Construction Materials (0.1%)
	1,628	Vulcan Materials Co.		97,322
		Containers/Packaging (0.1%)
	1,464	Ball Corp.		69,891
	1,494	Bemis Company, Inc.		33,495
	1,956	Pactiv Corp. (a)		41,526
	2,389	Sealed Air Corp.		45,415
				190,327

See Notes to Financial Statements
112

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Contract Drilling (0.9%)
	2,151	ENSCO International Inc.	$	173,672
	4,211	Nabors Industries, Ltd. (Bermuda) (a)		207,308
	4,017	Noble Corp. (Cayman Islands)		260,944
	1,688	Rowan Companies, Inc.		78,914
	4,905	Transocean Inc. (Cayman Islands)		747,473
				1,468,311
		Data Processing Services (0.7%)
	1,434	Affiliated Computer Services, Inc. (Class A) (a)		76,705
	7,735	Automatic Data Processing, Inc.		324,097
	1,852	Convergys Corp. (a)		27,521
	2,911	Fidelity National Information Services, Inc.		107,445
	2,449	Fiserv, Inc. (a)		111,111
	5,375	Paychex, Inc.		168,130
	2,957	Total System Services, Inc.		65,705
	11,050	Western Union Co.		273,156
				1,153,870
		Department Stores (0.2%)
	1,119	Dillard's, Inc. (Class A)		12,947
	4,584	Kohl's Corp. (a)		183,543
	6,272	Macy*s Inc.		121,802
	3,315	Penney (J.C.) Co., Inc.		120,301
				438,593
		Discount Stores (1.8%)
	1,225	Big Lots, Inc. (a)		38,269
	6,466	Costco Wholesale Corp.		453,525
	2,091	Family Dollar Stores, Inc.		41,695
	1,091	Sears Holdings Corp. (a)		80,363
	11,617	Target Corp.		540,074
	36,260	Wal-Mart Stores, Inc.		2,037,812
				3,191,738
		Drugstore Chains (0.8%)
	21,984	CVS Caremark Corp.		869,907
	14,781	Walgreen Co.		480,530
				1,350,437

NUMBER OF SHARES			VALUE
		Electric Utilities (3.5%)
	10,034	AES Corp. (The) (a)	$	192,753
	2,509	Allegheny Energy, Inc.		125,726
	3,121	Ameren Corp.		131,800
	6,003	American Electric Power Co., Inc.		241,501
	4,898	CenterPoint Energy, Inc.		78,613
	3,360	CMS Energy Corp.		50,064
	4,077	Consolidated Edison, Inc.		159,370
	2,658	Constellation Energy Group		218,222
	8,631	Dominion Resources, Inc.		409,886
	2,434	DTE Energy Co.		103,299
	18,888	Duke Energy Corp.		328,273
	4,868	Edison International		250,118
	2,867	Entergy Corp.		345,416
	10,090	Exelon Corp.		907,696
	4,555	FirstEnergy Corp.		375,013
	6,092	FPL Group, Inc.		399,513
	1,135	Integrys Energy Group, Inc.		57,692
	3,002	Pepco Holdings, Inc.		77,001
	5,331	PG&E Corp.		211,587
	1,509	Pinnacle West Capital Corp.		46,432
	5,570	PPL Corp.		291,144
	3,898	Progress Energy, Inc.		163,053
	7,600	Public Service Enterprise Group Inc.		349,068
	11,453	Southern Co.		399,939
	3,151	TECO Energy, Inc.		67,715
	6,436	Xcel Energy, Inc.		129,171
				6,110,065
		Electrical Products (0.4%)
	2,599	Cooper Industries Ltd. (Class A) (Bermuda)		102,661
	11,668	Emerson Electric Co.		576,983
	2,657	Molex Inc.		64,857
				744,501
		Electronic Components (0.3%)
	3,120	Jabil Circuit, Inc.		51,199
	3,405	MEMC Electronic Materials, Inc. (a)		209,544

See Notes to Financial Statements
113

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	3,360	SanDisk Corp. (a)	$	62,832
	7,138	Tyco Electronics Ltd. (Bermuda)		255,683
				579,258
		Electronic Equipment/ Instruments (0.3%)
	5,376	Agilent Technologies, Inc. (a)		191,063
	3,435	JDS Uniphase Corp. (a)		39,022
	2,195	Rockwell Automation, Inc.		95,987
	13,424	Xerox Corp.		182,029
				508,101
		Electronic Production Equipment (0.3%)
	20,232	Applied Materials, Inc.		386,229
	2,539	KLA-Tencor Corp.		103,363
	1,494	Novellus Systems, Inc. (a)		31,658
	2,569	Teradyne, Inc. (a)		28,439
				549,689
		Electronics/Appliance Stores (0.2%)
	5,959	Best Buy Co., Inc.		235,976
	1,956	RadioShack Corp.		24,000
				259,976
		Electronics/Appliances (0.1%)
	4,301	Eastman Kodak Co.		62,063
	867	Harman International Industries, Inc.		35,885
	1,120	Whirlpool Corp.		69,138
				167,086
		Engineering & Construction (0.2%)
	1,329	Fluor Corp.		247,300
	1,822	Jacobs Engineering Group, Inc. (a)		147,035
				394,335

NUMBER OF SHARES			VALUE
		Environmental Services (0.2%)
	6,450	Allied Waste Industries, Inc. (a)	$	81,399
	7,332	Waste Management, Inc.		276,490
				357,889
		Finance/Rental/Leasing (0.6%)
	3,032	American Capital Strategies, Ltd.		72,071
	5,600	Capital One Financial Corp.		212,856
	4,225	CIT Group, Inc.		28,772
	7,153	Discover Financial Services		94,205
	15,886	Fannie Mae		309,936
	9,661	Freddie Mac		158,440
	852	Ryder System, Inc.		58,686
	6,973	SLM Corp.		134,928
				1,069,894
		Financial Conglomerates (2.7%)
	18,467	American Express Co.		695,652
	83,732	Citigroup, Inc. (Note 4)		1,403,348
	53,811	JPMorgan Chase & Co.		1,846,269
	3,264	Leucadia National Corp.		153,212
	3,868	Principal Financial Group, Inc.		162,340
	6,511	Prudential Financial, Inc.		388,967
				4,649,788
		Financial Publishing/ Services (0.2%)
	1,942	Equifax, Inc.		65,290
	4,793	McGraw-Hill Companies, Inc. (The)		192,295
	3,658	Moody's Corp.		125,982
				383,567
		Food Distributors (0.1%)
	8,974	SYSCO Corp.		246,875
		Food Retail (0.4%)
	9,885	Kroger Co. (The)		285,380
	6,540	Safeway Inc.		186,717
	3,166	SUPERVALU, Inc.		97,798
	2,091	Whole Foods Market, Inc.		49,536
				619,431

See Notes to Financial Statements
114

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Food: Major Diversified (1.0%)
	3,358	Campbell Soup Co.	$	112,359
	7,287	ConAgra Foods Inc.		140,493
	5,002	General Mills, Inc.		303,972
	4,704	Heinz (H.J.) Co.		225,086
	3,956	Kellogg Co.		189,967
	24,226	Kraft Foods Inc. (Class A)		689,230
	10,542	Sara Lee Corp.		129,140
				1,790,247
		Food: Meat/Fish/Dairy (0.1%)
	2,270	Dean Foods Co.		44,537
	5,300	Tyson Foods, Inc. (Class A)		79,182
				123,719
		Food: Specialty/Candy (0.3%)
	3,389	Hershey Foods Co. (The)		111,091
	1,912	McCormick & Co., Inc. (Non-Voting)		68,182
	3,346	Wrigley (Wm.) Jr. Co.		260,252
				439,525
		Forest Products (0.1%)
	3,151	Weyerhaeuser Co.		161,142
		Gas Distributors (0.5%)
	7,743	Dynegy, Inc. (Class A) (a)		66,203
	672	Nicor Inc.		28,620
	4,092	NiSource, Inc.		73,329
	2,584	Questar Corp.		183,567
	3,733	Sempra Energy		210,728
	9,452	Spectra Energy Corp.		271,650
				834,097
		Home Building (0.1%)
	1,837	Centex Corp.		24,561
	4,718	D.R. Horton, Inc.		51,190
	1,343	KB Home		22,737
	2,403	Lennar Corp. (Class A)		29,653
	3,837	Pulte Homes, Inc.		36,950
				165,091

NUMBER OF SHARES			VALUE
		Home Furnishings (0.1%)
	2,479	Leggett & Platt, Inc.	$	41,573
	4,136	Newell Rubbermaid, Inc.		69,443
				111,016
		Home Improvement Chains (0.7%)
	27,145	Home Depot, Inc. (The)		635,736
	21,860	Lowe's Companies, Inc.		453,595
	1,776	Sherwin-Williams Co.		81,572
				1,170,903
		Hospital/Nursing Management (0.0%)
	7,153	Tenet Healthcare Corp. (a)		39,771
		Hotels/Resorts/ Cruiselines (0.3%)
	6,807	Carnival Corp (Units) (Panama)		224,359
	5,285	Marriott International, Inc. (Class A)		138,678
	2,793	Starwood Hotels & Resorts Worldwide, Inc.		111,916
	2,643	Wyndham Worldwide Corp.		47,336
				522,289
		Household/Personal Care (2.4%)
	6,376	Avon Products, Inc.		229,664
	2,061	Clorox Co. (The)		107,584
	7,585	Colgate-Palmolive Co.		524,124
	1,783	Estee Lauder Companies, Inc. (The) (Class A)		82,820
	1,210	International Flavors & Fragrances, Inc.		47,263
	6,242	Kimberly-Clark Corp.		373,147
	46,956	Procter & Gamble Co. (The)		2,855,394
				4,219,996
		Industrial Conglomerates (4.3%)
	11,199	3M Co.		779,338
	3,970	Danaher Corp.		306,881
	153,784	General Electric Co. ##		4,104,495

See Notes to Financial Statements
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Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	11,078	Honeywell International, Inc.	$	557,002
	4,748	Ingersoll-Rand Co. Ltd. (Class A) (Bermuda)		177,718
	2,718	ITT Corp.		172,131
	3,718	Textron, Inc.		178,204
	7,196	Tyco International Ltd. (Bermuda)		288,128
	15,371	United Technologies Corp.		948,391
				7,512,288
		Industrial Machinery (0.3%)
	6,658	Illinois Tool Works Inc.		316,321
	2,509	Parker Hannifin Corp.		178,942
				495,263
		Industrial Specialties (0.2%)
	3,294	Ecolab Inc.		141,609
	2,449	PPG Industries, Inc.		140,499
				282,108
		Information Technology Services (1.8%)
	2,748	Citrix Systems, Inc. (a)		80,819
	4,316	Cognizant Technology Solutions Corp. (Class A) (a)		140,313
	2,255	Computer Sciences Corp. (a)		105,624
	7,511	Electronic Data Systems Corp.		185,071
	21,125	International Business Machines Corp.		2,503,946
	2,688	Teradata Corp. (a)		62,200
	5,316	Unisys Corp. (a)		20,998
				3,098,971
		Insurance Brokers/ Services (0.2%)
	4,465	AON Corp.		205,122
	7,645	Marsh & McLennan Companies, Inc.		202,975
				408,097

NUMBER OF SHARES			VALUE
		Integrated Oil (8.1%)
	32,080	Chevron Corp.	$	3,180,090
	23,723	ConocoPhillips		2,239,214
	81,264	Exxon Mobil Corp.		7,161,796
	4,536	Hess Corp.		572,398
	10,572	Marathon Oil Corp.		548,370
	2,836	Murphy Oil Corp.		278,070
				13,979,938
		Internet Retail (0.3%)
	4,817	Amazon.com, Inc. (a)		353,231
	2,419	Gamestop Corp (Class A) (a)		97,728
	4,097	IAC/InterActiveCorp. (a)		78,990
				529,949
		Internet Software/ Services (1.5%)
	2,509	Akamai Technologies, Inc. (a)		87,288
	3,623	Google Inc. (Class A) (a)		1,907,220
	2,912	VeriSign, Inc. (a)		110,074
	20,546	Yahoo! Inc. (a)		424,480
				2,529,062
		Investment Banks/ Brokers (2.0%)
	3,315	Ameriprise Financial, Inc.		134,821
	14,472	Charles Schwab Corp. (The)		297,255
	822	CME Group Inc.		314,982
	7,063	E*TRADE Group, Inc. (a)		22,178
	6,063	Goldman Sachs Group, Inc. (The)		1,060,419
	1,061	IntercontinentalExchange Inc. (a)		120,954
	10,407	Lehman Brothers Holdings Inc.		206,163
	14,708	Merrill Lynch & Co., Inc.		466,391
	17,725	Morgan Stanley (Note 4)		639,341
	3,957	NYSE Euronext		200,462
				3,462,966
		Investment Managers (0.6%)
	1,522	Federated Investors, Inc. (Class B)		52,387

See Notes to Financial Statements
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Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	2,164	Franklin Resources, Inc.	$	198,331
	2,433	Janus Capital Group, Inc.		64,402
	2,106	Legg Mason, Inc.		91,758
	3,883	Price (T.) Rowe Group, Inc.		219,273
	6,375	State Street Corp.		407,936
				1,034,087
		Life/Health Insurance (0.9%)
	7,093	AFLAC, Inc.		445,440
	6,466	Genworth Financial Inc. (Class A)		115,159
	3,868	Lincoln National Corp.		175,298
	10,602	MetLife, Inc. (Note 4)		559,468
	1,344	Torchmark Corp.		78,826
	5,167	Unum Corp.		105,665
				1,479,856
		Major Banks (3.3%)
	69,484	Bank of America Corp.		1,658,583
	17,592	Bank of New York Mellon Corp.		665,505
	8,168	BB&T Corp.		185,985
	2,240	Comerica, Inc.		57,411
	5,465	Huntington Bancshares, Inc.		31,533
	7,256	KeyCorp		79,671
	11,347	National City Corp.		54,125
	5,167	PNC Financial Services Group		295,036
	10,378	Regions Financial Corp.		113,224
	5,256	SunTrust Banks, Inc.		190,372
	26,771	U.S. Bancorp		746,643
	31,923	Wachovia Corp.		495,764
	51,842	Wells Fargo & Co.		1,231,247
				5,805,099
		Major Telecommunications (3.0%)
	91,373	AT&T Inc.		3,078,356
	2,210	Embarq Corp.		104,467
	42,569	Sprint Nextel Corp.		404,406
	44,591	Verizon Communications, Inc.		1,578,521
				5,165,750

NUMBER OF SHARES			VALUE
		Managed Health Care (0.8%)
	7,242	Aetna, Inc.	$	293,518
	4,196	CIGNA Corp.		148,496
	2,270	Coventry Health Care, Inc. (a)		69,053
	2,524	Humana, Inc. (a)		100,379
	18,351	UnitedHealth Group Inc.		481,714
	7,854	WellPoint Inc. (a)		374,322
				1,467,482
		Media Conglomerates (1.6%)
	10,169	CBS Corp. (Class B)		198,194
	29,302	Disney (Walt) Co. (The)		914,222
	35,889	News Corp. (Class A)		539,771
	55,036	Time Warner, Inc.		814,533
	9,452	Viacom Inc. (Class B) (a)		288,664
				2,755,384
		Medical Distributors (0.4%)
	2,404	AmerisourceBergen Corp.		96,136
	5,331	Cardinal Health, Inc.		274,973
	4,136	McKesson Corp.		231,244
	1,927	Patterson Companies, Inc. (a)		56,635
				658,988
		Medical Specialties (2.4%)
	2,524	Applera Corp. - Applied Biosystems Group		84,504
	1,479	Bard (C.R.), Inc.		130,078
	9,362	Baxter International, Inc.		598,606
	3,644	Becton, Dickinson & Co.		296,257
	22,337	Boston Scientific Corp. (a)		274,522
	7,466	Covidien Ltd. (Bermuda)		357,547
	2,375	Hospira, Inc. (a)		95,261
	583	Intuitive Surgical, Inc. (a)		157,060
	17,273	Medtronic, Inc.		893,878
	1,792	Pall Corp.		71,106
	1,762	PerkinElmer, Inc.		49,072
	5,062	St. Jude Medical, Inc. (a)		206,934
	3,722	Stryker Corp.		234,039
	6,242	Thermo Fisher Scientific, Inc. (a)		347,867

See Notes to Financial Statements
117

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Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	1,882	Varian Medical Systems, Inc. (a)	$	97,582
	1,494	Waters Corp. (a)		96,363
	3,450	Zimmer Holdings, Inc. (a)		234,772
				4,225,448
		Miscellaneous Commercial Services (0.0%)
	2,299	Cintas Corp.		60,946
		Miscellaneous Manufacturing (0.1%)
	2,822	Dover Corp.		136,500
		Motor Vehicles (0.2%)
	33,476	Ford Motor Co. (a)		161,020
	8,452	General Motors Corp.		97,198
	3,539	Harley-Davidson, Inc.		128,324
				386,542
		Multi-Line Insurance (0.9%)
	41,063	American International Group, Inc.		1,086,527
	4,704	Hartford Financial Services Group, Inc. (The)		303,737
	1,344	SAFECO Corp.		90,263
				1,480,527
		Office Equipment/ Supplies (0.1%)
	1,583	Avery Dennison Corp.		69,541
	3,106	Pitney Bowes, Inc.		105,915
				175,456
		Oil & Gas Pipelines (0.3%)
	10,482	El Paso Corp.		227,879
	8,720	Williams Companies, Inc. (The)		351,503
				579,382
		Oil & Gas Production (3.2%)
	6,987	Anadarko Petroleum Corp.		522,907
	5,332	Apache Corp.		741,148
	1,463	Cabot Oil & Gas Corp.		99,089

NUMBER OF SHARES			VALUE
	7,815	Chesapeake Energy Corp.	$	515,477
	7,094	Devon Energy Corp.		852,415
	3,703	EOG Resources, Inc.		485,834
	2,569	Noble Energy, Inc.		258,339
	12,623	Occidental Petroleum Corp.		1,134,303
	2,315	Range Resources Corp.		151,725
	5,106	Southwestern Energy Co. (a)		243,097
	7,629	XTO Energy, Inc.		522,663
				5,526,997
		Oil Refining/Marketing (0.3%)
	1,747	Sunoco, Inc.		71,085
	2,061	Tesoro Corp.		40,746
	7,899	Valero Energy Corp.		325,281
				437,112
		Oilfield Services/ Equipment (2.7%)
	4,598	Baker Hughes Inc.		401,589
	4,390	BJ Services Co.		140,217
	3,241	Cameron International Corp. (a)		179,389
	13,941	Halliburton Co.		739,849
	6,196	National-Oilwell Varco, Inc. (a)		549,709
	18,592	Schlumberger Ltd. (Netherlands Antilles)		1,997,339
	3,002	Smith International, Inc.		249,586
	10,153	Weatherford International Ltd. (Bermuda) (a)		503,487
				4,761,165
		Other Consumer Services (0.4%)
	2,508	Apollo Group, Inc. (Class A) (a)		111,004
	4,853	Block (H&R), Inc.		103,854
	17,227	eBay Inc. (a)		470,814
	4,270	Expedia, Inc. (a)		78,483
				764,155
		Other Consumer Specialties (0.1%)
	2,300	Fortune Brands, Inc.		143,543

See Notes to Financial Statements
118

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Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Other Metals/Minerals (0.0%)
	2,702	Titanium Metals Corp.	$	37,801
		Packaged Software (3.3%)
	7,943	Adobe Systems, Inc. (a)		312,875
	3,345	Autodesk, Inc. (a)		113,094
	2,852	BMC Software, Inc. (a)		102,672
	7,106	CA Inc.		164,078
	3,912	Compuware Corp. (a)		37,320
	4,793	Intuit Inc. (a)		132,143
	123,186	Microsoft Corp.		3,388,847
	5,286	Novell, Inc. (a)		31,135
	61,008	Oracle Corp. (a)		1,281,168
	12,543	Symantec Corp. (a)		242,707
				5,806,039
		Personnel Services (0.1%)
	1,852	Monster Worldwide Inc. (a)		38,170
	2,375	Robert Half International, Inc.		56,929
				95,099
		Pharmaceuticals: Generic Drugs (0.1%)
	1,613	Barr Pharmaceuticals Inc. (a)		72,714
	4,540	Mylan Laboratories, Inc.		54,798
	1,553	Watson Pharmaceuticals, Inc. (a)		42,195
				169,707
		Pharmaceuticals: Major (5.7%)
	23,736	Abbott Laboratories		1,257,296
	29,564	Bristol-Myers Squibb Co.		606,949
	43,344	Johnson & Johnson		2,788,753
	15,415	Lilly (Eli) & Co.		711,556
	33,733	Merck & Co., Inc.		1,271,397
	105,425	Pfizer, Inc.		1,841,775
	24,204	Schering-Plough Corp.		476,577
	20,507	Wyeth		983,516
				9,937,819
		Pharmaceuticals: Other (0.2%)
	4,599	Allergan, Inc.		239,378
	4,555	Forest Laboratories, Inc. (a)		158,241

NUMBER OF SHARES			VALUE
	3,689	King Pharmaceuticals, Inc. (a)	$	38,624
				436,243
		Precious Metals (0.6%)
	6,121	Freeport-McMoRan Copper & Gold, Inc.		717,320
	6,779	Newmont Mining Corp.		353,593
				1,070,913
		Property - Casualty Insurers (1.1%)
	4,973	ACE Ltd. (Cayman Islands)		273,963
	8,228	Allstate Corp. (The) (Note 4)		375,114
	5,450	Chubb Corp. (The)		267,104
	2,434	Cincinnati Financial Corp.		61,824
	5,643	Loews Corp.		264,657
	10,124	Progressive Corp. (The)		189,521
	9,034	The Travelers Companies, Inc.		392,076
	2,673	XL Capital Ltd. (Class A) (Cayman Islands)		54,957
				1,879,216
		Publishing: Books/ Magazines (0.0%)
	686	Meredith Corp.		19,407
		Publishing: Newspapers (0.1%)
	3,420	Gannett Co., Inc.		74,111
	2,151	New York Times Co. (The) (Class A)		33,104
	1,399	Scripps (E.W.) Co. (Class A)		58,114
	139	Washington Post Co. (The) (Class B)		81,579
				246,908
		Pulp & Paper (0.1%)
	6,391	International Paper Co.		148,910
	2,599	MeadWestvaco Corp.		61,960
				210,870
		Railroads (1.0%)
	4,569	Burlington Northern Santa Fe Corp.		456,397

See Notes to Financial Statements
119

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Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	6,048	CSX Corp.	$	379,875
	5,615	Norfolk Southern Corp.		351,892
	7,720	Union Pacific Corp.		582,860
				1,771,024
		Real Estate Development (0.0%)
	3,016	CB Richard Ellis Group, Inc. (Class A) (a)		57,907
		Real Estate Investment Trusts (1.1%)
	1,344	Apartment Investment & Management Co. (Class A)		45,777
	1,150	AvalonBay Communities, Inc.		102,534
	1,792	Boston Properties, Inc.		161,674
	4,047	Equity Residential		154,879
	3,987	General Growth Properties, Inc.		139,665
	3,509	HCP, Inc.		111,621
	7,795	Host Hotels & Resorts Inc.		106,402
	3,793	Kimco Realty Corp.		130,934
	2,554	Plum Creek Timber Co., Inc.		109,081
	3,912	ProLogis		212,617
	2,219	Public Storage, Inc.		179,273
	3,360	Simon Property Group, Inc.		302,030
	2,299	Vornado Realty Trust		202,312
				1,958,799
		Recreational Products (0.2%)
	4,749	Electronic Arts Inc. (a)		210,998
	2,076	Hasbro, Inc.		74,155
	5,406	Mattel, Inc.		92,551
				377,704
		Regional Banks (0.3%)
	8,585	Fifth Third Bancorp		87,395
	2,792	First Horizon National Corp.		20,745
	1,548	M&T Bank Corp.		109,196
	3,868	Marshall & Ilsley Corp.		59,296
	3,284	Northern Trust Corp.		225,184
	1,613	Zions Bancorporation		50,793
				552,609

NUMBER OF SHARES			VALUE
		Restaurants (0.9%)
	2,091	Darden Restaurants, Inc.	$	66,787
	17,434	McDonald's Corp.		980,139
	10,870	Starbucks Corp. (a)		171,094
	1,314	Wendy's International, Inc.		35,767
	7,078	Yum! Brands, Inc.		248,367
				1,502,154
		Retail Strip Centers (0.0%)
	1,792	Developers Diversified Realty Corp.		62,200
		Savings Banks (0.2%)
	7,750	Hudson City Bancorp, Inc.		129,270
	9,541	Sovereign Bancorp, Inc.		70,222
	15,812	Washington Mutual, Inc.		77,953
				277,445
		Semiconductors (2.1%)
	9,064	Advanced Micro Devices, Inc. (a)		52,843
	4,480	Altera Corp.		92,736
	4,331	Analog Devices, Inc.		137,596
	7,674	Broadcom Corp. (Class A) (a)		209,423
	89,272	Intel Corp.		1,917,563
	3,315	Linear Technology Corp.		107,969
	9,512	LSI Logic Corp. (a)		58,404
	2,763	Microchip Technology Inc.		84,382
	11,363	Micron Technology, Inc. (a)		68,178
	3,628	National Semiconductor Corp.		74,519
	8,287	NVIDIA Corp. (a)		155,133
	19,754	Texas Instruments Inc.		556,273
	4,166	Xilinx, Inc.		105,192
				3,620,211
		Services to the Health Industry (0.5%)
	3,748	Express Scripts, Inc. (a)		235,075
	2,703	IMS Health Inc.		62,980
	1,658	Laboratory Corp. of America Holdings (a)		115,446

See Notes to Financial Statements
120

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Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	7,571	Medco Health Solutions Inc. (a)	$	357,351
	2,911	Quest Diagnostics Inc.		141,096
				911,948
		Specialty Insurance (0.1%)
	1,761	Assurant, Inc.		116,155
	3,553	MBIA Inc.		15,598
	1,866	MGIC Investment Corp.		11,401
				143,154
		Specialty Stores (0.4%)
	2,672	AutoNation, Inc. (a)		26,773
	904	AutoZone, Inc. (a)		109,393
	3,868	Bed Bath & Beyond Inc. (a)		108,691
	4,077	Office Depot, Inc. (a)		44,602
	10,482	Staples, Inc.		248,948
	1,882	Tiffany & Co.		76,691
				615,098
		Specialty Telecommunications (0.3%)
	5,928	American Tower Corp. (Class A) (a)		250,458
	1,568	CenturyTel, Inc.		55,805
	4,838	Citizens Communications Co.		54,863
	3	Fairpoint Communications, Inc.		22
	26,114	Qwest Communications International, Inc. (a)		102,628
	6,675	Windstream Corp.		82,370
				546,146
		Steel (0.5%)
	538	AK Steel Holding Corp.		37,122
	1,509	Allegheny Technologies, Inc.		89,454
	4,688	Nucor Corp.		350,053
	1,762	United States Steel Corp.		325,582
				802,211
		Telecommunication Equipment (1.1%)
	1,344	Ciena Corp. (a)		31,140
	23,516	Corning Inc.		542,044

NUMBER OF SHARES					VALUE
	33,670	Motorola, Inc.			$	247,138
	175	Nortel Networks Corp. (Canada) (a)				1,438
	24,896	QUALCOMM, Inc.				1,104,635
	5,928	Tellabs, Inc. (a)				27,565
						1,953,960
		Tobacco (1.6%)
	32,211	Altria Group, Inc.				662,258
	2,598	Lorillard, Inc. (a)				179,678
	32,956	Philip Morris International, Inc.				1,627,697
	2,670	Reynolds American, Inc.				124,609
	2,210	UST, Inc.				120,688
						2,714,930
		Tools/Hardware (0.1%)
	911	Black & Decker Corp.				52,392
	867	Snap-On, Inc.				45,093
	1,165	Stanley Works (The)				52,227
						149,712
		Trucks/Construction/ Farm Machinery (1.0%)
	9,240	Caterpillar Inc.				682,097
	3,032	Cummins Inc.				198,657
	6,436	Deere & Co.				464,229
	1,942	Manitowoc Co., Inc.				63,173
	5,450	PACCAR, Inc.				227,973
	1,494	Terex Corp. (a)				76,747
						1,712,876
		Wholesale Distributors (0.1%)
	2,449	Genuine Parts Co.				97,176
	1,149	Grainger (W.W.), Inc.				93,988
						191,164
		Total Common Stocks (Cost $125,472,217) (b)(c)				171,511,270
Total Investments (Cost $125,472,217) (b)(c)			99.1	%		171,511,270
Other Assets in Excess of Liabilities			0.9			1,610,836
Net Assets			100	%	$	173,122,106

See Notes to Financial Statements
121

Morgan Stanley Variable Investment Series - S&P 500 Index

Portfolio of Investments n June 30, 2008 (unaudited) continued

(a) Non-income producing security.

# 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.

## A portion of this security has been physically segregated in connection with open futures contracts in the amount of $100,800.

(b) Securities have been designated as collateral in the amount equal to $1,692,740 in connection with open futures contracts.

(c) The aggregate cost for federal income tax purposes approximates the aggregate cost for book cost. The aggregate gross unrealized appreciation is $61,928,261 and the aggregate gross unrealized depreciation is $15,889,208 resulting in net unrealized appreciation of $46,039,052.

Futures Contracts Open at June 30, 2008:

NUMBER OF
CONTRACTS

LONG/
SHORT

DESCRIPTION,
DELIVERY
MONTH, AND
YEAR

UNDERLYING
FACE AMOUNT
AT VALUE

UNREALIZED
DEPRECIATION

Long

S&P 500 Index
E-MINI
September
2008

$1,793,540

$(55,351)

See Notes to Financial Statements
122

Morgan Stanley Variable Investment Series - S&P 500 Index

Summary of Investments n June 30, 2008 (unaudited)

SECTOR	VALUE		PERCENT OF TOTAL INVESTMENTS
Finance	$	24,321,644		14.2	%
Energy Minerals		20,720,551		12.1
Electronic Technology		18,034,244		10.5
Health Technology		17,297,371		10.1
Consumer Non-Durables		14,418,985		8.4
Technology Services		12,587,942		7.3
Producer Manufacturing		11,325,162		6.6
Retail Trade		8,757,628		5.1
Industrial Services		7,561,082		4.4
Consumer Services		7,387,055		4.3
Utilities		6,944,162		4.1
Communications		5,711,896		3.3
Process Industries		4,304,050		2.5

SECTOR	VALUE			PERCENT OF TOTAL INVESTMENTS
Transportation	$	3,546,932			2.1	%
Non-Energy Minerals		2,602,813			1.5
Health Services		2,419,201			1.4
Consumer Durables		1,564,864			0.9
Distribution Services		1,097,027			0.7
Commercial Services		908,661			0.5
	$	171,511,270	*		100.0	%

* Does not include open futures contracts with an underlying face amount of $1,793,540 with unrealized depreciation of $55,351.

See Notes to Financial Statements
123

Morgan Stanley Variable Investment Series - Global Advantage

Portfolio of Investments n June 30, 2008 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (99.3%) Australia (2.0%)
		Data Processing Services
	40,435	Computershare Ltd.	$	357,009
		Bermuda (5.4%)
		Apparel/Footwear Retail
	30,100	Esprit Holdings Ltd.		312,687
		Investment Banks/Brokers
	20,800	MF Global Ltd. (a)		131,248
		Multi-Line Insurance
	5,902	Axis Capital Holdings Ltd.		175,939
		Wholesale Distributors
	118,200	Li & Fung Ltd. (Hong Kong)		356,241
		Total Bermuda		976,115
		Canada (1.7%)
		Food: Specialty/Candy
	60,800	SunOpta Inc. (a)		315,552
		China (1.0%)
		Coal
	48,500	China Shenhua Energy Company Ltd. (H Shares)		190,336
		Finland (1.1%)
		Electronic Components
	4,881	Vacon Oyj		197,887
		France (2.6%)
		Miscellaneous Commercial Services
	2,960	Sodexo		194,431
		Pharmaceuticals: Other
	5,532	Ipsen S.A.		283,071
		Total France		477,502
		Germany (6.7%)
		Apparel/Footwear
	5,430	Adidas AG		342,912
		Internet Software/Services
	9,700	United Internet AG (Registered Shares)		191,208

NUMBER OF SHARES			VALUE
		Medical Specialties
	5,252	Fresenius SE	$	454,632
		Miscellaneous Commercial Services
	16,715	Wirecard AG (a)		214,484
		Total Germany		1,203,236
		Greece (1.6%)
		Regional Banks
	12,152	EFG Eurobank Ergasias		288,905
		Israel (3.6%)
		Food: Specialty/Candy
	14,137	Strauss Group Ltd. (a)		198,488
		Pharmaceuticals: Other
	10,000	Teva Pharmaceutical Industries Ltd. (ADR)		458,000
		Total Israel		656,488
		Italy (3.0%)
		Apparel/Footwear
	14,721	Geox S.p.A.		150,075
		Major Banks
	64,146	UniCredit S.p.A.		392,618
		Total Italy		542,693
		Japan (2.5%)
		Home Building
	9,100	Daito Trust Construction Co., Ltd.		441,352
		Mexico (3.1%)
		Beverages: Non-Alcoholic
	6,900	Fomento Economico Mexicano, S.A.B. de C.V. (ADR) (Units) (b)		314,019
		Other Transportation
	4,800	Grupo Aeroportuario del Sureste S.A.B. de C.V. (ADR)		247,200
		Total Mexico		561,219

See Notes to Financial Statements
124

Morgan Stanley Variable Investment Series - Global Advantage

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Netherlands (0.8%)
		Electronic Equipment/Instruments
	4,400	Smartrac NV (a)	$	147,004
		Singapore (3.3%)
		Electronic Components
	25,900	Flextronics International Ltd. (a)		243,462
		Trucks/Construction/ Farm Machinery
	148,634	Cosco Corp (Singapore) Ltd.		349,588
		Total Singapore		593,050
		South Africa (1.4%)
		Pharmaceuticals: Generic Drugs
	61,700	Aspen Pharmacare Holdings Ltd. (a)		250,582
		Spain (4.7%)
		Major Banks
	14,542	Banco Santander S.A.		267,193
		Major Telecommunications
	21,460	Telefonica S.A.		570,339
		Total Spain		837,532
		Sweden (1.1%)
		Packaged Software
	10,915	ORC Software AB		192,113
		Switzerland (2.2%)
		Biotechnology
	2,800	Lonza Group AG (Registered Shares)		388,390
		United Kingdom (13.0%)
		Beverages: Alcoholic
	17,193	SABMiller PLC		394,509
		Investment Managers
	65,300	BlueBay Asset Management PLC		292,325
	25,923	Man Group PLC		322,195
				614,520
		Major Banks
	12,917	Standard Chartered PLC		367,918

NUMBER OF SHARES			VALUE
		Miscellaneous Commercial Services
	6,800	Homeserve PLC	$	229,308
	25,704	Intertek Group PLC		505,837
				735,145
		Pharmaceuticals: Other
	13,487	Shire Ltd.		221,224
		Total United Kingdom		2,333,316
		United States (38.5%)
		Beverages: Non-Alcoholic
	4,900	PepsiCo, Inc.		311,591
		Biotechnology
	7,900	Gilead Sciences, Inc. (a)		418,305
		Computer Processing Hardware
	3,363	Apple Inc. (a)		563,101
		Data Processing Services
	8,000	NeuStar, Inc. (Class A) (a)		172,480
		Electric Utilities
	6,100	Constellation Energy Group Inc.		500,810
		Electronic Components
	12,200	Amphenol Corporation (Class A)		547,536
		Environmental Services
	9,100	EnergySolutions Inc.		203,385
		Financial Conglomerates
	5,950	Prudential Financial, Inc.		355,453
		Food: Meat/Fish/Dairy
	25,700	Smart Balance Inc. (a)		185,297
		Life/Health Insurance
	8,900	Aflac		558,920
		Media Conglomerates
	11,216	News Corp. (Class A)		168,689
		Medical Specialties
	4,100	Bard (C.R.), Inc.		360,595
	8,100	Thermo Fisher Scientific, Inc. (a)		451,413
	7,100	West Pharmaceutical Services, Inc.		307,288
				1,119,296

See Notes to Financial Statements
125

Morgan Stanley Variable Investment Series - Global Advantage

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES					VALUE
		Miscellaneous Commercial Services
	7,600	FTI Consulting Inc. (a)			$	520,296
		Specialty Stores
	12,640	Staples, Inc.				300,200
		Telecommunication Equipment
	11,741	Corning Inc.				270,630
		Wireless Telecommunications
	18,000	MetroPCS Communications Inc. (a)				318,780
	8,800	NII Holdings Inc. (a)				417,912
						736,692
		Total United States				6,932,681
		Total Common Stocks (Cost $16,334,390)				17,882,962
NUMBER OF SHARES (000)
		Short-Term Investments (c) (0.2%)
		Investment Company
	31	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $30,855)				30,855
Total Investments (Cost $16,365,245) (d)			99.5	%		17,913,817
Other Assets in Excess of Liabilities			0.5			94,757
Net Assets			100.0	%	$	18,008,574

ADR American Depositary Receipt.

(a) Non-income producing security.

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

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

(d) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $3,525,424 and the aggregate gross unrealized depreciation is $1,976,852, resulting in net unrealized appreciation of $1,548,572.

See Notes to Financial Statements
126

Morgan Stanley Variable Investment Series - Global Advantage

Summary of Investments n June 30, 2008 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Miscellaneous Commercial Services	$	1,664,356		9.3	%
Medical Specialties		1,573,928		8.8
Major Banks		1,027,729		5.7
Electronic Components		988,885		5.5
Pharmaceuticals: Other		962,295		5.4
Biotechnology		806,695		4.5
Wireless Telecommunications		736,692		4.1
Beverages: Non-Alcoholic		625,610		3.5
Investment Managers		614,520		3.4
Major Telecommunications		570,339		3.2
Computer Processing Hardware		563,101		3.1
Life/Health Insurance		558,920		3.1
Data Processing Services		529,489		3.0
Food: Specialty/Candy		514,040		2.9
Electric Utilities		500,810		2.8
Apparel/Footwear		492,987		2.7
Home Building		441,352		2.5
Beverages: Alcoholic		394,509		2.2
Wholesale Distributors		356,241		2.0
Financial Conglomerates		355,453		2.0

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Trucks/Construction/ Farm Machinery	$	349,588		1.9	%
Apparel/Footwear Retail		312,687		1.7
Specialty Stores		300,200		1.7
Regional Banks		288,905		1.6
Telecommunication Equipment		270,630		1.5
Pharmaceuticals: Generic Drugs		250,582		1.4
Other Transportation		247,200		1.4
Environmental Services		203,385		1.1
Packaged Software		192,113		1.1
Internet Software/Services		191,208		1.1
Coal		190,336		1.1
Food: Meat/Fish/Dairy		185,297		1.0
Multi-Line Insurance		175,939		1.0
Media Conglomerates		168,689		0.9
Electronic Equipment/ Instruments		147,004		0.8
Investment Banks/Brokers		131,248		0.7
Investment Company		30,855		0.3
	$	17,913,817		100.0	%

See Notes to Financial Statements
127

Morgan Stanley Variable Investment Series - Aggressive Equity

Portfolio of Investments n June 30, 2008 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (96.2%)
		Air Freight/Couriers (4.3%)
	20,730	C.H. Robinson Worldwide, Inc.	$	1,136,833
	19,165	Expeditors International of Washington, Inc.		824,095
				1,960,928
		Apparel/Footwear Retail (2.2%)
	15,774	Abercrombie & Fitch Co. (Class A)		988,714
		Biotechnology (6.2%)
	17,838	Illumina, Inc. (a)		1,553,868
	16,728	Techne Corp. (a)		1,294,580
				2,848,448
		Casino/Gaming (3.1%)
	17,739	Wynn Resorts, Ltd.		1,443,068
		Chemicals: Agricultural (8.4%)
	30,266	Monsanto Co.		3,826,833
		Computer Processing Hardware (2.8%)
	7,585	Apple Inc. (a)		1,270,032
		Construction Materials (3.0%)
	54,896	Cemex SAB de C.V. (ADR) (Mexico) (a)		1,355,940
		Finance Energy (1.5%)
	34,367	Brookfield Infrastructure LP (Bermuda)		673,593
		Finance/Rental/Leasing (5.0%)
	5,138	Mastercard Inc. Class A		1,364,242
	50,781	Redecard SA (Brazil)		938,265
				2,302,507
		Financial Conglomerates (7.3%)
	64,002	Brookfield Asset Management Inc. (Class A) (Canada)		2,082,625
	27,214	Leucadia National Corp.		1,277,425
				3,360,050
		Home Building (1.0%)
	12,359	Gafisa S.A. (ADR) (Brazil)		424,779

NUMBER OF SHARES			VALUE
		Internet Retail (5.0%)
	31,378	Amazon.com, Inc. (a)	$	2,300,949
		Internet Software/ Services (10.8%)
	3,815	Baidu.com, Inc. (ADR) (Cayman Islands) (a)		1,193,942
	5,074	Google Inc. (Class A) (a)		2,671,055
	140,000	Tencent Holdings Ltd. (Cayman Islands)		1,082,689
				4,947,686
		Investment Banks/Brokers (4.8%)
	93,327	Bovespa Holding SA (Brazil)		1,152,688
	19,744	Greenhill & Co., Inc.		1,063,412
				2,216,100
		Miscellaneous Commercial Services (3.7%)
	14,671	Corporate Executive Board Co. (The)		616,916
	24,154	Costar Group, Inc. (a)		1,073,645
				1,690,561
		Oil & Gas Production (12.4%)
	49,430	Southwestern Energy Co. (a)		2,353,362
	33,780	Ultra Petroleum Corp. (Canada) (a)		3,317,196
				5,670,558
		Other Consumer Services (3.5%)
	58,197	eBay Inc. (a)		1,590,524
		Restaurants (1.8%)
	53,132	Starbucks Corp. (a)		836,298
		Specialty Telecommunications (1.5%)
	51,712	Cogent Communications Group, Inc. (a)		692,941
		Telecommunication Equipment (4.2%)
	25	Nortel Networks Corp. (Canada) (a)		206

See Notes to Financial Statements
128

Morgan Stanley Variable Investment Series - Aggressive Equity

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES					VALUE
	16,445	Research In Motion Ltd. (Canada) (a)			$	1,922,421
						1,922,627
		Wholesale Distributors (1.7%)
	260,000	Li & Fung Ltd. (Hong Kong) **				783,610
		Wireless Telecommunications (2.0%)
	17,517	America Movil SAB de C.V. (Series L) (ADR) (Mexico)				924,022
		Total Common Stocks (Cost $36,789,279)				44,030,768
NUMBER OF SHARES (000)
		Short-Term Investment (b) (3.9%) Investment Company
$	1,774	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $1,774,267)				1,774,267
Total Investments (Cost $38,563,546) (c)			100.1	%		45,805,035
Liabilities In Excess of Other Liabilities			(0.1	)		(59,722	)
Net Assets			100.0	%	$	45,745,313

ADR American Depositary Receipt.

** Security trades on a Hong Kong exchange

(a) Non-income producing security.

(b) See note 4 to the 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 $11,675,035 and the aggregate gross unrealized depreciation is $4,433,546, resulting in net unrealized appreciation of $7,241,489

See Notes to Financial Statements
129

Morgan Stanley Variable Investment Series - Aggressive Equity

Summary of Investments by Industry Classification n June 30, 2008 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Oil & Gas Production	$	5,670,558		12.4	%
Internet Software/Services		4,947,686		10.8
Chemicals: Agricultural		3,826,833		8.4
Financial Conglomerates		3,360,050		7.3
Biotechnology		2,848,448		6.2
Finance/Rental/Leasing		2,302,507		5.0
Internet Retail		2,300,949		5.0
Investment Banks/Brokers		2,216,100		4.8
Air Freight/Couriers		1,960,928		4.3
Telecommunication Equipment		1,922,627		4.2
Investment Company		1,774,267		4.0
Miscellaneous Commercial Services		1,690,561		3.7
Other Consumer Services		1,590,524		3.5

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Casino/Gaming	$	1,443,068		3.1	%
Construction Materials		1,355,940		3.0
Computer Processing Hardware		1,270,032		2.8
Apparel/Footwear Retail		988,714		2.1
Wireless Telecommunications		924,022		2.0
Restaurants		836,298		1.8
Wholesale Distributors		783,610		1.7
Specialty Telecommunications		692,941		1.5
Finance Energy		673,593		1.5
Home Building		424,779		0.9
	$	45,805,035		100.0	%

See Notes to Financial Statements
130

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (64.3%)
		Advertising/Marketing Services (0.7%)
	37,120	Omnicom Group, Inc.	$	1,665,946
		Aerospace & Defense (2.6%)
	49,715	Northrop Grumman Corp.		3,325,934
	57,135	Raytheon Co.		3,215,558
				6,541,492
		Airlines (1.0%)
	104,480	Continental Airlines, Inc. (Class B) (a)		1,056,293
	106,200	Southwest Airlines Co.		1,384,848
				2,441,141
		Aluminum (0.7%)
	25,610	Alcoa, Inc.		912,228
	31,440	Aluminum Corp. of China Ltd. (ADR) (China)		897,298
				1,809,526
		Automotive Aftermarket (0.2%)
	32,660	Goodyear Tire & Rubber Co. (The) (a)		582,328
		Biotechnology (1.9%)
	38,130	Celgene Corp. (a)		2,435,363
	44,860	Gilead Sciences, Inc. (a)		2,375,337
				4,810,700
		Chemicals: Major Diversified (0.6%)
	46,500	Dow Chemical Co. (The)		1,623,315
		Computer Communications (1.1%)
	124,400	Cisco Systems, Inc. (a)		2,893,544
		Computer Peripherals (0.9%)
	151,345	EMC Corp. (a)		2,223,258
		Computer Processing Hardware (2.8%)
	32,225	Apple Inc. (a)		5,395,754
	77,470	Dell Inc. (a)		1,695,044
				7,090,798
		Department Stores (1.0%)
	28,750	Kohl's Corp. (a)		1,151,150
	67,465	MACY*S Inc.		1,310,170
				2,461,320
		Discount Stores (0.9%)
	31,560	Costco Wholesale Corp.		2,213,618

See Notes to Financial Statements
131

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Electric Utilities (0.5%)
	30,520	American Electric Power Co., Inc.	$	1,227,820
		Electrical Products (0.8%)
	41,370	Emerson Electric Co.		2,045,747
		Electronic Production Equipment (0.5%)
	33,950	Applied Materials, Inc.		648,106
	16,970	KLA-Tencor Corp.		690,849
				1,338,955
		Electronics/Appliances (1.2%)
	69,450	Sony Corp. (ADR) (Japan)		3,037,743
		Finance/Rental/Leasing (0.9%)
	28,150	Visa Inc. - (Class A)		2,288,877
		Financial Conglomerates (1.1%)
	42,075	American Express Co.		1,584,965
	36,960	JPMorgan Chase & Co.		1,268,098
				2,853,063
		Food: Major Diversified (2.8%)
	61,020	Kellogg Co.		2,930,180
	145,010	Kraft Foods Inc. (Class A)		4,125,534
				7,055,714
		Forest Products (0.6%)
	32,110	Weyerhaeuser Co.		1,642,105
		Home Building (0.5%)
	34,360	Gafisa S.A. (ADR) (Brazil)		1,180,953
		Home Improvement Chains (0.6%)
	72,295	Lowe's Companies, Inc.		1,500,121
		Household/Personal Care (1.3%)
	46,385	Colgate-Palmolive Co.		3,205,204
		Information Technology Services (1.8%)
	38,880	International Business Machines Corp.		4,608,446
		Integrated Oil (2.4%)
	25,600	Exxon Mobil Corp.		2,256,128
	30,660	Hess Corp.		3,868,985
				6,125,113
		Internet Software/Services (0.8%)
	3,670	Google Inc. (Class A) (a)		1,931,961
		Investment Banks/Brokers (3.0%)
	181,875	Charles Schwab Corp. (The)		3,735,713

See Notes to Financial Statements
132

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	8,410	Goldman Sachs Group, Inc. (The)	$	1,470,909
	48,130	Lazard Ltd. (Class A) (Bermuda)		1,643,640
	17,420	NYSE Euronext		882,497
				7,732,759
		Investment Managers (0.6%)
	61,935	Janus Capital Group, Inc.		1,639,419
		Major Banks (1.1%)
	44,730	Bank of America Corp.		1,067,705
	31,895	Wachovia Corp.		495,329
	51,215	Wells Fargo & Co.		1,216,356
				2,779,390
		Media Conglomerates (0.3%)
	46,375	Time Warner, Inc.		686,350
		Medical Specialties (5.4%)
	32,810	Bard (C.R.), Inc.		2,885,640
	40,865	Covidien Ltd.		1,957,025
	82,870	St. Jude Medical, Inc. (a)		3,387,726
	66,070	Thermo Fisher Scientific, Inc. (a)		3,682,081
	27,550	Zimmer Holdings, Inc. (a)		1,874,778
				13,787,250
		Miscellaneous Commercial Services (0.5%)
	102,240	E-House China Holdings Ltd. (ADR) (China)		1,161,446
		Motor Vehicles (1.0%)
	77,670	Honda Motor Co., Ltd. (ADR) (Japan)		2,643,110
		Oilfield Services/Equipment (1.6%)
	38,590	Halliburton Co.		2,047,971
	23,180	Smith International, Inc.		1,927,185
				3,975,156
		Other Consumer Services (0.4%)
	35,980	eBay Inc. (a)		983,333
		Packaged Software (5.0%)
	134,180	Microsoft Corp. (a)		3,691,292
	232,895	Oracle Corp. (a)		4,890,795
	143,455	Sybase, Inc. (a)		4,220,446
				12,802,533
		Pharmaceuticals: Major (1.2%)
	47,610	Johnson & Johnson		3,063,227
		Precious Metals (1.1%)
	60,290	Barrick Gold Corp. (Canada)		2,743,195

See Notes to Financial Statements
133

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Property - Casualty Insurers (0.5%)
	30,370	Allstate Corp. (The)	$	1,384,568
		Pulp & Paper (0.8%)
	210,340	AbitibiBowater, Inc.		1,962,472
		Recreational Products (0.6%)
	90,500	Mattel, Inc.		1,549,360
		Restaurants (1.1%)
	51,510	McDonald's Corp.		2,895,892
		Semiconductors (2.1%)
	142,235	Intel Corp.		3,055,208
	203,470	Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) (Taiwan)		2,219,858
				5,275,066
		Specialty Telecommunications (0.9%)
	192,329	Windstream Corp.		2,373,340
		Steel (1.5%)
	20,837	United States Steel Corp.		3,850,261
		Telecommunication Equipment (0.8%)
	78,065	Nokia Corp. (ADR) (Finland)		1,912,592
		Tobacco (2.9%)
	83,350	Altria Group, Inc.		1,713,676
	42,250	Philip Morris International Inc. (a)		2,086,728
	66,440	UST, Inc.		3,628,288
				7,428,692
		Trucks/Construction/Farm Machinery (1.1%)
	15,335	Caterpillar Inc.		1,132,030
	40,210	PACCAR, Inc.		1,681,984
				2,814,014
		Wireless Telecommunications (0.9%)
	130,515	Metropcs Communications Inc. (a)		2,311,421
		Total Common Stocks (Cost $124,321,770)		164,153,654

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE
		Corporate Bonds (8.0%)
		Accident & Health Insurance (0.0%)
$	65	Travelers Co. Inc.		5.80	%	05/15/18	63,359

See Notes to Financial Statements
134

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Aerospace & Defense (0.1%)
$	202	Systems 2001 Asset Trust - 144A (b) (Cayman Islands)		6.664	%	09/15/13	$	204,859
		Agricultural Commodities/Milling (0.0%)
	90	Archer Daniels		5.45		03/15/18		87,971
		Airlines (0.1%)
	326	America West Airlines, Inc. (Series 01-1)		7.10		04/02/21		296,867
		Beverages: Alcoholic (0.1%)
	145	FBG Finance Ltd. - 144A (b) (Australia)		5.125		06/15/15		137,059
	195	Miller Brewing Co. - 144A (b)		4.25		08/15/08		195,272
								332,331
		Biotechnology (0.1%)
	130	Amgen, Inc.		5.85		06/01/17		128,265
	110	Biogen Idec, Inc.		6.875		03/01/18		112,873
								241,138
		Broadcasting (0.0%)
	100	Grupo Televisa SA - 144A (b)		6.00		05/15/18		97,754
		Cable/Satellite TV (0.1%)
	110	Comcast Cable Communications, Inc.		6.75		01/30/11		114,024
	195	Comcast Corp.		5.70		05/15/18		185,342
	30	Comcast Corp.		6.50		01/15/15		30,504
								329,870
		Chemicals: Agricultural (0.0%)
	25	Monsanto Co.		5.125		04/15/18		24,564
		Chemicals: Major Diversified (0.0%)
	105	ICI Wilmington Inc.		4.375		12/01/08		105,165
		Computer Processing Hardware (0.1%)
	105	Dell Inc. - 144A (b)		5.65		04/15/18		101,509
	45	Hewlett-Packard Co.		5.50		03/01/18		44,155
								145,664
		Department Stores (0.3%)
	415	General Electric Capital Corp.		5.625		05/01/18		402,073
	275	May Department Stores Co.		5.95		11/01/08		274,801
								676,874
		Discount Stores (0.1%)
	145	Wal Mart Stores Inc.		4.25		04/15/13		144,343
		Drugstore Chains (0.1%)
	25	CVS Caremark Corp.		5.75		06/01/17		24,631

See Notes to Financial Statements
135

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	55	CVS Corp.		5.75	%	08/15/11	$	56,393
	159	CVS Lease Pass Through - 144A (b)		6.036		12/10/28		148,277
								229,301
		Electric Utilities (0.6%)
	15	Appalachian Power Co. (Series O)		5.65		08/15/12		15,020
	175	Arizona Public Service Co.		5.80		06/30/14		166,478
	185	Carolina Power & Light Co.		5.125		09/15/13		186,362
	55	CenterPoint Energy Resources, Corp.		6.25		02/01/37		48,954
	25	CenterPoint Energy Resources, Corp. (Series B)		7.875		04/01/13		26,789
	65	Consolidated Natural Gas Co. (Series C)		6.25		11/01/11		67,133
	125	Consumers Energy Co. (Series H)		4.80		02/17/09		125,378
	100	Detroit Edison Co. (The)		6.125		10/01/10		104,129
	200	E.ON International Finance BV		5.80		04/30/18		196,564
	130	Entergy Gulf States, Inc.		3.082	(d)	12/01/09		128,547
	65	Ohio Edison Co.		6.40		07/15/16		64,946
	170	Ohio Power Company (Series K)		6.00		06/01/16		168,903
	60	Peco Energy Co.		5.35		03/01/18		58,831
	125	Public Service Electric & Gas Co. (Series B)		5.00		01/01/13		125,694
	85	Texas Eastern Transmission		7.00		07/15/32		85,440
	65	Union Electric Co.		6.70		02/01/19		65,964
								1,635,132
		Electrical Products (0.1%)
	175	Cooper Industries, Inc.		5.25		11/15/12		175,903
		Electronic Components (0.1%)
	140	Philips Electronics NV		5.75		03/11/18		137,412
		Electronic Equipment/Instruments (0.0%)
	80	Xerox Corp.		6.35		05/15/18		79,111
		Electronic Production Equipment (0.0%)
	105	KLA Instruments Corp.		6.90		05/01/18		103,119
		Electronics/Appliances (0.0%)
	90	LG Electronics Inc. - 144A (b) (South Korea)		5.00		06/17/10		88,595
		Finance (0.0%)
	100	Pearson Dollar Finance Two PLC - 144A (b)		6.25		05/06/18		99,028
		Finance/Rental/Leasing (0.2%)
	65	Capmark Financial Group		6.30		05/10/17		42,080
	155	Capmark Financial Group		5.875		05/10/12		109,425
	125	CIT Group Inc. (Series MTN)		4.75		08/15/08		124,372
	210	Nationwide Building Society - 144A (b) (United Kingdom)		4.25		02/01/10		206,430
	75	SLM Corp.		8.45		06/15/18		72,068
								554,375

See Notes to Financial Statements
136

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Financial Conglomerates (0.4%)
$	85	Brookfield Asset Management Inc. (Canada)		5.80	%	04/25/17	$	76,031
	295	Chase Manhattan Corp.		6.00		02/15/09		296,773
	110	Citigroup Inc.		5.875		05/29/37		93,835
	185	Citigroup Inc.		6.125		11/21/17		177,856
	95	General Electric Capital Corp. (Series A)		4.25		12/01/10		96,017
	165	JPMorgan Chase & Co.		4.75		05/01/13		160,527
	40	Prudential Financial, Inc.		6.625		12/01/37		37,876
								938,915
		Food Retail (0.0%)
	25	Delhaize America, Inc.		9.00		04/15/31		29,508
	50	Kroger Co.		5.00		04/15/13		49,233
								78,741
		Food: Major Diversified (0.1%)
	50	ConAgra Foods, Inc.		7.00		10/01/28		51,614
	75	ConAgra Foods, Inc.		8.25		09/15/30		87,117
	135	Kraft Foods Inc.		6.125		08/23/18		130,980
								269,711
		Foods & Beverages (0.0%)
	50	Dr. Pepper Snapple Group - 144A (b)		6.82		05/01/18		50,295
		Gas Distributors (0.1%)
	40	Equitable Resources Inc.		6.50		04/01/18		40,129
	75	Nisource Finance Corp.		6.80		01/15/19		73,685
	130	NiSource Finance Corp.		3.208	(d)	11/23/09		126,420
	95	Questar Market Resources Inc.		6.80		04/01/18		92,986
								333,220
		Home Improvement Chains (0.1%)
	100	Home Depot Inc.		5.40		03/01/16		91,965
	250	Home Depot Inc.		2.901	(d)	12/16/09		243,584
								335,549
		Hotels/Resorts/Cruiselines (0.0%)
	85	Starwood Hotels & Resorts		6.75		05/15/18		80,301
		Industrial Conglomerates (0.3%)
	470	General Electric Co.		5.25		12/06/17		452,651
	90	Honeywell International Inc.		5.30		03/01/18		88,823
	125	Textron Financial Corp. (Series MTN)		5.125		02/03/11		126,455
								667,929
		Industrial Machinery (0.0%)
	75	Parker-Hannifin Corp.		5.50		05/15/18		75,378

See Notes to Financial Statements
137

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Industrial Specialties (0.0%)
$	85	Cox Commuciations Inc.		6.25	%	06/01/18	$	83,127
		Insurance Brokers/Services (0.2%)
	210	Catlin Insurance Co., Ltd. - 144A (b) (Bahamas)		7.249		(e)		153,506
	375	Farmers Exchange Capital - 144A (b)		7.05		07/15/28		343,664
								497,170
		Integrated Oil (0.1%)
	165	Concophillips		5.20		05/15/18		162,921
	90	Marathon Oil Corp.		6.00		10/01/17		89,643
	75	Petro-Canada		6.05		05/15/18		74,047
								326,611
		Investment Banks/Brokers (0.5%)
	130	Bear Stearns Co. Inc.		7.25		02/01/18		135,898
	95	Bear Stearns Co. Inc.		6.40		10/02/17		94,040
	250	Goldman Sachs Group Inc. (The)		6.15		04/01/18		242,977
	205	Goldman Sachs Group Inc. (The)		6.75		(f)		188,088
	90	Lehman Brothers Holdings, Inc.		5.75		01/03/17		79,551
	135	Lehman Brothers Holdings, Inc.		6.50		07/19/17		125,098
	240	Lehman Brothers Holdings, Inc.		6.875		07/17/37		207,181
	125	NYSE Euronext		4.80		06/28/13		123,415
								1,196,248
		Major Banks (0.7%)
	225	Bank of America Corp.		5.65		05/01/18		210,443
	115	Bank of America Corp.		5.75		12/01/17		108,190
	75	Bank of New York Mellon Corp. (Series MTN)		4.50		04/01/13		73,188
	260	Credit Suisse New York		6.00		02/15/18		250,808
	130	HBOS PLC - 144A (b)		6.75		05/21/18		124,547
	115	HSBC Finance Corp.		6.75		05/15/11		119,589
	125	Popular North America, Inc. (Series F)		5.65		04/15/09		123,814
	360	Unicredit Luxembourg Finance S.A. - 144A (b) (Luxembourg)		2.97	(d)	10/24/08		359,778
	335	Wachovia Capital Trust III		5.80		(f)		227,928
	90	Wachovia Corp.		5.50		05/01/13		86,229
	210	Wells Fargo Co.		5.625		12/11/17		203,550
								1,888,064
		Major Telecommunications (0.5%)
	50	AT&T Corp.		8.00		11/15/31		57,563
	30	AT&T Inc.		5.60		05/15/18		29,325
	180	AT&T Inc.		6.30		01/15/38		170,606
	70	Deutsche Telekom International Finance Corp. NV (Netherlands)		8.75		06/15/30		80,527

See Notes to Financial Statements
138

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	155	France Telecom S.A. (France)		8.50	%	03/01/31	$	188,137
	125	SBC Communications, Inc.		6.15		09/15/34		117,162
	130	Sprint Capital Corp.		8.75		03/15/32		124,124
	45	Telecom Italia Capital SA (Luxembourg)		4.95		09/30/14		41,240
	110	Telecom Italia Capital SA (Luxembourg)		4.00		11/15/08		109,994
	115	Telecom Italia Capital SA (Luxembourg)		4.00		01/15/10		113,495
	150	Telefonica Europe BV (Netherlands)		8.25		09/15/30		172,663
	130	Verizon Communications		5.50		02/15/18		123,897
								1,328,733
		Managed Health Care (0.0%)
	80	Unitedhealth Group Inc.		6.00		02/15/18		77,526
		Media Conglomerates (0.3%)
	80	Time Warner Cable Inc.		6.75		07/01/18		80,676
	325	Time Warner Cable Inc.		2.915	(d)	11/13/09		315,933
	140	Viacom, Inc.		6.875		04/30/36		131,864
	130	Vivendi - 144A (b)		6.625		04/04/18		129,265
								657,738
		Medical Specialties (0.1%)
	65	Baxter International		4.625		03/15/15		61,942
	80	Baxter International		5.375		06/01/18		79,207
	100	Covidien International Finance		6.00		10/15/17		101,388
								242,537
		Miscellaneous (0.1%)
	140	Oracle Corp.		5.75		04/15/18		140,139
		Motor Vehicles (0.1%)
	80	DaimlerChrysler North American Holdings Co.		8.50		01/18/31		92,747
	85	Harley-Davidson Funding - 144A (b)		6.80		06/15/18		84,133
								176,880
		Multi-Line Insurance (0.2%)
	355	AIG SunAmerica Global Financing VI - 144A (b)		6.30		05/10/11		360,757
	250	American General Finance Corp. (Series H)		4.625		09/01/10		242,350
	225	Two-Rock Pass Through - 144A (b) (Bahamas)		3.656	(d)	(e)		22,781
								625,888
		Oil & Gas Pipelines (0.1%)
	100	Gaz Capital - 144A (b)		6.51		03/07/22		90,000
	170	Plains All American Pipeline LP/PAA Finance Corp.		6.70		05/15/36		162,268
								252,268
		Oil & Gas Production (0.1%)
	25	Husky Oil Ltd. (Canada)		8.90		08/15/28		25,141
	120	XTO Energy Inc.		5.50		06/15/18		114,813
								139,954

See Notes to Financial Statements
139

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Oil Refining/Marketing (0.1%)
$	50	Marathon Oil Corp.		5.90	%	03/15/18	$	49,505
	135	Valero Energy Corp.		3.50		04/01/09		134,655
								184,160
		Oilfield Services/Equipment (0.0%)
	70	Weatherford International Inc.		6.00		03/15/18		69,210
		Other Metals/Minerals (0.1%)
	185	Brascan Corp. (Canada)		7.125		06/15/12		186,973
	105	Rio Tinto Finance USA Ltd.		6.50		07/15/18		105,511
								292,484
		Pharmaceuticals: Major (0.2%)
	90	Astrazeneca		5.90		09/15/17		92,413
	165	Bristol-Myers Squibb		5.45		05/01/18		163,073
	150	Glaxosmithkline Capital Inc.		5.65		05/15/18		149,707
	60	Wyeth		5.45		04/01/17		59,277
	15	Wyeth		5.50		02/15/16		15,099
								479,569
		Property - Casualty Insurers (0.4%)
	80	Ace Ina Holdings		5.60		05/15/15		77,152
	220	Berkshire Hathaway Finance Corp. - 144A (b)		5.40		05/15/18		220,297
	25	Chubb Corp.		5.75		05/15/18		24,275
	300	Mantis Reef Ltd. - 144A (b) (Cayman Islands)		4.692		11/14/08		298,878
	85	Platinum Underwriters Finance Inc. (Series B)		7.50		06/01/17		79,980
	260	Xlliac Global Funding - 144A (b)		4.80		08/10/10		258,056
								958,638
		Railroads (0.1%)
	115	Burlington Santa Fe Corp.		6.125		03/15/09		116,075
	25	Canadian National Railway Co.		5.55		05/15/18		24,712
	100	Korea Railroad Corp. - 144A (b)		5.375		05/15/13		99,167
								239,954
		Real Estate Development (0.1%)
	362	World Financial Properties - 144A (b)		6.91		09/01/13		362,046
		Real Estate Investment Trusts (0.1%)
	260	iStar Financial Inc.		3.027	(d)	03/09/10		220,425
	35	Prologis Trust		6.625		05/15/18		34,539
								254,964
		Restaurants (0.1%)
	135	Tricon Global Restaurants, Inc.		8.875		04/15/11		146,012

See Notes to Financial Statements
140

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Savings Banks (0.3%)
$	110	Household Finance Corp.		4.125	%	12/15/08	$	109,841
	95	Household Finance Corp.		5.875		02/01/09		95,673
	75	Household Finance Corp.		6.375		10/15/11		76,762
	320	Sovereign Bancorp, Inc.		2.829		03/23/10		286,214
	165	Washington Mutual Bank		5.50		01/15/13		132,125
								700,615
		Services to the Health Industry (0.0%)
	80	Medco Health Solutions Inc.		7.125		03/15/18		83,225
		Specialty Steels (0.0%)
	100	GTL Trade Finance Inc. - 144A (b)		7.25		10/20/17		100,635
		Steel (0.0%)
	100	ArcelorMittal - 144A (b)		6.125		06/01/18		97,904
		Tobacco (0.1%)
	140	Philip Morris International Inc.		5.65		05/16/18		136,328
		Total Corporate Bonds (Cost $21,394,497)						20,421,401
		U.S. Government Obligations (3.2%)
		U.S. Treasury Bond
	2,250			6.125		08/15/29		2,714,591
	200			6.375		08/15/27		245,063
	700			4.50		02/15/36		695,243
	550			3.125		11/30/09		555,887
		U.S. Treasury Note
	750			6.00		08/15/09		779,356
	1,800			5.375		02/15/31		2,000,533
	350			3.50		08/15/09		354,566
	700			2.00		02/28/10		695,133
		Total U.S. Government Obligations (Cost $8,034,063)						8,040,372
		U.S. Government Agency - Mortgage-Backed Securities (4.2%)
		Federal Home Loan Mortgage Corp.
	62			7.50		01/01/30 - 04/01/31		67,456
	300			5.125		11/17/17		308,781
		Federal Home Loan Mortgage Corp. PC Gold
	3			6.50		05/01/29 - 12/01/31		2,783
	168			8.00		11/01/30		182,150

See Notes to Financial Statements
141

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Federal National Mortgage Assoc.
$	994			5.766	%	01/01/36	$	1,017,970
	449			5.783		03/01/36		458,293
	412			5.872		03/01/36		421,204
	450			6.232		05/01/36		457,246
	437			6.247		05/01/36		443,261
	3			6.50		11/01/29		2,474
	1,016			7.00		10/01/27 - 11/01/34		1,074,080
	752			7.50		10/01/29 - 09/01/35		810,981
	535			8.00		11/01/29 - 05/01/31		579,449
		Federal National Mortgage Assoc. ARM
	937			5.772		01/01/36		960,380
	557			5.819		12/01/35		569,766
	563			5.832		10/01/35		576,204
	476			5.833		11/01/35		486,475
	954			6.248		04/01/36		977,705
	461			6.286		07/01/36		468,672
	275			6.291		07/01/36		279,217
	545			6.302		04/01/36		555,260
		Total U.S. Government Agency - Mortgage-Backed Securities (Cost $10,719,313)						10,699,807
		Asset-Backed Securities (1.7%)
	482	Capital Auto Receivables Asset Trust 2006-2 A3A		4.98		05/15/11		487,955
	265	Capital Auto Receivables Asset Trust 2006-SN1A A3 144A (b)		5.31		10/20/09		265,029
	475	Capital Auto Receivables Assets Trust 2007-SN1 Class A3B		2.531	(d)	07/15/10		473,275
	176	Capital One Auto Finance Trust 2006-C A3A		5.07		07/15/11		173,136
	212	Caterpillar Financial Asset Trust 2006-A A3		5.57		05/25/10		213,863
	339	CIT Equipment Collateral 2006-VT2 A3		5.07		02/20/10		340,456
	450	Citibank Credit Card Issuance Trust 2007-A1 A1		2.791	(d)	03/22/12		445,880
	107	Ford Credit Auto Owner Trust 2006-A A3		5.05		03/15/10		107,675
	339	GS Auto Loan Trust 2006-1 A3		5.37		12/15/10		342,046
	167	Harley Davidson Motorcycle Trust 2005-3 A2		4.41		06/15/12		168,469
	381	Harley-Davidson Motorcycle Trust 2005-1 A2		3.76		12/17/12		382,349
	258	Harley-Davidson Motorcycle Trust 2005-2 A2		4.07		02/15/12		259,301
	300	Hertz Vehicle Financing LLC 2005-2A A2 - 144A (b)		4.93		02/25/10		298,578
	103	Honda Auto Receivables Owner Trust 2005-6 A3		4.85		10/19/09		102,903
	36	Hyundai Auto Receivables Trust 2005-A A3		3.98		11/16/09		36,095
	100	Lehman XS Trust 2006-16N M2		2.792	(d)	11/25/46		5,000
	85	National City Auto Receivables Trust 2004-A A4		2.88		05/15/11		84,534
	36	Nissan Auto Receivables Owner Trust 2005-B A3		3.99		07/15/09		36,166

See Notes to Financial Statements
142

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	125	TXU Electric Delivery Transition Bond Co. LLC 2004-1 A2		4.81	%	11/17/14	$	124,414
	16	Volkswagen Auto Loan Enhanced Trust 2005-1 A3		4.80		07/20/09		16,120
	7	Wachovia Auto Owner Trust 2005-A A3		4.06		09/21/09		7,209
	35	Wachovia Auto Owner Trust 2005-B A3		4.79		04/20/10		35,499
		Total Asset-Backed Securities (Cost $4,477,946)						4,405,952
		Collateralized Mortgage Obligations (3.0%)
		U.S. Government Agencies (0.6%)
	239	Federal Home Loan Mortgage Corp. Whole Loan 2005-S001 2A2		2.632	(d)	09/25/45		235,399
	999	Federal National Mortgage Assoc. 2005-68 XI (IO)		6.00		08/25/35		301,245
	4,331	Federal National Mortgage Assoc. 2006-28 1P (IO)		1.519	(d)	03/25/36		116,408
	522	Federal National Mortgage Assoc. 2006-118 A2		2.542	(d)	12/25/36		503,491
	372	Federal National Mortgage Assoc. 2006-28 1A1		2.592	(d)	03/25/36		364,090
		Total U.S. Government Agencies (Cost$1,546,545)						1,520,633
		Private Issues (2.4%)
	222	Adjustable Rate Mortgage Trust - 2005-6A 2A1		2.792	(d)	11/25/35		172,563
		American Home Mortgage Investment Trust
	125	2005-4 1M2		3.855	(d)	11/25/45		20,616
	200	2007-1 1M1		2.772	(d)	03/25/46		20,000
	419	2006-2		2.713	(d)	09/25/46		226,760
	452	2007-1 GA1C		2.672	(d)	05/25/47		325,046
	209	2007-5 A3		2.783	(d)	06/25/47		80,912
	510	2007-5		2.723	(d)	06/25/47		334,355
		Bear Stearns Mortgage Funding Trust
	326	2006-AR5 1A1		2.642	(d)	12/25/36		236,650
	332	2007-AR1 1A2		2.692	(d)	01/25/37		166,507
		Countrywide Alternative Loan Trust
	301	2005-56 2A3		5.028	(d)	11/25/35		222,734
	2,512	2006-0A17 (IO)		1.276	(d)	12/20/46		96,661
	141	2006-0A18		2.753	(d)	12/25/46		55,850
	310	2006-0A2 A3		2.752	(d)	05/20/46		166,731
	2,597	2006-0A21 X (IO)		1.53		03/20/47		111,626
	296	2006-OA1 2A2		2.792	(d)	03/20/46		159,216
	177	2006-OA17 1XP (IO)		2.782	(d)	12/20/46		59,156
	2,519	2007-0A3 X (IO)		2.00		04/25/47		107,055
	476	2007-0A8 2A2		2.713	(d)	06/25/47		268,646

See Notes to Financial Statements
143

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	440	Greenpoint Mortgage Funding Trust 2006-0H1 A2		2.712	(d)%	01/25/37	$	235,178
		Harborview Mortgage Loan Trust
	442	2006-14 2A1A		2.632	(d)	03/19/38		310,735
	350	2006-8 2A1B		2.731	(d)	08/21/36		200,872
	466	2006-AR1 2A1A		2.662	(d)	11/19/36		329,136
	370	Luminent Mortgage Trust 2006-4, A1B		2.712	(d)	05/25/46		216,899
	200	Mastr Adjustable Rate Mortgages Trust 2007-3 1M1		3.332	(d)	05/25/47		5,000
		Residential Accredit Loans, Inc.
	351	2007-Q03 A3		2.742	(d)	03/25/47		136,375
	542	2007-QH1 A2		2.672	(d)	02/25/37		284,544
		Structured Asset Mortgage Investments Inc.
	530	2007-AR1 2A2		2.692	(d)	01/25/37		305,547
	150	2006-AR7		2.852	(d)	08/25/36		7,500
		Washington Mutual Mortgage Pass-Through Cetificates
	213	2005-AR13 A1A2		4.978	(d)	10/25/45		166,718
	6,163	2005-AR6 X (IO)		1.166		04/25/45		100,151
	75	2006-AR5		2.832	(d)	06/25/46		34,130
	436	2007-0A1 A1B		2.682	(d)	02/25/47		302,096
	389	2007-0A1 CA1B		2.682	(d)	12/25/46		216,040
	14,060	2007-OA2 1XPP (IO)		0.255		03/25/47		228,480
	550	2007-OA6 CA1B		2.712	(d)	07/25/47		313,337
		Total Private Issues (Cost $10,287,593)						6,223,822
		Total Collateralized Mortgage Obligations (Cost $11,833,206)						7,744,455
NUMBER OF CONTRACTS
		Call Options Purchased (0.0%)
	108	90 day Euro $ Futures September/2009 @ 96.75 (Cost $93,436)						99,225
PRINCIPAL AMOUNT IN THOUSANDS
		Short-term Investments (14.8%)
		U.S. Government Obligation (g) (0.1%)
$	160	U.S. Treasury Bills (c) (Cost $159,313)						159,289

See Notes to Financial Statements
144

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

NUMBER OF SHARES (000)				VALUE
	Investment Company (h) (14.7%)
	37,595Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $37,594,709)			$	37,594,709
	Total Short-term Investments (Cost $37,754,022)				37,753,998
	Total Investments (Cost $218,628,253) (i) (j)	99.2	%		253,318,864
	Total Written Options Outstanding (Premiums $53,713)	0.0			(60,075	)
	Assets in Excess of Other Liabilities	0.8			2,153,763
	Net Assets	100.0	%	$	255,412,552

ADR American Depositary Receipt.

ARM Adjustable Rate Mortgage.

IO Interest Only Security.

MTN Medium-Term Note.

PC Participation Certificate.

(a) Non-income producing security.

(b) Resale is restricted to qualified institutional investors.

(c) A portion of this security has been physically segregated in connection with open future contracts in the amount of $86,037.

(d) Variable rate security. Rate shown is the rate in effect at June 30, 2008.

(e) Foreign issued with perpetual maturity.

(f) Security issued with perpetual maturity.

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

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

(i) Securities have been designated as collateral in amount equal to $23,677,122 in connection with open futures and swap contracts.

(j) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $48,534,899 and the aggregate gross unrealized depreciation is $13,850,649, resulting in net unrealized appreciation of $34,684,250.

See Notes to Financial Statements
145

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

SUMMARY OF INVESTMENTS PORTFOLIO COMPOSITION	MARKET VALUE			PERCENT OF TOTAL INVESTMENTS
Common Stocks	$	164,153,654			64.8	%
Short-Term Investments		37,753,998			14.9
U.S. Government Agencies and Obligations		18,740,179			7.4
Corporate Bonds		20,421,401			8.1
Collateralized Mortgage Obligations		7,744,455			3.1
Asset-Backed Securities		4,405,952			1.7
Put Option Purchased		99,225			0.0
TOTAL INVESTMENTS	$	253,318,864	@		100.0	%

@ Does not include open long/short futures contracts with an underlying face amount of $24,993,048 with unrealized depreciation of $34,472, and open swap contracts with net unrealized appreciation of $908,223.

Options Written as of June 30, 2008:

NUMBER OF CONTRACTS				DESCRIPTION				STRIKE PRICE				EXPIRATION DATE				PREMIUM				VALUE
	108				90 day Euro$ Futures			$	97.25			September 2009				$	53,714			$	60,075

See Notes to Financial Statements
146

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

Futures Contracts Open at June 30, 2008:

NUMBER OF CONTRACTS		LONG/SHORT	DESCRIPTION, DELIVERY MONTH AND YEAR	UNDERLYING FACE AMOUNT AT VALUE			UNREALIZED APPRECIATION (DEPRECIATION)
	27	Long	U.S.Treasury Notes 2 Year, September 2008	$	5,702,484		$	(2,674	)
	32	Long	U.S.Treasury Notes 5 Year, September 2008		3,537,750			(13,788	)
	3	Long	90 Day Euro$ June 2009		723,525			6,578
	1	Long	90 Day Euro$ December 2008		242,050			4,191
	1	Long	90 Day Euro$ March 2009		241,700			3,954
	1	Short	90 Day Euro$ June 2010		(238,938	)		(990	)
	2	Short	90 Day Euro$ March 2010		(478,725	)		(2,481	)
	2	Short	90 Day Euro$ December 2009		(479,675	)		(3,087	)
	2	Short	90 Day Euro$ September 2009		(481,075	)		159
	7	Short	Swap Future 10 Year, September 2008		(769,672	)		(7,335	)
	13	Short	U.S.Treasury Bonds 20 Year, September 2008		(1,502,719	)		(4,622	)
	93	Short	U.S.Treasury Notes 10 Year, September 2008		(10,594,735	)		(14,377	)
Net Unrealized Depreciation							$	(34,472	)

See Notes to Financial Statements
147

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

Credit Default Swap Contracts Open at June 30, 2008:

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Credit Suisse International Arrow Electronics, Inc.	Buy	$	150		1.00	%	March 20, 2015	$	(1,111	)
Goldman Sachs International Avalonbay Communities Inc.	Buy		110		3.05		March 20, 2013		(6,373	)
Merrill Lynch International Carnival Corp.	Buy		70		1.50		March 20, 2018		(244	)
Merrill Lynch International Carnival Corp.	Buy		55		1.57		March 20, 2018		(156	)
Bank of America, N.A. Carnival Corp.	Buy		65		1.57		March 20, 2018		(185	)
Merrill Lynch International Carnival Corp.	Buy		60		1.60		March 20, 2018		(460	)
Goldman Sachs International Coca-Cola Enterprises Inc.	Buy		220		0.588		March 20, 2013		(1,528	)
Goldman Sachs International Chubb Corp.	Buy		350		0.10		March 20, 2012		5,957
Goldman Sachs International Dell Inc.	Buy		180		0.22		March 20, 2012		1,985
Goldman Sachs International Dow Jones Index	Sell		125		0.60		December 20, 2012		(678	)
JPMorgan Chase N.A. New York Dow Jones Index	Sell		455		0.60		December 20, 2012		241
Lehman Brothers Special Financing Inc. Dow Jones Index	Sell		125		0.60		December 20, 2012		(1,496	)
Lehman Brothers Special Financing Inc. Dow Jones Index	Sell		255		0.60		December 20, 2012		(3,762	)
Goldman Sachs International Dow Jones Index	Sell		230		0.80		December 20, 2012		(96	)
Goldman Sachs International Dow Jones Index	Sell		290		1.55		June 20, 2013		(870	)
Citibank, N.A., New York Eaton Corp.	Buy		60		0.82		March 20, 2018		221
Merrill Lynch International Eaton Corp.	Buy		80		0.92		March 20, 2018		(310	)
Goldman Sachs International Eaton Corp.	Buy		60		0.97		March 20, 2018		(460	)

See Notes to Financial Statements
148

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
UBS AG Eli Lilly & Co.	Buy	$	180		0.30	%	March 20, 2013	$	(691	)
Goldman Sachs International Eli Lilly & Co.	Buy		45		0.33		March 20, 2013		(231	)
Lehman Brothers Special Financing Inc. Goodrich Corp.	Buy		60		0.46		March 20, 2018		728
Lehman Brothers Special Financing Inc. Goodrich Corp.	Buy		85		0.45		March 20, 2018		1,097
Goldman Sachs International Goodrich Corp.	Buy		90		0.47		March 20, 2018		1,023
Bank of America, N.A. Goodrich Corp.	Buy		75		0.70		March 20, 2013		(618	)
Bank of America, N.A. Goodrich Corp.	Buy		50		0.82		March 20, 2018		(777	)
Goldman Sachs International Hartford Financial Services Group, Inc.	Buy		350		0.12		December 20, 2011		10,651
UBS AG Martin Marietta Materials, Inc.	Buy		55		1.73		March 20, 2018		(728	)
UBS AG Martin Marietta Materials, Inc.	Buy		55		1.78		March 20, 2013		(634	)
Bank of America, N.A. Nordstrom, Inc.	Buy		20		1.03		March 20, 2018		1,060
JPMorgan Chase N.A. New York Nordstrom, Inc.	Buy		75		1.07		March 20, 2018		715
JPMorgan Chase N.A. New York Pepsi Bottling Group, Inc.	Buy		55		0.58		March 20, 2013		(317	)
JPMorgan Chase N.A. New York Pepsi Bottling Group, Inc.	Buy		80		0.63		March 20, 2013		(633	)
Goldman Sachs International Prologis	Buy		65		3.33		March 20, 2013		(2,671	)
Bank of America, N.A. Sealed Air Corp.	Buy		50		1.08		March 20, 2018		2,302
Goldman Sachs International Sealed Air Corp.	Buy		60		1.08		March 20, 2018		2,762
Bank of America, N.A. Sealed Air Corp.	Buy		90		1.12		March 20, 2018		3,887

See Notes to Financial Statements
149

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000'S)		INTEREST RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Goldman Sachs International Sealed Air Corp.	Buy	$	30		1.24	%	March 20, 2018	$	1,040
Bank of America, N.A. Textron Financial Corp.	Buy		70		0.80		March 20, 2018		2,182
UBS AG Textron Financial Corp.	Buy		80		1.00		March 20, 2013		771
UBS AG Textron Financial Corp.	Buy		50		1.01		March 20, 2013		482
Goldman Sachs International Textron Financial Corp.	Buy		110		1.05		March 20, 2013		791
UBS AG Textron Financial Corp	Buy		120		1.06		March 20, 2013		(1,341	)
Citibank, N.A., New York Tyco Electronics Ltd.	Buy		67		0.43		March 20, 2012		719
Citibank, N.A., New York Tyco Electronics Ltd.	Buy		140		0.43		March 20, 2012		1,510
Goldman Sachs International Union Pacific Corp.	Buy		175		0.20		December 20, 2011		2,294
Goldman Sachs International Motorola Inc,	Buy		120		0.15		December 20, 2011		9,288
Bank of America, N.A. Yum! Brands, Inc.	Buy		135		1.18		March 20, 2013		(973	)
Net Unrealized Appreciation								$	24,363

See Notes to Financial Statements
150

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2008 (unaudited) continued

Interest Rate Swap Contracts Open at June 30, 2008:

COUNTERPARTY

NOTIONAL
AMOUNT
(000'S)

PAYMENTS
RECEIVED
BY FUND

PAYMENTS
MADE
BY FUND

TERMINATION
DATE

UNREALIZED
APPRECIATION
(DEPRECIATION)

Bank of America N.A. New York

3,875

Fixed Rate 4.148%

Floating Rate 2.677%#

June 9, 2013

(18,522

)

Bank of America N.A. New York

1,113

Fixed Rate 5.37

Floating Rate 3.08#

February 12, 2018

7,758

Bank of America N.A. New York

1,850

Fixed Rate 5.592

Floating Rate 0.00#

February 19, 2018

27,546

Bank of America N.A. New York

1,050

Fixed Rate 5.07

Floating Rate 0.00#

April 14, 2018

(4,536

)

Bank of America N.A. New York

1,975

Fixed Rate 4.983

Floating Rate 0.00#

April 15, 2018

(14,674

)

Citibank N.A. New York

3,250

Fixed Rate 5.338

Floating Rate 2.638#

May 24, 2017

171,633

Citibank N.A. New York

1,900

Fixed Rate 5.448

Floating Rate 2.734#

August 9, 2017

115,387

Citibank N.A. New York

2,900

Fixed Rate 5.239

Floating Rate 2.655#

September 27, 2017

131,109

Citigroup Inc.

650

Fixed Rate 4.648

Floating Rate 2.638#

February 27, 2018

(734

)

Deutsche Bank AG, New York

1,950

Fixed Rate 5.389

Floating Rate 2.638#

May 25, 2017

110,312

Deutsche Bank AG, New York

EUR

705

Fixed Rate 5.268

Floating Rate 5.13†

July 3, 2023

(1,709

)

Goldman Sachs Group Inc.

1,875

Fixed Rate 5.565

Floating Rate 0.00#

February 27, 2018

25,912

Goldman Sachs Group Inc.

3,775

Fixed Rate 5.63

Floating Rate 0.00#

February 28, 2018

60,929

JPMorgan Chase N.A. New York

3,465

Fixed Rate 4.07

Floating Rate 2.72#

May 16, 2013

(27,547

)

JPMorgan Chase N.A. New York

3,550

Fixed Rate 5.34

Floating Rate 2.638#

May 24, 2017

188,150

JPMorgan Chase N.A. New York

2,450

Fixed Rate 5.448

Floating Rate 2.644#

May 29, 2017

149,328

JPMorgan Chase N.A. New York

2,150

Fixed Rate 5.088

Floating Rate 2.691#

September 11, 2017

73,208

Bank of America N.A. New York

1,437

Floating Rate 3.08#

Fixed Rate 5.815

February 12, 2023

(17,919

)

Bank of America N.A. New York

2,390

Floating Rate 0.00#

Fixed Rate 6.03

February 19, 2023

(43,952

)

Bank of America N.A. New York

1,345

Floating Rate 0.00#

Fixed Rate 5.47

April 14, 2023

(3,779

)

Bank of America N.A. New York

2,385

Floating Rate 0.00#

Fixed Rate 5.38

April 15, 2023

(811

)

Deutsche Bank AG, New York

EUR

565

Floating Rate 5.13†

Fixed Rate 4.934

July 1, 2018

(480

)

Goldman Sachs Group Inc.

2,405

Floating Rate 0.00#

Fixed Rate 5.96

February 27, 2023

(39,514

)

Goldman Sachs Group Inc.

4,840

Floating Rate 0.00#

Fixed Rate 6.035

February 28, 2023

(89,540

)

JPMorgan Chase N.A. New York

4,100

Floating Rate 2.873#

Fixed Rate 4.408

May 1, 2018

86,305

Net Unrealized Appreciation

883,860

EUR Euro.

# Floating rate represents USD-3 months LIBOR.

† Floating rate represents EUR-3 Months EURIBOR.

See Notes to Financial Statements
151

Morgan Stanley Variable Investment Series

Financial Statements

Statements of Assets and Liabilities

For the six months ended June 30, 2008 (unaudited)

	Money Market			Limited Duration			Income Plus			High Yield			Utilities
Assets:
Investments in securities, at value*	$	216,973,558		$	90,134,787		$	281,212,618		$	41,559,330	†	$	170,978,920	†
Investments in affiliates, at value**		—			15,040,420			23,985,624			8,138,969			2,100,172
Cash		24,980			39,936			810,401			—			341
Receivable for:
Investments sold		—			—			12,354,872			1,204,121			—
Shares of beneficial interest sold		—			—			7,300			—			—
Dividends		—			—			—			—			269,318
Interest		648,708			627,387			4,038,648			756,650			—
Foreign withholding taxes reclaimed		—			—			—			—			935
Principal paydowns		—			65,002			8			1,611			—
Variation margin		—			—			—			—			—
Periodic interest on open swap contracts		—			432,675			1,084,952			67,855			—
Interest/dividends from affiliates		—			40,284			37,382			—			7,251
Written options
Unrealized appreciation on open forward foreign currency contracts		—			—			—			—			—
Unrealized appreciation on open swap contracts		—			736,592			13,524,759			338,745			—
Prepaid expenses and other assets		10,435			5,795			31,541			3,125			7,271
Total Assets		217,657,681			107,122,878			337,088,105			52,070,406			173,364,208
Liabilities:
Collateral on securities loaned at value		—			—			—			10,667,428			31,760,802
Premium received on open swap contracts		—			53,283			376,494			204,082			—
Written call options outstanding, at value		—			59,519	##		—			—			—
Unrealized depreciation on open swap contracts		—			335,569			2,169,955			334,371			—
Payable for:
Investments purchased		—			629,735			10,985,893			1,113,659			—
Shares of beneficial interest redeemed		1,216,421			130,549			654,549			—			221,324
Variation margin		—			23,402			35,579			4,180			—
Distribution fee (Class Y)		22,593			18,191			37,574			4,520			5,815
Investment advisory fee		83,069			25,125			109,600			14,329			69,194
Administration fee		9,230			7,295			21,355			2,757			9,819
Periodic interest payment on open swap contracts		—			166,852			1,231,224			41,378			—
Transfer agent fee		250			250			250			250			250
Payable to bank		—			—			—			215,304			—
Unrealized depreciation on open forward foreign currency contracts		—			—			—			4,156			—
Swap contracts collateral due to brokers		—			660,000			11,370,000			40,000			—
Accrued expenses and other payables		59,622			51,378			76,801			182,989			45,043
Total Liabilities		1,391,185			2,161,148			27,069,274			12,829,403			32,112,247
Net Assets	$	216,266,496		$	104,961,730		$	310,018,831		$	39,241,003		$	141,251,961
Composition of Net Assets:
Paid-in-capital	$	216,266,354		$	132,023,477		$	337,515,780		$	345,914,711		$	66,798,342
Accumulated undistributed net investment income (loss)		236			(129,063	)		421,619			979,598			740,080
Accumulated undistributed net realized gain (loss)		(94	)		(12,578,199	)		(25,088,044	)		(246,108,469	)		14,596,455
Net unrealized appreciation (depreciation)		—			(14,354,485	)		(2,830,524	)		(61,544,837	)		59,117,084
Net Assets	$	216,266,496		$	104,961,730		$	310,018,831		$	39,241,003		$	141,251,961
* Cost	$	216,973,558		$	104,884,841		$	295,021,096		$	103,093,511		$	87,629,173
Affiliated Cost**	$	—		$	15,030,179		$	23,985,624		$	8,138,969		$	26,332,835
Class X Shares:
Net Assets	$	111,391,061		$	21,140,194		$	135,480,655		$	18,703,581		$	114,430,607
Shares Outstanding (unlimited authorized shares of $.01 par value)		111,390,886			2,526,690			13,368,852			17,137,694			7,075,826
Net Asset Value Per Share	$	1.00		$	8.37		$	10.13		$	1.09		$	16.17
Class Y Shares:
Net Assets	$	104,875,435		$	83,821,536		$	174,538,176		$	20,537,422		$	26,821,354
Shares Outstanding (unlimited authorized shares of $.01 par value)		104,875,468			10,037,289			17,258,813			18,801,673			1,660,812
Net Asset Value Per Share	$	1.00		$	8.35		$	10.11		$	1.09		$	16.15

† Includes securities loaned at value of $10,109,890, $31,415,146, $18,807,442, $2,876,467, respectively.

†† Includes foreign currency at value of $325,311, 139,890, $52,967, with cost of $324,180, $139,514, and $50,967, respectively.

## Premium received of $53,217.

See Notes to Financial Statements
152

	Income Builder			Dividend Growth			Global Dividend Growth			European Equity			Capital Opportunities
Assets:
Investments in securities, at value*	$	48,145,907		$	361,695,630		$	169,331,043	†	$	130,420,570	†	$	349,774,636
Investments in affiliates, at value**		321,311			18,567,781			361,305			22,861			18,315,210
Cash		—			1,065			325,117	††		140,009	††		—
Receivable for:
Investments sold		—			—			466,154			1,275,408			—
Shares of beneficial interest sold		—			—			112			1,224			851
Dividends		41,097			355,709			504,177			395,658			42,614
Interest		174,774			—			—			—			—
Foreign withholding taxes reclaimed		—			82,655			36,406			188,161			—
Principal paydowns		—			—			—			—			—
Variation margin		—			—			—			—			—
Periodic interest on open swap contracts		—			—			—			—			—
Interest/dividends from affiliates		1,236			24,413			2,023			1,401			47,460
Written options
Unrealized appreciation on open forward foreign currency contracts		—			—			—			1,950			—
Unrealized appreciation on open swap contracts		—			—			—			—			—
Prepaid expenses and other assets		1,659			17,818			8,170			7,865			106,091
Total Assets		48,685,984			380,745,071			171,034,507			132,455,107			368,286,862
Liabilities:
Collateral on securities loaned at value		—			—			19,714,422			3,107,270			—
Premium received on open swap contracts		—			—			—			—			—
Written call options outstanding, at value		—			—			—			—			—
Unrealized depreciation on open swap contracts		—			—			—			—			—
Payable for:
Investments purchased		80,538			—			—			—			78,286
Shares of beneficial interest redeemed		18,713			154,613			54,258			64,489			871,728
Variation margin		—			—			—			—			—
Distribution fee (Class Y)		5,815			20,511			11,055			6,764			20,162
Investment advisory fee		28,841			165,981			91,034			91,766			135,247
Administration fee		3,459			27,073			10,893			9,144			26,516
Periodic interest payment on open swap contracts		—			—			—			—			—
Transfer agent fee		250			250			250			250			250
Payable to bank		—			—			—			—			—
Unrealized depreciation on open forward foreign currency contracts		—			—			—			—			—
Swap contracts collateral due to brokers		—			—			—			—			—
Accrued expenses and other payables		27,010			74,137			51,790			52,373			68,261
Total Liabilities		164,626			442,565			19,933,702			3,332,056			1,200,450
Net Assets	$	48,521,358		$	380,302,506		$	151,100,805		$	129,123,051		$	367,086,412
Composition of Net Assets:
Paid-in-capital	$	48,350,675		$	526,684,732		$	121,187,041		$	103,218,656		$	640,293,392
Accumulated undistributed net investment income (loss)		16,468			1,419,054			3,048,899			3,008,193			(481,671	)
Accumulated undistributed net realized gain (loss)		1,157,065			(155,451,811	)		6,727,620			3,141,682			(317,460,138	)
Net unrealized appreciation (depreciation)		(1,002,850	)		7,650,531			20,137,245			19,754,520			44,734,829
Net Assets	$	48,521,358		$	380,302,506		$	151,100,805		$	129,123,051		$	367,086,412
* Cost	$	49,153,718		$	345,642,710		$	134,150,005		$	108,320,754		$	305,039,757
Affiliated Cost**	$	316,350		$	26,970,170		$	15,402,894		$	2,393,627		$	18,315,210
Class X Shares:
Net Assets	$	22,448,551		$	288,081,765		$	102,081,954		$	98,595,646		$	278,346,652
Shares Outstanding (unlimited authorized shares of $.01 par value)		2,283,313			19,199,925			9,177,715			4,904,310			8,443,971
Net Asset Value Per Share	$	9.83		$	15.00		$	11.12		$	20.10		$	32.96
Class Y Shares:
Net Assets	$	26,072,806		$	92,220,741		$	49,018,851		$	30,527,405		$	88,739,760
Shares Outstanding (unlimited authorized shares of $.01 par value)		2,661,339			6,158,337			4,448,708			1,525,912			2,706,900
Net Asset Value Per Share	$	9.80		$	14.97		$	11.02		$	20.01		$	32.78

153

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Assets and Liabilities continued

For the six months ended June 30, 2008 (unaudited)

	S&P 500 Index			Global Advantage			Aggressive Equity			Strategist
Assets:
Investments in securities, at value*	$	168,533,999		$	17,882,962		$	44,030,768		$	214,339,587	†
Investments in affiliates, at value**		2,977,271			30,855			1,774,267			38,979,277
Cash		—			53,191	††		—			—
Receivable for:
Investments sold		1,790,112			120,106			—			1,982,671
Shares of beneficial interest sold		86,819			22,564			—			—
Dividends		231,974			11,656			5,365			184,043
Interest		—			—			—			472,686
Foreign withholding taxes reclaimed		—			16,991			—			—
Principal paydowns		—			—			—			12,615
Variation margin		1,540			—			—			—
Periodic interest on open swap contracts		—			—			—			231,608
Interest/dividends from affiliate		1,322			439			5,243			87,534
Unrealized appreciation on open forward foreign currency contracts		—			—			—			—
Unrealized appreciation on open swap contracts		—			—			—			1,199,283
Prepaid expenses and other assets		9,381			2,606			2,664			26,393
Total Assets		173,632,418			18,141,370			45,818,307			257,515,697
Liabilities:
Collateral on securities loaned at value		—			—			—			—
Premium received on open swap contracts		—			—			—			32,920
Written call options outstanding, at value		—			—			—			60,075	##
Unrealized depreciation on open swap contracts		—			—			—			291,060
Payable for:
Investments purchased		38,729			—			228			402,980
Shares of beneficial interest redeemed		9,919			97,233			8,497			208,926
Variation margin		—			—			—			3,247
Distribution fee (Class Y)		27,147			1,681			5,601			16,508
Investment advisory fee		17,844			9,352			27,291			88,004
Administration fee		12,435			1,317			3,315			18,179
Periodic interest on open swap contracts		—			—			—			101,940
Transfer agent fee		250			250			250			250
Payable to bank		342,389			—			—			86,294
Unrealized depreciation on open forward foreign currency contracts		—			—			—			—
Swap contracts collateral due to brokers		—			—			—			730,000
Accrued expenses and other payables		61,599			22,963			27,812			62,762
Total Liabilities		510,312			132,796			72,994			2,103,145
Net Assets	$	173,122,106		$	18,008,574		$	45,745,313		$	255,412,552
Composition of Net Assets:
Paid-in-capital	$	155,251,702		$	33,107,748		$	64,342,075		$	213,171,471
Accumulated undistributed net investment income (loss)		1,621,641			73,653			(81,883	)		1,720,941
Accumulated undistributed net realized gain (loss)		(29,734,939	)		(16,723,451	)		(25,756,362	)		4,962,139
Net unrealized appreciation (depreciation)		45,983,702			1,550,624			7,241,483			35,558,001
Net Assets	$	173,122,106		$	18,008,574		$	45,745,313		$	255,412,552
* Cost	$	121,838,698		$	16,334,390		$	36,789,279		$	180,005,269
Affiliated Cost**	$	3,633,519		$	30,855		$	1,774,267		$	38,622,984
Class X Shares:
Net Assets	$	51,969,787		$	10,642,116		$	21,033,634		$	181,556,370
Shares Outstanding (unlimited authorized shares of $.01 par value)		4,491,520			1,095,216			1,268,460			14,029,982
Net Asset Value Per Share	$	11.57		$	9.72		$	16.58		$	12.94
Class Y Shares:
Net Assets	$	121,152,319		$	7,366,458		$	24,711,679		$	73,863,856
Shares Outstanding (unlimited authorized shares of $.01 par value)		10,529,195			760,481			1,513,458			5,721,572
Net Asset Value Per Share	$	11.51		$	9.69		$	16.33		$	12.91

† Includes securities loaned at value of $10,109,890, $31,415,146, $18,807,442, $2,876,467, respectively.

†† Includes foreign currency at value of $325,311, 139,890, $52,967, with cost of $324,180, $139,514, and $50,967, respectively.

## Premium received of $53,713.

See Notes to Financial Statements
154

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Operations
For the six months ended June 30, 2008 (unaudited)

	Money Market		Limited Duration			Income Plus			High Yield
Investment Income:
Income
Interest	$	4,117,722	$	2,384,469		$	9,185,042		$	2,087,444
Interest and dividends from affiliates		—		221,816			262,005			11,539
Income from securities loaned - net		—		—			—			2,590
Dividends†		—		—			—			—
Total Income		4,117,722		2,606,285			9,447,047			2,101,573
†Net of Foreign withholding tax		—		—			—			—
Expenses
Investment advisory fee		501,460		175,057			701,604			89,435
Administration fee		55,718		46,682			133,639			17,035
Distribution fee (Class Y shares)		137,384		115,901			234,721			28,225
Professional fees		28,944		16,397			25,144			219,302
Transfer agent fees and expenses		250		250			250			250
Shareholder reports and notices		13,821		9,354			18,674			6,832
Trustees' fees and expenses		1,294		1,115			3,114			431
Registration fees		—		—			—			—
Custodian fees		12,322		21,218			20,056			11,344
Other		9,300		11,583			20,392			8,235
Total Expenses		760,493		397,557			1,157,594			381,089
Less: rebate from Morgan Stanley affiliated cash sweep (Note 4)		—		(6,376	)		(8,077	)		(371	)
Net Expenses		760,493		391,181			1,149,517			380,718
Net Investment Income		3,357,229		2,215,104			8,297,530			1,720,855
Realized and Unrealized Loss:
Realized Gain (Loss) on:
Investments		—		(2,330,055	)		3,485,519			(186,281	)
Futures contracts		—		46,616			(3,516,266	)		(45,998	)
Option contracts		—		—			—			—
Swap contracts		—		243,729			(2,136,881	)		(16,160	)
Foreign exchange transactions		—		89			660			(36,499	)
Net Realized Loss		—		(2,039,621	)		(2,166,968	)		(284,938	)
Change in Unrealized Appreciation/Depreciation on:
Investments		—		(10,295,174	)		(16,386,622	)		(1,567,568	)
Investments in affiliates		—		(7,357	)		—			—
Futures contracts		—		(46,341	)		(414,399	)		(31,789	)
Swap contracts		—		(102,487	)		2,834,334			(232,117	)
Option contracts		—		(567	)		—			—
Translation of forward foreign currency contracts, other assets and liabilities denominated in foreign currencies		—		—			2,533			2,129
Net Change in Unrealized Appreciation (Depreciation)		—		(10,451,926	)		(13,964,134	)		(1,829,345	)
Net Loss		—		(12,491,547	)		(16,131,102	)		(2,114,283	)
Net Increase (Decrease)	$	3,357,229	$	(10,276,443	)	$	(7,833,572	)	$	(393,428	)

See Notes to Financial Statements
155

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Operations continued
For the six months ended June 30, 2008 (unaudited)

	Utilities			Income Builder			Dividend Growth			Global Dividend Growth			European Equity
Investment Income:
Income
Interest		—		$	423,585			—		$	466		$	608
Interest and dividends from affiliates	$	51,616			17,908		$	212,351			17,059			16,624
Income from securities loaned - net		11,306			—			—			125,616			95,887
Dividends†		1,922,468			538,747			4,173,417			3,646,894			3,655,206
Total Income		1,985,390			980,240			4,385,768			3,790,035			3,768,325
†Net of Foreign withholding tax		(19,569	)		(17,592	)		(5,320	)		(258,271	)		(421,286	)
Expenses
Investment advisory fee		419,045			184,263			1,040,085			577,863			621,517
Administration fee		58,813			22,001			168,512			68,999			57,151
Distribution fee (Class Y shares)		35,014			37,366			127,409			69,935			42,790
Professional fees		19,875			11,730			17,675			21,362			20,190
Transfer agent fees and expenses		250			250			250			250			250
Shareholder reports and notices		5,520			7,908			30,940			15,812			14,436
Trustees' fees and expenses		1,365			—			4,782			1,727			1,407
Registration fees		—			—			70			45			—
Custodian fees		4,654			8,286			10,186			24,227			29,716
Other		5,673			4,643			18,780			12,250			10,854
Total Expenses		550,209			276,447			1,418,689			792,470			798,311
Less: rebate from Morgan Stanley affiliated cash sweep (Note 4)		(1,629	)		(708	)		(7,452	)		(617	)		(685	)
Less: waived/reimbursed		—			—			—			—			(40,502	)
Net Expenses		548,580			275,739			1,411,237			791,853			757,124
Net Investment Income (Loss)		1,436,810			704,501			2,974,531			2,998,182			3,011,201
Realized and Unrealized Gain (Loss):
Realized Gain (Loss) on:
Investments		15,842,440			1,472,781			2,296,286			7,430,584			3,398,653
Investments in affiliates		—			—			(1,779,715	)		—			—
Futures contracts		—			—			—			—			—
Option contracts		—			—			180,271			—			—
Swap contracts		—			—			—			—			—
Foreign exchange transactions		(15,849	)		(470	)		—			(59,429	)		(34,696	)
Net Realized Gain		15,826,591			1,472,311			696,842			7,371,155			3,363,957
Change in Unrealized Appreciation/Depreciation on:
Investments		(24,961,927	)		(7,439,990	)		(54,553,314	)		(39,303,564	)		(28,336,333	)
Investments in affiliates		—			(17,958	)		(2,071,023	)		—			—
Futures contracts		—			—			—			—			—
Swap contracts		—			—			—			—			—
Option contracts		—			—			41,755			—			—
Translation of forward foreign currency contracts, other assets and liabilities denominated in foreign currencies		(3	)		—			—			2,746			12,058
Net Change in Unrealized Appreciation (Depreciation)		(24,961,930	)		(7,457,948	)		(56,582,582	)		(39,300,818	)		(28,324,275	)
Net Loss		(9,135,339	)		(5,985,637	)		(55,885,740	)		(31,929,663	)		(24,960,318	)
Net Decrease	$	(7,698,529	)	$	(5,281,136	)	$	(52,911,209	)	$	(28,931,481	)	$	(21,949,117	)

See Notes to Financial Statements
156

	Capital Opportunities			S&P 500 Index			Global Advantage			Aggressive Equity			Strategist
Investment Income:
Income
Interest		—			—			—			—		$	1,640,476
Interest and dividends from affiliates	$	353,255		$	112,273		$	2,693		$	38,774			817,809
Income from securities loaned - net		—			—			—			—			130,711
Dividends†		412,378			1,916,241			179,495			51,184			1,476,365
Total Income		765,633			2,028,514			182,188			89,958			4,065,361
†Net of Foreign withholding tax		(46,575	)		(111	)		(19,268	)		(5,908	)		(12,719	)
Expenses
Investment advisory fee		811,747			114,838			58,501			162,796			584,749
Administration fee		154,619			76,559			8,211			19,438			111,381
Distribution fee (Class Y shares)		117,985			167,259			10,557			32,736			101,400
Professional fees		18,198			12,997			13,478			12,838			17,642
Transfer agent fees and expenses		250			250			250			250			250
Shareholder reports and notices		20,307			20,125			4,427			5,847			21,912
Trustees' fees and expenses		3,407			1,869			206			367			2,637
Registration fees		—			—			—			—			—
Custodian fees		19,099			36,047			3,852			5,626			23,105
Other		17,404			20,694			6,285			2,256			15,725
Total Expenses		1,163,016			450,638			105,767			242,154			878,801
Less: rebate from Morgan Stanley affiliated cash sweep (Note 4)		(13,514	)		(1,605	)		(91	)		(1,540	)		(29,724	)
Less: waived/reimbursed		—			—			—			—			—
Net Expenses		1,149,502			449,033			105,676			240,614			849,077
Net Investment Income (Loss)		(383,869	)		1,579,481			76,512			(150,656	)		3,216,284
Realized and Unrealized Gain (Loss):
Realized Gain (Loss) on:
Investments		11,433,308			3,354,859			824,577			2,355,361			4,259,283
Investments in affiliates		—			(149,731	)		—			—			460,761
Futures contracts		—			(9,553	)		—			—			151,606
Option contracts		—			—			—			—			(15,148	)
Swap contracts		—			—			—			—			356,711
Foreign exchange transactions		(109,316	)		—			(6,869	)		(14,752	)		90
Net Realized Gain		11,323,992			3,195,575			817,708			2,340,609			5,213,303
Change in Unrealized Appreciation/Depreciation on:
Investments		(38,479,826	)		(28,743,116	)		(5,046,256	)		(5,848,157	)		(28,559,184	)
Investments in affiliates		—			(1,356,710	)		—			—			(728,377	)
Futures contracts		—			(28,481	)		—			—			(86,418	)
Swap contracts		—			—			—			—			(190,668	)
Option contracts		—			—			—			—			14,332
Translation of forward foreign currency contracts, other assets and liabilities denominated in foreign currencies		(4,218	)		—			771			10			—
Net Change in Unrealized Appreciation (Depreciation)		(38,484,044	)		(30,128,307	)		(5,045,485	)		(5,848,147	)		(29,550,315	)
Net Loss		(27,160,052	)		(26,932,732	)		(4,227,777	)		(3,507,538	)		(24,337,012	)
Net Decrease	$	(27,543,921	)	$	(25,353,251	)	$	(4,151,265	)	$	(3,658,194	)	$	(21,120,728	)

157

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, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007
	(unaudited)						(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	3,357,229		$	10,609,997		$	2,215,104		$	6,598,718		$	8,297,530		$	18,294,308
Net realized gain (loss)		—			(313,395	)		(2,039,621	)		(215,850	)		(2,166,968	)		(6,053,280	)
Net increase from payments by affiliate		—			313,301			—			—			—			—
Net change in unrealized appreciation/depreciation		—			—			(10,451,926	)		(2,429,695	)		(13,964,134	)		8,671,654
Net Increase (Decrease)		3,357,229			10,609,903			(10,276,443	)		3,953,173			(7,833,572	)		20,912,682
Dividends and Distributions to Shareholders from:
Net investment income
Class X Shares		(1,774,031	)		(5,857,356	)		(403,890	)		(1,566,053	)		(2,630,820	)		(8,970,194	)
Class Y Shares		(1,583,146	)		(4,752,646	)		(1,470,642	)		(5,390,079	)		(3,227,663	)		(10,354,285	)
Net realized gain
Class X Shares		—			—			—			—			—			—
Class Y Shares		—			—			—			—			—			—
Paid-in-capital
Class X Shares		—			—			—			—			—			(34,465	)
Class Y Shares		—			—			—			—			—			(39,783	)
Total Dividends and Distributions		(3,357,177	)		(10,610,002	)		(1,874,532	)		(6,956,132	)		(5,858,483	)		(19,398,727	)
Net increase (decrease) from transactions in shares of beneficial interest		3,264,914			(21,984,382	)		(10,167,613	)		(18,581,228	)		(28,941,975	)		(43,135,641	)
Total Increase (Decrease)		3,264,966			(21,984,481	)		(22,318,588	)		(21,584,187	)		(42,634,030	)		(41,621,686	)
Net Assets:
Beginning of period		213,001,530			234,986,011			127,280,318			148,864,505			352,652,861			394,274,547
End of Period	$	216,266,496		$	213,001,530		$	104,961,730		$	127,280,318		$	310,018,831		$	352,652,861
Accumulated Undistributed Net Investment Income (Loss)	$	236		$	184		$	(129,063	)	$	(469,635	)	$	421,619		$	(2,017,428	)

See Notes to Financial Statements
158

	High Yield						Utilities
	For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007
	(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	1,720,855		$	3,353,174		$	1,436,810		$	3,235,117
Net realized gain (loss)		(284,938	)		358,912			15,826,591			24,915,472
Net increase from payments by affiliate		—			—			—			—
Net change in unrealized appreciation/depreciation		(1,829,345	)		(1,783,162	)		(24,961,930	)		4,330,557
Net Increase (Decrease)		(393,428	)		1,928,924			(7,698,529	)		32,481,146
Dividends and Distributions to Shareholders from:
Net investment income
Class X Shares		(437,442	)		(1,650,929	)		(647,409	)		(2,621,400	)
Class Y Shares		(479,055	)		(1,782,057	)		(134,680	)		(539,363	)
Net realized gain
Class X Shares		—			—			(20,127,612	)		(14,149,868	)
Class Y Shares		—			—			(4,721,331	)		(3,381,848	)
Paid-in-capital
Class X Shares		—			—			—			—
Class Y Shares		—			—			—			—
Total Dividends and Distributions		(916,497	)		(3,432,986	)		(25,631,032	)		(20,692,479	)
Net increase (decrease) from transactions in shares of beneficial interest		(5,507,507	)		(11,109,031	)		9,294,213			(23,527,408	)
Total Increase (Decrease)		(6,817,432	)		(12,613,093	)		(24,035,348	)		(11,738,741	)
Net Assets:
Beginning of period		46,058,435			58,671,528			165,287,309			177,026,050
End of Period	$	39,241,003		$	46,058,435		$	141,251,961		$	165,287,309
Accumulated Undistributed Net Investment Income (Loss)	$	979,598		$	175,240		$	740,080		$	85,359

159

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, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007
	(unaudited)						(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income (loss)	$	704,501		$	1,599,645		$	2,974,531		$	6,718,615		$	2,998,182		$	3,736,431
Net realized gain		1,472,311			7,523,988			696,842			37,372,262			7,371,155			29,928,753
Net change in unrealized appreciation/depreciation		(7,457,948	)		(6,480,513	)		(56,582,582	)		(18,261,968	)		(39,300,818	)		(17,322,433	)
Net Increase (Decrease)		(5,281,136	)		2,643,120			(52,911,209	)		25,828,909			(28,931,481	)		16,342,751
Dividends and Distributions to Shareholders from:
Net investment income
Class X Shares		(176,967	)		(878,041	)		(1,348,818	)		(5,284,397	)		(2,855,985	)		(2,966,972	)
Class Y Shares		(191,122	)		(1,027,306	)		(367,487	)		(1,300,040	)		(1,205,443	)		(1,236,384	)
Net realized gain
Class X Shares		(3,462,207	)		(1,847,133	)		—			—			(19,931,632	)		(15,490,669	)
Class Y Shares		(4,034,192	)		(2,399,198	)		—			—			(9,677,542	)		(7,384,714	)
Total Dividends and Distributions		(7,864,488	)		(6,151,678	)		(1,716,305	)		(6,584,437	)		(33,670,602	)		(27,078,739	)
Net increase (decrease) from transactions in shares of beneficial interest		(1,294,488	)		(14,096,132	)		(50,077,954	)		(142,827,304	)		11,843,726			(28,017,578	)
Total Decrease		(14,440,112	)		(17,604,690	)		(104,705,468	)		(123,582,832	)		(50,758,357	)		(38,753,566	)
Net Assets:
Beginning of period		62,961,470			80,566,160			485,007,974			608,590,806			201,859,162			240,612,728
End of Period	$	48,521,358		$	62,961,470		$	380,302,506		$	485,007,974		$	151,100,805		$	201,859,162
Accumulated Undistributed Net Investment Income (Loss)	$	16,468		$	(319,944	)	$	1,419,054		$	160,828		$	3,048,899		$	4,112,145

See Notes to Financial Statements
160

	European Equity						Capital Opportunities
	For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007
	(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income (loss)	$	3,011,201		$	2,992,513		$	(383,869	)	$	2,791,786
Net realized gain		3,363,957			24,212,838			11,323,992			68,769,661
Net change in unrealized appreciation/depreciation		(28,324,275	)		(968,549	)		(38,484,044	)		12,242,224
Net Increase (Decrease)		(21,949,117	)		26,236,802			(27,543,921	)		83,803,671
Dividends and Distributions to Shareholders from:
Net investment income
Class X Shares		(2,413,005	)		(2,252,570	)		(635,044	)		(1,859,792	)
Class Y Shares		(642,298	)		(633,844	)		(146,796	)		(138,094	)
Net realized gain
Class X Shares		(16,690,917	)		—			—			—
Class Y Shares		(5,203,748	)		—			—			—
Total Dividends and Distributions		(24,949,968	)		(2,886,414	)		(781,840	)		(1,997,886	)
Net increase (decrease) from transactions in shares of beneficial interest		8,230,473			(43,195,990	)		(43,540,512	)		(127,317,765	)
Total Decrease		(38,668,612	)		(19,845,602	)		(71,866,273	)		(45,511,980	)
Net Assets:
Beginning of period		167,791,663			187,637,265			438,952,685			484,464,665
End of Period	$	129,123,051		$	167,791,663		$	367,086,412		$	438,952,685
Accumulated Undistributed Net Investment Income (Loss)	$	3,008,193		$	3,052,295		$	(481,671	)	$	684,038

161

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, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007
	(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income (loss)	$	1,579,481		$	3,781,861		$	76,512		$	150,279
Net realized gain		3,195,575			10,277,890			817,708			1,136,276
Net change in unrealized appreciation/depreciation		(30,128,307	)		(722,443	)		(5,045,485	)		2,923,040
Net Increase (Decrease)		(25,353,251	)		13,337,308			(4,151,265	)		4,209,595
Dividends and Distributions to Shareholders from:
Net investment income
Class X Shares		(1,233,419	)		(1,371,058	)		(116,591	)		(145,628	)
Class Y Shares		(2,473,396	)		(2,631,171	)		(53,683	)		(71,553	)
Net realized gain
Class X Shares		—			—			—			—
Class Y Shares		—			—			—			—
Total Dividends and Distributions		(3,706,815	)		(4,002,229	)		(170,274	)		(217,181	)
Net decrease from transactions in shares of beneficial interest		(17,077,124	)		(51,503,824	)		(2,639,884	)		(6,929,711	)
Total Decrease		(46,137,190	)		(42,168,745	)		(6,961,423	)		(2,937,297	)
Net Assets:
Beginning of period		219,259,296			261,428,041			24,969,997			27,907,294
End of Period	$	173,122,106		$	219,259,296		$	18,008,574		$	24,969,997
Accumulated Undistributed Net Investment Income (Loss)	$	1,621,641		$	3,748,975		$	73,653		$	167,415

See Notes to Financial Statements
162

	Aggressive Equity						Strategist
	For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007
	(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income (loss)	$	(150,656	)	$	123,592		$	3,216,284		$	9,353,018
Net realized gain		2,340,609			11,466,164			5,213,303			25,084,270
Net change in unrealized appreciation/depreciation		(5,848,147	)		(898,884	)		(29,557,990	)		(6,170,274	)
Net Increase (Decrease)		(3,658,194	)		10,690,872			(21,128,403	)		28,267,014
Dividends and Distributions to Shareholders from:
Net investment income
Class X Shares		(40,786	)		—			(1,351,632	)		(6,516,159	)
Class Y Shares		—			—			(508,281	)		(2,403,373	)
Net realized gain
Class X Shares		—			—			(17,621,031	)		(26,239,176	)
Class Y Shares		—			—			(7,191,473	)		(10,632,273	)
Total Dividends and Distributions		(40,786	)		—			(26,672,417	)		(45,790,981	)
Net decrease from transactions in shares of beneficial interest		(6,427,363	)		(17,577,948	)		(2,702,585	)		(36,602,060	)
Total Decrease		(10,126,343	)		(6,887,076	)		(50,503,405	)		(54,126,027	)
Net Assets:
Beginning of period		55,871,656			62,758,732			305,915,957			360,041,984
End of Period	$	45,745,313		$	55,871,656		$	255,412,552		$	305,915,957
Accumulated Undistributed Net Investment Income (Loss)	$	(81,883	)	$	109,559		$	1,720,941		$	364,570

163

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, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007
	(unaudited)						(unaudited)						(unaudited)
Class X Shares
Shares
Sold		22,281,250			78,177,992			167,168			507,726			244,690			2,023,873
Reinvestment of dividends and distributions		1,774,031			5,857,357			45,466			166,056			251,075			861,166
Redeemed		(24,142,255	)		(105,247,574	)		(512,886	)		(1,434,868	)		(1,889,072	)		(5,591,286	)
Net Increase (Decrease) - Class X		(86,974	)		(21,212,225	)		(300,252	)		(761,086	)		(1,393,307	)		(2,706,247	)
Amount
Sold	$	22,281,250		$	78,177,992		$	1,542,686		$	4,805,745		$	2,598,801		$	21,196,799
Reinvestment of dividends and distributions		1,774,031			5,857,357			403,890			1,566,053			2,630,820			9,004,659
Redeemed		(24,142,255	)		(105,247,574	)		(4,494,836	)		(13,579,613	)		(19,700,391	)		(58,516,308	)
Net Increase (Decrease) - Class X	$	(86,974	)	$	(21,212,225	)	$	(2,548,260	)	$	(7,207,815	)	$	(14,470,770	)	$	(28,314,850	)
Class Y Shares
Shares
Sold		32,995,918			83,425,440			335,146			1,289,909			515,942			2,141,895
Reinvestment of dividends and distributions		1,583,146			4,752,647			165,939			572,447			308,624			995,763
Redeemed		(31,227,176	)		(88,950,244	)		(1,378,468	)		(3,064,843	)		(2,231,206	)		(4,548,984	)
Net Increase (Decrease) - Class Y		3,351,888			(772,157	)		(877,383	)		(1,202,487	)		(1,406,640	)		(1,411,326	)
Amount
Sold	$	32,995,918		$	83,425,440		$	3,096,016		$	12,179,211		$	5,490,828		$	22,336,238
Reinvestment of dividends and distributions		1,583,146			4,752,647			1,470,642			5,390,079			3,227,663			10,394,068
Redeemed		(31,227,176	)		(88,950,244	)		(12,186,011	)		(28,942,703	)		(23,189,696	)		(47,551,097	)
Net Increase (Decrease) - Class Y	$	3,351,888		$	(772,157	)	$	(7,619,353	)	$	(11,373,413	)	$	(14,471,205	)	$	(14,820,791	)

See Notes to Financial Statements
164

	High Yield						Utilities
	For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007
	(unaudited)						(unaudited)
Class X Shares
Shares
Sold		288,618			2,632,195			108,236			525,300
Reinvestment of dividends and distributions		394,745			1,431,218			1,279,897			856,257
Redeemed		(2,754,051	)		(8,871,647	)		(775,125	)		(2,259,575	)
Net Increase (Decrease) - Class X		(2,070,688	)		(4,808,234	)		613,008			(878,018	)
Amount
Sold	$	320,693		$	3,059,133		$	2,134,193		$	10,749,137
Reinvestment of dividends and distributions		437,442			1,650,929			20,775,021			16,771,268
Redeemed		(3,062,502	)		(10,290,099	)		(15,036,317	)		(46,307,644	)
Net Increase (Decrease) - Class X	$	(2,304,367	)	$	(5,580,037	)	$	7,872,897		$	(18,787,239	)
Class Y Shares
Shares
Sold		129,688			1,392,635			28,091			185,627
Reinvestment of dividends and distributions		430,638			1,543,844			299,658			200,450
Redeemed		(3,437,359	)		(7,702,635	)		(206,277	)		(612,242	)
Net Increase (Decrease) - Class Y		(2,877,033	)		(4,766,156	)		121,472			(226,165	)
Amount
Sold	$	144,476		$	1,616,253		$	553,799		$	3,780,195
Reinvestment of dividends and distributions		479,055			1,782,057			4,856,011			3,921,211
Redeemed		(3,826,671	)		(8,927,304	)		(3,988,494	)		(12,441,575	)
Net Increase (Decrease) - Class Y	$	(3,203,140	)	$	(5,528,994	)	$	1,421,316		$	(4,740,169	)

165

Morgan Stanley Variable Investment Series

Financial Statements continued

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

	Income Builder						Dividend Growth						Global Dividend Growth
	For The Six months Ended June 30, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007
	(unaudited)						(unaudited)						(unaudited)
Class X Shares
Shares
Sold		36,990			243,868			165,004			1,621,444			64,313			637,149
Reinvestment of dividends and distributions		367,205			204,327			87,699			307,269			2,049,246			1,059,566
Redeemed		(317,787	)		(840,522	)		(2,733,678	)		(8,789,956	)		(1,028,065	)		(2,918,093	)
Net Increase (Decrease) - Class X		86,408			(392,327	)		(2,480,975	)		(6,861,243	)		1,085,494			(1,221,378	)
Amount
Sold	$	455,756		$	3,273,568		$	2,665,473		$	27,873,604		$	1,014,560		$	11,256,989
Reinvestment of dividends and distributions		3,639,174			2,725,175			1,348,818			5,284,397			22,787,617			18,457,641
Redeemed		(3,871,105	)		(11,387,330	)		(43,249,518	)		(151,292,748	)		(15,927,965	)		(51,997,174	)
Net Increase (Decrease) - Class X	$	223,825		$	(5,388,587	)	$	(39,235,227	)	$	(118,134,747	)	$	7,874,212		$	(22,282,544	)
Class Y Shares
Shares
Sold		47,883			198,850			26,622			382,904			33,734			401,943
Reinvestment of dividends and distributions		427,890			257,429			23,925			75,671			987,567			499,195
Redeemed		(521,513	)		(1,095,071	)		(738,039	)		(1,889,523	)		(486,031	)		(1,221,565	)
Net Increase (Decrease) - Class Y		(45,740	)		(638,792	)		(687,492	)		(1,430,948	)		535,270			(320,427	)
Amount
Sold	$	588,843		$	2,695,093		$	426,276		$	6,572,615		$	515,927		$	7,167,812
Reinvestment of dividends and distributions		4,225,314			3,426,503			367,487			1,300,040			10,882,985			8,621,098
Redeemed		(6,332,470	)		(14,829,141	)		(11,636,490	)		(32,565,212	)		(7,429,398	)		(21,523,944	)
Net Increase (Decrease) - Class Y	$	(1,518,313	)	$	(8,707,545	)	$	(10,842,727	)	$	(24,692,557	)	$	3,969,514		$	(5,735,034	)

See Notes to Financial Statements
166

	European Equity						Capital Opportunities
	For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007
	(unaudited)						(unaudited)
Class X Shares
Shares
Sold		31,922			373,538			65,636			647,037
Reinvestment of dividends and distributions		950,444			80,134			20,244			55,328
Redeemed		(485,071	)		(1,649,624	)		(1,044,217	)		(3,813,964	)
Net Increase (Decrease) - Class X		497,295			(1,195,952	)		(958,337	)		(3,111,599	)
Amount
Sold	$	829,489		$	10,254,961		$	2,125,165		$	21,275,599
Reinvestment of dividends and distributions		19,103,922			2,252,571			635,044			1,859,792
Redeemed		(12,676,017	)		(45,082,566	)		(34,367,397	)		(124,621,806	)
Net Increase (Decrease) - Class X	$	7,257,394		$	(32,575,034	)	$	(31,607,188	)	$	(101,486,415	)
Class Y Shares
Shares
Sold		10,124			105,539			67,166			205,380
Reinvestment of dividends and distributions		292,156			22,662			4,703			3,942
Redeemed		(197,584	)		(518,643	)		(437,335	)		(999,992	)
Net Increase (Decrease) - Class Y		104,696			(390,442	)		(365,466	)		(790,670	)
Amount
Sold	$	271,757		$	2,891,627		$	2,141,055		$	6,718,447
Reinvestment of dividends and distributions		5,846,046			633,844			146,796			138,094
Redeemed		(5,144,724	)		(14,146,426	)		(14,221,175	)		(32,687,891	)
Net Increase (Decrease) - Class Y	$	973,079		$	(10,620,955	)	$	(11,933,324	)	$	(25,831,350	)

167

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Financial Statements continued

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

	S&P 500 Index						Global Advantage
	For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007
	(unaudited)						(unaudited)
Class X Shares
Shares
Sold		82,901			628,816			54,787			173,049
Reinvestment of dividends and distributions		106,605			100,370			11,995			12,956
Redeemed		(620,350	)		(2,302,191	)		(212,050	)		(618,917	)
Net Increase (Decrease) - Class X		(430,844	)		(1,573,005	)		(145,268	)		(432,912	)
Amount
Sold	$	1,047,493		$	8,483,315		$	575,584		$	1,944,469
Reinvestment of dividends and distributions		1,233,419			1,371,058			116,591			145,628
Redeemed		(7,750,377	)		(31,154,539	)		(2,239,040	)		(6,917,578	)
Net Decrease - Class X	$	(5,469,465	)	$	(21,300,166	)	$	(1,546,865	)	$	(4,827,481	)
Class Y Shares
Shares
Sold		159,193			737,259			32,321			69,686
Reinvestment of dividends and distributions		214,891			193,896			5,546			6,389
Redeemed		(1,295,137	)		(3,174,327	)		(143,889	)		(266,423	)
Net Increase (Decrease) - Class Y		(921,053	)		(2,243,172	)		(106,022	)		(190,348	)
Amount
Sold	$	1,986,278		$	9,857,520		$	348,206		$	794,956
Reinvestment of dividends and distributions		2,473,396			2,631,171			53,683			71,553
Redeemed		(16,067,333	)		(42,692,349	)		(1,494,908	)		(2,968,739	)
Net Decrease - Class Y	$	(11,607,659	)	$	(30,203,658	)	$	(1,093,019	)	$	(2,102,230	)

See Notes to Financial Statements
168

	Aggressive Equity						Strategist
	For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007			For The Six Months Ended June 30, 2008			For The Year Ended December 31, 2007
	(unaudited)						(unaudited)
Class X Shares
Shares
Sold		19,891			136,153			231,710			1,061,523
Reinvestment of dividends and distributions		2,460			—			1,454,772			2,112,775
Redeemed		(218,932	)		(739,389	)		(1,628,036	)		(4,818,917	)
Net Increase (Decrease) - Class X		(196,581	)		(603,236	)		58,446			(1,644,619	)
Amount
Sold	$	329,126		$	2,266,135		$	3,484,452		$	17,359,396
Reinvestment of dividends and distributions		40,786			—			18,972,663			32,755,335
Redeemed		(3,621,998	)		(12,096,302	)		(24,272,814	)		(78,618,026	)
Net Decrease - Class X	$	(3,252,086	)	$	(9,830,167	)	$	(1,815,699	)	$	(28,503,295	)
Class Y Shares
Shares
Sold		27,077			186,518			135,362			441,792
Reinvestment of dividends and distributions		—			—			592,076			842,764
Redeemed		(219,905	)		(666,959	)		(715,794	)		(1,745,721	)
Net Increase (Decrease) - Class Y		(192,828	)		(480,441	)		11,644			(461,165	)
Amount
Sold	$	439,261		$	3,026,234		$	2,027,556		$	7,210,062
Reinvestment of dividends and distributions		—			—			7,699,754			13,035,646
Redeemed		(3,614,538	)		(10,774,015	)		(10,614,196	)		(28,345,473	)
Net Decrease - Class Y	$	(3,175,277	)	$	(7,747,781	)	$	(886,886	)	$	(8,099,765	)

169

Morgan Stanley Variable Investment Series

Notes to Financial Statements n June 30, 2008 (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

Capital Opportunities

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 and, as a secondary objective, capital appreciation, but only when consistent with its primary objective.

Utilities				Seeks both capital appreciation and current income .

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.

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Notes to Financial Statements n June 30, 2008 (unaudited) continued

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

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

Capital Opportunities* (Formerly Equity)				Seeks, as its primary objective, growth of capital and, as a secondary objective, 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 Standards & 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.

* Name Change effective May 1, 2008.

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; (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 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, European Equity and (effective June 30, 2008) Utilities, Morgan Stanley Investment Management Limited, (the "Sub Adviser")) determines that the latest sale price, the bid price or the mean

171

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Notes to Financial Statements n June 30, 2008 (unaudited) continued

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; (10) investments in open-end mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (11) 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-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.

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If a written call option is exercised, the Fund realizes a gain or loss from the sale of the underlying security and 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. By writing a covered call option, the Fund, in exchange for the premium, foregoes the opportunity for capital appreciation above the exercise price, should the market price of the underlying security increase. By writing a put option, the Fund, in exchange for the premium, accepts the risk of having to purchase a security at an exercise price that is above the current market price.

When the Fund purchases a call or put option, the premium paid is recorded as an investment which and 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. The maximum exposure to loss for any purchased option is limited to the premium initially paid for the option.

LIMITED DURATION	CONTRACT AMOUNT			PREMIUM
Options written, outstanding at beginning of the period		—			—
Options written		107		$	53,217
Options exercised		—			—
Options expired		—			—
Options written, outstanding at end of period		107		$	53,217
DIVIDEND GROWTH	CONTRACT AMOUNT			PREMIUM
Options written, outstanding at beginning of the period		613		$	40,685
Options written		3,126			215,968
Options exercised		(508	)		(40,834	)
Options expired		(3,231	)		(215,819	)
Options written, outstanding at end of period		—		$	—

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DIVIDEND GROWTH	CONTRACT AMOUNT			PREMIUM
Put options written, outstanding at beginning of the period		—			—
Put options purchased		372		$	35,548
Put options exercised		—			—
Put options expired		(372	)		(35,548	)
Put options purchased, outstanding at end of period		—		$	—
STRATEGIST	CONTRACT AMOUNT			PREMIUM
Options written, outstanding at beginning of the period		—			—
Options written		108		$	53,714
Options exercised		—			—
Options expired		—			—
Options written, outstanding at end of period		108		$	53,714

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 arising as a result of changes in the foreign exchange rates from the changes in the market prices of the securities held. Forward contracts

174

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Notes to Financial Statements n June 30, 2008 (unaudited) continued

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⁽¹⁾
High Yield	$	10,109,890	$	10,667,428
Global Dividend		18,807,442		19,714,422
European Equity		2,876,467		3,107,270
Utilities		31,415,146		31,760,802

⁽¹⁾ The Portfolios received cash collateral which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Money Market Portfolio 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 swap is said to sell protection and thus collects the periodic fees and profits if the credit of the issuer remains

175

Morgan Stanley Variable Investment Series

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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. The Fund may pay or receive cash to collateralize interest rate swap contracts. This cash collateral is recorded as assets/liabilities on the Fund's books. Any cash received may be invested in Morgan Stanley Institutional Liquidity Funds.

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 Statement of Operations. The Fund may pay or receive cash to collateralize interest rate swap contracts. This cash collateral is recorded as assets/liabilities on the Fund's books. Any cash received may be invested in Morgan Stanley Institutional Liquidity Funds.

K. Federal Income Tax Policy — It is the Fund's policy to comply with the requirements of the Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable and nontaxable income to its shareholders. Therefore, no provision for federal income tax is required. The Fund files tax returns with the U.S. Internal Revenue Service, New York State and New York City. The Fund adopted the provisions of the Financial Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN 48") Accounting for Uncertainty in Income Taxes on June 27, 2008. FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in other expenses in the Statement of Operations. Each of the tax years in the four year period ended June 30, 2008, remains subject to examination by taxing authorities.

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. The expense offset represents a reduction of the custodian fees for earnings on cash balances maintained by a Portfolio.

176

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Notes to Financial Statements n June 30, 2008 (unaudited) continued

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.

177

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Notes to Financial Statements n June 30, 2008 (unaudited) continued

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.

Capital Opportunities — 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 Investment Adviser. As compensation for its services provided pursuant to the Sub-Advisory Agreements, the

178

Morgan Stanley Variable Investment Series

Notes to Financial Statements n June 30, 2008 (unaudited) continued

Investment Adviser paid the Sub-Adviser compensation in the amounts of $299,817 and $301,459, respectively, for the six months ended June 30, 2008.

Effective June 30, 2008, the Utilities Portfolio entered into a Sub-Advisory Agreement with the Sub-Adviser, Morgan Stanley Investment Management Limited.

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.

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

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 (except Money Market) may invest in Morgan Stanley Institutional Liquidity Money Market Portfolio — Institutional Class, an open-end management investment company managed by the Investment Adviser, both directly, and as a portion of the securities held as collateral on loaned securities. 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, 2008, the tables below identifies, for each Portfolio that invested in Morgan Stanley Institutional Liquidity Money Market Portfolio — Institutional Class, that 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.

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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 in the Statement of Operations.

PORTFOLIO	INCOME DISTRIBUTION EARNED		INVESTMENT ADVISORY FEE WAIVED
Limited Duration	$	204,177	$	6,376
Income Plus		262,005		8,077
High Yield		11,539		371
Utilities		51,616		1,629
Income Builder		17,908		708
Dividend Growth		212,351		7,452
Global Dividend Growth		17,059		617
European Equity		16,624		685
Capital Opportunities		353,255		13,514
S&P 500 Index		42,778		1,605
Global Advantage		2,693		91
Aggressive Equity		38,774		1,540
Strategist		817,809		29,724

During the year six months ended June 30, 2008, 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	$	53,301,747	$	47,144,433
Income Plus		121,609,390		104,567,235
High Yield		11,284,415		11,821,099
Utilities.		16,255,823		16,064,981
Income Builder		6,050,437		8,850,430
Dividend Growth		84,790,947		90,797,711
Global Dividend Growth		25,187,046		25,120,283
European Equity		15,671,920		16,372,667
Capital Opportunities		68,683,719		79,198,694
S&P 500 Index		68,910,270		70,655,380
Global Advantage		3,836,379		3,805,524
Aggressive Equity		9,121,366		10,842,515
Strategist		26,541,702		38,126,630

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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, 2008 were as follows:

	U.S. GOVERNMENT SECURITIES				OTHER
	PURCHASES		SALES/PREPAYMENTS/ MATURITIES		PURCHASES		SALES/PREPAYMENTS/ MATURITIES
Money Market	$	5,497,332	$	10,037,962	$	1,359,532,351	$	1,352,295,489
Limited Duration	19,317,014			13,515,164		3,347,798	24,116,470
Income Plus	—			39,526,631		105,579,065	114,309,769
High Yield	—			1,017,012		6,912,004	9,140,626
Utilities	—			—		16,755,626	31,740,785
Income Builder	—			—		9,369,360	14,943,287
Dividend Growth	—			—		156,719,768	199,259,174
Global Dividend Growth	—			—		30,496,260	48,684,913
European Equity	—			—		9,434,364	23,961,081
Capital Opportunities	—			—		60,055,086	93,160,602
S&P 500 Index	—			—		16,087,876	34,761,540
Global Advantage	—			—		3,218,007	5,887,131
Aggressive Equity	—			—		7,511,853	12,350,603
Strategist	6,197,169			9,023,372		45,375,993	58,611,951

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	Met Life Global		—		—		—		$	17,639	$	770,332
Income Builder	MetLife, Inc.		—		—		—			3,267		107,461
Dividend Growth	Allstate Corp. (The)	$	5,593,277		—		—			—		5,030,857
	Citigroup Inc.*		—	$	2,077,798	$	(1,779,715	)		193,501		3,572,310
	MetLife, Inc.		2,473,722		—		—			—		4,625,554
S&P 500 Index	Allstate Corp. (The)		5,736		72,900		15,114			7,261		375,114
	MetLife, Inc.		—		109,943		40,975			—		559,468
	Morgan Stanley		61,293		73,781		(3,586	)		9,290		639,341
	Citigroup Inc.*		241,553		270,667		(202,234	)		52,944		1,403,348
Strategist	Allstate Corp. (The)		—		769,721		460,761			24,903		1,384,568

* 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, 2008:

	PURCHASES		SALES		NET REALIZED GAINS(LOSS)
Utilities	$	717,683	$	3,365,314	$	1,482,688
Dividend Growth		—		451,208		(831,866	)
Global Dividend Growth		—		3,283,379		50,868
Capital Opportunities		1,356,151		3,657,062		(2,138,831	)
Aggressive Equity		170,488		473,849		(64,897	)
Income Builder		—		16,040		946
Income Plus		—		2,095,668		102,556
S&P 500 Index		—		—		—
Strategist		222,115		53,118		(355	)

For the six months ended June 30, 2008, 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				CAPITAL OPPORTUNITIES				GLOBAL ADVANTAGE				AGGRESSIVE EQUITY				INCOME BUILDER				STRATEGIST				GLOBAL DIVIDEND
$	274			$	18,040			$	5,667			$	332			$	715			$	226			$	15,581			$	1,206

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, 2008, 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	$	157	$	402	$	75	$	162	$	47	$	784	$	228
EUROPEAN EQUITY		CAPITAL OPPORTUNITIES		S&P 500 INDEX		GLOBAL ADVANTAGE		AGGRESSIVE EQUITY		STRATEGIST
$	186	$	579	$	229	$	29	$	54	$	302

ACCRUED PENSION LIABILITY

MONEY MARKET		LIMITED DURATION		INCOME PLUS		HIGH YIELD		UTILITIES		INCOME BUILDER		DIVIDEND GROWTH		GLOBAL DIVIDEND GROWTH
$	11,832	$	149	$	7,536	$	3,975	$	5,918	$	897	$	12,190	$	1,329
EUROPEAN EQUITY		CAPITAL OPPORTUNITIES		S&P 500 INDEX		GLOBAL ADVANTAGE		AGGRESSIVE EQUITY		STRATEGIST
$	1,734	$	7,173	$	158	$	546	$	956	$	8,435

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, 2007, 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,	2008		2009		2010		2011		2012		2013		2014		2015		TOTAL
Limited Duration		—		—	$	328	$	1,546	$	4,026	$	1,267	$	2,233	$	1,063	$	10,463
Income Plus		—		—		16,864		—		—		—		—		5,280		22,144
High Yield	$	7,524	$	47,273		63,495		81,458		24,098		15,736		6,219		—		245,803
Dividend Growth		—		—		106,810		48,222		—		—		—		—		155,032
Equity (Currently Capital Opportunities)		—		197,818		130,806		—		—		—		—		—		328,624
S & P 500 Index		—		—		10,905		—		3,450		9,726		5,449		—		29,530
Global Advantage		—		3,367		14,172		—		—		—		—		—		17,539
Aggressive Equity		—		15,004		13,085		—		—		—		—		—		28,089

During the year ended December 31, 2007, the following Portfolios utilized net capital loss carryforwards: High Yield — $242,155; Dividend Growth — $36,229,244; European Equity — $2,274,243; Equity (Currently Capital Opportunities) — $68,973,415; S&P 500 Index — $10,087,522; Global Advantage — $1,113,136; Aggressive Equity — $11,478,613.

At December 31, 2007, 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 (Currently Capital Opportunities)	•	•
S & P 500 Index		•
Global Advantage		•
Aggressive Equity	•	•
Strategist		•

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Additionally, the following Portfolios had other temporary differences: High Yield — income from the mark-to-market of forward foreign currency contracts; Limited Duration, Income Plus, High Yield, S&P 500 Index, Strategist — capital gain/loss from the mark-to-market of futures contracts and/or options contracts; High Yield — income on bonds in default; Income Plus, Strategist — capital loss deferral on straddles. The following Portfolios had other permanent differences: High Yield — expired capital loss carryforward; Income Builder, S&P 500 Index — tax adjustments on real estate investment trusts and/or convertible preferred stock held/sold, Global Dividend Growth — tax adjustments on passive foreign investment companies sold. The following Portfolios had temporary and permanent differences attributable to book amortization of premiums/discounts on debt securities: Limited Duration, Income Plus, High Yield, Income Builder and Strategist. The following Portfolios had temporary and/or permanent differences attributable to tax adjustment on swaps: Limited Duration, Income Plus, High Yield and Strategist.

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 Portfolio 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 the Portfolio is a buyer and no credit event occurs, it will lose its investment. In addition, if the Portfolio is a seller and a credit event occurs, the value of the referenced obligation received by the Portfolio coupled with the periodic payments previously received may be less than the maximum payout amount it pays 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. The portfolio expects to enter into these transactions primarily to manage interest rate risk, hedge

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portfolio positions and preserve a return or spread on a particular investment or portion of its portfolio. The Portfolio may also enter into these transactions to protect against any increase in the price of securities the Portfolio anticipates 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 Statement 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 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.

Certain Portfolios may invest in mortgage securities, including securities issued by Federal National Mortgage Assoc. ("FNMA") and Federal Home Loan Mortgage Corp. ("FHLMC"). These are fixed income securities that derive their value from or represent interests in a pool of mortgages or mortgage securities. An unexpectedly high rate of defaults on the mortgages held by a mortgage pool may adversely affect the value of a mortgage-backed security and could result in losses to the Portfolio. The risk of such defaults is generally higher in the case of mortgage pools that include sub-prime mortgages. Sub-prime mortgages refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments on their mortgages.

Additionally, securities issued by FNMA and FHLMC are not backed by or entitled to the full faith and credit of the United States and are supported by the right of the issuer to borrow from the Treasury.

At June 30, 2008, European Equity's investments in securities of issuers in the United Kingdom and Switzerland represented 36.6% and 16.6%, respectively, of the Portfolio's net assets. Global Dividend Growth's investments in securities of issuers in the United Kingdom represented 19.0% 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.

7. Fair Valuation Measurements

The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"), effective December 1, 2007. In accordance with FAS 157, fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. FAS 157 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in

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

• Level 1 — quoted prices in active markets for identical investments

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

• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used as of June 30, 2008 in valuing the Fund's investments carried at value:

				Fair Value Measurements at June 30, 2008 Using
	Total			Quoted Prices In Active Market for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money Market
Investments in Securities	$	216,973,558			—		$	216,973,558		—
Limited Duration
Investments in Securities	$	105,076,901		$	14,899,151		$	90,177,750		—
Other Financial Instruments*		430,417			29,394			401,023		—
Total	$	105,507,318		$	14,928,545		$	90,578,773		—
Income Plus
Investments in Securities	$	305,198,242		$	23,985,624		$	281,212,618		—
Other Financial Instruments*		10,975,473			(379,330	)		11,354,803		—
Total	$	316,173,715		$	23,606,294		$	292,567,421		—
High Yield
Investments in Securities	$	49,698,299		$	8,142,910		$	41,527,348	$	28,041
Other Financial Instruments*		(11,059	)		(11,277	)		218		—
Total	$	49,687,240		$	8,131,633		$	41,527,566	$	28,041

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				Fair Value Measurements at June 30, 2008 Using
	Total			Quoted Prices In Active Market for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Utilities
Investments in Securities	$	173,079,092		$	165,550,953		$	7,528,139		—
Income Builder
Investments in Securities	$	48,467,218		$	29,166,391		$	19,300,827		—
Dividend Growth
Investments in Securities	$	380,263,411		$	380,263,411			—		—
Global Dividend Growth
Investments in Securities	$	169,692,348		$	165,019,515		$	4,672,833		—
European Equity
Investments in Securities	$	130,443,431		$	129,706,928		$	736,503		—
Other Financial Instruments*		1,950			—			1,950		—
Total	$	130,445,381		$	129,706,928		$	738,453		—
Capital Opportunities
Investments in Securities	$	368,089,846		$	368,089,846			—		—
S&P 500 Index
Investments in Securities	$	171,511,270		$	171,511,270			—		—
Other Financial Instruments*		(55,351	)		(55,351	)		—		—
Total	$	171,455,919		$	171,455,919			—		—
Global Advantage
Investments in Securities	$	17,913,817		$	17,913,817			—		—
Aggressive Equity
Investments in Securities	$	45,805,035		$	45,805,035			—		—
Strategist
Investments in Securities	$	253,219,639		$	201,748,363		$	51,471,276		—
Other Financial Instruments*		912,901			4,678			908,223		—
Total	$	254,132,540		$	201,753,041		$	52,379,499		—

* Other financial instruments include futures, forwards, options and swap contracts.

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

	Investments in Securities
High Yield
Beginning Balance	$	28,041
Net purchases (sales)		—
Transfers in and/or out		—
Change in unrealized appreciation/depreciation		—
Realized gains (losses)		—
Ending Balance	$	28,041
Net change in unrealized appreciation/ depreciation from investments still held as of June 30, 2008		—

8. Accounting Pronouncement

On March 19, 2008, FASB released Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). SFAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The application of SFAS 161 is required for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. At this time, management is evaluating the implications of SFAS 161 and its impact on the financial statements has not yet been determined.

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Financial Highlights


YEAR ENDED DECEMBER 31,			NET ASSET VALUE BEGINNING OF PERIOD		NET INVESTMENT INCOME(a)		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
	2003		$	1.00	$	0.007		—		$	0.007		$	(0.007	)(d)		—	$	(0.007	)
	2004			1.00		0.009		—			0.009			(0.009	)(d)		—		(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			1.00		0.050		—			0.050			(0.050	)		—		(0.050	)
	2008	(j)		1.00		0.016		—			0.016			(0.016	)		—		(0.016	)
CLASS Y SHARES
	2003			1.00		0.004		—			0.004			(0.004	)(d)		—		(0.004	)
	2004			1.00		0.006		—			0.006			(0.006	)(d)		—		(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			1.00		0.050		—			0.050			(0.050	)		—		(0.050	)
	2008	(j)		1.00		0.014		—			0.014			(0.014	)		—		(0.014	)
LIMITED DURATION CLASS X SHARES
	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			9.49		0.47		(0.19	)		0.28			(0.50	)		—		(0.50	)
	2008	(j)		9.27		0.18		(0.93	)		(0.75	)		(0.15	)		—		(0.15	)
CLASS Y SHARES
	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			9.48		0.44		(0.19	)		0.25			(0.47	)		—		(0.47	)
	2008	(j)		9.26		0.16		(0.93	)		(0.77	)		(0.14	)		—		(0.14	)
INCOME PLUS CLASS X SHARES
	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			10.51		0.53		0.08			0.61			(0.56	)(g)		—		(0.56	)
	2008	(j)		10.56		0.27		(0.52	)		(0.25	)		(0.18	)		—		(0.18	)

See Notes to Financial Statements
190

										RATIOS TO AVERAGE NET ASSETS(c)
YEAR ENDED DECEMBER 31,			NET ASSET VALUE END OF PERIOD		TOTAL RETURN(b)			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME			PORTFOLIO TURNOVER RATE
MONEY MARKET CLASS X SHARES
	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			1.00		4.93	(h)		111,478		0.55			4.79			N/A
	2008	(j)		1.00		1.57	(l)		111,391		0.56	(k)		3.14	(k)		N/A
CLASS Y SHARES
	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			1.00		4.67	(h)		101,524		0.80			4.54			N/A
	2008	(j)		1.00		1.45	(l)		104,875		0.81	(k)		2.89	(k)		N/A
LIMITED DURATION CLASS X SHARES
	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			9.27		2.95			26,214		0.47			4.95			49
	2008	(j)		8.37		(8.22	)(l)		21,140		0.47	(k)(n)		3.99	(k)(n)		22	(l)
CLASS Y SHARES
	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			9.26		2.80			101,066		0.72			4.70			49
	2008	(j)		8.35		(8.42	)(l)		83,822		0.72	(k)(n)		3.74	(k)(n)		22	(l)
INCOME PLUS CLASS X SHARES
	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			10.56		5.99			155,879		0.55			5.02			125
	2008	(j)		10.13		(2.37	)(l)		135,481		0.55	(k)(o)		5.11	(k)(o)		33	(l)

191

Morgan Stanley Variable Investment Series

Financial Highlights continued


YEAR ENDED DECEMBER 31,			NET ASSET VALUE BEGINNING OF PERIOD		NET INVESTMENT INCOME(a)		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
	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			10.49		0.50		0.08			0.58			(0.53	)(g)		—			(0.53	)
	2008	(j)		10.54		0.25		(0.50	)		(0.25	)		(0.18	)		—			(0.18	)
HIGH YIELD CLASS X SHARES
	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			1.16		0.08		(0.03	)		0.05			(0.08	)		—			(0.08	)
	2008	(j)		1.13		0.05		(0.07	)		(0.02	)		(0.02	)		—			(0.02	)
CLASS Y SHARES
	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			1.16		0.07		(0.03	)		0.04			(0.07	)		—			(0.07	)
	2008	(j)		1.13		0.04		(0.06	)		(0.02	)		(0.02	)		—			(0.02	)
UTILITIES CLASS X SHARES
	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			19.44		0.39		3.38			3.77			(0.39	)	$	(2.16	)		(2.55	)
	2008	(j)		20.66		0.19		(1.13	)		(0.94	)		(0.11	)		(3.44	)		(3.55	)
CLASS Y SHARES
	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			19.43		0.34		3.38			3.72			(0.34	)		(2.16	)		(2.50	)
	2008	(j)		20.65		0.17		(1.14	)		(0.97	)		(0.09	)		(3.44	)		(3.53	)

See Notes to Financial Statements
192

										RATIOS TO AVERAGE NET ASSETS(c)
YEAR ENDED DECEMBER 31,			NET ASSET VALUE END OF PERIOD		TOTAL RETURN(b)			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME			PORTFOLIO TURNOVER RATE
INCOME PLUS CLASS Y SHARES
	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			10.54		5.73			196,774		0.80			4.77			125
	2008	(j)		10.11		(2.45	)(l)		174,538		0.80	(k)(o)		4.86	(k)(o)		33	(l)
HIGH YIELD CLASS X SHARES
	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			1.13		4.17			21,625		1.18			6.48			26
	2008	(j)		1.09		(1.42	)(l)		18,704		1.66	(k)(o)		8.21	(k)(o)		17	(l)
CLASS Y SHARES
	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			1.13		3.90			24,433		1.43			6.23			26
	2008	(j)		1.09		(1.51	)(l)		20,537		1.91	(k)(o)		7.96	(k)(o)		17	(l)
UTILITIES CLASS X SHARES
	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			20.66		20.34			133,507		0.70			1.90			8
	2008	(j)		16.17		(4.51	)(l)		114,431		0.70	(k)(o)		2.00	(k)(o)		12	(l)
CLASS Y SHARES
	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			20.65		20.04			31,780		0.95			1.65			8
	2008	(j)		16.15		(4.63	)(l)		26,821		0.95	(k)(o)		1.75	(k)(o)		12	(l)

193

Morgan Stanley Variable Investment Series

Financial Highlights continued


YEAR ENDED DECEMBER 31,			NET ASSET VALUE BEGINNING OF PERIOD		NET INVESTMENT INCOME(a)		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
	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		0.33		1.38			1.71			(0.34	)		—			(0.34	)
	2007			13.59		0.31		0.15			0.46			(0.38	)	$	(0.81	)		(1.19	)
	2008	(j)		12.86		0.16		(1.31	)		(1.15	)		(0.09	)		(1.79	)		(1.88	)
CLASS Y SHARES
	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		0.30		1.37			1.67			(0.31	)		—			(0.31	)
	2007			13.56		0.28		0.14			0.42			(0.35	)		(0.81	)		(1.16	)
	2008	(j)		12.82		0.15		(1.30	)		(1.15	)		(0.08	)		(1.79	)		(1.87	)
DIVIDEND GROWTH CLASS X SHARES
	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			16.53		0.22		0.48			0.70			(0.22	)		—			(0.22	)
	2008	(j)		17.01		0.12		(2.06	)		(1.94	)		(0.07	)		—			(0.07	)
CLASS Y SHARES
	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			16.51		0.17		0.48			0.65			(0.18	)		—			(0.18	)
	2008	(j)		16.98		0.10		(2.05	)		(1.95	)		(0.06	)		—			(0.06	)
GLOBAL DIVIDEND GROWTH CLASS X SHARES
	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			17.81		0.31		1.01			1.32			(0.36	)		(1.90	)		(2.26	)
	2008	(j)		16.87		0.27		(2.83	)		(2.56	)		(0.40	)		(2.79	)		(3.19	)

See Notes to Financial Statements
194

										RATIOS TO AVERAGE NET ASSETS(c)
YEAR ENDED DECEMBER 31,			NET ASSET VALUE END OF PERIOD		TOTAL RETURN(b)			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME			PORTFOLIO TURNOVER RATE
INCOME BUILDER CLASS X SHARES
	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			2.61			19
	2007			12.86		3.21			28,244		0.85			2.31			32
	2008	(j)		9.83		(8.97	)(l)		22,449		0.87	(k)(o)		2.69	(k)(o)		17	(l)
CLASS Y SHARES
	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			2.36			19
	2007			12.82		2.86			34,717		1.10			2.06			32
	2008	(j)		9.80		(8.98	)(l)		26,073		1.12	(k)(o)		2.44	(k)(o)		17	(l)
DIVIDEND GROWTH CLASS X SHARES
	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			17.01		4.22			368,737		0.58			1.27			48
	2008	(j)		15.00		(11.43	)(l)		288,082		0.61	(k)(o)		1.47	(k)(o)		38	(l)
CLASS Y SHARES
	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			16.98		3.9			116,271		0.83			1.02			48
	2008	(j)		14.97		(11.51	)(l)		92,221		0.86	(k)(o)		1.22	(k)(o)		38	(l)
GLOBAL DIVIDEND GROWTH CLASS X SHARES
	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			16.87		7.02			136,494		0.82			1.72			38
	2008	(j)		11.12		(15.14	)(l)		102,082		0.84	(k)(o)		3.55	(k)(o)		18	(l)

195

Morgan Stanley Variable Investment Series

Financial Highlights continued


YEAR ENDED DECEMBER 31,			NET ASSET VALUE BEGINNING OF PERIOD		NET INVESTMENT INCOME (LOSS)(a)			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
	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			17.66		0.26			1.00			1.26			(0.32	)		(1.90	)		(2.22	)
	2008	(j)		16.70		0.25			(2.79	)		(2.54	)		(0.35	)		(2.79	)		(3.14	)
EUROPEAN EQUITY CLASS X SHARES
	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			25.34		0.47			3.48			3.95			(0.46	)		0.00			(0.46	)
	2008	(j)		28.83		0.56			(4.46	)		(3.90	)		(0.61	)		(4.22	)		(4.83	)
CLASS Y SHARES
	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			25.19		0.40			3.46			3.86			(0.40	)		0.00			(0.40	)
	2008	(j)		28.65		0.52			(4.42	)		(3.90	)		(0.52	)		(4.22	)		(4.74	)
CAPITAL OPPORTUNITIES CLASS X SHARES
	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			29.63		0.21			5.57			5.78			(0.18	)		—			(0.18	)
	2008	(j)		35.23		(0.02	)		(2.18	)		(2.20	)		(0.07	)		—			(0.07	)
CLASS Y SHARES
	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			29.43		0.13			5.54			5.67			(0.04	)		—			(0.04	)
	2008	(j)		35.06		(0.06	)		(2.17	)		(2.23	)		(0.05	)		—			(0.05	)

See Notes to Financial Statements
196

										RATIOS TO AVERAGE NET ASSETS(c)
YEAR ENDED DECEMBER 31,			NET ASSET VALUE END OF PERIOD		TOTAL RETURN(b)			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME (LOSS)			PORTFOLIO TURNOVER RATE
GLOBAL DIVIDEND GROWTH CLASS Y SHARES
	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			16.70		6.77			65,364		1.07			1.47			38
	2008	(j)		11.02		(15.24	)(l)		49,019		1.09	(k)(o)		3.30	(k)(o)		18	(l)
EUROPEAN EQUITY CLASS X SHARES
	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	(i)		1.60	(i)		61
	2006			25.34		30.21			142,000		1.00	(i)		1.59	(i)		62
	2007			28.83		15.59			127,071		1.00	(i)		1.73	(i)		41
	2008	(j)		20.10		(13.54	)(l)		98,596		1.00	(i)(k)(o)		4.27	(i)(k)(o)		7	(l)
CLASS Y SHARES
	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	(i)		1.35	(i)		61
	2006			25.19		29.88			45,637		1.25	(i)		1.34	(i)		62
	2007			28.65		15.34			40,721		1.25	(i)		1.48	(i)		41
	2008	(j)		20.01		(13.62	)(l)		30,527		1.25	(i)(k)(o)		4.02	(i)(k)(o)		7	(l)
CAPITAL OPPORTUNITIES CLASS X SHARES
	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			35.23		19.54			331,243		0.54			0.66			55
	2008	(j)		32.96		(6.23	)(l)		278,347		0.53	(k)(n)		(0.13	)(k)(n)		16	(l)
CLASS Y SHARES
	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			35.06		19.24			107,710		0.79			0.41			55
	2008	(j)		32.78		(6.35	)(l)		88,740		0.78	(k)(n)		(0.38	)(k)(n)		16	(l)

197

Morgan Stanley Variable Investment Series

Financial Highlights continued


YEAR ENDED DECEMBER 31,			NET ASSET VALUE BEGINNING OF PERIOD		NET INVESTMENT INCOME (LOSS)(a)			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
	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			13.02		0.23			0.45			0.68			(0.24	)		—		(0.24	)
	2008	(j)		13.46		0.11			(1.72	)		(1.61	)		(0.28	)		—		(0.28	)
CLASS Y SHARES
	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			12.92		0.20			0.46			0.66			(0.21	)		—		(0.21	)
	2008	(j)		13.36		0.10			(1.71	)		(1.61	)		(0.24	)		—		(0.24	)
GLOBAL ADVANTAGE CLASS X SHARES
	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			10.24		0.07			1.67			1.74			(0.10	)		—		(0.10	)
	2008	(j)		11.88		0.05			(2.10	)		(2.05	)		(0.11	)		—		(0.11	)
CLASS Y SHARES
	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			10.19		0.05			1.65			1.70			(0.08	)		—		(0.08	)
	2008	(j)		11.81		0.03			(2.08	)		(2.05	)		(0.07	)		—		(0.07	)
AGGRESSIVE EQUITY CLASS X SHARES
	2003			7.87		0.01			2.04			2.05			0.00	(e)		—		—
	2004			9.92		(0.02	)		1.28			1.26			0.00	(f)		—		—
	2005			11.18		(0.03	)		2.62			2.59			—			—		—
	2006			13.77		(0.04	)		1.12			1.08			—			—		—
	2007			14.85		0.06			2.86			2.92			—			—		—
	2008	(j)		17.77		(0.04	)		(1.12	)		(1.16	)		(0.03	)		—		(0.03	)

See Notes to Financial Statements
198

										RATIOS TO AVERAGE NET ASSETS(c)
YEAR ENDED DECEMBER 31,			NET ASSET VALUE END OF PERIOD		TOTAL RETURN(b)			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME (LOSS)			PORTFOLIO TURNOVER RATE
S&P 500 INDEX CLASS X SHARES
	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			13.46		5.23			66,275		0.27			1.71			3
	2008	(j)		11.57		(11.95	)(l)		51,970		0.29	(k)(n)		1.83	(k)(n)		8	(l)
CLASS Y SHARES
	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			13.36		5.00			152,984		0.52			1.46			3
	2008	(j)		11.51		(12.05	)(l)		121,152		0.54	(k)(n)		1.58	(k)(n)		8	(l)
GLOBAL ADVANTAGE CLASS X SHARES
	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			11.88		17.09			14,734		0.87			0.66			18
	2008	(j)		9.72		(17.28	)(l)		10,642		0.93	(k)(o)		0.85	(k)(o)		16	(l)
CLASS Y SHARES
	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			11.81		16.68			10,236		1.12			0.41			18
	2008	(j)		9.69		(17.43	)(l)		7,366		1.18	(k)(o)		0.60	(k)(o)		16	(l)
AGGRESSIVE EQUITY CLASS X SHARES
	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			17.77		19.66			26,035		0.87			0.34			56
	2008	(j)		16.58		(6.52	)(l)		21,034		0.86	(k)(o)		(0.49	)(k)(o)		16	(l)

199

Morgan Stanley Variable Investment Series

Financial Highlights continued


YEAR ENDED DECEMBER 31,			NET ASSET VALUE BEGINNING OF PERIOD		NET INVESTMENT INCOME (LOSS)(a)			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
	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			14.65		0.02			2.82			2.84			—			—			—
	2008	(j)		17.49		(0.06	)		(1.10	)		(1.16	)		—			—			—
STRATEGIST CLASS X SHARES
	2003			12.36		0.18			3.03			3.21		$	(0.23	)		—		$	(0.23	)
	2004			15.34		0.28			1.30			1.58			(0.32	)(g)		—			(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			16.53		0.46			0.92			1.38			(0.46	)		(1.90	)		(2.36	)
	2008	(j)		15.55		0.18			(1.30	)		(1.12	)		(0.10	)		(1.39	)		(1.49	)
CLASS Y SHARES
	2003			12.35		0.14			3.03			3.17			(0.20	)		—			(0.20	)
	2004			15.32		0.24			1.30			1.54			(0.28	)(g)		—			(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			16.51		0.42			0.92			1.34			(0.42	)		(1.90	)		(2.32	)
	2008	(j)		15.53		0.16			(1.30	)		(1.14	)		(0.09	)		(1.39	)		(1.48	)

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

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

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

(d) Includes capital gain distribution of less than $0.001.

(e) Distribution of investment income of less than $0.001.

(f) Distribution of investment income of $0.001.

(g) Includes distributions from paid-in-capital of $0.002.

(h) The Adviser fully reimbursed the portfolio for losses incurred resulting from the disposal of investments. Without this reimbursement, the total returns were 4.79% and 4.52% for Class X and Y, respectively. See Note 4.

(i) If the Portfolio had borne all of its expenses that were reimbursed or waived by the Investment Advisor and Administrator, the annualized expense and net investment income ratios would have been as follows:

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT INCOME INCOME RATIO
June 1 through December 31, 2005
Class X		1.06	%		1.56	%
Class Y		1.31			1.31

See Notes to Financial Statements
200

										RATIOS TO AVERAGE NET ASSETS(c)
YEAR ENDED DECEMBER 31,			NET ASSET VALUE END OF PERIOD		TOTAL RETURN(b)			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME (LOSS)			PORTFOLIO TURNOVER RATE
AGGRESSIVE EQUITY CLASS Y SHARES
	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			17.49		19.39			29,837		1.12			0.09			56
	2008	(j)		16.33		(6.63	)(l)		24,712		1.11	(k)(o)		(0.74	)(k)(o)		16	(l)
STRATEGIST CLASS X SHARES
	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			15.55		8.63			217,265		0.54			2.84			34
	2008	(j)		12.94		(7.20	)(l)		181,556		0.54	(k)(m)		2.38	(k)(m)		22	(l)
CLASS Y SHARES
	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			15.53		8.37			88,651		0.79			2.59			34
	2008	(j)		12.91		(7.33	)(l)		73,864		0.79	(k)(m)		2.13	(k)(m)		22	(l)

(i) Continued

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT INCOME INCOME RATIO
December 31, 2006
Class X		1.07	%		1.52	%
Class Y		1.32			1.27
December 31, 2007
Class X		1.04			1.69
Class Y		1.29			1.44
June 30, 2008
Class X		1.06			4.21
Class Y		1.31			3.96

(j) For the six months ended June 30, 2008 (unaudited).

(k) Annualized.

(l) Not annualized.

(m) Reflects rebate 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 rebate, the expenses as a percentage of it net assets had an effect of 0.02%.

(n) Reflects rebate 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 rebate, the expenses as a percentage of it net assets had an effect of 0.01%.

(o) Reflects rebate 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 rebate, the expenses as a percentage of it net assets had an effect of less than 0.005%.

201

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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

Kevin Klingert 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 20 Bank Street, Canary Wharf London, England E14 4AD

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 FINRA.

VARINSNN
IU08-04405P-Y06/08

#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.

(a) Refer to Item 1.

(b) Not applicable.

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 15, 2008

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 15, 2008

/s/ Francis Smith
Francis Smith
Principal Financial Officer
August 15, 2008