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)
Arthur Lev 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, 2011
Date of reporting period:		June 30, 2011

Item 1 - Report to Shareholders

MORGAN STANLEY
VARIABLE INVESTMENT SERIES

Semi-Annual Report

JUNE 30, 2011

The Portfolios are intended to be the funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Morgan Stanley Variable Investment Series

Table of Contents

Letter to the Shareholders	1
Fund Performance	14
Expense Example	16
Investment Advisory Agreement Approval	20
Portfolios of Investments:
Money Market	24
Limited Duration	26
Income Plus	34
Global Infrastructure	44
European Equity	47
Multi Cap Growth	51
Aggressive Equity	54
Strategist	57
Financial Statements:
Statements of Assets and Liabilities	70
Statements of Operations	72
Statements of Changes in Net Assets	74
Notes to Financial Statements	82
Financial Highlights	108

Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)

Dear Shareholder,

The financial markets benefited from a relatively positive outlook on the global economy in the early months of 2011, but gains diminished as the period progressed. Political turmoil in the Middle East and North Africa and the subsequent spike in oil prices, Japan's natural disaster and its repercussions on global supply chains, troubling U.S. economic data and uncertainties about the anticipated conclusion of the second round of quantitative easing (QE2) in June, and a renewed focus about the European sovereign debt crisis were among the issues weighing on the markets in the second quarter of 2011. Overall for the six-month period, riskier assets outperformed, with U.S. and international equities generally outpacing fixed income securities.

Domestic Equity Overview

The U.S. equity market rose in the six-month period ended June 30, 2011. The market as represented by the S&P 500 Index, posted a stronger gain in the first quarter, when investors were more confident about the economy's path. However, heading into the second quarter, markets were disrupted by the news of political unrest in the Middle East and North Africa, and the earthquake and tsunami in Japan. The pace of U.S. economic growth began to look less certain, with weakening jobs reports, declining consumer spending and retail sales, and reduced activity in the manufacturing sector. Spiking oil prices also weighed on the market, but prices have eased since April's high.

Fixed Income Overview

Despite slowing U.S. economic growth and intensifying European debt concerns, U.S. fixed income securities, as represented by the Barclays U.S. Aggregate Index rose modestly during the period. Early in the period, opinions were divided on whether interest rates would rise or fall once the Treasury market's main buyer, the Federal Reserve, concluded its asset purchase program (QE2) in June. Corporate bonds fared well against a backdrop of global economic growth, low interest rates, and healthy corporate balance sheets. However, in the second quarter, a loss of momentum in the global economy and the worsening debt crisis in Europe slowed the corporate sector's gains and prompted a Treasury rally. The ultra-low interest rate environment continued to weigh on the money markets during the period. With economic growth stalling, investors expect the Fed to maintain its near-zero interest rate policy for a prolonged period, which would keep yields on the short end of the curve anchored. (Note: after the close of the reporting period, the Federal Open Market Committee's August 9, 2011 statement noted that the committee anticipates economic conditions would warrant maintaining the federal funds rate at nearly zero through mid-2013.) The money markets were also disrupted by concerns about U.S. money funds' exposure to European banks' commercial paper.

Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)continued

International Equity Overview

Among international equity markets, Europe led, with the emerging markets trading nearly flat and Japan's market falling during the period (as measured by the MSCI regional indexes). In Europe, the debt crisis seemed to enter a new phase with Greece needing a second bailout and fears that spreading to Italy and Spain, the eurozone's third and fourth largest economies, respectively would be next. Yet, the "core" economies of Germany and France (which together comprise half of eurozone Gross Domestic Product) continued to look strong. European companies' exposure to the faster growth in the emerging markets has served them well, corporate profit margins have remained high, and balance sheets have been strong. Japan's equity market was volatile during the period. The market retreated following the earthquake and tsunami on March 11 and subsequent nuclear crisis but was able to regain some of its losses before the end of the reporting period. A rally in mid-June was driven by more optimistic corporate and economic news. Meanwhile, rising inflation and higher interest rates across the emerging markets, combined with concerns about reduced global liquidity, weighed on emerging market equities during the reporting period.

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, 2011, Variable Investment Series — Money Market Portfolio had net assets of approximately $117 million with an average portfolio maturity of 11 days. For the seven-day period ended June 30, 2011, the Portfolio's Class X shares provided an effective annualized yield of 0.01% (subsidized) and – 0.43% (non-subsidized) and a current yield of 0.01% (subsidized) and – 0.43% (non-subsidized), while its 30-day moving average yield for June was 0.01% (subsidized) and – 0.37% (non-subsidized). Yield quotations more closely reflect the current earnings of the Portfolio. The non-subsidized yield reflects what the yield would have been had a fee and/or expense waiver not been in place during the period shown. For the six-month period ended June 30, 2011, the Portfolio's Class X shares returned 0.00%. Past performance is no guarantee of future results.

For the seven-day period ended June 30, 2011, the Portfolio's Class Y shares provided an effective annualized yield of 0.01% (subsidized) and – 0.69% (non-subsidized) and a current yield of 0.01% (subsidized) and – 0.69% (non-subsidized), while its 30-day moving average yield for June was 0.01% (subsidized) and – 0.62% (non-subsidized). Yield quotations more closely reflect the current earnings of the Portfolio. The non-subsidized yield reflects what the yield would have been had a fee and/or expense waiver not been in place during the period shown. For the six-month period ended June 30, 2011, the Portfolio's Class Y shares returned 0.00%. Past performance is no guarantee of future results.

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Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)continued

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.

We have focused our investment in the front-end of the curve. We remain quite comfortable in our conservative approach to managing our money market funds. Our investment process and focus on credit research and risk management, combined with the high degree of liquidity and short maturity position of the Portfolio, has put us in a unique position to respond to market uncertainty. Our investment philosophy continues to revolve around prudent credit and risk management and portfolios of securities that are positioned defensively and with very high levels of liquidity.

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, 2011, Variable Investment Series — Limited Duration Portfolio Class X shares produced a total return of 1.95%, outperforming the Barclays Capital U.S. Government/Credit Index (1-5 Year) (the "Index"),¹ which returned 1.77%, and underperforming the Barclays Capital U.S. Credit Index (1-5 Year),² which returned 2.55%. For the same period, the Portfolio's Class Y shares returned 1.78%. 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 benefited from an overweight to the investment-grade credit segment. Shorter maturity investment-grade credit spreads relative to Treasuries tightened by about 10 basis points over the period. The Portfolio's allocation to asset-backed securities, which are not represented in the Index, also helped performance as spreads in the sector narrowed in the first half of 2011.

1  The Barclays Capital U.S. Government/Credit Index (1-5 Year) tracks the performance of U.S. government and corporate obligations, including U.S. government agency and Treasury securities, and corporate and Yankee bonds 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. The benchmark for the Portfolio changed from the Barclays Capital U.S. Credit Index (1-5 Year) to the Barclays Capital U.S. Government/Credit Index (1-5 Year) effective 01/01/11.

2  The Barclays Capital 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.

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Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)continued

However, the Portfolio's interest-rate positions dampened relative performance. The Portfolio was positioned to benefit from a widening of swap spreads, which detracted slightly from returns as the spread instead tightened. The Portfolio also had a shorter duration than that of the Index, which slightly hurt 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.

Income Plus Portfolio

For the six-month period ended June 30, 2011, Variable Investment Series — Income Plus Portfolio Class X shares produced a total return of 3.59%, outperforming the Barclays Capital U.S. Corporate Index (the "Index"),³ which returned 3.16%. For the same period, the Portfolio's Class Y shares returned 3.48%. 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 first half of 2011 truly represented a tale of two markets. The first quarter provided a positive backdrop for risky assets and the Portfolio outperformed the Index. However, the Portfolio retreated during the second quarter of the year, as spread products broadly underperformed Treasuries. For the six-month period overall, the Portfolio outpaced the Index largely due to an overweight to investment grade corporates and selected holdings in lower-rated high yield credits. The Portfolio's yield curve positioning also contributed positively to performance during the reporting period.

The Portfolio began the year overweight investment grade corporate bonds, and with exposure to high yield corporates and convertible bonds as well. These positions were initiated to try to benefit from a continuing global economic recovery and rally in risky assets. During the first quarter, with economic growth exceeding consensus expectations and volatility declining, these overweight positions, particularly in investment grade corporate bonds, contributed positively to performance. Most of the outperformance came from the financial sector (banking, insurance, finance and real estate investment trusts), which collectively represented the Portfolio's largest overweight relative to the Index. Our preference for owning these positions was predicated on the belief that these companies would continue to increase capital while working to reduce balance sheet risks.

3  The Barclays Capital 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.

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Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)continued

The second quarter of 2011 turned out to be quite different from the first three months of the year. After a relatively good month for spread products in April, risky assets underperformed Treasuries in May and June on concerns over a slowing U.S. economy and a resurgence of European sovereign debt issues. The Portfolio's overweight to investment grade credit as well as our exposure to high yield and convertible bonds dampened performance in this quarter. Volatility and spread widening were especially notable in the banking sector, the Portfolio's largest overweight. While volatility is likely to persist, we continue to see value in the sector and remain comfortable with our exposures to many systemically important banks from around the globe. In the final months of the period, the Portfolio did benefit from underweights to select non-financial sectors, such as railroads and health care, although gains made by these positions did not offset underperformance from elsewhere within 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.

Global Infrastructure Portfolio

For the six-month period ended June 30, 2011, Variable Investment Series — Global Infrastructure Portfolio Class X shares produced a total return of 12.08%, outperforming the Dow Jones Brookfield Global Infrastructure Index (the "Index"),⁴ which returned 11.84%, and the S&P Global BMI Index,⁵ which returned 4.96%. For the same period, the Portfolio's Class Y shares returned 11.95%. 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.

Infrastructure shares appreciated 11.84% during the first half of 2011, as measured by the Index. Among the major infrastructure sectors, the European regulated utilities, pipeline, and gas midstream sectors exhibited relative outperformance, while the communications, gas distribution utilities, and transmission and distribution sectors underperformed the Index.

4  The Dow Jones Brookfield Global Infrastructure Index^SM is a float-adjusted market capitalization weighted index that measures the stock performance of companies that exhibit strong infrastructure characteristics. The Index intends to measure all sectors of the infrastructure market. 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.

5  The Standard & Poor's Global BMI Index (S&P Global BMI Index) is a broad market index designed to capture exposure to equities in all countries in the world that meet minimum size and liquidity requirements. As of the date of this Report, there are approximately 10,000 index members representing 26 developed and 19 emerging market countries. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

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Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)continued

The first six months of 2011 were characterized by considerable macroeconomic uncertainty, equity market volatility, and investor tendency towards risk aversion. In the U.S., despite some encouraging economic signs in the first quarter and the beginning of the second quarter, investors became increasingly concerned over the sustainability of economic growth without a further accommodative monetary policy by the Federal Reserve. Furthermore, persistent weakness in the labor markets added to the unease. In Europe, concern over the weak fiscal condition of certain European Union member states — with a primary focus on Greece — continued to unsettle the markets. In Asia, investors focused on events in Japan and China, as they attempted to assess the longer-term impact of the Eastern Japan Great Earthquake and the Chinese central government's ability to control inflation while avoiding a significant slowdown in the Chinese economy.

Despite these macroeconomic challenges, the fundamentals and share price performance of infrastructure companies over the first six months of 2011 turned out to be quite resilient. This is most acutely observed in the European regulated utilities sector, where concerns over regulatory risk and the potential negative impact of higher debt interest costs resulting from the sovereign debt crisis have been largely overdone (at least to date). In fact, longer-term capital plans for the majority of the European regulated utilities have remained quite stable throughout the European debt crisis.

Aside from European regulated utilities, another bright spot within infrastructure for the first half of 2011 was energy infrastructure, where fundamentals in the U.S. and Canada continue to be quite strong and show little sign of letting up. During the first six months of 2011, a number of pipeline and gas midstream companies announced new projects or expansions of existing infrastructure to facilitate the gathering, processing, and transportation of natural gas and natural gas liquids, primarily in shale formations in the U.S. and western Canada. In particular, natural gas liquids take-away capacity remains insufficient in some markets, and companies have been aggressive in bidding for opportunities to meet this need.

Among the sectors that underperformed for the first six months of 2011, we attribute underperformance in the communications sector to the perceived negative impact of a proposed merger of two large wireless carriers on wireless tower company cash flows. Within gas distribution utilities, we attribute underperformance primarily to negative sentiment and perceived regulatory risk relating to the Hong Kong-listed Chinese gas distribution utilities.

The Portfolio's outperformance for the first half of 2011 was primarily driven by bottom-up stock selection, with neutral or favorable stock selection in all the infrastructure sectors except for gas distribution utilities and European regulated utilities. This positive bottom-up stock selection was only partially offset by

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Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)continued

negative top-down positioning, where our overweight to the communications sector and underweight to European regulated utilities detracted from performance.

In terms of portfolio positioning, we began the first part of 2011 with a large overweight in the toll road sector, more modest overweights in the diversified and gas midstream sectors, and a significant underweight to the gas distribution utilities sector. As many of our investments in the toll road, diversified, and gas midstream sectors have played out in the first six months of the year, we have reduced positions in these sectors accordingly. Moreover, as companies in the gas distribution utilities sector have exhibited underperformance over the first six months of 2011 — with much of the underperformance coming from Hong Kong-listed Chinese gas distribution companies — we have increased the Portfolio's weight to this sector considerably. Overall, our research currently leads us to an overweighting in the Portfolio (amongst the largest sectors) to a group of companies in the gas distribution, communications, and pipeline companies sectors, and an underweighting to companies in the European regulated utilities, gas midstream, and transmission and distribution sectors. The Portfolio's underweight positions primarily reflect caution on near-term valuation.

We remain committed to our core investment philosophy as an infrastructure value investor. As value-oriented, bottom-up driven investors, our investment perspective is that over the medium and long terms, the key factor in determining the performance of infrastructure securities will be underlying infrastructure asset values. Given the large and growing private infrastructure market, we believe that there are limits as to the level of premium or discount at which the public sector should trade relative to its underlying private infrastructure value. These limits can be viewed as the point at which the arbitrage opportunity between owning infrastructure in the private versus public markets becomes compelling. In aiming to achieve core infrastructure exposure in a cost effective manner, we invest in equity securities of publicly listed infrastructure companies we believe offer the best value relative to their underlying assets and growth prospects.

As we look to the second half of the year, we continue to be most positive on infrastructure companies in Asia, where valuations appear to be quite attractive. Stocks are trading at significant discounts to intrinsic value, and growth — despite some concerns over the possibility of a significant slowdown in the Chinese economy — continues to be robust. We also remain positive on energy infrastructure, particularly within the pipeline and gas midstream space in the United States and Canada, as the extraction of shale gas and crude oil continues at a very resilient pace.

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.

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Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)continued

European Equity Portfolio

For the six-month period ended June 30, 2011, Variable Investment Series — European Equity Portfolio Class X shares produced a total return of 8.32%, underperforming the MSCI Europe Index (the "Index"),⁶ which returned 9.05%. For the same period, the Portfolio's Class Y shares returned 8.20%. 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 main performance detractors on a sector basis for the six-month period were stock selections in the consumer discretionary, materials, and telecommunications sectors. In the consumer discretionary sector, a position in a German retailer underperformed after consumer demand, especially from Eastern Europe, grew by less than expected. The Portfolio's materials holdings featured several weak performers, including a U.K.-based mining company and a Luxembourg-based steel producer. We were not invested in a German chemicals company, which outperformed the Index and the overall sector and dampened relative returns. In the telecommunications sector, we sold the Portfolio's position in a lagging U.K. telecommunications services provider, which hurt overall performance. On a country basis, stock selections in France and Germany dampened relative returns.

However, stock selections in the industrials and financials sectors were more favorable to performance. Within the industrials sector, several capital goods holdings performed well during the period, bolstered by their strong exposure to emerging markets and the benefits of pricing power in a weak euro environment. Within financials, the Portfolio's holdings in bank stocks aided returns, as did the lack of exposure to some of the larger underperforming European banks. On a country basis, stock selections in Portugal and Finland were the most additive.

As with the global and U.S. economies, we expect European gross domestic product (GDP) to slow in the second half of 2011 and inflation should begin to ease with falling commodity prices. Sovereign debt risks remain in the peripheral European countries of Greece, Ireland and Portugal (which together account for 6.5% to 7% of eurozone GDP). While there are fears that the much larger economies of Spain and Italy

6  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.

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Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)continued

could be impacted by the crisis (Spain alone represents 12% of eurozone GDP), this is not our base case. The "core" European economies, namely Germany and France, still look strong, capable of sustaining positive GDP growth in our view. European companies have significant exposure to the growth in emerging markets, and a backdrop of peak corporate margins, healthy corporate balance sheets and cheap valuations may provide a positive backdrop for European equities. Our investment approach remains the same. We continue to seek high quality companies with high earnings visibility and predictability, stable and strong cash flow, and low levels of debt, that are trading at what we consider attractive valuations.

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.

Multi Cap Growth Portfolio

For the six-month period ended June 30, 2011, Variable Investment Series — Multi Cap Growth (formerly Capital Opportunities) Portfolio Class X shares produced a total return of 5.06%, underperforming the Russell 3000^® Growth Index (the "Index"),⁷ which returned 6.98%. For the same period, the Portfolio's Class Y shares returned 4.93%. 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 largest detractor from relative performance during the period was the financial services sector. Within the sector, holdings in diversified financial services and in securities brokerage and services performed poorly. Stock selection in producer durables was also unfavorable, primarily due to disappointing performance from a position in a commercial services stock not represented in the Index and from a global logistics stock. The energy sector was another area of weakness. Energy was one of the better performing sectors in the Index during the period and the Portfolio's lack of exposure to those gains dampened relative performance.

However, stock selection in technology helped to offset relative losses. Performance within the sector was primarily driven by several holdings in the computer services systems and software industry, and a position

7  The Russell 3000^® Growth Index measures the performance of the broad growth segment of the U.S. equity universe. It includes those Russell 3000^® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000^® Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

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Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)continued

in a telecommunications equipment company that is not represented in the Index. Stock selection in the health care sector also contributed positively, led by positions in two medical equipment stocks and a medical supply stock.

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.

Aggressive Equity Portfolio

For the six-month period ended June 30, 2011, Variable Investment Series — Aggressive Equity Portfolio Class X shares produced a total return of 4.70%, underperforming the Russell 3000^® Growth Index (the "Index"),⁸ which returned 6.98%. For the same period, the Portfolio's Class Y shares returned 4.54%. 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 largest detractor from relative performance during the period was the financial services sector. Within the sector, holdings in diversified financial services and in securities brokerage and services performed poorly. Stock selection in producer durables was also unfavorable, primarily due to disappointing performance from a position in a commercial services stock not represented in the Index and from a global logistics stock. The energy sector was another area of weakness. Energy was one of the better performing sectors in the Index during the period, and the Portfolio's lack of exposure to those gains dampened relative performance.

However, stock selection in technology helped to offset relative losses. Performance within the sector was primarily driven by several holdings in the computer services systems and software industry, and a position in a telecommunications equipment company that is not represented in the Index. Stock selection in the health care sector also contributed positively, led by positions in two medical equipment stocks and a medical supply stock.

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.

8  The Russell 3000^® Growth Index measures the performance of the broad growth segment of the U.S. equity universe. It includes those Russell 3000^® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000^® Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

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Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)continued

Strategist Portfolio

For the six-month period ended June 30, 2011, Variable Investment Series — Strategist Portfolio Class X shares produced a total return of 1.07%, underperforming both the S&P 500^® Index (the "Index"),⁹ which returned 6.03%, and the Barclays Capital U.S. Government/Credit Index,¹⁰ which returned 2.61%. For the same period, the Portfolio's Class Y shares returned 1.00%. 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.

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

The Portfolio entered 2011 with an overweight exposure to equities at 75% of total assets (versus an average balanced fund's 55% weight) and an underweight exposure to fixed income (20% versus an average balanced fund's 35% weight) and cash (5% versus an average balanced fund's 10% exposure)¹¹.

As 2010 ended, macroeconomic indicators generally pointed to a continuation of the global economic recovery that began in early 2009. Stubbornly high unemployment levels and European sovereign debt uncertainty loomed, but both appeared on the mend as global industrial activity and trade boomed. Unanticipated events, however, shifted expectations quite abruptly, as a severe winter, rapidly rising gasoline prices, escalating Middle East tensions, and the Japanese earthquake and tsunami combined to dampen sentiment around the globe.

9  The Standard & Poor's 500^® Index (S&P 500^®) measures the performance of the large cap segment of the U.S. equities market, covering approximately 75% of the U.S. equities market. The Index includes 500 leading companies in leading industries of the U.S. economy. 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.

10  The Barclays Capital 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.

¹¹  Source for average balanced fund asset allocation weights: Pensions & Investments.

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Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)continued

During the first quarter of the year, we reduced our exposure to equities within the Portfolio to take into account these unanticipated risks, as well as the slower-than-expected progress in job creation and European debt reduction. We further repositioned sectors to reflect these views, but also to focus the Portfolio in sectors where our conviction levels were higher (financials, basic materials and telecommunications).

As the second quarter came to a close, our Portfolio held 59% of its assets in equities, 22% in fixed income, and 19% in cash equivalents. Within equities, our sector exposures featured overweight positions (versus the Index) in financials, basic materials, telecommunications and consumer discretionary securities.

Within the fixed income component of the Portfolio, our largest exposure (corporate credits, 43% of total) remained unchanged throughout the first half of 2011. We increased both our government bond and asset-backed securities holdings slightly (to 38% and 3%, respectively) while reducing our agency (15%) and cash (1%) exposures at the margin. We continued to avoid mortgage debt.

During the reporting period, instruments defined as derivatives were used only to position the fixed income portfolio to desired weights as reflected in the asset allocation mandate.

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

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

Very truly yours,

Arthur Lev
President and Principal Executive Officer

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Morgan Stanley Variable Investment Series

Letter to the Shareholders nJune 30, 2011 (unaudited)continued

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 and monthly holdings for each money market fund on Form N-MFP. Morgan Stanley does not deliver these reports to shareholders, nor are the first and third fiscal quarter reports posted to the Morgan Stanley public web site. However, the holdings for each money market fund are posted to the Morgan Stanley public web site. You may obtain the Form N-Q filings (as well as the Form N-CSR, N-CSRS and N-MFP 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 20549-1520.

Proxy Voting Policy and Procedures and Proxy Voting Record

You may obtain a copy of the Portfolio's 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 SEC'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 SEC's web site at http://www.sec.gov.

13

Morgan Stanley Variable Investment Series

Fund Performance nJune 30, 2011 (unaudited)

Average Annual Total Returns—Period Ended June 30, 2011(1)
Class X	1 Year			5 Years			10 Years			Since Inception			Date of Inception
Aggressive Equity		43.63	%		7.58	%		6.13	%		6.09	%	5/4/1999
European Equity		40.20			2.78			4.34			9.29		3/1/1991
Global Infrastructure		36.41			5.71			3.70			7.73		3/1/1990
Income Plus		8.31			7.37			6.40			7.36		3/1/1987
Limited Duration		3.02			-0.11			1.44			1.99		5/4/1999
Money Market		0.01			1.95			1.90			4.43		3/9/1984
Multi Cap Growth		45.11			8.74			5.54			11.41		3/9/1984
Strategist		12.82			3.08			4.86			8.04		3/1/1987

Performance data quoted represents past performance, which is no guarantee of future results and current performance may be lower or higher than the figures shown. For most recent month-end performance figures, please contact the issuing insurance company or speak with your Financial Advisor. Investment return and principal value will fluctuate. When you sell Portfolio shares, they may be worth less than their original cost. Total returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio 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. If performance information included the effect of these additional charges, the total returns would be lower.

14

Morgan Stanley Variable Investment Series

Fund Performance nJune 30, 2011 (unaudited)

Average Annual Total Returns—Period Ended June 30, 2011(1)
Class Y	1 Year			5 Years			10 Years			Since Inception			Date of Inception
Aggressive Equity		43.21	%		7.31	%		5.87	%		2.80	%	6/5/2000
European Equity		39.89			2.53			4.09			1.52		6/5/2000
Global Infrastructure		35.96			5.44			3.43			2.22		6/5/2000
Income Plus		8.11			7.12			6.14			6.64		6/5/2000
Limited Duration		2.71			-0.35			1.20			1.64		6/5/2000
Money Market		0.01			1.82			1.71			2.06		6/5/2000
Multi Cap Growth		44.75			8.47			5.27			2.42		6/5/2000
Strategist		12.52			2.82			4.60			3.48		6/5/2000

Performance data quoted represents past performance, which is no guarantee of future results and current performance may be lower or higher than the figures shown. For most recent month-end performance figures, please contact the issuing insurance company or speak with your Financial Advisor. Investment return and principal value will fluctuate. When you sell Portfolio shares, they may be worth less than their original cost. Total returns do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio 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. If performance information included the effect of these additional charges, the total returns would be lower.

15

Morgan Stanley Variable Investment Series

Expense Example nJune 30, 2011 (unaudited)

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 01/01/11 – 06/30/11.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the second line of the table is useful in comparing ongoing costs, and will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

16

Morgan Stanley Variable Investment Series

Expense Example nJune 30, 2011 (unaudited)continued

Money Market

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/11		06/30/11		01/01/11 – 06/30/11
Class X
Actual (0.00% return)	$	1,000.00	$	1,000.00	$	1.49
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,023.31	$	1.51
Class Y
Actual (0.00% return)	$	1,000.00	$	1,000.00	$	1.49
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,023.31	$	1.51

  @  Expenses are equal to the Portfolio's annualized expense ratios of 0.30% and 0.30% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). If the Portfolio had borne all of its expenses, the annualized expense ratios would have been 0.60% and 0.85% for Class X and Class Y shares, respectively.

Limited Duration

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/11		06/30/11		01/01/11 – 06/30/11
Class X
Actual (1.95% return)	$	1,000.00	$	1,019.50	$	2.80
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.02	$	2.81
Class Y
Actual (1.78% return)	$	1,000.00	$	1,017.80	$	4.05
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.78	$	4.06

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

Income Plus

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/11		06/30/11		01/01/11 – 06/30/11
Class X
Actual (3.59% return)	$	1,000.00	$	1,035.90	$	2.93
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,021.92	$	2.91
Class Y
Actual (3.48% return)	$	1,000.00	$	1,034.80	$	4.19
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.68	$	4.16

  @  Expenses are equal to the Portfolio's annualized expense ratios of 0.58% and 0.83% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

17

Morgan Stanley Variable Investment Series

Expense Example nJune 30, 2011 (unaudited)continued

Global Infrastructure

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/11		06/30/11		01/01/11 – 06/30/11
Class X
Actual (12.08% return)	$	1,000.00	$	1,120.80	$	4.42
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.63	$	4.21
Class Y
Actual (11.95% return)	$	1,000.00	$	1,119.50	$	5.73
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.39	$	5.46

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

European Equity

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/11		06/30/11		01/01/11 – 06/30/11
Class X
Actual (8.32% return)	$	1,000.00	$	1,083.20	$	5.17
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.84	$	5.01
Class Y
Actual (8.20% return)	$	1,000.00	$	1,082.00	$	6.45
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,018.60	$	6.26

  @  Expenses are equal to the Portfolio's annualized expense ratios of 1.00% and 1.25% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). If the Portfolio had borne all of its expenses, the annualized expense ratios would have been 1.15% and 1.40% for Class X and Class Y shares, respectively.

Multi Cap Growth

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/11		06/30/11		01/01/11 – 06/30/11
Class X
Actual (5.06% return)	$	1,000.00	$	1,050.60	$	2.85
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.02	$	2.81
Class Y
Actual (4.93% return)	$	1,000.00	$	1,049.30	$	4.12
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.78	$	4.06

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

18

Morgan Stanley Variable Investment Series

Expense Example nJune 30, 2011 (unaudited)continued

Aggressive Equity

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/11		06/30/11		01/01/11 – 06/30/11
Class X
Actual (4.70% return)	$	1,000.00	$	1,047.00	$	5.23
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.69	$	5.16
Class Y
Actual (4.54% return)	$	1,000.00	$	1,045.40	$	6.49
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,018.45	$	6.41

  @  Expenses are equal to the Portfolio's annualized expense ratios of 1.03% and 1.28% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Strategist

	Beginning Account Value		Ending Account Value		Expenses Paid During Period@
	01/01/11		06/30/11		01/01/11 – 06/30/11
Class X
Actual (1.07% return)	$	1,000.00	$	1,010.70	$	2.89
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,021.92	$	2.91
Class Y
Actual (1.00% return)	$	1,000.00	$	1,010.00	$	4.14
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.68	$	4.16

  @  Expenses are equal to the Portfolio's annualized expense ratios of 0.58% and 0.83% for Class X and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). If the Portfolio had borne all of its expenses, the annualized expense ratios would have been 0.59% and 0.84% for Class X and Class Y shares, respectively.

19

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval nJune 30, 2011 (unaudited)

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 (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Advisers (as defined herein), to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator (as defined herein) 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, Sub-Advisers and Administrator together are referred to as the "Adviser" and the advisory, sub-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 administrative and advisory 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 the Portfolios and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Portfolios

The Board reviewed the performance, fees and expenses of the Portfolios compared to their peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Portfolios. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2010, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, they discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel.

Performance

The Board noted that the performance of the Money Market and Limited Duration Portfolios was below the peer group averages for the one-, three- and five-year periods.

The Board noted that the performance of the Income Plus, Multi Cap Growth and Aggressive Equity Portfolios was better than the peer group averages for the one-, three- and five-year periods.

20

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval nJune 30, 2011 (unaudited)continued

The Board noted that the performance of the Global Infrastructure, European Equity and Strategist Portfolios was better than the peer group averages for the five-year period but below the peer group averages for the one- and three-year periods.

Performance Conclusions

With respect to the Money Market, Limited Duration, Global Infrastructure and Strategist Portfolios, after discussion, the Board concluded that performance was acceptable.

With respect to the Income Plus, Multi Cap Growth, Aggressive Equity and European Equity Portfolios, after discussion, the Board concluded that performance was competitive with the peer group averages.

Fees and Expenses

The Board members discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for the Portfolios relative to comparable funds and/or other accounts advised by the Adviser and/or compared to their peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Portfolios' total expense ratios.

The Board noted that the management fees and total expense ratios for the Money Market, Limited Duration, Income Plus, Multi Cap Growth, Global Infrastructure and Strategist Portfolios were lower than the peer group averages.

The Board noted for the Aggressive Equity Portfolio that the management fee was higher than its peer group average and the total expense ratio was higher but close to its peer group average.

The Board noted for the European Equity Portfolio that while the management fee was higher but close to its peer group average, the total expense ratio was lower than its peer group average.

Fee and Expense Conclusions

With respect to the Money Market, Limited Duration, Income Plus, Multi Cap Growth, Global Infrastructure, European Equity and Strategist Portfolios, after discussion, the Board concluded that the management fees and total expense ratios were competitive with the peer group averages.

With respect to the Aggressive Equity Portfolio, after discussion, the Board concluded that (i) the management fee, although higher than its peer group average, was acceptable given the quality and nature of services provided, and (ii) the total expense ratio was competitive with its peer group average.

21

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval nJune 30, 2011 (unaudited)continued

Economies of Scale

The Board considered the size and growth prospects of the Portfolios and how that relates to the Portfolios' total expense ratios and particularly the Portfolios' management fee rates (which, for all the Portfolios except Limited Duration, include one or more breakpoints). In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Portfolios and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of each Portfolio supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Portfolios 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. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other benefits to the Adviser and its affiliates derived from their relationship with the Portfolios and other funds advised by the Adviser. These benefits may include, among other things, "float" benefits derived from handling of checks for purchases and sales, research received by the Adviser generated from commission dollars spent on funds' portfolio trading and fees for distribution and/or shareholder servicing. The Board reviewed with the Adviser each of these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Portfolios and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Portfolios 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 the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Portfolios to continue their relationship with the Adviser.

22

Morgan Stanley Variable Investment Series

Investment Advisory Agreement Approval nJune 30, 2011 (unaudited)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 the Fund'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. In reaching this conclusion the Board did not give particular weight to any single factor referenced above. The Board considered these factors over the course of numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

23

Morgan Stanley Variable Investment Series - Money Market

Portfolio of Investments n June 30, 2011 (unaudited)

PRINCIPAL AMOUNT IN THOUSANDS			ANNUALIZED YIELD ON DATE OF PURCHASE				MATURITY DATE	VALUE
		Repurchase Agreements (58.9%)
$	18,880	BNP Paribas Securities Corp., (dated 06/30/11; proceeds $18,880,026; fully collateralized by U.S. Government Agencies; Federal Home Loan Mortgage Corporation 2.38% - 6.47% due 11/01/24 - 08/01/37; Federal National Mortgage Association 1.37% - 5.51% due 05/01/18 - 10/01/40; Government National Mortgage Association 1.75% - 5.00% due 08/20/23 - 01/20/40; valued at $19,446,400)		0.05	%		07/01/11	$	18,880,000
	25,000	Credit Agricole Securites USA, Inc., (dated 06/30/11; proceeds $25,000,007; fully collateralized by a U.S. Government Obligation; U.S. Treasury Note 0.75% due 03/31/13; valued at $25,500,053)		0.01			07/01/11		25,000,000
	10,000	ING Financial Markets LLC, (dated 06/30/11; proceeds $10,000,011; fully collateralized by U.S. Government Agencies; Federal Home Loan Mortgage Corporation 6.00% due 03/01/36 - 05/01/36; valued at $10,323,551)		0.04			07/01/11		10,000,000
	15,000	TD Securities USA, (dated 06/30/11; proceeds $15,000,002; fully collateralized by a U.S. Government Obligation; U.S. Treasury Note 1.50% due 06/30/16; valued at $15,300,021)		0.005			07/01/11		15,000,000
		Total Repurchase Agreements(Cost $68,880,000)							68,880,000
						DEMAND DATE(b)
		Floating Rate Notes (19.2%)
		International Banks
	6,000	Barclays Bank PLC		0.78	(a)	07/19/11	07/19/11		6,000,000
	5,000	Lloyds TSB Bank PLC		0.77	(a)	07/29/11	07/29/11		5,000,000
	3,000	Royal Bank of Canada		0.26	(a)	08/25/11	02/27/12		3,000,000
	5,000	Societe Generale		0.27	(a)	08/08/11	05/08/12		5,000,000
	3,500	UBS AG		0.24	(a)	07/14/11	12/14/11		3,500,000
		Total Floating Rate Notes(Cost $22,500,000)							22,500,000

See Notes to Financial Statements
24

Morgan Stanley Variable Investment Series - Money Market

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			ANNUALIZED YIELD ON DATE OF PURCHASE				MATURITY DATE			VALUE
		Commercial Paper (10.2%)
		International Banks
$	1,000	ABN Amro Funding USA LLC (c)		0.20	%		07/22/11			$	999,883
	5,000	BPCE SA (c)		0.25 - 0.43			07/08/11 - 09/12/11				4,998,312
	3,000	ING US Funding LLC		0.29			07/08/11				2,999,831
	3,000	Svenska Handelsbanken, Inc. (c)		0.29			07/15/11				2,999,662
		Total Commercial Paper(Cost $11,997,688)									11,997,688
		Certificates of Deposit (9.0%)
		International Banks
	3,000	Bank of Montreal		0.11			07/01/11				3,000,000
	2,500	Credit Agricole CIB		0.24			08/04/11				2,500,000
	3,000	Nordea Bank Finland PLC		0.07			07/05/11				3,000,000
	2,000	Svenska Handelsbanken AB		0.24			08/30/11				2,000,091
		Total Certificates of Deposit (Cost $10,500,091)									10,500,091
			COUPON RATE(a)			DEMAND DATE(b)
		Tax-Exempt Instrument Weekly Variable Rate Bond (2.6%)
	3,000	Miami-Dade County, Professional Sports Franchise Facilities Tax Ser 2009 E (Cost $3,000,000)		0.08	%	07/07/11	10/01/48				3,000,000
		Total Investments (Cost $116,877,779) (d)						99.9	%		116,877,779
		Other Assets in Excess of Liabilities						0.1			76,290
		Net Assets						100.0	%	$	116,954,069

  (a)  Rate shown is the rate in effect at June 30, 2011.

  (b)  Date of next interest rate reset.

  (c)  144A security — Certain conditions for public sale must exist. Unless otherwise noted, these securities are deemed to be liquid.

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

MATURITY SCHEDULE†

1 - 30 Days	86.7	%
31 - 60 Days	9.0
61 - 90 Days	4.3
	100.0	%

†  As a percentage of total investments.

See Notes to Financial Statements
25

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2011 (unaudited)

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Corporate Bonds (51.8%)
		Basic Materials (2.7%)
$	350	Anglo American Capital PLC (United Kingdom) (a)		9.375	%	04/08/14	$	418,692
	190	ArcelorMittal (Luxembourg)		9.00		02/15/15		226,961
	230	Barrick Gold Corp. (Canada) (a)		1.75		05/30/14		230,606
	350	Dow Chemical Co. (The)		5.90		02/15/15		393,484
	350	Potash Corp. of Saskatchewan, Inc. (Canada)		5.25		05/15/14		384,992
								1,654,735
		Communications (5.0%)
	375	AT&T, Inc.		2.50		08/15/15		380,249
	300	Comcast Corp.		6.50		01/15/15		343,499
	215	COX Communications, Inc.		4.625		06/01/13		228,400
	220	DirecTV Holdings LLC/DirecTV Financing Co., Inc.		4.75		10/01/14		240,999
	290	NBC Universal Media LLC (a)		2.10		04/01/14		294,042
	245	News America, Inc.		5.30		12/15/14		273,317
	375	Telecom Italia Capital SA (Italy)		5.25		11/15/13		393,883
	200	Time Warner Cable, Inc.		8.25		02/14/14		232,769
	350	Viacom, Inc.		4.375		09/15/14		376,188
	340	Vodafone Group PLC (United Kingdom)		5.00		12/16/13		370,169
								3,133,515
		Consumer, Cyclical (2.7%)
	305	Best Buy Co., Inc.		3.75		03/15/16		306,789
	180	CVS Caremark Corp.		5.75		08/15/11		181,040
	360	Daimler Finance North America LLC		7.30		01/15/12		372,580
	220	Home Depot, Inc.		5.40		03/01/16		246,086
	420	Marriott International, Inc.		4.625		06/15/12		432,986
	135	Wesfarmers Ltd. (Australia) (a)		2.983		05/18/16		135,552
								1,675,033
		Consumer, Non-Cyclical (4.7%)
	250	Altria Group, Inc.		4.125		09/11/15		265,176
	165	Anheuser-Busch InBev Worldwide, Inc.		4.125		01/15/15		177,598
	205	Anheuser-Busch InBev Worldwide, Inc.		5.375		11/15/14		229,109
	265	Bacardi Ltd.(Bermuda) (a)		7.45		04/01/14		305,442
	260	Bunge Ltd. Finance Corp.		5.35		04/15/14		280,489
	330	Delhaize Group SA (Belgium)		5.875		02/01/14		362,223
	300	Kraft Foods, Inc.		6.75		02/19/14		340,011
	225	Kroger Co. (The)		7.50		01/15/14		257,330
	370	McKesson Corp.		3.25		03/01/16		381,894
	320	Quest Diagnostics, Inc.		3.20		04/01/16		327,173
								2,926,445

See Notes to Financial Statements
26

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Energy (2.7%)
$	225	Enterprise Products Operating LLC, Series O		9.75	%	01/31/14	$	268,758
	350	EOG Co. of Canada (Canada) (a)		7.00		12/01/11		359,172
	380	Marathon Petroleum Corp. (a)		3.50		03/01/16		389,958
	320	Plains All American Pipeline L.P. / PAA Finance Corp.		4.25		09/01/12		330,955
	305	Spectra Energy Capital LLC		5.90		09/15/13		331,608
								1,680,451
		Finance (28.6%)
	100	ABB Treasury Center USA, Inc. (Switzerland) (a)		2.50		06/15/16		99,345
	255	Abbey National Treasury Services PLC (United Kingdom)		2.875		04/25/14		256,088
	575	Abbey National Treasury Services PLC (United Kingdom) (a)		3.875		11/10/14		586,008
	110	Aflac, Inc.		3.45		08/15/15		112,445
	475	American Express Co.		7.25		05/20/14		543,610
	260	American International Group, Inc.		3.65		01/15/14		265,093
	230	Banco Bradesco SA (Brazil) (a)		4.125		05/16/16		232,599
	300	Bank of America Corp.		4.50		04/01/15		313,919
	405	Bank One Corp.		5.25		01/30/13		429,140
	315	Barclays Bank PLC (United Kingdom)		2.50		01/23/13		320,917
	330	BBVA Bancomer SA (Mexico) (a)		4.50		03/10/16		337,425
	200	BBVA US Senior SAU (Spain)		3.25		05/16/14		197,920
	205	BP Capital Markets PLC (United Kingdom)		3.875		03/10/15		216,081
	390	Canadian Imperial Bank of Commerce (Canada)		1.45		09/13/13		391,843
	300	Capital One Financial Corp.		7.375		05/23/14		342,776
	500	Cie de Financement Foncier (France) (a)		2.25		03/07/14		505,768
	475	Citigroup, Inc. (See Note 6)		4.587		12/15/15		500,016
	575	Commonwealth Bank of Australia (Australia) (a)		2.75		10/15/12		587,933
	340	Credit Suisse, New York (Switzerland)		5.50		05/01/14		373,683
	355	Deutsche Bank AG (Germany)		2.375		01/11/13		360,274
	140	Fifth Third Bancorp		3.625		01/25/16		141,363
	975	General Electric Capital Corp.		2.95		05/09/16		981,469
	300	Genworth Life Institutional Funding Trust (a)		5.875		05/03/13		316,728
	425	Goldman Sachs Group, Inc. (The)		3.70		08/01/15		433,171
	250	Harley-Davidson Funding Corp. (a)		5.25		12/15/12		261,779
	200	HCP, Inc.		2.70		02/01/14		203,010
	350	HSBC Finance Corp.		5.25		04/15/15		382,228
	120	Intesa Sanpaolo SpA (Italy) (a)		3.625		08/12/15		117,016
	75	Jefferies Group, Inc.		3.875		11/09/15		76,293
	135	JPMorgan Chase & Co.		3.15		07/05/16		135,982
	500	Lloyds TSB Bank PLC (United Kingdom) (a)		2.80		04/02/12		508,948

See Notes to Financial Statements
27

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	230	Macquarie Group Ltd. (Australia) (a)		7.30	%	08/01/14	$	257,603
	250	MBNA Corp.		6.125		03/01/13		267,813
	325	Metropolitan Life Global Funding I (See Note 6) (a)		2.00		01/10/14		326,962
	350	Monumental Global Funding III (a)		5.25		01/15/14		372,760
	270	Nationwide Building Society (United Kingdom) (a)		4.65		02/25/15		279,832
	30	Nissan Motor Acceptance Corp. (a)		3.25		01/30/13		30,673
	365	Nordea Bank AB (Sweden) (a)		2.50		11/13/12		371,989
	270	Principal Financial Group, Inc.		7.875		05/15/14		312,587
	320	Prudential Financial, Inc.		4.75		09/17/15		344,609
	2,300	Royal Bank of Scotland PLC (The) (United Kingdom) (a)		2.625		05/11/12		2,343,928
	335	Royal Bank of Scotland PLC (The) (United Kingdom)		4.875		03/16/15		347,966
	110	Societe Generale SA (France) (a)		3.10		09/14/15		108,837
	300	Standard Chartered PLC (United Kingdom) (a)		3.85		04/27/15		310,833
	320	Svenska Handelsbanken AB (Sweden) (a)		2.875		09/14/12		326,994
	365	TD Ameritrade Holding Corp.		2.95		12/01/12		373,453
	365	UBS AG/Stamford CT (Switzerland)		3.875		01/15/15		381,304
	470	Wells Fargo & Co.		3.676		06/15/16		483,393
								17,772,406
		Industrials (1.2%)
	385	Agilent Technologies, Inc.		4.45		09/14/12		398,889
	90	Danaher Corp.		1.30		06/23/14		90,013
	220	Thermo Fisher Scientific, Inc.		3.25		11/20/14		232,128
								721,030
		Technology (0.8%)
	160	Applied Materials, Inc.		2.65		06/15/16		160,795
	330	Texas Instruments, Inc.		1.375		05/15/14		331,611
								492,406
		Utilities (3.4%)
	150	Commonwealth Edison Co.		1.625		01/15/14		151,151
	380	Dominion Resources, Inc.		5.70		09/17/12		401,808
	350	EDF SA (France) (a)		5.50		01/26/14		384,829
	350	Enel Finance International N.V. (Luxembourg) (a)		3.875		10/07/14		361,443
	215	FirstEnergy Solutions Corp.		4.80		02/15/15		230,863
	265	NextEra Energy Capital Holdings, Inc.		5.35		06/15/13		283,553
	320	Sempra Energy		2.00		03/15/14		323,230
								2,136,877
		Total Corporate Bonds (Cost $31,370,531)						32,192,898

See Notes to Financial Statements
28

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Sovereign (3.4%)
$	1,508	Kingdom of Denmark (Denmark)		2.75	%	11/15/11	$	1,520,657
	577	Societe Financement de l'Economie Francaise (France) (a)		3.375		05/05/14		612,398
		Total Sovereign(Cost $2,122,781)						2,133,055
		Asset-Backed Securities (22.2%)
		Ally Master Owner Trust
	100	(a)		1.94	(b)	01/15/15		101,830
	200			2.15		01/15/16		202,752
	225	(a)		2.88		04/15/15		231,548
	800	American Express Credit Account Master Trust		1.437	(b)	03/15/17		824,750
	119	ARI Fleet Lease Trust (a)		1.637	(b)	08/15/18		119,480
	807	Capital One Multi-Asset Execution Trust		0.267	(b)	09/15/15		806,420
	225	CarMax Auto Owner Trust		1.29		09/15/15		226,233
	143	Chesapeake Funding LLC (a)		2.187	(b)	12/15/20		143,182
	149	CIT Equipment Collateral (a)		1.51		05/15/12		148,698
	600	Citibank Credit Card Issuance Trust (See Note 6)		2.25		12/23/14		614,487
		CNH Equipment Trust
	600			1.17		05/15/15		602,065
	483			1.54		07/15/14		485,152
	850	Discover Card Master Trust		1.487	(b)	12/15/14		860,130
		Ford Credit Floorplan Master Owner Trust
	775			1.74	(b)	09/15/14		785,722
	375	(a)		4.20		02/15/17		404,053
	1,150	GE Capital Credit Card Master Note Trust		2.287	(b)	04/15/15		1,165,516
	425	GE Equipment Midticket LLC (a)		0.94		07/14/14		425,681
		Harley-Davidson Motorcycle Trust
	625			1.16		02/15/15		626,797
	401			1.87		02/15/14		402,748
	239	Huntington Auto Trust (a)		3.94		06/17/13		240,821
	575	Hyundai Auto Receivables Trust		1.50		10/15/14		580,479
	525	Macquarie Equipment Funding Trust (a)		1.21		09/20/13		523,441
	371	MMAF Equipment Finance LLC (a)		2.37		11/15/13		373,628
		MMCA Automobile Trust
	225	(a)		1.22		01/15/15		226,095
	524	(a)		1.39		01/15/14		526,539
	416	Navistar Financial Corp. Owner Trust (a)		1.47		10/18/12		416,882
	575	Nissan Auto Lease Trust		1.12		12/15/13		577,903
	200	Nissan Master Owner Trust Receivables (a)		1.337	(b)	01/15/15		202,230
	100	Panhandle-Plains Higher Education Authority, Inc.		1.208	(b)	07/01/24		99,036

See Notes to Financial Statements
29

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	400	Toyota Auto Receivables Owner Trust		1.27	%	12/16/13	$	402,214
	261	Volvo Financial Equipment LLC (a)		1.06		06/15/12		261,282
	150	Wheels SPV LLC (a)		1.737	(b)	03/15/18		150,813
		Total Asset-Backed Securities(Cost $13,629,956)						13,758,607
		Agency Fixed Rate Mortgages (0.9%)
		Federal National Mortgage Association,
		Conventional Pools:
	372			6.50		01/01/32 - 11/01/33		422,841
	133			7.00		08/01/29 - 06/01/32		154,139
		Total Agency Fixed Rate Mortgages(Cost $526,608)						576,980
		Municipal Bonds (1.4%)
	300	New Jersey Economic Development Authority		1.247	(b)	06/15/13		299,094
		North Carolina State Education Assistance Authority
	350			0.82	(b)	01/25/21		349,489
	225			1.14		07/25/25		219,449
		Total Municipal Bonds(Cost $868,897)						868,032
		Agency Bond - Banking (FDIC Guaranteed) (1.1%)
	700	FDIC Structured Sale Guaranteed Notes (Cost $696,486) (a)		0.00		10/25/11		699,640
		U.S. Treasury Securities (10.9%)
	2,250	U.S. Treasury Bond		7.50		11/15/24		3,168,985
		U.S. Treasury Notes
	2,250			1.25		08/31/15		2,240,332
	1,350			1.75		07/31/15		1,373,093
		Total U.S. Treasury Securities(Cost $6,676,777)						6,782,410
		Commercial Mortgage Backed Security (0.3%)
	190	Wachovia Bank Commercial Mortgage Trust (Cost $193,399)		5.512	(b)	07/15/41		205,023
		Non-U.S. Government - Guaranteed (5.4%)
	900	Commonwealth Bank of Australia (Australia) (a)		2.50		12/10/12		923,241
	1,545	Swedbank AB(Sweden) (a)		2.90		01/14/13		1,599,243

See Notes to Financial Statements
30

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE			VALUE
$	810	Westpac Securities NZ Ltd. (New Zealand) (a)		2.50	%	05/25/12			$	823,265
		Total Non-U.S. Government - Guaranteed(Cost $3,249,897)								3,345,749
		Agency Adjustable Rate Mortgages (0.7%)
	99	Federal Home Loan Mortgage Corporation, Conventional Pools:		5.47		01/01/38				105,401
	292	Federal National Mortgage Association, Conventional Pools:		2.479		05/01/35				306,381
		Total Agency Adjustable Rate Mortgages(Cost $410,096)								411,782
		Collateralized Mortgage Obligation - Agency Collateral Series (0.6%)
	331	Federal Home Loan Mortgage Corporation, REMIC (Cost $354,566)		7.50		09/15/29				382,531
		Short-Term Investments (1.9%)
		U.S. Treasury Security (1.1%)
	670	U.S. Treasury Bill (Cost $669,931) (c)(d)		0.046		09/22/11				669,931
NUMBER OF SHARES (000)
		Investment Company (0.8%)
		472Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class (See Note 6) (Cost $472,396)								472,396
		Total Short-Term Investments(Cost $1,142,327)								1,142,327
		Total Investments (Cost $61,242,321) (e)(f)					100.6	%		62,499,034
		Liabilities in Excess of Other Assets					(0.6	)		(363,120	)
		Net Assets					100.0	%	$	62,135,914

  FDIC  Federal Deposit Insurance Corporation.

  REMIC  Real Estate Mortgage Investment Conduit.

  (a)  144A security - Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

  (b)  Variable/Floating Rate Security - Interest rate changes on these instruments are based on changes in a designated base rate. The rates shown are those in effect on June 30, 2011.

  (c)  Rate shown is the yield to maturity at June 30, 2011.

  (d)  A portion of this security has been physically segregated in connection with open futures contracts and swap agreements.

See Notes to Financial Statements
31

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2011 (unaudited)continued

  (e)  Securities have been designated as collateral in connection with open futures contracts and swap agreements.

  (f)  The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $1,459,594 and the aggregate gross unrealized depreciation is $202,881 resulting in net unrealized appreciation of $1,256,713.

FUTURES CONTRACTS OPEN AT JUNE 30, 2011:

NUMBER OF CONTRACTS		LONG/SHORT	DESCRIPTION, DELIVERY MONTH AND YEAR	UNDERLYING FACE AMOUNT AT VALUE			UNREALIZED APPRECIATION (DEPRECIATION)
	66	Long	U.S. Treasury 5 yr. Note, Sep-11	$	7,866,891		$	15,469
	30	Short	U.S. Treasury 2 yr. Note, Sep-11		(6,580,313	)		(12,312	)
Net Unrealized Appreciation							$	3,157

INTEREST RATE SWAP AGREEMENTS OPEN AT JUNE 30, 2011:

SWAP COUNTERPARTY	NOTIONAL AMOUNT (000)		FLOATING RATE INDEX	PAY/RECEIVE FLOATING RATE	FIXED RATE			TERMINATION DATE	UNREALIZED DEPRECIATION
Credit Suisse	$	6,515	3 Month LIBOR	Receive		0.80	%	10/28/13	$	(2,183	)
Credit Suisse		2,730	3 Month LIBOR	Pay		2.10		10/28/17		(52,646	)
Total Unrealized Depreciation									$	(54,829	)

ZERO COUPON SWAP AGREEMENTS OPEN AT JUNE 30, 2011:

SWAP COUNTERPARTY	NOTIONAL AMOUNT (000)		FLOATING RATE INDEX	PAY/RECEIVE FLOATING RATE	TERMINATION DATE	PREMIUM PAID (RECEIVED)		UNREALIZED APPRECIATION (DEPRECIATION)
Barclays Capital	$	973	3 Month LIBOR	Receive	11/15/19	$	—	$	(232,145	)
Barclays Capital		1,153	3 Month LIBOR	Pay	11/15/19		—		64,322
Deutsche Bank		626	3 Month LIBOR	Receive	11/15/21		—		(128,793	)
Deutsche Bank		733	3 Month LIBOR	Pay	11/15/21		—		29,455
JPMorgan Chase		1,364	3 Month LIBOR	Receive	11/15/22		—		(131,512	)
JPMorgan Chase		437	3 Month LIBOR	Receive	11/15/19		—		(97,263	)
JPMorgan Chase		687	3 Month LIBOR	Receive	11/15/20		—		(172,270	)
Net Unrealized Depreciation								$	(668,206	)

  LIBOR  London Interbank Offered Rate.

See Notes to Financial Statements
32

Morgan Stanley Variable Investment Series - Limited Duration

Portfolio of Investments n June 30, 2011 (unaudited)continued

LONG TERM CREDIT ANALYSIS++

AAA	52.9	%
AA	13.5
A	17.4
BBB	15.5
Not Rated	0.7
	100.0	%+

  +  Does not include open long/short futures contracts with an underlying face amount of $14,447,204 and net unrealized appreciation of $3,157. Also does not include open swap agreements with net unrealized depreciation of $723,035.

  ++  The ratings shown are based on the Portfolio's security ratings as determined by Standard & Poor's, Moody's or Fitch, each a Nationally Recognized Statistical Ratings Organization ("NRSRO").

See Notes to Financial Statements
33

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2011 (unaudited)

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Corporate Bonds (96.8%)
		Basic Materials (6.5%)
$	820	ArcelorMittal (Luxembourg)		9.85	%	06/01/19	$	1,041,044
	1,570	CF Industries, Inc.		6.875		05/01/18		1,783,912
	835	Cliffs Natural Resources, Inc.		4.875		04/01/21		838,916
	540	FMG Resources August 2006 Pty Ltd. (Australia) (a)		6.375		02/01/16		541,350
	205	FMG Resources August 2006 Pty Ltd. (Australia) (a)		6.875		02/01/18		209,100
	440	Georgia-Pacific LLC		7.75		11/15/29		507,776
	595	Georgia-Pacific LLC		8.875		05/15/31		753,683
	203	Goldcorp, Inc. (Canada)		2.00		08/01/14		255,273
	535	Incitec Pivot Ltd. (Australia) (a)		4.00		12/07/15		546,911
	685	International Paper Co.		7.50		08/15/21		802,123
	545	Lubrizol Corp.		8.875		02/01/19		709,837
	489	Lyondell Chemical Co. (a)		8.00		11/01/17		545,235
	1,325	MeadWestvaco Corp.		7.375		09/01/19		1,483,910
	445	Nalco Co. (a)		6.625		01/15/19		458,350
	1,075	Reliance Steel & Aluminum Co.		6.85		11/15/36		1,071,796
	415	Southern Copper Corp. (Mexico)		5.375		04/16/20		427,160
	605	Teck Resources, Ltd. (Canada)		4.75		01/15/22		607,825
	705	Teck Resources, Ltd. (Canada)		6.25		07/15/41		714,193
	195	Vale Overseas Ltd. (Brazil)		6.875		11/21/36		212,216
	210	Vale Overseas Ltd. (Brazil)		6.875		11/10/39		229,274
								13,739,884
		Communications (11.2%)
	1,070	American Tower Corp.		4.50		01/15/18		1,071,000
	1,700	AT&T, Inc.		5.35		09/01/40		1,617,147
	980	AT&T, Inc.		6.15		09/15/34		1,017,720
	310	Cablevision Systems Corp.		7.75		04/15/18		332,087
	325	CenturyLink, Inc.		6.15		09/15/19		327,394
	800	Comcast Corp.		5.15		03/01/20		862,866
	820	Comcast Corp.		6.40		05/15/38		877,844
	100	Comcast Corp.		6.45		03/15/37		107,301
	505	Corning, Inc.		7.25		08/15/36		589,425
	110	COX Communications, Inc. (a)		8.375		03/01/39		144,288
	315	Deutsche Telekom International Finance BV (Netherlands)		6.75		08/20/18		372,210
	300	Deutsche Telekom International Finance BV (Germany)		8.75		06/15/30		396,974
	230	DirecTV Holdings LLC/DirecTV Financing Co., Inc.		4.60		02/15/21		231,536
	735	DirecTV Holdings LLC/DirecTV Financing Co., Inc.		5.875		10/01/19		816,513
	175	Expedia, Inc.		5.95		08/15/20		171,063
	775	Frontier Communications Corp.		8.50		04/15/20		848,625
	1,045	NBC Universal Media LLC (a)		4.375		04/01/21		1,036,111

See Notes to Financial Statements
34

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	170	News America, Inc.		6.40	%	12/15/35	$	178,339
	930	News America, Inc.		6.65		11/15/37		999,882
	370	News America, Inc.		7.85		03/01/39		444,392
	245	Omnicom Group, Inc.		4.45		08/15/20		243,486
	715	Qwest Corp.		6.50		06/01/17		779,350
	260	Qwest Corp.		6.875		09/15/33		251,875
	280	Qwest Corp.		8.375		05/01/16		331,800
	545	Sable International Finance Ltd. (South Africa) (a)		7.75		02/15/17		550,450
	305	SBA Telecommunications, Inc.		8.25		08/15/19		327,875
	1,280	Telecom Italia Capital SA (Italy)		7.175		06/18/19		1,415,396
	1,330	Telefonica Europe BV (Spain)		8.25		09/15/30		1,592,187
	640	Telstra Corp. Ltd. (Australia ) (a)		4.80		10/12/21		643,411
	1,200	Time Warner Cable, Inc.		6.75		07/01/18		1,393,608
	375	Time Warner Cable, Inc.		6.75		06/15/39		411,568
	155	Time Warner Cable, Inc.		8.25		04/01/19		193,604
	610	Time Warner, Inc.		6.50		11/15/36		652,411
	545	Time Warner, Inc.		7.70		05/01/32		659,860
	150	Verizon Communications, Inc.		6.40		02/15/38		163,107
	715	Verizon Communications, Inc.		8.95		03/01/39		1,012,521
	455	Viacom, Inc.		6.875		04/30/36		509,556
	335	Vivendi SA (France) (a)		6.625		04/04/18		379,489
								23,954,271
		Consumer, Cyclical (6.0%)
	890	America West Airlines 2001-1 Pass-Through Trust, Series 011G (Ambac Assurance Corp)		7.10		04/02/21		883,402
	700	Best Buy Co., Inc.		3.75		03/15/16		704,105
	1,105	Chrysler Group LLC/CG Co-Issuer, Inc. (a)		8.00		06/15/19		1,091,187
	1,485	CVS Pass-Through Trust		6.036		12/10/28		1,580,458
	116	CVS Pass-Through Trust (a)		8.353		07/10/31		142,311
	395	Daimler Finance North America LLC (Germany)		8.50		01/18/31		535,549
	344	DR Horton, Inc., Series DHI		2.00		05/15/14		382,700
	925	Gap, Inc. (The)		5.95		04/12/21		890,271
	405	Hyatt Hotels Corp. (a)		6.875		08/15/19		452,681
	105	Ingram Micro, Inc.		5.25		09/01/17		110,209
	208	International Game Technology		3.25		05/01/14		249,080
	210	JC Penney Co., Inc.		5.65		06/01/20		208,950
	455	JC Penney Corp., Inc.		6.375		10/15/36		409,500
	285	Levi Strauss & Co.		7.625		05/15/20		286,425
	620	QVC, Inc. (a)		7.125		04/15/17		654,100
	427	RadioShack Corp. (a)		2.50		08/01/13		428,601
	300	Tech Data Corp.		2.75		12/15/26		313,500

See Notes to Financial Statements
35

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	450	Whirlpool Corp.		8.60	%	05/01/14	$	524,722
	800	Wyndham Worldwide Corp.		5.625		03/01/21		799,462
	365	Wyndham Worldwide Corp.		5.75		02/01/18		377,409
	590	Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp.		7.75		08/15/20		643,837
	1,040	Yum! Brands, Inc.		6.875		11/15/37		1,183,639
								12,852,098
		Consumer, Non-Cyclical (6.5%)
	505	Altria Group, Inc.		10.20		02/06/39		726,418
	300	Amgen, Inc., Series B		0.375		02/01/13		302,625
	416	Archer-Daniels-Midland Co.		0.875		02/15/14		440,960
	1,025	Boston Scientific Corp.		6.00		01/15/20		1,111,479
	580	Bunge Ltd. Finance Corp.		8.50		06/15/19		708,152
	300	Cephalon, Inc.		2.50		05/01/14		369,000
	230	ConAgra Foods, Inc.		7.00		10/01/28		241,933
	740	ConAgra Foods, Inc.		8.25		09/15/30		881,563
	165	Constellation Brands, Inc.		7.25		09/01/16		181,088
	1,185	Delhaize Group SA (Belgium)		5.70		10/01/40		1,106,246
	460	Fortune Brands, Inc.		6.375		06/15/14		511,738
	420	Gilead Sciences, Inc. (a)		1.00		05/01/14		469,350
	490	Grupo Bimbo SAB de CV (Mexico) (a)		4.875		06/30/20		494,108
	700	Kraft Foods, Inc.		6.875		02/01/38		812,482
	610	Kraft Foods, Inc.		6.875		01/26/39		705,791
	300	Life Technologies Corp.		1.50		02/15/24		344,250
	835	Lorillard Tobacco Co.		8.125		06/23/19		974,031
	330	Molson Coors Brewing Co.		2.50		07/30/13		363,825
	300	Mylan, Inc.		1.25		03/15/12		335,250
	365	Quest Diagnostics, Inc.		6.95		07/01/37		406,517
	800	Sigma Alimentos SA de CV (Mexico) (a)		5.625		04/14/18		820,000
	520	TreeHouse Foods, Inc.		7.75		03/01/18		553,800
	945	Verisk Analytics, Inc.		5.80		05/01/21		1,004,245
								13,864,851
		Energy (7.0%)
	85	Alpha Natural Resources, Inc.		6.00		06/01/19		85,212
	370	Alpha Natural Resources, Inc.		6.25		06/01/21		373,700
	600	Anadarko Petroleum Corp.		6.95		06/15/19		701,902
	175	Anadarko Petroleum Corp.		8.70		03/15/19		223,333
	665	Chesapeake Energy Corp.		7.625		07/15/13		728,175
	150	Concho Resources, Inc.		7.00		01/15/21		155,625
	745	Continental Resources, Inc., Series WI		7.125		04/01/21		789,700
	1,750	Energy Transfer Partners LP		9.00		04/15/19		2,179,128
	275	Enterprise Products Operating LLC		5.25		01/31/20		293,081

See Notes to Financial Statements
36

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	850	Enterprise Products Operating LLC		5.95	%	02/01/41	$	847,130
	715	EQT Corp.		8.125		06/01/19		875,956
	400	Gazprom OAO Via Gaz Capital SA (Russia) (a)		6.51		03/07/22		425,000
	1,480	Kinder Morgan Finance Co. ULC		5.70		01/05/16		1,548,450
	325	Marathon Petroleum Corp. (a)		5.125		03/01/21		334,750
	775	Marathon Petroleum Corp. (a)		6.50		03/01/41		803,663
	410	Petrobras International Finance Co. (Brazil)		5.75		01/20/20		439,420
	1,095	Plains All American Pipeline LP/PAA Finance Corp.		6.70		05/15/36		1,169,491
	675	Plains All American Pipeline LP/PAA Finance Corp.		8.75		05/01/19		850,422
	480	Plains Exploration & Production Co.		7.625		06/01/18		506,400
	535	QEP Resources, Inc.		6.875		03/01/21		567,100
	225	Spectra Energy Capital LLC		8.00		10/01/19		275,666
	700	Valero Energy Corp.		6.125		02/01/20		770,551
								14,943,855
		Finance (46.4%)
	1,125	Aegon N.V. (Netherlands)		4.625		12/01/15		1,193,383
	660	Aflac, Inc.		8.50		05/15/19		808,386
	700	Ally Financial, Inc. (a)		6.25		12/01/17		697,957
	356	Alpha Natural Resources, Inc.		2.375		04/15/15		418,300
	1,285	American Financial Group, Inc.		9.875		06/15/19		1,600,279
	720	American International Group, Inc.		6.40		12/15/20		776,381
	432	Ares Capital Corp. (a)		5.75		02/01/16		455,760
	1,135	Banco Bradesco SA (Brazil) (a)		4.125		05/16/16		1,147,826
	1,150	Banco de Credito del Peru (Peru) (a)		4.75		03/16/16		1,144,250
	990	Banco Votorantim SA (Brazil) (a)		5.25		02/11/16		1,008,612
	340	Bank of America Corp.		5.625		07/01/20		351,672
	1,865	Bank of America Corp.		5.75		12/01/17		1,985,669
	780	Barclays Bank PLC (United Kingdom) (a)		6.05		12/04/17		826,954
	700	Barclays Bank PLC (United Kingdom)		6.75		05/22/19		787,003
	1,135	BBVA Bancomer SA (Mexico) (a)		4.50		03/10/16		1,160,537
	900	BBVA US Senior SAU (Spain)		3.25		05/16/14		890,640
	610	Bear Stearns Cos. LLC (The)		5.55		01/22/17		667,946
	1,600	BNP Paribas SA (France)		5.00		01/15/21		1,611,677
	1,025	Brandywine Operating Partnership		4.95		04/15/18		1,040,642
	490	Brookfield Asset Management, Inc. (Canada)		5.80		04/25/17		526,784
	780	Capital One Bank, USA NA		8.80		07/15/19		958,683
	800	Capital One Capital VI		8.875		05/15/40		829,126
	394	Chesapeake Energy Corp.		2.75		11/15/35		437,833
	1,735	Citigroup, Inc. (See Note 6)		5.875		05/29/37		1,725,968
	480	Citigroup, Inc. (See Note 6)		6.125		05/15/18		529,337
	785	Citigroup, Inc. (See Note 6)		8.125		07/15/39		985,420

See Notes to Financial Statements
37

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	2,690	Citigroup, Inc. (See Note 6)		8.50	%	05/22/19	$	3,339,665
	1,335	CNA Financial Corp.		7.35		11/15/19		1,524,242
	260	Cooperatieve Centrale Raiffeisen-Boerenleenbank BA (Netherlands) (a)		11.00	(b)	06/30/19		332,724
	1,305	Credit Agricole SA (France) (a)(c)		8.375	(b)	10/13/19		1,370,250
	280	Credit Suisse (Switzerland)		6.00		02/15/18		302,551
	290	Credit Suisse AG (Switzerland)		5.40		01/14/20		294,088
	800	Dexus Diversfied Trust/Dexus Office Trust (Australia) (a)		5.60		03/15/21		809,895
	1,125	Digital Realty Trust LP		5.25		03/15/21		1,121,266
	425	Discover Bank/Greenwood		7.00		04/15/20		472,829
	715	Discover Bank/Greenwood		8.70		11/18/19		863,879
	300	ERP Operating LP		3.85		08/15/26		307,110
	1,750	Farmers Insurance Exchange (a)		8.625		05/01/24		2,106,900
	605	Ford Motor Credit Co. LLC		5.75		02/01/21		605,768
	545	General Electric Capital Corp.		5.30		02/11/21		568,161
	735	General Electric Capital Corp.		5.625		05/01/18		805,029
	75	General Electric Capital Corp.		5.875		01/14/38		76,123
	6,350	General Electric Capital Corp., Series G		6.00		08/07/19		7,042,493
	1,195	Genworth Financial, Inc.		7.70		06/15/20		1,247,167
	4,345	Goldman Sachs Group, Inc. (The)		6.15		04/01/18		4,735,411
	1,565	Goldman Sachs Group, Inc. (The)		6.75		10/01/37		1,569,767
	950	Goodman Funding Pty Ltd. (Australia) (a)		6.375		04/15/21		977,115
	550	Harley-Davidson Funding Corp. (a)		6.80		06/15/18		622,478
	1,250	Hartford Financial Services Group, Inc.		5.50		03/30/20		1,290,739
	1,675	HBOS PLC (United Kingdom) (a)		6.75		05/21/18		1,614,084
	450	HCP, Inc.		5.375		02/01/21		465,008
	600	HCP, Inc.		5.625		05/01/17		652,438
	300	Health Care REIT, Inc.		4.75		07/15/27		339,375
	860	Health Care REIT, Inc.		6.125		04/15/20		922,726
	595	Huntington Bancshares, Inc.		7.00		12/15/20		672,047
	915	International Lease Finance Corp.		5.75		05/15/16		901,958
	945	International Lease Finance Corp.		6.25		05/15/19		924,738
	510	Intesa Sanpaolo SpA (Italy) (a)		6.50		02/24/21		532,844
	200	Jefferies Group, Inc.		3.875		11/09/15		203,449
	710	Jefferies Group, Inc.		6.875		04/15/21		764,444
	2,610	JPMorgan Chase Capital XXVII		7.00		11/01/39		2,614,763
	745	Lincoln National Corp.		8.75		07/01/19		941,531
	505	Lloyds TSB Bank PLC (United Kingdom) (a)		5.80		01/13/20		506,573
	260	Lloyds TSB Bank PLC (United Kingdom)		6.375		01/21/21		271,158
	710	Macquarie Bank Ltd. (Australia) (a)		6.625		04/07/21		715,581
	705	Macquarie Group Ltd. (Australia) (a)		6.00		01/14/20		708,111

See Notes to Financial Statements
38

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	3,625	Merrill Lynch & Co., Inc.		6.875	%	04/25/18	$	4,016,268
	930	Merrill Lynch & Co., Inc.		7.75		05/14/38		1,034,020
	965	MetLife, Inc. (See Note 6)		10.75		08/01/39		1,361,794
	165	NASDAQ OMX Group, Inc. (The)		5.25		01/16/18		169,136
	305	NASDAQ OMX Group, Inc. (The)		5.55		01/15/20		304,524
	1,665	Nationwide Building Society (United Kingdom) (a)		6.25		02/25/20		1,734,352
	525	Nationwide Financial Services (a)		5.375		03/25/21		528,321
	370	Platinum Underwriters Finance, Inc.		7.50		06/01/17		398,700
	1,025	Principal Financial Group, Inc.		8.875		05/15/19		1,305,761
	925	Protective Life Corp.		7.375		10/15/19		1,053,325
	635	Prudential Financial, Inc.		6.625		12/01/37		676,333
	775	QBE Capital Funding III Ltd. (Australia) (a)		7.25	(b)	05/24/41		778,973
	1,240	Regions Financial Corp.		5.75		06/15/15		1,222,461
	775	Reinsurance Group of America, Inc.		6.45		11/15/19		843,054
	925	Royal Bank of Scotland Group PLC (United Kingdom)		6.40		10/21/19		951,646
	1,175	Royal Bank of Scotland PLC (The) (United Kingdom)		4.875		03/16/15		1,220,476
	360	Santander Holdings USA, Inc.		4.625		04/19/16		362,173
	1,300	Santander US Debt SA Unipersonal (Spain) (a)		3.724		01/20/15		1,259,383
	1,060	SLM Corp.		6.25		01/25/16		1,100,833
	495	SLM Corp.		8.00		03/25/20		532,373
	885	Standard Chartered Bank (United Kingdom) (a)		6.40		09/26/17		986,825
	1,120	TD Ameritrade Holding Corp.		5.60		12/01/19		1,202,683
	1,125	Ventas Realty LP/Ventas Capital Corp.		4.75		06/01/21		1,100,316
	300	Vornado Realty LP		3.875		04/15/25		340,125
	975	WEA Finance LLC (Australia) (a)		4.625		05/10/21		948,041
	900	Wells Operating Partnership II LP (a)		5.875		04/01/18		929,732
	900	Willis Group Holdings PLC		4.125		03/15/16		918,554
	850	XL Group Plc (Cayman Islands)		5.25		09/15/14		911,376
								98,895,061
		Industrials (6.1%)
	1,060	BAA Funding Ltd. (United Kingdom) (a)		4.875		07/15/21		1,036,700
	540	Ball Corp.		7.375		09/01/19		592,650
	255	Bombardier, Inc. (Canada) (a)		7.50		03/15/18		286,875
	505	Bombardier, Inc. (Canada) (a)		7.75		03/15/20		570,650
	820	CRH America, Inc.		6.00		09/30/16		901,106
	480	CRH America, Inc.		8.125		07/15/18		570,027
	585	Crown Americas LLC/Crown Americas Capital Corp. III (a)		6.25		02/01/21		593,775
	510	DISH DBS Corp.		7.125		02/01/16		540,600
	545	Holcim US Finance Sarl & Cie SCS (Switzerland) (a)		6.00		12/30/19		583,350
	915	L-3 Communications Corp.		4.95		02/15/21		914,740
	670	Lafarge SA (France) (a)		5.85		07/09/15		716,970

See Notes to Financial Statements
39

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	381	Liberty Media LLC		3.125	%	03/30/23	$	456,724
	815	Liberty Media LLC		3.50		01/15/31		444,175
	710	Masco Corp.		6.125		10/03/16		730,158
	615	Meccanica Holdings USA (Italy) (a)		7.375		07/15/39		651,469
	750	Odebrecht Finance Ltd. (Brazil) (a)		6.00		04/05/23		749,062
	375	Omnicom Group, Inc.		0.00		07/01/38		414,844
	286	Orbital Sciences Corp.		2.438		01/15/27		296,010
	374	Owens-Brockway Glass Container, Inc. (a)		3.00		06/01/15		370,260
	620	Roper Industries, Inc.		6.25		09/01/19		703,138
	351	SBA Communications Corp.		1.875		05/01/13		387,416
	350	Symantec Corp., Series B		1.00		06/15/13		427,000
								12,937,699
		Technology (1.0%)
	905	KLA-Tencor Corp.		6.90		05/01/18		1,023,715
	300	Linear Technology Corp., Series A		3.00		05/01/27		319,125
	434	Microsoft Corp. (a)		0.00		06/15/13		445,935
	350	SanDisk Corp.		1.00		05/15/13		339,938
								2,128,713
		Utilities (6.1%)
	1,610	AES Corp. (The)		8.00		06/01/20		1,722,700
	775	CMS Energy Corp.		6.25		02/01/20		828,584
	22	CMS Energy Corp.		6.30		02/01/12		22,635
	750	EDP Finance BV (Portugal) (a)		4.90		10/01/19		643,588
	1,175	Enel Finance International N.V. (Italy) (a)		5.125		10/07/19		1,190,052
	2,100	Exelon Generation Co. LLC		4.00		10/01/20		1,985,779
	975	FirstEnergy Solutions Corp.		6.05		08/15/21		1,051,146
	975	FirstEnergy Solutions Corp.		6.80		08/15/39		1,017,114
	875	Iberdrola Finance Ireland Ltd. (Ireland) (a)		5.00		09/11/19		864,369
	295	NRG Energy, Inc.		8.50		06/15/19		306,800
	900	PPL WEM Holdings PLC (United Kingdom) (a)		3.90		05/01/16		924,575
	1,150	Puget Energy, Inc.		6.50		12/15/20		1,189,695
	1,200	UIL Holdings Corp.		4.625		10/01/20		1,172,675
								12,919,712
		Total Corporate Bonds(Cost $194,078,746)						206,236,144
		Asset-Backed Security (0.5%)
	1,060	FUEL Trust (Cost $1,060,000) (a)		4.207		10/15/22		1,065,183

See Notes to Financial Statements
40

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE			VALUE
		Municipal Bond (0.3%)
$	600	State of California, General Obligation Bonds (Cost $603,036)		5.95	%	04/01/16			$	671,898
		Agency Fixed Rate Mortgage (0.0%)
	1	Federal Home Loan Mortgage Corporation, Gold Pools: (Cost $1,461)		6.50		12/01/28				1,594
NUMBER OF SHARES
		Preferred Stock (0.3%)
		Consumer Finance
	22,725	GMAC Capital Trust I (Cost $574,065) (d)								581,760
		Convertible Preferred Stock (0.1%)
		Diversified Financial Services
	350	Bank of America Corp. (Series L) $72.50 (Cost $337,770)								350,420
PRINCIPAL AMOUNT IN THOUSANDS
		Short-Term Investments (1.0%)
		U.S. Treasury Security (0.3%)
$	585	U.S. Treasury Bill (Cost $584,940) (e)(f)		0.046		09/22/11				584,940
NUMBER OF SHARES (000)
		Investment Company (0.7%)
	1,493	Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class (See Note 6) (Cost $1,492,774)								1,492,774
		Total Short-Term Investments(Cost $2,077,714)								2,077,714
		Total Investments(Cost $198,732,792) (g)(h)					99.0	%		210,984,713
		Other Assets in Excess of Liabilities					1.0			2,036,520
		Net Assets					100.0	%	$	213,021,233

  REIT  Real Estate Investment Trust.

See Notes to Financial Statements
41

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2011 (unaudited)continued

  (a)  144A security - Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

  (b)  Variable/Floating Rate Security - Interest rate changes on these instruments are based on changes in a designated base rate. The rates shown are those in effect on June 30, 2011.

  (c)  Perpetual - Security does not have a predetermined maturity date. Rate for this security is fixed for a period of time then reverts to a floating rate. The interest shown is the rate in effect at June 30, 2011.

  (d)  Non-income producing security.

  (e)  Rate shown is the yield to maturity at June 30, 2011.

  (f)  A portion of this security has been physically segregated in connection with open futures contracts and swap agreements.

  (g)  Securities have been designated as collateral in connection with open futures contracts and swap agreements.

  (h)  The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $13,192,533 and the aggregate gross unrealized depreciation is $940,612 resulting in net unrealized appreciation of $12,251,921.

FUTURES CONTRACTS OPEN AT JUNE 30, 2011:

NUMBER OF CONTRACTS		LONG/SHORT	DESCRIPTION, DELIVERY MONTH AND YEAR	UNDERLYING FACE AMOUNT AT VALUE			UNREALIZED APPRECIATION (DEPRECIATION)
	226	Long	U.S. Treasury Notes 5 Year, Sep-11	$	26,938,141		$	49,305
	63	Long	U.S. Treasury Ultra Bond, Sep-11		7,953,750			(163,399	)
	58	Long	U.S. Treasury Notes 2 Year, Sep-11		12,721,937			14,500
	39	Short	U.S. Treasury Bonds 30 Year, Sep-11		(4,798,219	)		28,336
	384	Short	U.S. Treasury Notes 10 Year, Sep-11		(46,974,000	)		(190,556	)
Net Unrealized Depreciation							$	(261,814	)

CREDIT DEFAULT SWAP AGREEMENTS OPEN AT JUNE 30, 2011:

SWAP COUNTERPARTY & REFERENCE OBLIGATION	BUY/SELL PROTECTION	NOTIONAL AMOUNT (000's)		INTEREST RATE		TERMINATION DATE	UNREALIZED DEPRECIATION			UPFRONT PAYMENTS		VALUE			CREDIT RATING OF REFERENCE OBLIGATION+
															(unaudited)
Barclays Capital Whirlpoor Corp.	Buy	$	450		1.00	June 20, 2014	$	(26,336	)	$	24,264	$	(1,935	)	BBB-

  +  Credit rating as issued by Standard & Poor's.

See Notes to Financial Statements
42

Morgan Stanley Variable Investment Series - Income Plus

Portfolio of Investments n June 30, 2011 (unaudited)continued

INTEREST RATE SWAP AGREEMENTS OPEN AT JUNE 30, 2011:

SWAP COUNTERPARTY	NOTIONAL AMOUNT (000)		FLOATING RATE INDEX	PAY/RECEIVE FLOATING RATE	FIXED RATE			TERMINATION DATE	UNREALIZED DEPRECIATION
Credit Suisse	$	21,865	3 Month LIBOR	Receive		0.80	%	10/28/13	$	(7,327	)
Credit Suisse		9,160	3 Month LIBOR	Pay		2.10		10/28/17		(176,644	)
Total Unrealized Depreciation									$	(183,971	)

  LIBOR  London Interbank Offered Rate.

LONG TERM CREDIT ANALYSIS+++

AAA	0.4	%
AA	8.6
A	26.3
BBB	49.8
BB	11.5
B or BELOW	2.1
Not Rated	1.3
	100.0	%++

  ++  Does not include open long/short futures contracts with an underlying face amount of $99,386,047 and net unrealized depreciation of $261,814. Also does not include open swap agreements with total unrealized depreciation of $210,307.

  +++  The ratings shown are based on the Portfolio's security ratings as determined by Standard & Poor's, Moody's or Fitch, each a Nationally Recognized Statistical Ratings Organization ("NRSRO").

See Notes to Financial Statements
43

Morgan Stanley Variable Investment Series - Global Infrastructure

Portfolio of Investments n June 30, 2011 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (96.9%)
		Australia (4.3%)
		Airports
	280,513	MAp Group (Stapled Securities) (a)	$	1,008,801
		Diversified
	156,400	DUET Group (Stapled Securities) (a)(b)		285,626
		Oil & Gas Storage & Transportation
	105,100	APA Group (Stapled Securities) (a)		459,300
		Toll Roads
	229,100	Transurban Group (Stapled Securities) (a)		1,289,974
		Transmission & Distribution
	182,606	Spark Infrastructure Group		252,982
		Total Australia		3,296,683
		Brazil (0.6%)
		Water
	7,800	Cia de Saneamento Basico do Estado de Sao Paulo ADR		465,426
		Canada (14.5%)
		Oil & Gas Storage & Transportation
	127,640	Enbridge, Inc.		4,150,335
	140,770	TransCanada Corp.		6,181,357
				10,331,692
		Ports
	10,150	Westshore Terminals Investment Corp. (Stapled Securities) (a)(b)		251,106
		Transmission & Distribution
	17,420	Fortis, Inc.		584,309
		Total Canada		11,167,107

NUMBER OF SHARES			VALUE
		China (12.4%)
		Oil & Gas Storage & Transportation
	761,000	Beijing Enterprises Holdings Ltd. (c)	$	3,981,006
	3,386,000	China Gas Holdings Ltd. (c)		1,367,207
	532,000	ENN Energy Holdings Ltd. (c)		1,808,333
	1,116,000	Sichuan Expressway Co. Ltd. (c)		576,818
				7,733,364
		Ports
	258,327	China Merchants Holdings International Co., Ltd. (c)		1,002,933
		Toll Roads
	919,000	Jiangsu Expressway Co., Ltd. H Shares (c)		852,845
		Total China		9,589,142
		France (3.8%)
		Communications
	15,011	Eutelsat Communications SA		675,172
	81,140	SES SA		2,276,240
		Total France		2,951,412
		Germany (0.3%)
		Airports
	3,091	Fraport AG Frankfurt Airport Services Worldwide		248,541
		Hong Kong (2.7%)
		Oil & Gas Storage & Transportation
	898,800	Hong Kong & China Gas Co., Ltd.		2,045,183
		Italy (3.6%)
		Oil & Gas Storage & Transportation
	211,611	Snam Rete Gas SpA		1,252,741
		Toll Roads
	64,361	Atlantia SpA		1,370,183

See Notes to Financial Statements
44

Morgan Stanley Variable Investment Series - Global Infrastructure

Portfolio of Investments n June 30, 2011 (unaudited)continued

NUMBER OF SHARES			VALUE
		Transmission & Distribution
	31,700	Terna Rete Elettrica Nazionale SpA	$	147,307
		Total Italy		2,770,231
		Mexico (0.3%)
		Airports
	3,500	Grupo Aeroportuario del Sureste SAB de CV ADR		206,290
		Netherlands (1.2%)
		Oil & Gas Storage & Transportation
	18,342	Koninklijke Vopak N.V.		898,819
		Spain (3.6%)
		Diversified
	22,328	Ferrovial SA		281,938
		Oil & Gas Storage & Transportation
	4,994	Enagas SA		121,099
		Toll Roads
	94,993	Abertis Infraestructuras SA		2,122,220
		Transmission & Distribution
	4,716	Red Electrica Corp. SA		284,975
		Total Spain		2,810,232
		Switzerland (0.6%)
		Airports
	936	Flughafen Zuerich AG		427,021
		United Kingdom (12.6%)
		Transmission & Distribution
	738,100	National Grid PLC		7,263,424
		Water
	65,400	Pennon Group PLC		732,678
	34,500	Severn Trent PLC		814,567
	99,100	United Utilities Group PLC		952,151
				2,499,396
		Total United Kingdom		9,762,820

NUMBER OF SHARES			VALUE
		United States (36.4%)
		Communications
	78,530	American Tower Corp. Class A (d)	$	4,109,475
	73,620	Crown Castle International Corp. (d)		3,002,960
	24,980	SBA Communications Corp. Class A (d)		953,986
				8,066,421
		Diversified
	138,870	CenterPoint Energy, Inc.		2,687,135
		Oil & Gas Storage & Transportation
	4,140	Atmos Energy Corp.		137,655
	17,980	Enbridge Energy Management LLC (d)		555,582
	7,696	Kinder Morgan Management LLC (d)		504,781
	56,810	NiSource, Inc.		1,150,402
	3,990	Northwest Natural Gas Co.		180,069
	15,420	Oneok, Inc.		1,141,234
	39,850	Sempra Energy		2,107,268
	4,050	Southwest Gas Corp.		156,371
	137,176	Spectra Energy Corp.		3,759,994
				9,693,356
		Transmission & Distribution
	37,900	Consolidated Edison, Inc.		2,017,796
	31,470	ITC Holdings Corp.		2,258,602
	48,560	Northeast Utilities		1,707,855
	21,180	NSTAR		973,856
				6,958,109
		Water
	15,810	American Water Works Co., Inc.		465,604
	11,770	Aqua America, Inc.		258,705
				724,309
		Total United States		28,129,330
		Total Common Stocks (Cost $62,123,074)		74,768,237

See Notes to Financial Statements
45

Morgan Stanley Variable Investment Series - Global Infrastructure

Portfolio of Investments n June 30, 2011 (unaudited)continued

NUMBER OF SHARES (000)					VALUE
		Short-Term Investment (1.2%)
		Investment Company
	956	Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class (See Note 6) (Cost $955,537)			$	955,537
Total Investments (Cost $63,078,611) (e)(f)			98.1	%		75,723,774
Other Assets in Excess of Liabilities			1.9			1,476,609
Net Assets			100.0	%	$	77,200,383

ADR  American Depositary Receipt.

  (a)  Comprised of securities in separate entities that are traded as a single stapled security.

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

  (c)  Security trades on the Hong Kong exchange.

  (d)  Non-income producing security.

  (e)  The market value and percentage of net assets, $34,800,084 and 45.1%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note 1A within the Notes to the Financial Statements.

  (f)  The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $13,282,879 and the aggregate gross unrealized depreciation is $637,716 resulting in net unrealized appreciation of $12,645,163.

SUMMARY OF INVESTMENTS INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Oil & Gas Storage & Transportation	$	32,535,554		43.0	%
Transmission & Distribution		15,491,106		20.5
Communications		11,017,833		14.5
Toll Roads		5,635,222		7.4
Water		3,689,131		4.9
Diversified		3,254,699		4.3
Airports		1,890,653		2.5
Ports		1,254,039		1.6
Investment Company		955,537		1.3
	$	75,723,774		100.0	%

See Notes to Financial Statements
46

Morgan Stanley Variable Investment Series - European Equity

Portfolio of Investments n June 30, 2011 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (97.5%)
		Belgium (1.7%)
		Chemicals
	21,610	Umicore SA	$	1,177,862
		Finland (2.0%)
		Machinery
	22,814	Kone OYJ Class B		1,432,464
		France (12.3%)
		Commercial Banks
	23,058	Societe Generale SA		1,366,683
	25,443	BNP Paribas SA		1,962,303
				3,328,986
		Electrical Equipment
	10,314	Schneider Electric SA		1,723,180
		Hotels, Restaurants & Leisure
	21,776	Accor SA		975,014
		Metals & Mining
	39,213	ArcelorMittal		1,364,504
		Multi-Utilities
	36,336	GDF Suez		1,329,784
		Total France		8,721,468
		Germany (15.5%)
		Automobiles
	25,254	Daimler AG (Registered)		1,900,638
		Food & Staples Retailing
	16,527	Metro AG		1,000,484
		Health Care Equipment & Supplies
	14,499	Fresenius SE & Co. KGaA		1,513,325
		Industrial Conglomerates
	18,618	Siemens AG (Registered)		2,556,342
		Insurance
	7,609	Muenchener Rueckversicherungs AG (Registered)		1,161,630

NUMBER OF SHARES			VALUE
		Machinery
	9,668	MAN SE (a)	$	1,288,148
		Pharmaceuticals
	19,909	Bayer AG (Registered)		1,600,605
		Total Germany		11,021,172
		Portugal (1.6%)
		Oil, Gas & Consumable Fuels
	46,238	Galp Energia SGPS SA Class B (a)		1,103,044
		Spain (4.1%)
		Commercial Banks
	148,311	Banco Bilbao Vizcaya Argentaria SA		1,738,308
		Information Technology Services
	55,644	Amadeus IT Holding SA Class A (b)		1,157,534
		Total Spain		2,895,842
		Sweden (1.4%)
		Auto Components
	12,095	Autoliv, Inc. SDR		955,969
		Switzerland (12.7%)
		Food Products
	51,469	Nestle SA (Registered)		3,198,760
		Insurance
	5,621	Zurich Financial Services AG (b)		1,420,688
		Pharmaceuticals
	37,310	Novartis AG (Registered)		2,285,516
	12,777	Roche Holding AG (Genusschein)		2,137,580
				4,423,096
		Total Switzerland		9,042,544

See Notes to Financial Statements
47

Morgan Stanley Variable Investment Series - European Equity

Portfolio of Investments n June 30, 2011 (unaudited)continued

NUMBER OF SHARES			VALUE
		United Kingdom (46.2%)
		Aerospace & Defense
	122,971	Rolls-Royce Holdings PLC (b)	$	1,273,064
		Commercial Banks
	261,482	HSBC Holdings PLC		2,594,040
	352,636	Barclays PLC		1,451,523
				4,045,563
		Food & Staples Retailing
	245,657	WM Morrison Supermarkets PLC		1,173,785
		Household Products
	27,690	Reckitt Benckiser Group PLC		1,528,856
		Insurance
	116,090	Prudential PLC		1,341,598
		Media
	136,304	Reed Elsevier PLC		1,239,602
		Metals & Mining
	43,987	Anglo American PLC		2,179,895
	73,048	Xstrata PLC		1,610,986
				3,790,881
		Oil, Gas & Consumable Fuels
	71,588	Royal Dutch Shell PLC Class A		2,550,843
	61,199	Tullow Oil PLC		1,218,034
	279,512	BP PLC		2,059,443
	92,456	BG Group PLC		2,098,340
				7,926,660
		Pharmaceuticals
	93,055	GlaxoSmithKline PLC		1,992,370
		Professional Services
	100,848	Experian PLC		1,284,386
		Specialty Retail
	179,467	Carphone Warehouse Group PLC (b)		1,218,445

NUMBER OF SHARES			VALUE
		Tobacco
	46,007	British American Tobacco PLC	$	2,016,641
	48,700	Imperial Tobacco Group PLC		1,619,194
				3,635,835
		Wireless Telecommunication Services
	883,645	Vodafone Group PLC		2,348,403
		Total United Kingdom		32,799,448
		Total Common Stocks(Cost $53,555,850)		69,149,813
PRINCIPAL AMOUNT IN THOUSANDS
		Short-Term Investments (4.8%)
		Securities held as Collateral on Loaned Securities (3.1%)
		Repurchase Agreements (0.6%)
$	25	Barclays Capital, Inc. (0.01%, dated 06/30/11, due 07/01/11; proceeds $25,229; fully collateralized by a U.S. Government Obligation; U.S. Treasury Note 3.38% due 11/15/19; valued at $25,733)		25,229
	401	Nomura Holdings, Inc. (0.09%, dated 06/30/11, due 07/01/11; proceeds $400,889; fully collateralized by U.S. Government Agencies; Federal National Mortgage Association 4.50% - 6.50% due 08/01/36 - 09/01/40; valued at $408,906)		400,888
		Total Repurchase Agreements (Cost $426,117)		426,117

See Notes to Financial Statements
48

Morgan Stanley Variable Investment Series - European Equity

Portfolio of Investments n June 30, 2011 (unaudited)continued

NUMBER OF SHARES (000)					VALUE
		Investment Company (2.5%)
	1,768	Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class (See Note 6) (Cost $1,768,388)			$	1,768,388
		Total Securities held as Collateral on Loaned Securities (Cost $2,194,505)				2,194,505
		Investment Company (1.7%)
	1,218	Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class (See Note 6) (Cost $1,218,065)				1,218,065
		Total Short-Term Investments (Cost $3,412,570)				3,412,570
Total Investments (Cost $56,968,420) (c)(d)(e)			102.3	%		72,562,383
Liabilities in Excess of Other Assets			(2.3	)		(1,613,274	)
Net Assets			100.0	%	$	70,949,109

SDR  Swedish Depositary Receipt.

  (a)  All or a portion of this security was on loan at June 30, 2011.

  (b)  Non-income producing security.

  (c)  Securities have been designated as collateral in connection with open foreign currency exchange contracts.

  (d)  The market value and percentage of net assets, $69,149,813 and 97.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note 1A within the Notes to the Financial Statements.

  (e)  The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $17,832,377 and the aggregate gross unrealized depreciation is $2,238,414 resulting in net unrealized appreciation of $15,593,963.

FOREIGN CURRENCY EXCHANGE CONTRACTS OPEN AT JUNE 30, 2011:

COUNTERPARTY	CONTRACTS TO DELIVER		IN EXCHANGE FOR		DELIVERY DATE	UNREALIZED APPRECIATION
State Street Bank London	GBP	2,200,000	EUR	2,471,671	07/08/2011	$	53,232

Currency Abbreviations:

EUR  Euro.

GBP  British Pound.

See Notes to Financial Statements
49

Morgan Stanley Variable Investment Series - European Equity

Summary of Investments n June 30, 2011 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Commercial Banks	$	9,112,857		13.0	%
Oil, Gas & Consumable Fuels		9,029,704		12.8
Pharmaceuticals		8,016,071		11.4
Metals & Mining		5,155,385		7.3
Insurance		3,923,916		5.6
Tobacco		3,635,835		5.2
Food Products		3,198,760		4.5
Machinery		2,720,612		3.9
Industrial Conglomerates		2,556,342		3.6
Wireless Telecommunication Services		2,348,403		3.3
Food & Staples Retailing		2,174,269		3.1
Automobiles		1,900,638		2.7
Electrical Equipment		1,723,180		2.4
Household Products		1,528,856		2.2
Health Care Equipment & Supplies		1,513,325		2.2
Multi-Utilities		1,329,784		1.9

INDUSTRY	VALUE			PERCENT OF TOTAL INVESTMENTS
Professional Services	$	1,284,386			1.8	%
Aerospace & Defense		1,273,064			1.8
Media		1,239,602			1.8
Specialty Retail		1,218,445			1.7
Investment Company		1,218,065			1.7
Chemicals		1,177,862			1.7
Information Technology Services		1,157,534			1.6
Hotels, Restaurants & Leisure		975,014			1.4
Auto Components		955,969			1.4
	$	70,367,878	^		100.0	%

^  Does not reflect the value of securities held as collateral on loaned securities and does not include open foreign currency exchange contracts with unrealized appreciation of $53,232.

See Notes to Financial Statements
50

Morgan Stanley Variable Investment Series - Multi Cap Growth

Portfolio of Investments n June 30, 2011 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (96.9%)
		Air Transport (2.1%)
	108,729	Expeditors International of Washington, Inc.	$	5,565,838
		Alternative Energy (4.4%)
	85,888	Range Resources Corp.		4,766,784
	153,869	Ultra Petroleum Corp. (a)		7,047,200
				11,813,984
		Asset Management & Custodian (1.9%)
	96,484	Greenhill & Co., Inc.		5,192,769
		Biotechnology (3.4%)
	123,026	Illumina, Inc. (a)		9,245,404
		Casinos & Gambling (2.5%)
	156,992	Las Vegas Sands Corp. (a)		6,626,632
		Chemicals: Diversified (2.8%)
	105,122	Monsanto Co.		7,625,550
		Commercial Finance & Mortgage Companies (2.0%)
	795,890	BM&F Bovespa SA (Brazil)		5,268,025
		Commercial Services (7.3%)
	120,180	CoStar Group, Inc. (a)		7,124,270
	200,543	eBay, Inc. (a)		6,471,523
	182,843	Leucadia National Corp.		6,234,946
				19,830,739
		Communications Technology (3.5%)
	204,293	Motorola Solutions, Inc. (a)		9,405,650
		Computer Services, Software & Systems (15.6%)
	79,435	Baidu, Inc. ADR (China) (a)		11,131,227
	327,898	Facebook, Inc. Class B (a)(b)(c)		8,197,450
	22,433	Google, Inc. Class A (a)		11,359,623
	50,537	Salesforce.com, Inc. (a)		7,529,002
	148,000	Tencent Holdings Ltd. (China) (d)		4,059,017
				42,276,319

NUMBER OF SHARES			VALUE
		Computer Technology (10.4%)
	54,428	Apple, Inc. (a)	$	18,269,847
	36,410	LinkedIn Corp. Class A (a)		3,280,177
	184,408	Yandex NV Class A (Russia) (a)		6,548,328
				28,098,352
		Diversified Media (1.9%)
	88,742	Naspers Ltd. Class N (South Africa)		5,022,319
		Diversified Retail (13.5%)
	100,989	Amazon.com, Inc. (a)		20,651,240
	152,775	Ctrip.com International Ltd. ADR (China) (a)		6,581,547
	34,930	NetFlix, Inc. (a)		9,175,762
				36,408,549
		Financial Data & Systems (4.9%)
	190,765	MSCI, Inc. Class A (a)		7,188,025
	171,750	Verisk Analytics, Inc. Class A (a)		5,945,985
				13,134,010
		Health Care Services (2.1%)
	138,329	athenahealth, Inc. (a)		5,685,322
		Medical Equipment (2.6%)
	19,103	Intuitive Surgical, Inc. (a)		7,108,417
		Metals & Minerals: Diversified (4.3%)
	2,771,679	Lynas Corp. Ltd. (Australia) (a)		5,350,979
	104,852	Molycorp, Inc. (a)		6,402,263
				11,753,242
		Pharmaceuticals (2.5%)
	100,160	Mead Johnson Nutrition Co.		6,765,808
		Real Estate Investment Trusts (REIT) (3.8%)
	308,887	Brookfield Asset Management, Inc. Class A (Canada)		10,245,782

See Notes to Financial Statements
51

Morgan Stanley Variable Investment Series - Multi Cap Growth

Portfolio of Investments n June 30, 2011 (unaudited)continued

NUMBER OF SHARES					VALUE
		Recreational Vehicles & Boats (3.5%)
	312,502	Edenred (France)			$	9,529,560
		Wholesale & International Trade (1.9%)
	2,574,000	Li & Fung Ltd. (d)				5,176,894
		Total Common Stocks (Cost $183,717,554)				261,779,165
		Convertible Preferred Stock (0.5%)
		Alternative Energy
	488,605	Better Place, Inc. (Cost $1,465,815) (a)(b)(c)				1,465,815
NUMBER OF SHARES (000)
		Short-Term Investment (2.7%)
		Investment Company
	7,387	Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class (See Note 6) (Cost $7,387,213)				7,387,213
Total Investments (Cost $192,570,582) (e)(f)			100.1	%		270,632,193
Liabilities in Excess of Other Assets			(0.1	)		(391,056	)
Net Assets			100.0	%	$	270,241,137

ADR  American Depositary Receipt.

REIT  Real Estate Investment Trust.

  (a)  Non-income producing security.

  (b)  Illiquid security. Resale is restricted to qualified institutional investors.

  (c)  At June 30, 2011, the Portfolio held fair valued securities valued at $9,663,265, representing 3.6% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Trustees.

  (d)  Security trades on the Hong Kong exchange.

  (e)  The market value and percentage of net assets, $29,138,769 and 10.8%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note 1A within the Notes to the Financial Statements.

  (f)  The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $86,795,084 and the aggregate gross unrealized depreciation is $8,733,473 resulting in net unrealized appreciation of $78,061,611.

See Notes to Financial Statements
52

Morgan Stanley Variable Investment Series - Multi Cap Growth

Summary of Investments n June 30, 2011 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Computer Services, Software & Systems	$	42,276,319		15.6	%
Diversified Retail		36,408,549		13.5
Computer Technology		28,098,352		10.4
Commercial Services		19,830,739		7.3
Alternative Energy		13,279,799		4.9
Financial Data & Systems		13,134,010		4.9
Metals & Minerals: Diversified		11,753,242		4.3
Real Estate Investment Trusts (REIT)		10,245,782		3.8
Recreational Vehicles & Boats		9,529,560		3.5
Communications Technology		9,405,650		3.5
Biotechnology		9,245,404		3.4

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Chemicals: Diversified	$	7,625,550		2.8	%
Investment Company		7,387,213		2.7
Medical Equipment		7,108,417		2.6
Pharmaceuticals		6,765,808		2.5
Casinos & Gambling		6,626,632		2.5
Health Care Services		5,685,322		2.1
Air Transport		5,565,838		2.1
Commercial Finance & Mortgage Companies		5,268,025		1.9
Asset Management & Custodian		5,192,769		1.9
Wholesale & International Trade		5,176,894		1.9
Diversified Media		5,022,319		1.9
	$	270,632,193		100.0	%

See Notes to Financial Statements
53

Morgan Stanley Variable Investment Series - Aggressive Equity

Portfolio of Investments n June 30, 2011 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (95.8%)
		Air Transport (2.1%)
	12,910	Expeditors International of Washington, Inc.	$	660,863
		Alternative Energy (4.3%)
	10,066	Range Resources Corp.		558,663
	18,034	Ultra Petroleum Corp. (a)		825,957
				1,384,620
		Asset Management & Custodian (1.9%)
	11,308	Greenhill & Co., Inc.		608,597
		Biotechnology (3.4%)
	14,419	Illumina, Inc. (a)		1,083,588
		Casinos & Gambling (2.4%)
	18,400	Las Vegas Sands Corp. (a)		776,664
		Chemicals: Diversified (2.8%)
	12,321	Monsanto Co.		893,765
		Commercial Finance & Mortgage Companies (1.9%)
	93,281	BM&F Bovespa SA (Brazil)		617,430
		Commercial Services (7.3%)
	14,085	CoStar Group, Inc. (a)		834,959
	23,504	eBay, Inc. (a)		758,474
	21,430	Leucadia National Corp.		730,763
				2,324,196
		Communications Technology (3.4%)
	23,944	Motorola Solutions, Inc. (a)		1,102,382
		Computer Services, Software & Systems (15.5%)
	9,310	Baidu, Inc. ADR (China) (a)		1,304,610
	39,222	Facebook, Inc. Class B (a)(b)(c)		980,550
	2,629	Google, Inc. Class A (a)		1,331,273
	5,923	Salesforce.com, Inc. (a)		882,409
	17,300	Tencent Holdings Ltd. (China) (d)		474,466
				4,973,308

NUMBER OF SHARES			VALUE
		Computer Technology (10.2%)
	6,379	Apple, Inc. (a)	$	2,141,239
	3,945	LinkedIn Corp. Class A (a)		355,405
	21,613	Yandex N.V. Class A (Russia) (a)		767,478
				3,264,122
		Diversified Media (1.8%)
	10,401	Naspers Ltd. Class N (South Africa)		588,641
		Diversified Retail (13.3%)
	11,836	Amazon.com, Inc. (a)		2,420,344
	17,906	Ctrip.com International Ltd. ADR (China) (a)		771,390
	4,094	NetFlix, Inc. (a)		1,075,453
				4,267,187
		Financial Data & Systems (4.8%)
	22,657	MSCI, Inc. Class A (a)		853,716
	20,130	Verisk Analytics, Inc. Class A (a)		696,900
				1,550,616
		Health Care Services (2.1%)
	16,213	athenahealth, Inc. (a)		666,354
		Medical Equipment (2.6%)
	2,239	Intuitive Surgical, Inc. (a)		833,154
		Metals & Minerals: Diversified (4.3%)
	324,848	Lynas Corp. Ltd. (Australia) (a)		627,149
	12,289	Molycorp, Inc. (a)		750,366
				1,377,515
		Pharmaceuticals (2.5%)
	11,739	Mead Johnson Nutrition Co.		792,969
		Real Estate Investment Trusts (REIT) (3.8%)
	36,202	Brookfield Asset Management, Inc. Class A (Canada)		1,200,820

See Notes to Financial Statements
54

Morgan Stanley Variable Investment Series - Aggressive Equity

Portfolio of Investments n June 30, 2011 (unaudited)continued

NUMBER OF SHARES					VALUE
		Recreational Vehicles & Boats (3.5%)
	36,626	Edenred (France)			$	1,116,888
		Wholesale & International Trade (1.9%)
	302,000	Li & Fung Ltd. (d)				607,390
		Total Common Stocks (Cost $21,614,141)				30,691,069
		Convertible Preferred Stock (0.5%)
		Alternative Energy
	59,090	Better Place, Inc. (Cost $177,270) (a)(b)(c)				177,270
NUMBER OF SHARES (000)
		Short-Term Investment (3.9%)
		Investment Company
	1,234	Morgan Stanley Institutional Liquidity Funds - Money Market Portfolio - Institutional Class (See Note 6) (Cost $1,233,710)				1,233,710
Total Investments (Cost $23,025,121) (e)(f)			100.2	%		32,102,049
Liabilities in Excess of Other Assets			(0.2	)		(68,394	)
Net Assets			100.0	%	$	32,033,655

ADR  American Depositary Receipt.

  (a)  Non-income producing security.

  (b)  At June 30, 2011, the Portfolio held fair valued securities valued at $1,157,820, representing 3.6% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Trustees.

  (c)  Illiquid security. Resale is restricted to qualified institutional investors.

  (d)  Security trades on the Hong Kong exchange.

  (e)  The market value and percentage of net assets, $3,414,534 and 10.7%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note 1A within the Notes to the Financial Statements.

  (f)  The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $9,919,459 and the aggregate gross unrealized depreciation is $842,531 resulting in net unrealized appreciation of $9,076,928.

See Notes to Financial Statements
55

Morgan Stanley Variable Investment Series - Aggressive Equity

Summary of Investments n June 30, 2011 (unaudited)

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Computer Services, Software & Systems	$	4,973,308		15.5	%
Diversified Retail		4,267,187		13.3
Computer Technology		3,264,122		10.2
Commercial Services		2,324,196		7.2
Alternative Energy		1,561,890		4.9
Financial Data & Systems		1,550,616		4.8
Metals & Minerals: Diversified		1,377,515		4.3
Investment Company		1,233,710		3.8
Real Estate Investment Trusts (REIT)		1,200,820		3.7
Recreational Vehicles & Boats		1,116,888		3.5
Communications Technology		1,102,382		3.4

INDUSTRY	VALUE		PERCENT OF TOTAL INVESTMENTS
Biotechnology	$	1,083,588		3.4	%
Chemicals: Diversified		893,765		2.8
Medical Equipment		833,154		2.6
Pharmaceuticals		792,969		2.5
Casinos & Gambling		776,664		2.4
Health Care Services		666,354		2.1
Air Transport		660,863		2.1
Commercial Finance & Mortgage Companies		617,430		1.9
Asset Management & Custodian		608,597		1.9
Wholesale & International Trade		607,390		1.9
Diversified Media		588,641		1.8
	$	32,102,049		100.0	%

See Notes to Financial Statements
56

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (60.5%)
		Auto Components (1.3%)
	30,000	Visteon Corp. (a)	$	2,052,300
		Biotechnology (4.4%)
	140,700	Vertex Pharmaceuticals, Inc. (a)		7,314,993
		Capital Markets (2.7%)
	34,000	Goldman Sachs Group, Inc. (The)		4,525,060
		Commercial Banks (2.5%)
	500,000	Popular, Inc. (Puerto Rico) (a)		1,380,000
	100,000	Wells Fargo & Co.		2,806,000
				4,186,000
		Communications Equipment (2.6%)
	279,350	Cisco Systems, Inc.		4,360,653
		Computers & Peripherals (9.5%)
	376,000	Dell, Inc. (a)		6,267,920
	101,300	Hewlett-Packard Co.		3,687,320
	137,700	SanDisk Corp. (a)		5,714,550
				15,669,790
		Diversified Financial Services (6.0%)
	125,000	Citigroup, Inc. (See Note 6)		5,205,000
	116,445	JPMorgan Chase & Co.		4,767,258
				9,972,258
		Diversified Telecommunication Services (3.0%)
	122,770	CenturyLink, Inc.		4,963,591
		Hotels, Restaurants & Leisure (1.2%)
	50,000	Hyatt Hotels Corp. Class A (a)		2,041,000
		Industrial Conglomerates (1.1%)
	97,010	General Electric Co.		1,829,609
		Insurance (2.2%)
	58,145	Chubb Corp.		3,640,458
		Metals & Mining (8.5%)
	354,000	Alcoa, Inc.		5,614,440
	52,060	Freeport-McMoRan Copper & Gold, Inc.		2,753,974
	122,000	United States Steel Corp.		5,616,880
				13,985,294

See Notes to Financial Statements
57

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)continued

NUMBER OF SHARES			VALUE
		Oil, Gas & Consumable Fuels (4.0%)
	30,355	Chevron Corp.	$	3,121,708
	45,300	ConocoPhillips		3,406,107
				6,527,815
		Real Estate Investment Trusts (REITs) (2.2%)
	90,825	Plum Creek Timber Co., Inc. REIT		3,682,046
		Semiconductors & Semiconductor Equipment (2.8%)
	123,805	Intel Corp.		2,743,519
	250,000	Micron Technology, Inc. (a)		1,870,000
				4,613,519
		Specialty Retail (1.1%)
	51,935	Home Depot, Inc.		1,881,086
		Wireless Telecommunication Services (5.4%)
	1,666,000	Sprint Nextel Corp. (a)		8,979,740
		Total Common Stocks (Cost $100,813,758)		100,225,212

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE
		Corporate Bonds (8.8%)
		Basic Materials (0.6%)
$	100	Anglo American Capital PLC (United Kingdom)		9.375	%	04/08/19	131,738
	50	ArcelorMittal (Luxembourg)		9.85		06/01/19	63,478
	15	ArcelorMittal (Luxembourg)		7.00		10/15/39	15,213
	55	Barrick North America Finance LLC (Canada)		4.40		05/30/21	54,854
	130	CF Industries, Inc.		6.875		05/01/18	147,712
	55	Cliffs Natural Resources, Inc.		4.875		04/01/21	55,258
	15	FMG Resources August 2006 Pty Ltd. (Australia) (b)		6.875		02/01/18	15,300
	40	FMG Resources August 2006 Pty Ltd. (Australia) (b)		6.375		02/01/16	40,100
	35	Georgia-Pacific LLC		7.75		11/15/29	40,391
	50	Georgia-Pacific LLC		8.875		05/15/31	63,335
	55	International Paper Co.		7.50		08/15/21	64,404
	30	Rio Tinto Finance USA Ltd. (Australia)		9.00		05/01/19	39,810
	10	Southern Copper Corp. (Mexico)		5.375		04/16/20	10,293
	20	Southern Copper Corp. (Mexico)		6.75		04/16/40	19,556
	65	Teck Resources, Ltd. (Canada)		4.75		01/15/22	65,304
	70	Teck Resources, Ltd. (Canada)		6.25		07/15/41	70,913

See Notes to Financial Statements
58

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	60	Vale Overseas Ltd. (Brazil)		5.625	%	09/15/19	$	64,336
	15	Vale Overseas Ltd. (Brazil)		6.875		11/10/39		16,377
								978,372
		Communications (1.1%)
	95	AT&T, Inc.		6.15		09/15/34		98,657
	50	CBS Corp.		8.875		05/15/19		63,833
	45	Comcast Corp.		5.70		05/15/18		50,281
	50	Comcast Corp.		5.15		03/01/20		53,929
	15	Comcast Corp.		6.45		03/15/37		16,095
	15	COX Communications, Inc. (b)		8.375		03/01/39		19,676
	45	Deutsche Telekom International Finance BV (Germany)		8.75		06/15/30		59,546
	30	DirecTV Holdings LLC/DirecTV Financing Co., Inc.		7.625		05/15/16		32,733
	30	DirecTV Holdings LLC/DirecTV Financing Co., Inc.		5.875		10/01/19		33,327
	20	Expedia, Inc.		5.95		08/15/20		19,550
	70	Frontier Communications Corp.		8.50		04/15/20		76,650
	65	NBC Universal Media LLC		5.15		04/30/20		68,756
	100	News America, Inc.		7.85		03/01/39		120,106
	50	Qwest Corp.		6.50		06/01/17		54,500
	40	Qwest Corp.		6.875		09/15/33		38,750
	45	Qwest Corp.		8.375		05/01/16		53,325
	100	Sable International Finance Ltd. (South Africa) (b)		7.75		02/15/17		101,000
	65	Telecom Italia Capital SA (Italy)		7.175		06/18/19		71,876
	95	Telefonica Europe BV (Spain)		8.25		09/15/30		113,728
	55	Telstra Corp. Ltd. (Australia) (b)		4.80		10/12/21		55,293
	65	Time Warner Cable, Inc.		8.75		02/14/19		82,944
	45	Time Warner Cable, Inc.		6.75		06/15/39		49,388
	25	Time Warner, Inc.		7.70		05/01/32		30,269
	40	Time Warner, Inc.		5.875		11/15/16		45,775
	25	Time Warner, Inc.		4.875		03/15/20		25,934
	55	Verizon Communications, Inc.		8.95		03/01/39		77,886
	35	Verizon Communications, Inc.		4.60		04/01/21		36,184
	80	Viacom, Inc.		6.875		04/30/36		89,592
	45	Vivendi SA (France) (b)		6.625		04/04/18		50,976
	100	WPP Finance UK (United Kingdom)		8.00		09/15/14		117,388
								1,807,947
		Consumer, Cyclical (0.6%)
	128	America West Airlines 2001-1 Pass-Through Trust, Series 011G (AMBAC Insd)		7.10		04/02/21		127,471
	90	Best Buy Co., Inc.		3.75		03/15/16		90,528
	146	CVS Pass-Through Trust		6.036		12/10/28		155,687

See Notes to Financial Statements
59

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	60	Daimler Finance North America LLC		7.30	%	01/15/12	$	62,097
	65	Gap, Inc. (The)		5.95		04/12/21		62,559
	90	Home Depot, Inc.		5.875		12/16/36		92,417
	40	Hyatt Hotels Corp. (b)		6.875		08/15/19		44,709
	20	Ingram Micro, Inc.		5.25		09/01/17		20,992
	25	JC Penney Co., Inc.		5.65		06/01/20		24,875
	49	JC Penney Corp., Inc.		6.375		10/15/36		44,100
	70	QVC, Inc. (b)		7.125		04/15/17		73,850
	40	Wal-Mart Stores, Inc.		5.25		09/01/35		40,139
	45	Wesfarmers Ltd. (Australia) (b)		2.983		05/18/16		45,184
	75	Wyndham Worldwide Corp.		5.625		03/01/21		74,950
	100	Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp.		7.75		08/15/20		109,125
	5	Yum! Brands, Inc.		6.875		11/15/37		5,690
								1,074,373
		Consumer, Non-Cyclical (0.8%)
	60	Altria Group, Inc.		9.25		08/06/19		78,355
	50	Altria Group, Inc.		4.125		09/11/15		53,035
	50	BAT International Finance PLC (United Kingdom)		9.50		11/15/18		66,986
	120	Boston Scientific Corp.		6.00		01/15/20		130,124
	45	Bunge Ltd. Finance Corp.		8.50		06/15/19		54,943
	30	ConAgra Foods, Inc.		7.00		10/01/28		31,556
	55	ConAgra Foods, Inc.		8.25		09/15/30		65,522
	25	Constellation Brands, Inc.		7.25		09/01/16		27,438
	96	Delhaize Group SA (Belgium)		5.70		10/01/40		89,620
	95	Gilead Sciences, Inc.		4.50		04/01/21		95,344
	100	Grupo Bimbo SAB de CV (Mexico) (b)		4.875		06/30/20		100,838
	180	Kraft Foods, Inc.		7.00		08/11/37		210,367
	50	Quest Diagnostics, Inc.		6.95		07/01/37		55,687
	115	UnitedHealth Group, Inc.		6.625		11/15/37		127,990
	80	Verisk Analytics, Inc.		5.80		05/01/21		85,015
	60	Warner Chilcott Co. LLC/Warner Chilcott Finance LLC (Ireland)		7.75		09/15/18		60,825
	65	Woolworths Ltd. (Australia)		4.00		09/22/20		63,415
								1,397,060
		Energy (0.7%)
	10	Alpha Natural Resources, Inc.		6.00		06/01/19		10,025
	35	Alpha Natural Resources, Inc.		6.25		06/01/21		35,350
	45	Anadarko Petroleum Corp.		6.95		06/15/19		52,643
	75	Energy Transfer Partners LP		8.50		04/15/14		87,314
	90	Enterprise Products Operating LLC		6.50		01/31/19		103,251
	35	Enterprise Products Operating LLC		5.25		01/31/20		37,301

See Notes to Financial Statements
60

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	35	EQT Corp.		8.125	%	06/01/19	$	42,879
	100	Gazprom OAO Via Gaz Capital SA (Russia) (b)		6.51		03/07/22		106,250
	50	Kinder Morgan Energy Partners LP		5.95		02/15/18		55,786
	135	Kinder Morgan Finance Co. ULC		5.70		01/05/16		141,244
	35	Marathon Petroleum Corp. (b)		5.125		03/01/21		36,050
	80	Petrobras International Finance Co. (Brazil)		5.75		01/20/20		85,740
	60	Plains All American Pipeline LP/PAA Finance Corp.		6.70		05/15/36		64,082
	60	Plains All American Pipeline LP/PAA Finance Corp.		8.75		05/01/19		75,593
	45	QEP Resources, Inc.		6.875		03/01/21		47,700
	50	Spectra Energy Capital LLC		7.50		09/15/38		60,420
	55	Texas Eastern Transmission LP		7.00		07/15/32		64,263
								1,105,891
		Finance (3.8%)
	100	Abbey National Treasury Services PLC (United Kingdom) (b)		3.875		11/10/14		101,914
	75	Aegon N.V. (Netherlands)		4.625		12/01/15		79,559
	135	American International Group, Inc.		6.40		12/15/20		145,571
	100	Australia & New Zealand Banking Group Ltd. (Australia)		4.875		01/12/21		101,460
	135	Bank of America Corp.		5.65		05/01/18		142,536
	30	Bank of America Corp.		5.75		12/01/17		31,941
	175	Barclays Bank PLC (United Kingdom)		6.75		05/22/19		196,751
	170	Bear Stearns Cos. LLC (The)		7.25		02/01/18		202,144
	60	Bear Stearns Cos. LLC (The)		6.40		10/02/17		68,545
	125	BNP Paribas (France)		5.00		01/15/21		125,912
	75	Brandywine Operating Partnership		4.95		04/15/18		76,144
	45	Brookfield Asset Management, Inc. (Canada)		5.80		04/25/17		48,378
	110	Citigroup, Inc. (See Note 6)		5.875		05/29/37		109,427
	160	Citigroup, Inc. (See Note 6)		6.125		11/21/17		176,948
	70	Citigroup, Inc. (See Note 6)		6.125		05/15/18		77,195
	95	CNA Financial Corp.		5.75		08/15/21		98,284
	100	Credit Agricole SA (France)		3.50		04/13/15		100,376
	25	Credit Suisse (Switzerland)		6.00		02/15/18		27,014
	240	Credit Suisse AG (Switzerland)		5.40		01/14/20		243,383
	60	Dexus Diversfied Trust/Dexus Office Trust (Australia) (b)		5.60		03/15/21		60,742
	115	Digital Realty Trust LP		4.50		07/15/15		119,799
	140	Farmers Exchange Capital		7.05		07/15/28		144,562
	40	Fifth Third Bancorp		3.625		01/25/16		40,390
	60	General Electric Capital Corp.		5.30		02/11/21		62,550
	160	General Electric Capital Corp.		5.625		05/01/18		175,244

See Notes to Financial Statements
61

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	270	General Electric Capital Corp.		6.00	%	08/07/19	$	299,445
	75	Genworth Financial, Inc.		7.20		02/15/21		75,182
	60	Goldman Sachs Group, Inc. (The)		7.50		02/15/19		69,916
	80	Goldman Sachs Group, Inc. (The)		6.75		10/01/37		80,244
	190	Goldman Sachs Group, Inc. (The)		6.15		04/01/18		207,072
	45	Harley-Davidson Funding Corp. (b)		6.80		06/15/18		50,930
	60	Hartford Financial Services Group, Inc.		5.50		03/30/20		61,955
	130	HBOS PLC (United Kingdom) (b)		6.75		05/21/18		125,272
	30	HCP, Inc.		5.375		02/01/21		31,001
	50	HCP, Inc.		5.625		05/01/17		54,370
	60	Health Care REIT, Inc.		6.125		04/15/20		64,376
	75	Hess Corp.		6.00		01/15/40		77,892
	210	HSBC Holdings PLC (United Kingdom)		5.10		04/05/21		215,616
	15	JPMorgan Chase & Co.		4.95		03/25/20		15,522
	70	Lloyds TSB Bank PLC (United Kingdom)		6.375		01/21/21		73,004
	50	Macquarie Bank Ltd. (Australia) (b)		6.625		04/07/21		50,393
	55	Macquarie Group Ltd. (Australia) (b)		6.00		01/14/20		55,243
	225	Merrill Lynch & Co., Inc.		6.875		04/25/18		249,286
	35	NASDAQ OMX Group, Inc. (The)		5.55		01/15/20		34,945
	170	Nationwide Building Society (United Kingdom) (b)		6.25		02/25/20		177,081
	50	Nationwide Financial Services (b)		5.375		03/25/21		50,316
	75	Pacific LifeCorp		6.00		02/10/20		80,560
	60	Platinum Underwriters Finance, Inc.		7.50		06/01/17		64,654
	50	Principal Financial Group, Inc.		8.875		05/15/19		63,696
	40	Prudential Financial, Inc.		6.625		12/01/37		42,604
	50	Regions Financial Corp.		5.75		06/15/15		49,293
	60	Reinsurance Group of America, Inc.		6.45		11/15/19		65,269
	100	Royal Bank of Scotland PLC (The) (United Kingdom)		4.875		03/16/15		103,870
	25	Santander Holdings USA, Inc.		4.625		04/19/16		25,151
	70	SLM Corp.		6.25		01/25/16		72,697
	100	Standard Chartered Bank (United Kingdom) (b)		6.40		09/26/17		111,506
	105	TD Ameritrade Holding Corp.		5.60		12/01/19		112,751
	100	Ventas Realty LP/Ventas Capital Corp.		4.75		06/01/21		97,806
	75	WEA Finance LLC (Australia) (b)		4.625		05/10/21		72,926
	25	Wells Fargo & Co.		3.676		06/15/16		25,712
	235	Wells Fargo & Co.		5.625		12/11/17		259,935
	80	Wells Operating Partnership II LP (b)		5.875		04/01/18		82,643
	80	Willis Group Holdings PLC		4.125		03/15/16		81,649
								6,288,552
		Industrials (0.5%)
	100	BAA Funding Ltd. (United Kingdom) (b)		4.875		07/15/21		97,802

See Notes to Financial Statements
62

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
$	20	Bombardier, Inc. (Canada) (b)		7.50	%	03/15/18	$	22,500
	40	Bombardier, Inc. (Canada) (b)		7.75		03/15/20		45,200
	90	Cooper US, Inc.		5.25		11/15/12		95,329
	75	CRH America, Inc.		6.00		09/30/16		82,418
	40	DISH DBS Corp.		7.125		02/01/16		42,400
	30	Holcim US Finance Sarl & Cie SCS (Switzerland) (b)		6.00		12/30/19		32,111
	75	L-3 Communications Corp.		4.95		02/15/21		74,979
	55	Lafarge SA (France) (b)		5.85		07/09/15		58,856
	60	Norfolk Southern Corp.		7.25		02/15/31		74,122
	40	Union Pacific Corp.		6.125		02/15/20		46,582
	80	Waste Management, Inc.		6.125		11/30/39		84,007
								756,306
		Technology (0.2%)
	75	Fiserv, Inc.		3.125		06/15/16		74,690
	100	International Business Machines Corp.		7.625		10/15/18		127,369
	45	KLA-Tencor Corp.		6.90		05/01/18		50,903
								252,962
		Utilities (0.5%)
	120	CMS Energy Corp.		6.25		02/01/20		128,297
	50	EDF SA (France)		4.60		01/27/20		52,030
	125	Enel Finance International N.V. (Italy) (b)		5.125		10/07/19		126,601
	150	Exelon Generation Co. LLC		6.25		10/01/39		152,101
	140	FirstEnergy Solutions Corp.		6.05		08/15/21		150,934
	75	Iberdrola Finance Ireland Ltd. (Ireland) (b)		5.00		09/11/19		74,089
	45	NRG Energy, Inc.		8.50		06/15/19		46,800
	75	Ohio Power Co., Series M		5.375		10/01/21		80,950
	75	PPL WEM Holdings PLC (United Kingdom) (b)		3.90		05/01/16		77,048
								888,850
		Total Corporate Bonds (Cost $13,773,963)						14,550,313
		Sovereign (0.5%)
	230	Federative Republic of Brazil (Brazil)		6.00		01/17/17		269,330
EUR	95	Ireland Government Bond (Ireland)		5.40		03/13/25		85,360
MXN	1,600	Mexican Bonos (Mexico)		8.00		06/11/20		146,949
$	105	Republic of Italy (Italy)		6.875		09/27/23		119,333
RUB	5,000	Russian Foreign Bond - Eurobond (Russia)		7.85		03/10/18		187,990
		Total Sovereign(Cost $777,772)						808,962

See Notes to Financial Statements
63

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		Municipal Bonds (0.3%)
$	75	Chicago Illinois Transit Authority		6.20	%	12/01/40	$	75,768
	30	City of Chicago		6.395		01/01/40		31,398
	70	City of New York, Series G-1		5.968		03/01/36		74,094
	85	Illinois State Toll Highway Authority, Highway Revenue, Build America Bonds		6.184		01/01/34		88,419
		Municipal Electric Authority of Georgia
	50			6.64		04/01/57		49,203
	95			6.66		04/01/57		90,245
	65	New York City Transitional Finance Authority		5.267		05/01/27		67,457
		State of California, General Obligation Bonds
	30			6.65		03/01/22		33,656
	45			5.95		04/01/16		50,392
		Total Municipal Bonds(Cost $547,369)						560,632
		Agency Fixed Rate Mortgages (0.0%)
		Federal Home Loan Mortgage Corporation, Gold Pools:
	2			6.50		05/01/29 - 12/01/31		2,850
	1	Federal National Mortgage Association, Conventional Pools:		6.50		11/01/29		1,492
		Total Agency Fixed Rate Mortgages(Cost $3,971)						4,342
		Asset-Backed Securities (0.6%)
	100	Ally Master Owner Trust		1.057	(c)	01/15/16		100,499
	33	Brazos Student Finance Corp.		1.147	(c)	06/25/35		33,242
	175	Ford Credit Floorplan Master Owner Trust		1.887	(c)	02/15/17		181,977
	200	FUEL Trust (b)		4.207		10/15/22		200,978
	100	GE Dealer Floorplan Master Note Trust		1.737	(c)	10/20/14		101,505
	175	Louisiana Public Facilities Authority		1.207	(c)	04/26/27		172,517
	150	Nissan Auto Receivables Owner Trust		1.18		02/16/15		150,920
	125	World Omni Automobile Lease Securitization Trust		1.49		10/15/14		125,589
		Total Asset-Backed Securities(Cost $1,055,766)						1,067,227
		Agency Bonds - Banking (FDIC Guaranteed) (1.6%)
	200	Ally Financial, Inc.		2.20		12/19/12		205,177
	1,200	Citigroup Funding, Inc. (See Note 6)		2.25		12/10/12		1,230,704
	1,200	General Electric Capital Corp.		2.625		12/28/12		1,236,726
		Total Agency Bonds - Banking (FDIC Guaranteed) (Cost $2,623,866)						2,672,607

See Notes to Financial Statements
64

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)continued

PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE	VALUE
		U.S. Treasury Securities (7.8%)
		U.S. Treasury Bonds
$	1,090			7.50	%	11/15/24	$	1,535,197
	1,320			6.88		08/15/25		1,774,781
	870			3.50		02/15/39		747,248
	860			4.38		11/15/39		860,537
	270			4.63		02/15/40		281,560
		U.S. Treasury Notes
	800			2.38		08/31/14		837,188
	3,400			1.75		04/15/13 - 07/31/15		3,475,569
	1,175			2.25		01/31/15		1,222,826
	2,130			1.25		08/31/15		2,120,847
		Total U.S. Treasury Securities(Cost $12,844,422)						12,855,753
		U.S. Agency Securities (1.5%)
		Federal Home Loan Mortgage Corporation
	365			1.00		07/30/14		364,835
	250			6.75		03/15/31		321,349
	150			3.75		03/27/19		158,986
		Federal National Mortgage Association
	450			5.38		06/12/17		524,422
	350			4.13		04/15/14		381,407
	700			4.38		10/15/15		776,478
		Total U.S. Agency Securities(Cost $2,506,381)						2,527,477
		Short-Term Investments (18.6%)
		U.S. Treasury Security (0.3%)
	415	U.S. Treasury Bill (Cost $414,957) (d)(e)		0.046		09/22/11		414,957

See Notes to Financial Statements
65

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)continued

NUMBER OF SHARES (000)					VALUE
		Investment Company (18.3%)
	30,332	Morgan Stanley Institutional Liquidity Funds - Money Market Porfolio - Institutional Class (See Note 6) (Cost $30,331,575)			$	30,331,575
		Total Short-Term Investments(Cost $30,746,532)				30,746,532
		Total Investments (Cost $165,693,800) (f)(g)	100.2	%		166,019,057
		Liabilities in Excess of Other Assets	(0.2	)		(292,817	)
		Net Assets	100.0	%	$	165,726,240

  FDIC  Federal Deposit Insurance Corporation.

  REIT  Real Estate Investment Trust.

  (a)  Non-income producing security.

  (b)  144A security - Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

  (c)  Variable/Floating Rate Security - Interest rate changes on these instruments are based on changes in a designated base rate. The rates shown are those in effect on June 30, 2011.

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

  (e)  A portion of this security has been physically segregated in connection with open futures contracts and swap agreements.

  (f)  Securities have been designated as collateral in connection with open foreign currency exchange contracts, futures contracts and swap agreements.

  (g)  The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $7,448,270 and the aggregate gross unrealized depreciation is $7,123,013 resulting in net unrealized appreciation of $325,257.

Bond Insurance:

AMBAC  AMBAC Assurance Corporation.

FOREIGN CURRENCY EXCHANGE CONTRACTS OPEN AT JUNE 30, 2011:

COUNTERPARTY	CONTRACTS TO DELIVER		IN EXCHANGE FOR		DELIVERY DATE	UNREALIZED APPRECIATION (DEPRECIATION)
UBS AG	$	148,916	CLP	69,590,000	07/15/2011	$	(203	)
Bank of America NA	$	147,197	KRW	159,400,000	07/15/2011		2,010
UBS AG	$	181,209	NOK	980,000	07/15/2011		325
UBS AG	$	184,187	SEK	1,140,000	07/15/2011		(4,060	)
Bank of America NA	$	147,488	SGD	182,000	07/15/2011		685
UBS AG	CHF	165,000	$	196,347	07/15/2011		82
UBS AG	EUR	141,773	$	204,380	07/15/2011		(1,155	)
UBS AG	JPY	15,300,000	$	187,868	07/15/2011		(2,191	)
Net Unrealized Depreciation						$	(4,507	)

See Notes to Financial Statements
66

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)continued

FUTURES CONTRACTS OPEN AT JUNE 30, 2011:

NUMBER OF CONTRACTS		LONG/SHORT	DESCRIPTION, DELIVERY MONTH AND YEAR	UNDERLYING FACE AMOUNT AT VALUE			UNREALIZED APPRECIATION (DEPRECIATION)
	7	Long	U.S. Treasury 5 yr. Note, Sep-11	$	834,367		$	1,641
	1	Long	U.S. Treasury Ultra Long Bond, Sep-11		126,250			(1,813	)
	1	Short	German Euro Bund, Sep-11		(181,965	)		217
	6	Short	U.S. Treasury 10 yr. Note, Sep-11		(733,969	)		1,528
	10	Short	U.S. Treasury Bonds 30 Year, Sep-11		(1,230,312	)		9,164
Net Unrealized Appreciation							$	10,737

INTEREST RATE SWAP AGREEMENTS OPEN AT JUNE 30, 2011:

SWAP COUNTERPARTY	NOTIONAL AMOUNT (000)		FLOATING RATE INDEX	PAY/RECEIVE FLOATING RATE	FIXED RATE			TERMINATION DATE	UNREALIZED APPRECIATION (DEPRECIATION)
Credit Suisse	$	3,690	3 Month LIBOR	Receive		0.80	%	10/28/13	$	(1,237	)
Credit Suisse	CAD	1,185	3 Month CDOR	Receive		2.18		09/08/15		7,252
Credit Suisse		854	3 Month CDOR	Receive		2.21		09/08/15		4,157
Credit Suisse	$	1,545	3 Month LIBOR	Pay		2.10		10/28/17		(29,794	)
Credit Suisse	CAD	1,388	3 Month CDOR	Pay		4.07		09/08/20		(13,945	)
Credit Suisse		1,000	3 Month CDOR	Pay		4.12		09/08/20		(7,611	)
Goldman Sachs	GBP	1,210	6 Month LIBOR	Pay		4.90		03/04/21		12,040
Goldman Sachs		455	6 Month LIBOR	Pay		4.85		04/01/21		2,768
Goldman Sachs		280	6 Month LIBOR	Receive		4.18		03/04/41		(12,992	)
Goldman Sachs		105	6 Month LIBOR	Receive		4.13		04/01/41		(3,034	)
Net Unrealized Depreciation									$	(42,396	)

See Notes to Financial Statements
67

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)continued

ZERO COUPON SWAP AGREEMENTS OPEN AT JUNE 30, 2011:

SWAP COUNTERPARTY	NOTIONAL AMOUNT (000)		FLOATING RATE INDEX	PAY/RECEIVE FLOATING RATE	TERMINATION DATE	PREMIUM PAID (RECEIVED)		UNREALIZED APPRECIATION (DEPRECIATION)
Barclays Capital	$	435	3 Month LIBOR	Receive	11/15/19		—	$	(103,662	)
Barclays Capital		515	3 Month LIBOR	Pay	11/15/19		—		28,723
JPMorgan Chase		456	3 Month LIBOR	Receive	11/15/19		—		(101,402	)
JPMorgan Chase		741	3 Month LIBOR	Receive	11/15/21		—		(171,708	)
Net Unrealized Depreciation								$	(348,049	)

  CDOR  Canadian Dealer Offered Rate.

  LIBOR  London Interbank Offered Rate.

Currency Abbreviations:

CAD  Canadian Dollar.

CHF  Swiss Franc.

CLP  Chilean Peso.

EUR  Euro.

GBP  British Pound.

JPY  Japanese Yen.

KRW  South Korean Won.

MXN  Mexican New Peso.

NOK  Norwegian Krone.

RUB  Russian Ruble.

SEK  Swedish Krona.

SGD  Singapore Dollar.

See Notes to Financial Statements
68

Morgan Stanley Variable Investment Series - Strategist

Portfolio of Investments n June 30, 2011 (unaudited)continued

PORTFOLIO COMPOSITION	VALUE			PERCENT OF TOTAL INVESTMENTS
Common Stocks	$	100,225,212			60.4	%
Investment Company		30,331,575			18.3
Corporate Bonds		14,550,313			8.8
U.S. Treasury Securities		12,855,753			7.8
Agency Bonds - Banking (FDIC Guaranteed)		2,672,607			1.6
U.S. Agency Securities		2,527,477			1.5
Asset-Backed Securities		1,067,227			0.6
Sovereign		808,962			0.5
Municipal Bonds		560,632			0.3
U.S. Treasury Security		414,957			0.2
Agency Fixed Rate Mortgages		4,342			0.0
	$	166,019,057	†		100.0	%

  †  Does not include open long/short futures contracts with an underlying face amount of $3,106,863 and net unrealized appreciation of $10,737. Also does not include open foreign currency exchange contracts with net unrealized depreciation of $4,507 and open swap agreements with net unrealized depreciation of $390,445.

See Notes to Financial Statements
69

Morgan Stanley Variable Investment Series

Financial Statements

Statements of Assets and Liabilities
June 30, 2011 (unaudited)

	Money Market			Limited Duration			Income Plus			Global Infrastructure
Assets:
Investments in securities, at value*	$	116,877,779	(1)	$	60,585,173		$	201,549,755		$	74,768,237
Investment in affiliates, at value**		—			1,913,861			9,434,958			955,537
Total investments in securities, at value		116,877,779			62,499,034			210,984,713			75,723,774
Unrealized appreciation on open swap agreements		—			93,777			—			—
Unrealized appreciation on open foreign currency exchange contracts		—			—			—			—
Cash		5,604			—			—			125,049	(3)
Due from broker		—			—			—			—
Receivable for:
Interest		21,441			457,961			2,821,008			—
Investments sold		—			—			1,544,083			1,199,993
Dividends		—			—			6,344			566,126
Shares of beneficial interest sold		113,200			35,421			18,702			—
Foreign withholding taxes reclaimed		—			—			—			34,827
Interest and dividends from affiliates		—			4,387			67,096			84
Premium paid on open swap agreements		—			—			24,264			—
Variation margin		—			—			135,174			—
Prepaid expenses and other assets		4,001			2,325			5,244			4,676
Total Assets		117,022,025			63,092,905			215,606,628			77,654,529
Liabilities:
Collateral on securities loaned, at value		—			—			—			—
Unrealized depreciation on open swap agreements		—			816,812			210,307			—
Unrealized depreciation on open foreign currency exchange contracts		—			—			—			—
Payable to bank		—			—			—			—
Payable for:
Investments purchased		—			—			1,555,380			312,187
Shares of beneficial interest redeemed		509			57,040			641,723			51,114
Investment advisory fee		6,530			15,438			74,993			35,558
Variation margin		—			19,640			—			—
Distribution fee (Class Y)		—			10,067			28,866			3,097
Administration fee		4,836			4,141			14,284			5,016
Transfer agent fee		251			288			2,212			237
Accrued expenses and other payables		55,830			33,565			57,630			46,937
Total Liabilities		67,956			956,991			2,585,395			454,146
Net Assets	$	116,954,069		$	62,135,914		$	213,021,233		$	77,200,383
Composition of Net Assets:
Paid-in-capital	$	116,953,567		$	97,314,415		$	216,847,702		$	59,989,190
Net unrealized appreciation (depreciation)		—			536,835			11,779,800			12,645,724
Accumulated undistributed net investment income (net investment loss)		74			257,598			5,065,859			1,027,135
Accumulated net realized gain (loss)		428			(35,972,934	)		(20,672,128	)		3,538,334
Net Assets	$	116,954,069		$	62,135,914		$	213,021,233		$	77,200,383
* Cost	$	116,877,779		$	59,352,164		$	190,324,586		$	62,123,074
** Affiliated Cost	$	—		$	1,890,157		$	8,408,206		$	955,537
Class X Shares:
Net Assets	$	54,773,447		$	13,846,758		$	98,969,967		$	61,993,548
Shares Outstanding (unlimited shares authorized, $.01 par value)		54,773,163			1,814,160			9,010,981			7,370,997
Net Asset Value Per Share	$	1.00		$	7.63		$	10.98		$	8.41
Class Y Shares:
Net Assets	$	62,180,622		$	48,289,156		$	114,051,266		$	15,206,835
Shares Outstanding (unlimited shares authorized, $.01 par value)		62,180,410			6,338,731			10,409,535			1,812,046
Net Asset Value Per Share	$	1.00		$	7.62		$	10.96		$	8.39

⁽¹⁾  Including Repurchase Agreements of $68,880,000.

⁽²⁾  Including security loaned at value of $2,144,686.

⁽³⁾  Including foreign currency valued at $125,049, $151,308, and $5,527, respectively with a cost of $124,602, $149,363, and $5,458, respectively.

See Notes to Financial Statements
70

	European Equity			Multi Cap Growth			Aggressive Equity			Strategist
Assets:
Investments in securities, at value*	$	69,575,930	(2)	$	263,244,980		$	30,868,339		$	128,888,208
Investment in affiliates, at value**		2,986,453			7,387,213			1,233,710			37,130,849
Total investments in securities, at value		72,562,383			270,632,193			32,102,049			166,019,057
Unrealized appreciation on open swap agreements		—			—			—			54,940
Unrealized appreciation on open foreign currency exchange contracts		53,232			—			—			3,102
Cash		150,939	(3)		—			—			11,378	(3)
Due from broker		—			—			—			25,000
Receivable for:
Interest		—			—			—			365,613
Investments sold		356,825			—			—			—
Dividends		234,816			66,667			7,685			49,384
Shares of beneficial interest sold		—			34,355			1,648			802
Foreign withholding taxes reclaimed		168,922			—			—			—
Interest and dividends from affiliates		49			253			58			5,425
Premium paid on open swap agreements		—			—			—			—
Variation margin		—			—			—			6,555
Prepaid expenses and other assets		3,617			9,065			2,602			4,898
Total Assets		73,530,783			270,742,533			32,114,042			166,546,154
Liabilities:
Collateral on securities loaned, at value		2,194,505			—			—			—
Unrealized depreciation on open swap agreements		—			—			—			445,385
Unrealized depreciation on open foreign currency exchange contracts		—			—			—			7,609
Payable to bank		—			—			167			—
Payable for:
Investments purchased		260,027			219,836			32,196			134,698
Shares of beneficial interest redeemed		35,008			90,078			1,686			99,773
Investment advisory fee		42,018			90,212			17,188			55,836
Variation margin		—			—			—			—
Distribution fee (Class Y)		3,497			12,259			3,530			10,077
Administration fee		4,608			17,400			2,063			10,912
Transfer agent fee		238			292			209			171
Accrued expenses and other payables		41,773			71,319			23,348			55,453
Total Liabilities		2,581,674			501,396			80,387			819,914
Net Assets	$	70,949,109		$	270,241,137		$	32,033,655		$	165,726,240
Composition of Net Assets:
Paid-in-capital	$	68,624,769		$	200,072,697		$	22,130,590		$	148,627,323
Net unrealized appreciation (depreciation)		15,669,681			78,062,235			9,077,001			(58,636	)
Accumulated undistributed net investment income (net investment loss)		1,247,867			(280,424	)		(122,487	)		1,375,216
Accumulated net realized gain (loss)		(14,593,208	)		(7,613,371	)		948,551			15,782,337
Net Assets	$	70,949,109		$	270,241,137		$	32,033,655		$	165,726,240
* Cost	$	53,981,967		$	185,183,369		$	21,791,411		$	127,776,243
** Affiliated Cost	$	2,986,453		$	7,387,213		$	1,233,710		$	37,917,557
Class X Shares:
Net Assets	$	53,768,336		$	209,709,738		$	14,522,500		$	117,117,157
Shares Outstanding (unlimited shares authorized, $.01 par value)		3,160,262			4,990,065			716,135			10,253,022
Net Asset Value Per Share	$	17.01		$	42.03		$	20.28		$	11.42
Class Y Shares:
Net Assets	$	17,180,773		$	60,531,399		$	17,511,155		$	48,609,083
Shares Outstanding (unlimited shares authorized, $.01 par value)		1,013,028			1,450,631			883,553			4,266,885
Net Asset Value Per Share	$	16.96		$	41.73		$	19.82		$	11.39

71

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Operations
For the six months ended June 30, 2011 (unaudited)

	Money Market			Limited Duration			Income Plus			Global Infrastructure
Net Investment Income:
Income
Interest†	$	186,378		$	891,356		$	6,014,165			—
Dividends†		—			—			22,512		$	1,421,830
Interest and dividends from affiliates		—			30,281			268,640			1,298
Income from securities loaned - net		—			—			—			—
Total Income		186,378			921,637			6,305,317			1,423,128
†Net of foreign withholding taxes		—			—			—			66,490
Expenses
Investment advisory fee (Note 4)		269,682			97,253			466,017			220,281
Distribution fee (Class Y shares) (Note 5)		79,264			63,319			149,056			19,501
Administration fee (Note 4)		29,965			25,934			88,765			30,917
Professional fees		33,241			30,144			36,280			34,870
Shareholder reports and notices		13,815			11,000			18,707			13,921
Custodian fees		8,747			3,625			5,897			15,092
Trustees' fees and expenses		2,250			1,282			4,083			1,496
Transfer agent fees and expenses		1,501			1,247			1,488			1,487
Other		2,587			11,563			18,255			6,182
Total Expenses		441,052			245,367			788,548			343,747
Less: amounts waived		(260,908	)		—			—			—
Less: rebate from Morgan Stanley affiliated cash sweep (Note 6)		—			(90	)		(953	)		(808	)
Net Expenses		180,144			245,277			787,595			342,939
Net Investment Income (Loss)		6,234			676,360			5,517,722			1,080,189
Realized and Unrealized Gain (Loss):
Realized Gain (Loss) on:
Investments		512			(192,733	)		4,043,371			3,795,529
Investments in affiliates		—			26,644			96,895			—
Futures contracts		—			310,659			(124,879	)		—
Swap agreements		—			27,958			183,300			—
Foreign currency exchange contracts		—			—			—			—
Foreign currency translation		—			—			—			26,702
Net Realized Gain		512			172,528			4,198,687			3,822,231
Change in Unrealized Appreciation/Depreciation on:
Investments		—			459,231			(971,921	)		3,914,749
Investments in affiliates		—			(14,688	)		(75,104	)		—
Futures contracts		—			19,649			(728,034	)		—
Swap agreements		—			(121,257	)		(86,181	)		—
Foreign currency exchange contracts		—			—			—			—
Foreign currency translation		—			—			—			(3,199	)
Net Change in Unrealized Appreciation/Depreciation		—			342,935			(1,861,240	)		3,911,550
Net Gain		512			515,463			2,337,447			7,733,781
Net Increase	$	6,746		$	1,191,823		$	7,855,169		$	8,813,970

See Notes to Financial Statements
72

	European Equity			Multi Cap Growth			Aggressive Equity			Strategist
Net Investment Income:
Income
Interest†	$	26		$	280			—		$	743,183
Dividends†		1,676,359			874,373		$	105,466			1,303,693
Interest and dividends from affiliates		920			6,116			636			38,502
Income from securities loaned - net		64,594			—			—			—
Total Income		1,741,899			880,769			106,102			2,085,378
†Net of foreign withholding taxes		165,851			53,168			6,251			224
Expenses
Investment advisory fee (Note 4)		315,233			587,712			111,642			374,828
Distribution fee (Class Y shares) (Note 5)		22,169			80,069			22,968			67,056
Administration fee (Note 4)		28,987			111,945			13,330			71,396
Professional fees		35,644			39,156			28,460			36,865
Shareholder reports and notices		18,039			18,250			8,182			19,723
Custodian fees		9,039			15,980			4,886			6,504
Trustees' fees and expenses		1,389			4,910			702			3,313
Transfer agent fees and expenses		1,488			1,804			1,251			1,421
Other		6,264			11,699			4,074			14,760
Total Expenses		438,252			871,525			195,495			595,866
Less: amounts waived		(53,746	)		—			—			—
Less: rebate from Morgan Stanley affiliated cash sweep (Note 6)		(574	)		(3,960	)		(401	)		(7,525	)
Net Expenses		383,932			867,565			195,094			588,341
Net Investment Income (Loss)		1,357,967			13,204			(88,992	)		1,497,037
Realized and Unrealized Gain (Loss):
Realized Gain (Loss) on:
Investments		1,127,380			20,836,887			2,982,407			15,821,075
Investments in affiliates		—			—			—			25,037
Futures contracts		—			—			—			37,271
Swap agreements		—			—			—			93,328
Foreign currency exchange contracts		1,619			—			—			(1,681	)
Foreign currency translation		216,544			(69,646	)		(10,290	)		(304	)
Net Realized Gain		1,345,543			20,767,241			2,972,117			15,974,726
Change in Unrealized Appreciation/Depreciation on:
Investments		3,114,485			(6,932,254	)		(1,373,414	)		(14,104,211	)
Investments in affiliates		—			—			—			(856,299	)
Futures contracts		—			—			—			(39,179	)
Swap agreements		—			—			—			(100,130	)
Foreign currency exchange contracts		(3,504	)		—			—			(3,450	)
Foreign currency translation		16,017			470			54			520
Net Change in Unrealized Appreciation/Depreciation		3,126,998			(6,931,784	)		(1,373,360	)		(15,102,749	)
Net Gain		4,472,541			13,835,457			1,598,757			871,977
Net Increase	$	5,830,508		$	13,848,661		$	1,509,765		$	2,369,014

73

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, 2011			For The Year Ended December 31, 2010			For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010			For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010
	(unaudited)						(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	6,234		$	8,852		$	676,360		$	1,509,025		$	5,517,722		$	12,408,378
Net realized gain (loss)		512			1,958			172,528			940,308			4,198,687			11,573,449
Net change in unrealized appreciation/depreciation		—			—			342,935			(810,317	)		(1,861,240	)		(2,449,027	)
Net Increase		6,746			10,810			1,191,823			1,639,016			7,855,169			21,532,800
Dividends and Distributions to Shareholders from:
Net investment income
Class X shares		(2,823	)		(7,144	)		(456,806	)		(562,429	)		(5,809,741	)		(6,824,574	)
Class Y shares		(3,171	)		(7,532	)		(1,462,462	)		(1,897,146	)		(6,427,424	)		(7,792,022	)
Net realized gain
Class X shares		—			—			—			—			—			—
Class Y shares		—			—			—			—			—			—
Total Dividends and Distributions		(5,994	)		(14,676	)		(1,919,268	)		(2,459,575	)		(12,237,165	)		(14,616,596	)
Net decrease from transactions in shares of beneficial interest		(10,116,802	)		(38,557,210	)		(5,818,319	)		(8,139,476	)		(13,281,459	)		(38,827,172	)
Net Increase (Decrease)		(10,116,050	)		(38,561,076	)		(6,545,764	)		(8,960,035	)		(17,663,455	)		(31,910,968	)
Regulatory Settlement Proceeds:		—			—			—			—			—			—
Net Assets:
Beginning of period		127,070,119			165,631,195			68,681,678			77,641,713			230,684,688			262,595,656
End of Period	$	116,954,069		$	127,070,119		$	62,135,914		$	68,681,678		$	213,021,233		$	230,684,688
Accumulated Undistributed Net Investment Income (Loss)	$	74		$	(166	)	$	257,598		$	1,500,506		$	5,065,859		$	11,785,302

See Notes to Financial Statements
74

	Global Infrastructure						European Equity
	For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010			For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010
	(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	1,080,189		$	2,073,599		$	1,357,967		$	1,247,197
Net realized gain (loss)		3,822,231			5,114,667			1,345,543			(2,469,262	)
Net change in unrealized appreciation/depreciation		3,911,550			(2,435,382	)		3,126,998			5,518,693
Net Increase		8,813,970			4,752,884			5,830,508			4,296,628
Dividends and Distributions to Shareholders from:
Net investment income
Class X shares		(1,548,002	)		(1,869,792	)		(1,159,573	)		(1,420,614	)
Class Y shares		(341,922	)		(440,577	)		(329,209	)		(416,655	)
Net realized gain
Class X shares		(3,167,474	)		(5,105,356	)		—			—
Class Y shares		(781,261	)		(1,313,510	)		—			—
Total Dividends and Distributions		(5,838,659	)		(8,729,235	)		(1,488,782	)		(1,837,269	)
Net decrease from transactions in shares of beneficial interest		(2,971,582	)		(5,393,355	)		(6,038,159	)		(10,418,618	)
Net Increase (Decrease)		3,729			(9,369,706	)		(1,696,433	)		(7,959,259	)
Regulatory Settlement Proceeds:		—			—			—			84,956
Net Assets:
Beginning of period		77,196,654			86,566,360			72,645,542			80,519,845
End of Period	$	77,200,383		$	77,196,654		$	70,949,109		$	72,645,542
Accumulated Undistributed Net Investment Income (Loss)	$	1,027,135		$	1,836,870		$	1,247,867		$	1,378,682

75

Morgan Stanley Variable Investment Series

Financial Statements continued

Statements of Changes in Net Assets

	Multi Cap Growth						Aggressive Equity
	For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010			For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010
	(unaudited)						(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income (loss)	$	13,204		$	330,653		$	(88,992	)	$	(139,804	)
Net realized gain		20,767,241			27,894,016			2,972,117			3,081,471
Net change in unrealized appreciation/depreciation		(6,931,784	)		36,811,414			(1,373,360	)		4,245,027
Net Increase		13,848,661			65,036,083			1,509,765			7,186,694
Dividends and Distributions to Shareholders from:
Net investment income
Class X shares		(327,521	)		(333,905	)		—			—
Class Y shares		—			—			—			—
Net realized gain
Class X shares		—			—			—			—
Class Y shares		—			—			—			—
Total Dividends and Distributions		(327,521	)		(333,905	)		—			—
Net decrease from transactions in shares of beneficial interest		(31,136,063	)		(43,247,359	)		(3,666,645	)		(5,434,742	)
Net Increase (Decrease)		(17,614,923	)		21,454,819			(2,156,880	)		1,751,952
Net Assets:
Beginning of period		287,856,060			266,401,241			34,190,535			32,438,583
End of Period	$	270,241,137		$	287,856,060		$	32,033,655		$	34,190,535
Accumulated Undistributed Net Investment Income (Loss)	$	(280,424	)	$	33,893		$	(122,487	)	$	(33,495	)

See Notes to Financial Statements
76

	Strategist
	For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010
	(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income (loss)	$	1,497,037		$	3,426,081
Net realized gain		15,974,726			17,577,561
Net change in unrealized appreciation/depreciation		(15,102,749	)		(8,886,455	)
Net Increase		2,369,014			12,117,187
Dividends and Distributions to Shareholders from:
Net investment income
Class X shares		(2,406,851	)		(2,078,387	)
Class Y shares		(860,346	)		(786,800	)
Net realized gain
Class X shares		(12,604,023	)		(699,178	)
Class Y shares		(5,258,076	)		(311,234	)
Total Dividends and Distributions		(21,129,296	)		(3,875,599	)
Net decrease from transactions in shares of beneficial interest		(128,743	)		(21,094,433	)
Net Increase (Decrease)		(18,889,025	)		(12,852,845	)
Net Assets:
Beginning of period		184,615,265			197,468,110
End of Period	$	165,726,240		$	184,615,265
Accumulated Undistributed Net Investment Income (Loss)	$	1,375,216		$	3,145,376

77

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, 2011			For The Year Ended December 31, 2010			For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010			For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010
	(unaudited)						(unaudited)						(unaudited)
Class X Shares
Shares
Sold		5,147,540			7,067,298			15,168			182,994			37,798			87,443
Reinvestment of dividends and distributions		2,823			7,144			59,870			73,810			529,120			646,266
Redeemed		(10,308,909	)		(31,627,402	)		(187,936	)		(484,177	)		(999,351	)		(1,707,768	)
Net Decrease - Class X		(5,158,546	)		(24,552,960	)		(112,898	)		(227,373	)		(432,433	)		(974,059	)
Amount
Sold	$	5,147,540		$	7,067,298		$	117,736		$	1,424,485		$	441,490		$	974,412
Reinvestment of dividends and distributions		2,823			7,144			456,806			562,429			5,809,741			6,824,574
Redeemed		(10,308,909	)		(31,627,402	)		(1,466,589	)		(3,778,238	)		(11,529,693	)		(19,049,643	)
Net Decrease - Class X	$	(5,158,546	)	$	(24,552,960	)	$	(892,047	)	$	(1,791,324	)	$	(5,278,462	)	$	(11,250,657	)
Class Y Shares
Shares
Sold		8,551,460			12,204,944			38,884			459,275			49,889			456,727
Reinvestment of dividends and distributions		3,171			7,532			191,924			249,624			586,444			739,983
Redeemed		(13,512,887	)		(26,216,726	)		(860,020	)		(1,519,333	)		(1,308,786	)		(3,645,566	)
Net Decrease - Class Y		(4,958,256	)		(14,004,250	)		(629,212	)		(810,434	)		(672,453	)		(2,448,856	)
Amount
Sold	$	8,551,460		$	12,204,944		$	301,018		$	3,550,343		$	571,256		$	5,104,104
Reinvestment of dividends and distributions		3,171			7,532			1,462,462			1,897,146			6,427,424			7,792,022
Redeemed		(13,512,887	)		(26,216,726	)		(6,689,752	)		(11,795,641	)		(15,001,677	)		(40,472,641	)
Net Decrease - Class Y	$	(4,958,256	)	$	(14,004,250	)	$	(4,926,272	)	$	(6,348,152	)	$	(8,002,997	)	$	(27,576,515	)
Regulatory Settlement Proceeds:		—			—			—			—			—			—

See Notes to Financial Statements
78

	Global Infrastructure						European Equity
	For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010			For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010
	(unaudited)						(unaudited)
Class X Shares
Shares
Sold		26,202			46,011			2,677			7,727
Reinvestment of dividends and distributions		560,033			1,047,320			68,170			111,246
Redeemed		(771,112	)		(1,462,098	)		(325,680	)		(672,452	)
Net Decrease - Class X		(184,877	)		(368,767	)		(254,833	)		(553,479	)
Amount
Sold	$	229,279		$	379,861		$	45,466		$	111,210
Reinvestment of dividends and distributions		4,715,476			6,975,148			1,159,573			1,420,614
Redeemed		(6,681,336	)		(11,546,584	)		(5,520,719	)		(9,737,700	)
Net Decrease - Class X	$	(1,736,581	)	$	(4,191,575	)	$	(4,315,680	)	$	(8,205,876	)
Class Y Shares
Shares
Sold		8,467			41,158			2,024			19,373
Reinvestment of dividends and distributions		133,712			263,773			19,411			32,730
Redeemed		(279,446	)		(416,792	)		(123,454	)		(195,961	)
Net Decrease - Class Y		(137,267	)		(111,861	)		(102,019	)		(143,858	)
Amount
Sold	$	74,769		$	325,071		$	32,498		$	273,981
Reinvestment of dividends and distributions		1,123,183			1,754,087			329,209			416,655
Redeemed		(2,432,953	)		(3,280,938	)		(2,084,186	)		(2,903,378	)
Net Decrease - Class Y	$	(1,235,001	)	$	(1,201,780	)	$	(1,722,479	)	$	(2,212,742	)
Regulatory Settlement Proceeds:		—			—			—		$	84,956

79

Morgan Stanley Variable Investment Series

Financial Statements continued

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

	Multi Cap Growth						Aggressive Equity
	For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010			For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010
	(unaudited)						(unaudited)
Class X Shares
Shares
Sold		9,916			19,352			9,036			21,087
Reinvestment of dividends and distributions		7,793			10,719			—			—
Redeemed		(531,887	)		(964,108	)		(88,446	)		(194,973	)
Net Increase (Decrease) - Class X		(514,178	)		(934,037	)		(79,410	)		(173,886	)
Amount
Sold	$	412,201		$	644,195		$	178,658		$	338,664
Reinvestment of dividends and distributions		327,521			333,905			—			—
Redeemed		(22,031,819	)		(32,044,596	)		(1,767,532	)		(3,118,178	)
Net Increase (Decrease) - Class X	$	(21,292,097	)	$	(31,066,496	)	$	(1,588,874	)	$	(2,779,514	)
Class Y Shares
Shares
Sold		6,703			22,133			24,127			50,042
Reinvestment of dividends and distributions		—			—			—			—
Redeemed		(248,269	)		(384,584	)		(131,004	)		(223,151	)
Net Decrease - Class Y		(241,566	)		(362,451	)		(106,877	)		(173,109	)
Amount
Sold	$	277,063		$	704,927		$	469,201		$	800,661
Reinvestment of dividends and distributions		—			—			—			—
Redeemed		(10,121,029	)		(12,885,790	)		(2,546,972	)		(3,455,889	)
Net Decrease - Class Y	$	(9,843,966	)	$	(12,180,863	)	$	(2,077,771	)	$	(2,655,228	)

See Notes to Financial Statements
80

	Strategist
	For The Six Months Ended June 30, 2011			For The Year Ended December 31, 2010
	(unaudited)
Class X Shares
Shares
Sold		10,502			54,599
Reinvestment of dividends and distributions		1,314,437			229,551
Redeemed		(970,709	)		(1,492,547	)
Net Increase (Decrease) - Class X		354,230			(1,208,397	)
Amount
Sold	$	140,172		$	677,302
Reinvestment of dividends and distributions		15,010,874			2,777,565
Redeemed		(12,942,393	)		(18,715,821	)
Net Increase (Decrease) - Class X	$	2,208,653		$	(15,260,954	)
Class Y Shares
Shares
Sold		5,104			106,023
Reinvestment of dividends and distributions		537,175			90,972
Redeemed		(643,007	)		(665,609	)
Net Decrease - Class Y		(100,728	)		(468,614	)
Amount
Sold	$	68,213		$	1,342,545
Reinvestment of dividends and distributions		6,118,422			1,098,034
Redeemed		(8,524,031	)		(8,274,058	)
Net Decrease - Class Y	$	(2,337,396	)	$	(5,833,479	)

81

Morgan Stanley Variable Investment Series

Notes to Financial Statements nJune 30, 2011 (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 8 Portfolios ("Portfolios") which commenced operations as follows:

PORTFOLIO	COMMENCEMENT OF OPERATIONS	PORTFOLIO	COMMENCEMENT OF OPERATIONS
Money Market	March 9, 1984	European Equity	March 1, 1991
Limited Duration	May 4, 1999	Multi Cap Growth	March 9, 1984
Income Plus	March 1, 1987	Aggressive Equity	May 4, 1999
Global Infrastructure	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 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:

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.
Global Infrastructure	Seeks both capital appreciation and current income.
European Equity	Seeks to maximize the capital appreciation of its investments.
Multi Cap Growth* (Formerly Capital Opportunities)	Seeks, as its primary objective, growth of capital and, as a secondary objective, income, but only when consistent with its primary objective.
Aggressive Equity	Seeks long-term capital growth.
Strategist	Seeks high total investment return.

*  Name change effective April 29, 2011.

82

Morgan Stanley Variable Investment Series

Notes to Financial Statements nJune 30, 2011 (unaudited)continued

The following is a summary of significant 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 domestic exchange is valued at its last sale price prior to the time when assets are valued; if there were no sales that day, the security is valued at the mean between the last reported bid and ask price; (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 ask price; (3) all other domestic securities for which over-the-counter market quotations are readily available are valued at the mean between the last reported bid and ask price. In cases where a security is traded on more than one domestic exchange, the security is valued on the exchange designated as the primary market; (4) 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) futures are valued at the latest price published by the commodities exchange on which they trade; (7) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Advisors Inc. (the "Investment Adviser") or Morgan Stanley Investment Management Limited or Morgan Stanley Investment Management Company (each, a "Sub-Adviser"), each a wholly owned subsidiary of Morgan Stanley, determines that the latest sale price, the bid price or the mean between the last reported bid and ask price do not reflect a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Trustees. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business on the NYSE. If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Fund's Trustees or by the Investment Adviser using a pricing service and/or procedures approved by the Trustees of the Fund; (8) certain portfolio securities may be valued by an outside pricing service approved by the Fund's Trustees; (9) 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 (10) short-term debt securities having a maturity date of more than sixty days at time of purchase are valued on a mark-to-market basis until sixty days prior to maturity and thereafter at amortized cost based on their value on the 61st day. Short-term debt securities having a maturity date of sixty days or less at the time of purchase are valued at amortized cost, which approximates fair value.

83

Morgan Stanley Variable Investment Series

Notes to Financial Statements nJune 30, 2011 (unaudited)continued

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 as earned except where collection is not expected. Discounts are accreted and premiums are amortized over the life of the respective securities and are included in interest income.

C. Repurchase Agreements — The Fund invests 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 as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization.

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. Foreign Currency Translation — 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 foreign currency 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 gains/losses on foreign currency exchange contracts and foreign currency translations. Pursuant to U.S. federal income tax regulations, certain foreign exchange gains/losses included in realized and unrealized gains/losses 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.

F. Securities 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.

84

Morgan Stanley Variable Investment Series

Notes to Financial Statements nJune 30, 2011 (unaudited)continued

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 SECURITY		VALUE OF COLLATERAL CASH(1)
European Equity	$	2,144,686	$	2,194,505

⁽¹⁾  The Portfolio received cash collateral of $2,194,505 which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds, as reported in the Portfolio of Investments.

The Portfolio has the right under the lending agreement to recover the security from the borrower on demand.

G. Structured Investments — Certain Portfolios also may invest a portion of its assets in structured investments. A structured investment is a derivative security designed to offer a return linked to a particular underlying security, currency or market. Structured investments may come in various forms including notes, warrants and options to purchase securities. The Portfolio will typically use structured investments to gain exposure to a permitted underlying security, currency or market when direct access to a market is limited or inefficient from a tax or cost standpoint.

H. Federal Income Tax Policy — It is the Fund's policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. The Fund files tax returns with the U.S. Internal Revenue Service, New York State and New York City. The Fund recognizes the tax effects of a tax position taken or expected to be taken in a tax return only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date. The more-likely-than-not threshold must continue to be met in each reporting period to support continued recognition of the benefit. The difference between the tax benefit recognized in the financial statements for a tax position taken and the tax benefit claimed in the income tax return is referred to as an unrecognized tax benefit. There are no 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 Statements of Operations. Each of the tax years in the four-year period ended December 31, 2010 remains subject to examination by taxing authorities.

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

J. 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.

85

Morgan Stanley Variable Investment Series

Notes to Financial Statements nJune 30, 2011 (unaudited)continued

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

L. Indemnifications — The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

2. Fair Valuation Measurements

Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures ("ASC 820"), defines fair value as the value 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. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing 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 valuing 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 — unadjusted quoted prices in active markets for identical investments

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

•  Level 3 — significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

86

Morgan Stanley Variable Investment Series

Notes to Financial Statements nJune 30, 2011 (unaudited)continued

The following is a summary of the inputs used as of June 30, 2011 in valuing the Fund's investments carried at fair value:

			Fair Value Measurements at June 30, 2011 Using
Investment Type	Total		Unadjusted Quoted Prices In Active Markets for Identical Investments (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money Market
Short-Term Investments
Repurchase Agreements	$	68,880,000		—	$	68,880,000		—
Floating Rate Notes		22,500,000		—		22,500,000		—
Commercial Paper		11,997,688		—		11,997,688		—
Certificates of Deposit		10,500,091		—		10,500,091		—
Weekly Variable Rate Bond		3,000,000		—		3,000,000		—
Total Assets	$	116,877,779		—	$	116,877,779		—
Limited Duration
Assets:
Corporate Bonds	$	32,192,898		—	$	32,192,898		—
Sovereign		2,133,055		—		2,133,055		—
Asset-Backed Securities		13,758,607		—		13,758,607		—
Agency Fixed Rate Mortgages		576,980		—		576,980		—
Municipal Bonds		868,032		—		868,032		—
Agency Bond — Banking (FDIC Guaranteed)		699,640		—		699,640		—
U.S. Treasury Securities		6,782,410		—		6,782,410		—
Commercial Mortgage Backed Security		205,023		—		205,023		—
Non-U.S. Government — Guaranteed		3,345,749		—		3,345,749		—
Agency Adjustable Rate Mortgages		411,782		—		411,782		—
Collateralized Mortgage Obligation — Agency Collateral Series		382,531		—		382,531		—
Short-Term Investments
U.S. Treasury Security		669,931		—		669,931		—
Investment Company		472,396	$	472,396		—		—
Total Short-Term Investments		1,142,327		472,396		669,931		—
Futures		15,469		15,469		—		—
Zero Coupon Swaps		93,777		—		93,777		—
Total Assets		62,608,280		487,865		62,120,415		—

87

Morgan Stanley Variable Investment Series

Notes to Financial Statements nJune 30, 2011 (unaudited)continued

				Fair Value Measurements at June 30, 2011 Using
Investment Type	Total			Unadjusted Quoted Prices In Active Markets for Identical Investments (Level 1)			Other Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Liabilities:
Futures	$	(12,312	)	$	(12,312	)		—			—
Interest Rate Swaps		(54,829	)		—		$	(54,829	)		—
Zero Coupon Swaps		(761,983	)		—			(761,983	)		—
Total Liabilities		(829,124	)		(12,312	)		(816,812	)		—
Total	$	61,779,156		$	475,553		$	61,303,603			—
Income Plus
Assets:
Corporate Bonds	$	206,236,144			—		$	206,236,144			—
Asset-Backed Security		1,065,183			—			1,065,183			—
Municipal Bond		671,898			—			671,898			—
Agency Fixed Rate Mortgage		1,594			—			1,594			—
Preferred Stock		581,760		$	581,760			—			—
Convertible Preferred Stocks		350,420			350,420			—			—
Short-Term Investments
U.S. Treasury Security		584,940			—			584,940			—
Investment Company		1,492,774			1,492,774			—			—
Total Short-Term Investments		2,077,714			1,492,774			584,940			—
Futures		92,141			92,141			—			—
Total Assets		211,076,854			2,517,095			208,559,759			—
Liabilities:
Credit Default Swaps		(26,336	)		—			(26,336	)		—
Futures		(353,955	)		(353,955	)		—			—
Interest Rate Swaps		(183,971	)		—			(183,971	)		—
Total Liabilities		(564,262	)		(353,955	)		(210,307	)		—
Total	$	210,512,592		$	2,163,140		$	208,349,452			—
Global Infrastructure
Common Stocks
Airports	$	1,890,653		$	206,290		$	1,684,363			—
Communications		11,017,833			8,066,421			2,951,412			—
Diversified		3,254,699			2,687,135			567,564			—
Oil & Gas Storage & Transportation		32,535,554			20,025,048			12,510,506			—
Ports		1,254,039			251,106			1,002,933			—

88

Morgan Stanley Variable Investment Series

Notes to Financial Statements nJune 30, 2011 (unaudited)continued

			Fair Value Measurements at June 30, 2011 Using
Investment Type	Total		Unadjusted Quoted Prices In Active Markets for Identical Investments (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Toll Roads	$	5,635,222		—	$	5,635,222		—
Transmission & Distribution		15,491,106	$	7,542,418		7,948,688		—
Water		3,689,131		1,189,735		2,499,396		—
Total Common Stocks		74,768,237		39,968,153		34,800,084		—
Short-Term Investment — Investment Company		955,537		955,537		—		—
Total Assets	$	75,723,774	$	40,923,690	$	34,800,084		—
European Equity
Common Stocks
Aerospace & Defense	$	1,273,064		—	$	1,273,064		—
Auto Components		955,969		—		955,969		—
Automobiles		1,900,638		—		1,900,638		—
Chemicals		1,177,862		—		1,177,862		—
Commercial Banks		9,112,857		—		9,112,857		—
Electrical Equipment		1,723,180		—		1,723,180		—
Food & Staples Retailing		2,174,269		—		2,174,269		—
Food Products		3,198,760		—		3,198,760		—
Health Care Equipment & Supplies		1,513,325		—		1,513,325		—
Hotels, Restaurants & Leisure		975,014		—		975,014		—
Household Products		1,528,856		—		1,528,856		—
Industrial Conglomerates		2,556,342		—		2,556,342		—
Information Technology Services		1,157,534		—		1,157,534		—
Insurance		3,923,916		—		3,923,916		—
Machinery		2,720,612		—		2,720,612		—
Media		1,239,602		—		1,239,602		—
Metals & Mining		5,155,385		—		5,155,385		—
Multi-Utilities		1,329,784		—		1,329,784		—
Oil, Gas & Consumable Fuels		9,029,704		—		9,029,704		—
Pharmaceuticals		8,016,071		—		8,016,071		—
Professional Services		1,284,386		—		1,284,386		—
Specialty Retail		1,218,445		—		1,218,445		—
Tobacco		3,635,835		—		3,635,835		—
Wireless Telecommunication Services		2,348,403		—		2,348,403		—
Total Common Stocks		69,149,813		—		69,149,813		—

89

Morgan Stanley Variable Investment Series

Notes to Financial Statements nJune 30, 2011 (unaudited)continued

			Fair Value Measurements at June 30, 2011 Using
Investment Type	Total		Unadjusted Quoted Prices In Active Markets for Identical Investments (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Short-Term Investments
Repurchase Agreements	$	426,117		—	$	426,117		—
Investment Company		2,986,453	$	2,986,453		—		—
Total Short-Term Investments		3,412,570		2,986,453		426,117		—
Foreign Currency Exchange Contracts		53,232		—		53,232		—
Total Assets	$	72,615,615	$	2,986,453	$	69,629,162		—
Multi Cap Growth
Common Stocks
Air Transport	$	5,565,838	$	5,565,838		—		—
Alternative Energy		11,813,984		11,813,984		—		—
Asset Management & Custodian		5,192,769		5,192,769		—		—
Biotechnology		9,245,404		9,245,404		—		—
Casinos & Gambling		6,626,632		6,626,632		—		—
Chemicals: Diversified		7,625,550		7,625,550		—		—
Commercial Finance & Mortgage Companies		5,268,025		5,268,025		—		—
Commercial Services		19,830,739		19,830,739		—		—
Communications Technology		9,405,650		9,405,650		—		—
Computer Services, Software &Systems		42,276,319		30,019,852	$	4,059,017	$	8,197,450
Computer Technology		28,098,352		28,098,352		—		—
Diversified Media		5,022,319		—		5,022,319		—
Diversified Retail		36,408,549		36,408,549		—		—
Financial Data & Systems		13,134,010		13,134,010		—		—
Health Care Services		5,685,322		5,685,322		—		—
Medical Equipment		7,108,417		7,108,417		—		—
Metals & Minerals: Diversified		11,753,242		6,402,263		5,350,979		—
Pharmaceuticals		6,765,808		6,765,808		—		—
Real Estate Investment Trusts (REIT)		10,245,782		10,245,782		—		—
Recreational Vehicles & Boats		9,529,560		—		9,529,560		—
Wholesale & International Trade		5,176,894		—		5,176,894		—
Total Common Stocks		261,779,165		224,442,946		29,138,769		8,197,450

90

Morgan Stanley Variable Investment Series

Notes to Financial Statements nJune 30, 2011 (unaudited)continued

			Fair Value Measurements at June 30, 2011 Using
Investment Type	Total		Unadjusted Quoted Prices In Active Markets for Identical Investments (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Convertible Preferred Stock	$	1,465,815		—		—	$	1,465,815
Short-Term Investment — Investment Company		7,387,213	$	7,387,213		—		—
Total Assets	$	270,632,193	$	231,830,159	$	29,138,769	$	9,663,265
Aggressive Equity
Common Stocks
Air Transport	$	660,863	$	660,863		—		—
Alternative Energy		1,384,620		1,384,620		—		—
Asset Management & Custodian		608,597		608,597		—		—
Biotechnology		1,083,588		1,083,588		—		—
Casinos & Gambling		776,664		776,664		—		—
Chemicals: Diversified		893,765		893,765		—		—
Commercial Finance & Mortgage Companies		617,430		617,430		—		—
Commercial Services		2,324,196		2,324,196		—		—
Communications Technology		1,102,382		1,102,382		—		—
Computer Services, Software &Systems		4,973,308		3,518,292	$	474,466	$	980,550
Computer Technology		3,264,122		3,264,122		—		—
Diversified Media		588,641		—		588,641		—
Diversified Retail		4,267,187		4,267,187		—		—
Financial Data & Systems		1,550,616		1,550,616		—		—
Health Care Services		666,354		666,354		—		—
Medical Equipment		833,154		833,154		—		—
Metals & Minerals: Diversified		1,377,515		750,366		627,149		—
Pharmaceuticals		792,969		792,969		—		—
Real Estate Investment Trusts (REIT)		1,200,820		1,200,820		—		—
Recreational Vehicles & Boats		1,116,888		—		1,116,888		—
Wholesale & International Trade		607,390		—		607,390		—
Total Common Stocks		30,691,069		26,295,985		3,414,534		980,550
Convertible Preferred Stock		177,270		—		—		177,270
Short-Term Investment — Investment Company		1,233,710		1,233,710		—		—
Total Assets	$	32,102,049	$	27,529,695	$	3,414,534	$	1,157,820

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			Fair Value Measurements at June 30, 2011 Using
Investment Type	Total		Unadjusted Quoted Prices In Active Markets for Identical Investments (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Strategist
Assets:
Common Stocks
Auto Components	$	2,052,300	$	2,052,300		—		—
Biotechnology		7,314,993		7,314,993		—		—
Capital Markets		4,525,060		4,525,060		—		—
Commercial Banks		4,186,000		4,186,000		—		—
Communications Equipment		4,360,653		4,360,653		—		—
Computers & Peripherals		15,669,790		15,669,790		—		—
Diversified Financial Services		9,972,258		9,972,258		—		—
Diversified Telecommunication Services		4,963,591		4,963,591		—		—
Hotels, Restaurants & Leisure		2,041,000		2,041,000		—		—
Industrial Conglomerates		1,829,609		1,829,609		—		—
Insurance		3,640,458		3,640,458		—		—
Metals & Mining		13,985,294		13,985,294		—		—
Oil, Gas & Consumable Fuels		6,527,815		6,527,815		—		—
Real Estate Investment Trusts (REITs)		3,682,046		3,682,046		—		—
Semiconductors & Semiconductor Equipment		4,613,519		4,613,519		—		—
Specialty Retail		1,881,086		1,881,086		—		—
Wireless Telecommunication Services		8,979,740		8,979,740		—		—
Total Common Stocks		100,225,212		100,225,212		—		—
Corporate Bonds		14,550,313		—	$	14,550,313		—
Sovereign		808,962		—		808,962		—
Municipal Bonds		560,632		—		560,632		—
Agency Fixed Rate Mortgages		4,342		—		4,342		—
Asset-Backed Securities		1,067,227		—		1,067,227		—
Agency Bonds — Banking (FDIC Guaranteed)		2,672,607		—		2,672,607		—
U.S. Treasury Securities		12,855,753		—		12,855,753		—
U.S. Agency Securities		2,527,477		—		2,527,477		—

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				Fair Value Measurements at June 30, 2011 Using
Investment Type	Total			Unadjusted Quoted Prices In Active Markets for Identical Investments (Level 1)			Other Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Short-Term Investments
U.S. Treasury Security	$	414,957			—		$	414,957			—
Investment Company		30,331,575		$	30,331,575			—			—
Total Short-Term Investments		30,746,532			30,331,575			414,957			—
Foreign Currency Exchange Contracts		3,102			—			3,102			—
Futures		12,550			12,550			—			—
Interest Rate Swaps		26,217			—			26,217			—
Zero Coupon Swaps		28,723			—			28,723			—
Total Assets		166,089,649			130,569,337			35,520,312			—
Liabilities:
Foreign Currency Exchange Contracts		(7,609	)		—			(7,609	)		—
Futures		(1,813	)		(1,813	)		—			—
Interest Rate Swaps		(68,613	)		—			(68,613	)		—
Zero Coupon Swaps		(376,772	)		—			(376,772	)		—
Total Liabilities		(454,807	)		(1,813	)		(452,994	)		—
Total	$	165,634,842		$	130,567,524		$	35,067,318			—

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of June 30, 2011, the fair market value of certain securities were adjusted due to developments which occurred between the time of the close of the foreign markets on which they trade and the close of business on the NYSE which resulted in their Level 2 classification. The values of the transfers were as follows:

GLOBAL INFRASTRUCTURE		EUROPEAN EQUITY		MULTI CAP GROWTH		AGGRESSIVE EQUITY
$	32,571,084	$	64,060,820	$	23,961,875	$	2,807,143

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

	Multi Cap Growth				Aggressive Equity
	Common Stock		Convertible Preferred Stock		Common Stock		Convertible Preferred Stock
Beginning Balance	$	5,231,372	$	1,465,815		—	$	177,270
Purchases		1,334,854		—	$	862,949		—
Sales		—		—		—		—
Amortization of discount		—		—		—		—
Transfers in		—		—		—		—
Transfers out		—		—		—		—
Change in unrealized appreciation (depreciation)		1,631,224		—		117,601		—
Realized gains (losses)		—		—		—		—
Ending Balance	$	8,197,450	$	1,465,815	$	980,550	$	177,270
Net change in unrealized appreciation/ depreciation from investments still held as of June 30, 2011.	$	1,631,224		—	$	117,601		—

3. Derivatives

Certain Portfolios use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based on the value of another underlying asset, interest rate, index or financial instrument. A derivative instrument often has risks similar to its underlying instrument and may have additional risks, including imperfect correlation between the value of the derivative and the underlying instrument, risks of default by the other party to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which they relate, and risks that the transactions may not be liquid. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of a Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage associated with derivative transactions may cause the Portfolios to liquidate portfolio positions when it may not be advantageous to do

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so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Portfolios to be more volatile than if the Portfolios had not been leveraged. Although the Investment Adviser and/or Sub-Advisers seek to use derivatives to further the Portfolio's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Portfolios used during the period and their associated risks:

Foreign Currency Exchange Contracts In connection with its investments in foreign securities, certain Portfolios entered into contracts with banks, brokers or dealers to purchase or sell foreign currencies at a future date. A foreign currency exchange contract ("currency contracts") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the currency contract. Currency contracts are used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. In addition, certain Portfolios used cross currency hedging or proxy hedging with respect to currencies in which a Portfolio has or expects to have portfolio or currency exposure. Cross currency hedges involve the sale of one currency against the positive exposure to a different currency and may be used for hedging purposes or to establish an active exposure to the exchange rate between any two currencies. Hedging a Portfolio's currency risks involves the risk of mismatching a Portfolio's objectives under a currency contract with the value of securities denominated in a particular currency. Furthermore, such transactions reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is an additional risk to the effect that currency contracts create exposure to currencies in which a Portfolio's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for a Portfolio than if it had not entered into such contracts. A currency contract is marked-to-market daily and the change in market value is recorded by a Portfolio as unrealized gain or (loss). A Portfolio records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

Futures A futures contract is a standardized agreement between two parties to buy or sell a specific quantity of an underlying instrument at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Futures contracts are bilateral agreements, with both the purchaser and the seller equally obligated to complete the transaction. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement

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amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as to whether, when and how to use futures involves the exercise of skill and judgment and even a well conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures can be highly volatile, using futures can lower total return, and the potential loss from futures can exceed a Portfolio's initial investment in such contracts.

Swaps A swap agreement is an agreement between two parties pursuant to which the parties exchange payments at specified dates on the basis of a specified notional amount, with the payments calculated by reference to specified securities, indexes, reference rates, currencies or other instruments. Most swap agreements provide that when the period payment dates for both parties are the same, the payments are made on a net basis (i.e., the two payment streams are netted out, with only the net amount paid by one party to the other). A Portfolio's obligations or rights under a swap agreement entered into on a net basis will generally be equal only to the net amount to be paid or received under the agreement, based on the relative values of the positions held by each counterparty. Swap agreements are not entered into or traded on exchanges and there is no central clearing or guaranty function for swaps. Therefore, swaps are subject to credit risk or the risk of default or non-performance by the counterparty. Swaps could result in losses if interest rate or foreign currency exchange rates or credit quality changes are not correctly anticipated by a Portfolio or if the reference index, security or investments do not perform as expected.

A Portfolio's use of swaps during the period included those based on the credit of an underlying security and commonly referred to as credit default swaps. Where a Portfolio is the buyer of a credit default swap agreement, it would be entitled to receive the par (or other agreed-upon) value of a referenced debt obligation from the counterparty to the agreement only in the event of a default by a third party on the debt obligation. If no default occurs, a Portfolio would have paid to the counterparty a periodic stream of payments over the term of the agreement and received no benefit from the agreement. When a Portfolio is the seller of a credit default swap agreement, it receives the stream of payments but is obligated to pay upon default of the referenced debt obligation. The current credit rating of each individual issuer is listed in the table following the Portfolio of Investments and serves as an indicator of the current status of the payment/performance risk of the credit derivative. Alternatively, for credit default swaps on an index of credits, the quoted market prices and current values serve as an indicator of the current status of the payment/performance risk of the credit derivative. Generally, lower credit ratings and increasing market values, in absolute terms, represent a deterioration of the credit and a greater likelihood of an adverse credit event of the issuer.

When a Portfolio has an unrealized loss on a swap agreement, the Portfolio will instruct the custodian to pledge cash or liquid securities as collateral with a value approximately equal to the amount of the

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unrealized loss. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate. If applicable, cash collateral is included with "Due from (to) Broker" on the Statements of Assets and Liabilities. Cash collateral has been offset against open swap agreements under the provisions of FASB ASC 210, Balance Sheet ("ASC 210").

FASB ASC 815, "Derivatives and Hedging: Overall" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why a Portfolio uses derivative instruments, how these derivative instruments are accounted for and their effects on a Portfolio's financial position and results of operations.

The following table sets forth the fair value of the Portfolios derivative contracts by primary risk exposure as of June 30, 2011.

PORTFOLIO	PRIMARY RISK EXPOSURE	ASSET DERIVATIVES STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FAIR VALUE			LIABILITIES DERIVATIVES STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FAIR VALUE
Limited Duration	Interest Rate	Variation margin	$	15,469	†	Variation margin	$	(12,312	)†
	Risk	Unrealized appreciation on open swap agreements		93,777		Unrealized depreciation on open swap agreements		(816,812	)
			$	109,246			$	(829,124	)
Income Plus	Interest Rate	Variation margin	$	92,141	†	Variation margin	$	(353,955	)†
	Risk	Unrealized appreciation on open swap agreements		—		Unrealized depreciation on open swap agreements		(183,971	)
	Credit Risk	Unrealized appreciation on open swap agreements		—		Unrealized depreciation on open swap agreements		(26,336	)
			$	92,141			$	(564,262	)
European Equity	Currency Risk	Unrealized appreciation on open foreign currency exchange contracts	$	53,232		Unrealized depreciation on open foreign currency exchange contracts	$	—
Strategist	Interest Rate	Variation margin	$	12,550	†	Variation margin	$	(1,813	)†
	Risk	Unrealized appreciation				Unrealized depreciation
		on open swap agreements		54,940		on open swap agreements		(445,385	)
	Currency Risk	Unrealized appreciation on open foreign currency				Unrealized depreciation on open foreign currency
		exchange contracts		3,102		exchange contracts		(7,609	)
			$	70,592			$	(454,807	)

†  Includes cumulative appreciation/depreciation of futures contracts as reported in the Portfolio of Investments. Only current day's variation margin is reported within the Statements of Assets and Liabilities.

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The following tables set forth by primary risk exposure the Portfolio's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2011.

AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVE CONTRACTS

PORTFOLIO	PRIMARY RISK EXPOSURE	FUTURES			SWAPS		FORWARD FOREIGN CURRENCY
Limited Duration	Interest Rate Risk	$	310,659		$	27,958		—
Income Plus	Interest Rate Risk	$	(124,879	)	$	183,300		—
European Equity	Currency Risk		—			—	$	1,619
Strategist	Interest Rate Risk	$	37,271		$	93,328		—
	Currency Risk		—			—	$	(1,681	)
	Total	$	37,271		$	93,328	$	(1,681	)

CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVE CONTRACTS

PORTFOLIO	PRIMARY RISK EXPOSURE	FUTURES			SWAPS			FORWARD FOREIGN CURRENCY
Limited Duration	Interest Rate Risk	$	19,649		$	(121,257	)		—
Income Plus	Interest Rate Risk	$	(728,034	)	$	(86,181	)		—
European Equity	Currency Risk		—			—		$	(3,504	)
Strategist	Interest Rate Risk	$	(39,179	)	$	(100,130	)		—
	Currency Risk		—			—		$	(3,450	)
	Total	$	(39,179	)	$	(100,130	)	$	(3,450	)

For the six months ended June 30, 2011, Strategist Portfolio's average monthly principal amount of foreign currency exchange contracts was $740,689, the average monthly original value of futures contracts was $4,712,133 and the average monthly notional amount of swap agreements was $49,725,157. Income Plus and Limited Duration Portfolios' average monthly original value of futures contracts was $110,770,052 and $15,782,598, respectively, and average monthly notional amount of swap agreements was $48,135,000 and $27,258,378, respectively. European Equity Portfolio's average monthly principal amount of foreign currency exchange contracts was $12,269,689.

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4. Investment Advisory/Administration and Sub-Advisory Agreements

Pursuant to an Investment Advisory Agreement with the Investment Adviser and Sub-Advisers, the Fund pays an advisory fee, accrued daily and payable monthly, by applying the annual rates listed below to each Portfolio's 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.

Global Infrastructure — 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.

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.

Multi Cap Growth — 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.

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.

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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 Agreement between the Investment Adviser and the Sub-Advisers, the Sub-Advisers provide Global Infrastructure and European Equity with investment advisory services, subject to the overall supervision of the Investment Adviser and the Fund's Officers and Trustees. The Investment Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Investment Adviser receives from each Portfolio.

The Investment Adviser has agreed to cap European Equity's operating expenses (except for brokerage and 12b-1 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% of the average daily net assets of the Portfolio on an annualized basis. The fee waivers and/or expense reimbursements are expected to continue for one year or until such time as the Fund's Board of Trustees acts to discontinue such waivers and/or reimbursements when it deems that such action is appropriate.

Pursuant to an Administration Agreement with the Administrator, an affiliate of the Investment Adviser and Sub-Advisers, 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 a Sub-Administration 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.

5. 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-Advisers. 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.

The Distributor, Investment Adviser and Administrator have agreed to waive all or a portion of the Money Market Portfolio's distribution fee, investment advisory fee and administration fee, respectively, to the extent that total expenses exceed total income of the Money Market Portfolio on a daily basis. For the six months ended June 30, 2011, the Distributor waived $155,771 and the Investment Adviser waived $105,137. These fee waivers and/or expense reimbursements are expected to continue for one year or until such time that the

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Board of Trustees acts to discontinue such waivers and/or expense reimbursements when it deems such action is appropriate.

6. Security Transactions and Transactions with Affiliates

For the six months ended June 30, 2011, purchases and sales/prepayments/maturities of investment securities, excluding short-term investments, were as follows:

	U.S. GOVERNMENT SECURITIES				OTHER
	PURCHASES		SALES/PREPAYMENTS MATURITIES		PURCHASES		SALES/PREPAYMENTS MATURITIES
Limited Duration	$	8,284,790	$	9,160,440	$	9,040,324	$	13,455,216
Income Plus		—		—		59,194,013		76,639,670
Global Infrastructure		—		—		13,874,913		21,636,494
European Equity		—		—		4,463,066		10,827,488
Multi Cap Growth		—		—		42,674,119		70,647,731
Aggressive Equity		—		—		5,952,555		9,680,266
Strategist		4,437,356		4,205,561		92,083,832		134,133,882

Each Portfolio (except Money Market) invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by an affiliate of the Investment Adviser both directly, and as a portion of the securities held as collateral on loaned securities. Investment advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the six months ended June 30, 2011 is as follows:

PORTFOLIO	VALUE DECEMBER 31, 2010		PURCHASED AT COST		SALES PROCEED		VALUE JUNE 30, 2011
Limited Duration	$	830,785	$	9,586,394	$	9,944,783	$	472,396
Income Plus		3,382,277		36,498,214		38,387,717		1,492,774
Global Infrastructure		2,007,943		10,752,762		11,805,168		955,537
European Equity		1,187,046		8,828,070		7,028,663		2,986,453
Multi Cap Growth		10,848,140		45,099,753		48,560,680		7,387,213
Aggressive Equity		1,244,382		7,250,477		7,261,149		1,233,710
Strategist		7,186,645		44,497,804		21,352,874		30,331,575

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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 the Liquidity Funds.

Income distributions are included in "interest and dividends from affiliates" in the Statements of Operations.

PORTFOLIO	INCOME DISTRIBUTION EARNED		ADVISORY FEE REDUCTION
Limited Duration	$	515	$	90
Income Plus		1,666		953
Global Infrastructure		1,298		808
European Equity		920		574
Multi Cap Growth		6,116		3,960
Aggressive Equity		636		401
Strategist		12,108		7,525

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

PORTFOLIO	ISSUER	PURCHASES		SALES		NET REALIZED GAIN		INCOME		VALUE
Limited Duration	MetLife Global	$	328,646	$	229,402	$	3,395	$	10,972	$	326,962
Income Plus	MetLife, Inc.		—		—		—		51,772		1,361,794
Strategist	Allstate Corp. (The)		—		61,526		10,492		168		—
	MetLife, Inc.		—		55,375		3,372		810		—

The following Portfolios had transactions with Citigroup, Inc., and its affiliated broker/dealers, which may be deemed to be affiliates of the Investment Adviser, Administrator, Sub-Advisers and Distributor under Section 17 of the Act, for the six months ended June 30, 2011:

PORTFOLIO	PURCHASES		SALES		NET REALIZED GAIN		INCOME		VALUE
Limited Duration	$	498,322	$	639,540	$	23,249	$	18,794	$	1,114,503
Income Plus		704,602		643,270		96,895		215,202		6,580,389
Strategist		3,667,730		114,196		11,173		25,392		6,799,274

The following Portfolio had transactions with other Morgan Stanley funds for the six months ended June 30, 2011:

PORFOLIO	PURCHASES		SALES		REALIZED GAIN
Multi Cap Growth		—	$	5,035,807	$	1,567,592

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During the six months ended June 30, 2011, the following Portfolios incurred brokerage commissions with Morgan Stanley & Co. LLC, an affiliate of the Investment Adviser, Administrator, Sub-Advisers and Distributor, for portfolio transactions executed on behalf of each Portfolio:

GLOBAL INFRASTRUCTURE		MULTI CAP GROWTH		AGGRESSIVE EQUITY		STRATEGIST
$	246	$	1,314	$	160	$	141,961

During the six months ended June 30, 2011, the following Portfolios incurred brokerage commissions with Citigroup, Inc. and its affiliated broker/dealers which may be deemed affiliates of the Investment Adviser, Sub-Advisers, Administrator and Distributor, under Section 17 of the Act, for portfolio transactions executed on behalf of each Portfolio:

GLOBAL INFRASTRUCTURE		EUROPEAN EQUITY		MULTI CAP GROWTH		AGGRESSIVE EQUITY
$	6,084	$	721	$	365	$	14

Morgan Stanley Services Company Inc., an affiliate of the Investment Adviser, Sub-Advisers 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.

Aggregate pension costs for the six months ended June 30, 2011, included in "trustees' fees and expenses" in the Statements of Operations and the accrued pension liability included in "accrued expenses and other payables" in the Statements of Assets and Liabilities are as follows:

AGGREGATE PENSION COSTS

MONEY MARKET		LIMITED DURATION		INCOME PLUS		GLOBAL INFRASTRUCTURE		EUROPEAN EQUITY		MULTI CAP GROWTH		AGGRESSIVE EQUITY		STRATEGIST
$	161	$	88	$	302	$	111	$	100	$	380	$	45	$	251

AGGREGATE PENSION LIABILITY

MONEY MARKET		LIMITED DURATION		INCOME PLUS		GLOBAL INFRASTRUCTURE		EUROPEAN EQUITY		MULTI CAP GROWTH		AGGRESSIVE EQUITY		STRATEGIST
$	5,343	$	2,777	$	9,225	$	2,817	$	2,514	$	9,670	$	1,149	$	7,241

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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.

7. 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 GAAP. 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 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, 2010, 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,	2011		2012		2013		2014		2015		2016		2017		2018		TOTAL
Limited Duration	$	1,425	$	4,026	$	1,267	$	2,233	$	1,063	$	17,119	$	8,980		—	$	36,113
Income Plus		—		—		—		—		5,172		19,232		—		—		24,404
European Equity		—		—		—		—		—		—		11,884	$	3,308		15,192
Multi Cap Growth		—		—		—		—		—		20,502		7,207		—		27,709
Aggressive Equity		—		—		—		—		—		1,612		375		—		1,987

At December 31, 2010, the primary reason(s) for significant temporary differences were as follows:

	TEMPORARY DIFFERENCES
	POST- OCTOBER LOSSES	LOSS DEFERRALS FROM WASH SALES
Money Market
Limited Duration
Income Plus
Global Infrastructure	•	•

104

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Notes to Financial Statements nJune 30, 2011 (unaudited)continued

	TEMPORARY DIFFERENCES
	POST- OCTOBER LOSSES	LOSS DEFERRALS FROM WASH SALES
European Equity	•	•
Multi Cap Growth	•	•
Aggressive Equity	•	•
Strategist

Additionally, the following Portfolios had other temporary differences: Global Infrastructure, Strategist — income from the mark-to-market of foreign currency exchange contracts; Global Infrastructure, European Equity — foreign tax credit pass-through; Limited Duration, Income Plus, Strategist — capital gain/loss from the mark-to-market of futures contracts and/or options contracts; Limited Duration, Strategist — capital loss deferrals on straddles; The following Portfolios had temporary and permanent differences attributable to book amortization of premiums/discounts on debt securities: Limited Duration, Income Plus and Strategist. The following Portfolios had temporary and/or permanent differences attributable to tax adjustment on swaps: Limited Duration, Income Plus and Strategist. The following Portfolios had temporary and permanent differences attributable to tax adjustments on passive foreign investment companies held/sold: Global Infrastructure and Strategist.

8. Purposes of and Risks Relating to Certain Financial Instruments

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 Association ("FNMA") and Federal Home Loan Mortgage Corporation ("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 subprime mortgages. Subprime mortgages refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments on their mortgages. The securities issued by FNMA and FHLMC that are held by the Portfolios are not backed by subprime mortgages.

105

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Notes to Financial Statements nJune 30, 2011 (unaudited)continued

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

The Federal Housing Finance Agency ("FHFA") serves as conservator of FNMA and FHLMC and the U.S. Department of the Treasury has agreed to provide capital as needed to ensure FNMA and FHLMC continue to provide liquidity to the housing and mortgage markets.

Certain Portfolios may enter into repurchase agreements under which a Portfolio lends excess cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In the event of default on the obligation to repurchase, the Portfolio has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to certain costs and delays.

Certain Portfolios may invest in structured investments, which involve risks including counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to counterparty risk because the Portfolio is relying on the creditworthiness of such counterparty and has no rights with respect to the issuer of the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Portfolio's illiquidity to the extent that the Portfolio, at a particular point in time, may be unable to find qualified buyers for these securities.

At June 30, 2011, European Equity Portfolio's investments in securities of issuers in the United Kingdom, Germany, Switzerland and France represented 46.2%, 15.5%, 12.7% and 12.3%, respectively 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 countries.

9. Expense Offset

The Fund has entered into an arrangement with State Street ("Custodian"), whereby credits realized on uninvested cash balances were used to offset a portion of the Fund's expenses. If applicable, these custodian credits are shown as "expense offset" in the Statements of Operations.

10. Accounting Pronouncement

In May 2011, FASB issued Accounting Standards Update ("ASU") 2011-04. The amendments in this update are the results of the work of FASB and the International Accounting Standards Board to develop common requirements for measuring fair value and for disclosing information about fair value measurements, which

106

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Notes to Financial Statements nJune 30, 2011 (unaudited)continued

are effective during interim and annual periods beginning after December 15, 2011. Consequently, these amendments improve the comparability of fair value measurements presented and disclosed in the financial statements prepared in accordance with U.S. GAAP and International Financial Reporting Standards.

11. Regulatory Settlement Proceeds

The European Equity Portfolio received $84,956 in a settlement of administrative proceedings against other unaffiliated third parties involving findings by the Securities and Exchange Commission (SEC) of market timing and/or late trading of mutual funds. The settlement is recorded as an increase to paid-in capital in the accompanying financial statements.

12. Subsequent Event

Effective July 31, 2011, the Board of Trustees of the Fund has approved (i) changing the investment adviser with respect to each Portfolio from Morgan Stanley Investment Advisors Inc. to Morgan Stanley Investment Management Inc., and (ii) changing the distributor with respect to each Portfolio from Morgan Stanley Distributors Inc. to Morgan Stanley Distribution, Inc. In connection with this approval, there will be no change in the nature of the services currently provided to the Fund through its existing advisory and distribution relationships.

107

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Financial Highlights

FOR THE YEAR DECEMBER 31 ENDED	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
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		1.00		0.020			—			0.020			(0.020	)		—		(0.020	)
2009		1.00		0.000	(e)		—			0.000	(e)		(0.000	)(e)		—		(0.000	)(e)
2010		1.00		0.000	(e)		—			0.000	(e)		(0.000	)(e)		—		(0.000	)(e)
2011^		1.00		0.000	(e)		—			0.000	(e)		(0.000	)(e)		—		(0.000	)(e)
CLASS Y SHARES
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		1.00		0.020			—			0.020			(0.020	)		—		(0.020	)
2009		1.00		0.000	(e)		—			0.000	(e)		(0.000	)(e)		—		(0.000	)(e)
2010		1.00		0.000	(e)		—			0.000	(e)		(0.000	)(e)		—		(0.000	)(e)
2011^		1.00		0.000	(e)		—			0.000	(e)		(0.000	)(e)		—		(0.000	)(e)
LIMITED DURATION CLASS X SHARES
2006		9.54		0.40			—			0.40			(0.45	)		—		(0.45	)
2007		9.49		0.47			(0.19	)		0.28			(0.50	)		—		(0.50	)
2008		9.27		0.36			(1.72	)		(1.36	)		(0.15	)		—		(0.15	)
2009		7.76		0.20			0.24			0.44			(0.36	)		—		(0.36	)
2010		7.84		0.18			—			0.18			(0.28	)		—		(0.28	)
2011^		7.74		0.09			0.06			0.15			(0.26	)		—		(0.26	)
CLASS Y SHARES
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		9.26		0.34			(1.73	)		(1.39	)		(0.14	)		—		(0.14	)
2009		7.73		0.18			0.24			0.42			(0.34	)		—		(0.34	)
2010		7.81		0.16			0.01			0.17			(0.26	)		—		(0.26	)
2011^		7.72		0.08			0.06			0.14			(0.24	)		—		(0.24	)
INCOME PLUS CLASS X SHARES
2006		10.49		0.51			0.05			0.56			(0.54	)		—		(0.54	)
2007		10.51		0.53			0.08			0.61			(0.56	)		—		(0.56	)
2008		10.56		0.53			(1.46	)		(0.93	)		(0.18	)		—		(0.18	)
2009		9.45		0.57			1.50			2.07			(0.53	)		—		(0.53	)
2010		10.99		0.58			0.39			0.97			(0.70	)		—		(0.70	)
2011^		11.26		0.29			0.11			0.40			(0.68	)		—		(0.68	)

See Notes to Financial Statements
108

								RATIO TO AVERAGE NET ASSETS(c)
FOR THE YEAR DECEMBER 31 ENDED	NET ASSET VALUE END OF PERIOD		TOTAL RETURN(b)			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME			REBATE FROM MORGAN STANLEY AFFILIATE			PORTFOLIO TURNOVER RATE
MONEY MARKET CLASS X SHARES
2006	$	1.00		4.61	%	$	132,690		0.55	%		4.53	%		—			N/A
2007		1.00		4.93	(d)		111,478		0.55			4.79			—			N/A
2008		1.00		2.45			115,415		0.57			2.40			—			N/A
2009		1.00		0.03			84,486		0.40	(f)(g)		0.03	(f)(g)		—			N/A
2010		1.00		0.01			59,932		0.29	(g)		0.00	(g)(h)		—			N/A
2011^		1.00		0.00	(h)(l)		54,773		0.30	(g)(m)		0.01	(g)(m)		—			N/A
CLASS Y SHARES
2006		1.00		4.35			102,296		0.80			4.28			—			N/A
2007		1.00		4.67	(d)		101,524		0.80			4.54			—			N/A
2008		1.00		2.19			112,113		0.82			2.15			—			N/A
2009		1.00		0.01			81,145		0.41	(f)(g)		0.01	(f)(g)		—			N/A
2010		1.00		0.01			67,139		0.29	(g)		0.00	(g)(h)		—			N/A
2011^		1.00		0.00	(h)(l)		62,181		0.30	(g)(m)		0.01	(g)(m)		—			N/A
LIMITED DURATION CLASS X SHARES
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		7.76		(14.91	)		16,405		0.48	(i)		4.27	(i)		0.01	%		54
2009		7.84		5.76			16,889		0.49	(i)		2.61	(i)		0.00	(h)		105
2010		7.74		2.35			14,921		0.55	(i)		2.25	(i)		0.00	(h)		88
2011^		7.63		1.95	(l)		13,847		0.56	(i)(m)		2.28	(i)(m)		0.00	(h)(m)		27	(l)
CLASS Y SHARES
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		7.73		(15.22	)		63,223		0.73	(i)		4.02	(i)		0.01			54
2009		7.81		5.56			60,753		0.74	(i)		2.36	(i)		0.00	(h)		105
2010		7.72		2.22			53,760		0.80	(i)		2.00	(i)		0.00	(h)		88
2011^		7.62		1.78	(l)		48,289		0.81	(i)(m)		2.03	(i)(m)		0.00	(h)(m)		27	(l)
INCOME PLUS CLASS X SHARES
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		9.45		(8.92	)		109,833		0.55	(i)		5.34	(i)		0.00	(h)		55
2009		10.99		22.57			114,488		0.56	(i)		5.64	(i)		0.00	(h)		75
2010		11.26		9.28			106,363		0.59	(i)		5.23	(i)		0.00	(h)		53
2011^		10.98		3.59	(l)		98,970		0.58	(i)(m)		5.11	(i)(m)		0.00	(h)(m)		27	(l)

109

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Financial Highlights continued

FOR THE YEAR DECEMBER 31 ENDED	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
2006	$	10.47	$	0.49	$	0.05		$	0.54		$	(0.52	)		—		$	(0.52	)
2007		10.49		0.50		0.08			0.58			(0.53	)		—			(0.53	)
2008		10.54		0.51		(1.45	)		(0.94	)		(0.18	)		—			(0.18	)
2009		9.42		0.55		1.49			2.04			(0.51	)		—			(0.51	)
2010		10.95		0.55		0.39			0.94			(0.67	)		—			(0.67	)
2011^		11.22		0.28		0.11			0.39			(0.65	)		—			(0.65	)
GLOBAL INFRASTRUCTURE CLASS X SHARES
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		20.66		0.40		(6.21	)		(5.81	)		(0.11	)		(3.44	)		(3.55	)
2009		11.30		0.31		1.16			1.47			(0.38	)		(3.71	)		(4.09	)
2010		8.68		0.21		0.18			0.39			(0.25	)		(0.69	)		(0.94	)
2011^		8.13		0.12		0.85			0.97			(0.23	)		(0.46	)		(0.69	)
CLASS Y SHARES
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		20.65		0.35		(6.20	)		(5.85	)		(0.09	)		(3.44	)		(3.53	)
2009		11.27		0.28		1.15			1.43			(0.35	)		(3.71	)		(4.06	)
2010		8.64		0.19		0.19			0.38			(0.23	)		(0.69	)		(0.92	)
2011^		8.10		0.11		0.84			0.95			(0.20	)		(0.46	)		(0.66	)
EUROPEAN EQUITY CLASS X SHARES
2006		19.82		0.36		5.55			5.91			(0.39	)		—			(0.39	)
2007		25.34		0.47		3.48			3.95			(0.46	)		—			(0.46	)
2008		28.83		0.63		(11.31	)		(10.68	)		(0.61	)		(4.22	)		(4.83	)
2009		13.32		0.36		3.01			3.37			(0.56	)		(0.71	)		(1.27	)
2010		15.42		0.26		0.76			1.02			(0.39	)		—			(0.39	)
2011^		16.05		0.32		1.01			1.33			(0.37	)		—			(0.37	)
CLASS Y SHARES
2006		19.70		0.29		5.54			5.83			(0.34	)		—			(0.34	)
2007		25.19		0.40		3.46			3.86			(0.40	)		—			(0.40	)
2008		28.65		0.58		(11.25	)		(10.67	)		(0.52	)		(4.22	)		(4.74	)
2009		13.24		0.32		3.00			3.32			(0.50	)		(0.71	)		(1.21	)
2010		15.35		0.22		0.76			0.98			(0.35	)		—			(0.35	)
2011^		15.98		0.30		1.01			1.31			(0.33	)		—			(0.33	)

See Notes to Financial Statements
110

								RATIO TO AVERAGE NET ASSETS(c)
FOR THE YEAR DECEMBER 31 ENDED	NET ASSET VALUE END OF PERIOD		TOTAL RETURN(b)			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME			REBATE FROM MORGAN STANLEY AFFILIATE			PORTFOLIO TURNOVER RATE
INCOME PLUS CLASS Y SHARES
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		9.42		(9.11	)		135,850		0.80	(i)		5.09	(i)		0.00	%(h)		55
2009		10.95		22.29			148,108		0.81	(i)		5.39	(i)		0.00	(h)		75
2010		11.22		9.01			124,322		0.84	(i)		4.98	(i)		0.00	(h)		53
2011^		10.96		3.48	(l)		114,051		0.83	(i)(m)		4.86	(i)(m)		0.00	(h)(m)		27	(l)
GLOBAL INFRASTRUCTURE CLASS X SHARES
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		11.30		(33.27	)		70,951		0.74	(i)		2.46	(i)		0.00	(h)		76
2009		8.68		19.26			68,748		0.96	(i)		3.37	(i)		0.00	(h)		280
2010		8.13		6.93			61,408		0.87	(i)		2.71	(i)		0.00	(h)		148
2011^		8.41		12.08	(l)		61,994		0.84	(i)(m)		2.85	(i)(m)		0.00	(h)(m)		18	(l)
CLASS Y SHARES
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		11.27		(33.45	)		16,545		0.99	(i)		2.21	(i)		0.00	(h)		76
2009		8.64		18.83			17,818		1.21	(i)		3.12	(i)		0.00	(h)		280
2010		8.10		6.74			15,789		1.12	(i)		2.46	(i)		0.00	(h)		148
2011^		8.39		11.95	(l)		15,207		1.09	(i)(m)		2.60	(i)(m)		0.00	(h)(m)		18	(l)
EUROPEAN EQUITY CLASS X SHARES
2006		25.34		30.21			142,000		1.00	(j)		1.59	(j)		—			62
2007		28.83		15.59			127,071		1.00	(j)		1.73	(j)		—			41
2008		13.32		(42.70	)		57,734		1.00	(i)(j)		3.01	(i)(j)		0.00	(h)		15
2009		15.42		27.73			61,197		1.00	(i)(j)		2.67	(i)(j)		0.00	(h)		26
2010		16.05		7.23	(k)		54,824		1.00	(i)(j)		1.81	(i)(j)		0.00	(h)		22
2011^		17.01		8.32	(l)		53,768		1.00	(i)(j)(m)		3.81	(i)(j)(m)		0.00	(h)(m)		6	(l)
CLASS Y SHARES
2006		25.19		29.88			45,637		1.25	(j)		1.34	(j)		—			62
2007		28.65		15.34			40,721		1.25	(j)		1.48	(j)		—			41
2008		13.24		(42.84	)		17,845		1.25	(i)(j)		2.76	(i)(j)		0.00	(h)		15
2009		15.35		27.41			19,323		1.25	(i)(j)		2.42	(i)(j)		0.00	(h)		26
2010		15.98		6.96	(k)		17,821		1.25	(i)(j)		1.56	(i)(j)		0.00	(h)		22
2011^		16.96		8.20	(l)		17,181		1.25	(i)(j)(m)		3.56	(i)(j)(m)		0.00	(h)(m)		6	(l)

111

Morgan Stanley Variable Investment Series

Financial Highlights continued

FOR THE YEAR DECEMBER 31 ENDED	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
MULTI CAP GROWTH CLASS X SHARES
2006	$	28.46	$	0.02		$	1.15		$	1.17			—			—			—
2007		29.63		0.21			5.57			5.78		$	(0.18	)		—		$	(0.18	)
2008		35.23		0.03			(16.78	)		(16.75	)		(0.07	)		—			(0.07	)
2009		18.41		0.11			12.99			13.10			(0.09	)		—			(0.09	)
2010		31.42		0.06			8.65			8.71			(0.06	)		—			(0.06	)
2011^		40.07		0.01			2.02			2.03			(0.07	)		—			(0.07	)
CLASS Y SHARES
2006		28.34		(0.05	)		1.14			1.09			—			—			—
2007		29.43		0.13			5.54			5.67			(0.04	)		—			(0.04	)
2008		35.06		(0.05	)		(16.67	)		(16.72	)		(0.05	)		—			(0.05	)
2009		18.29		0.05			12.90			12.95			(0.03	)		—			(0.03	)
2010		31.21		(0.02	)		8.58			8.56			—			—			—
2011^		39.77		(0.04	)		2.00			1.96			—			—			—
AGGRESSIVE EQUITY CLASS X SHARES
2006		13.77		(0.04	)		1.12			1.08			—			—			—
2007		14.85		0.06			2.86			2.92			—			—			—
2008		17.77		(0.04	)		(8.63	)		(8.67	)		(0.03	)		—			(0.03	)
2009		9.07		0.00			6.30			6.30			—			—			—
2010		15.37		(0.05	)		4.05			4.00			—			—			—
2011^		19.37		(0.04	)		0.95			0.91			—			—			—
CLASS Y SHARES
2006		13.61		(0.07	)		1.11			1.04			—			—			—
2007		14.65		0.02			2.82			2.84			—			—			—
2008		17.49		(0.08	)		(8.49	)		(8.57	)		—			—			—
2009		8.92		(0.03	)		6.19			6.16			—			—			—
2010		15.08		(0.09	)		3.97			3.88			—			—			—
2011^		18.96		(0.06	)		0.92			0.86			—			—			—
STRATEGIST CLASS X SHARES
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		15.55		0.30			(3.76	)		(3.46	)		(0.10	)		(1.39	)		(1.49	)
2009		10.60		0.16			1.90			2.06			(0.26	)		—			(0.26	)
2010		12.40		0.24			0.59			0.83			(0.20	)		(0.07	)		(0.27	)
2011^		12.96		0.12			0.02			0.14			(0.27	)		(1.41	)		(1.68	)

See Notes to Financial Statements
112

								RATIO TO AVERAGE NET ASSETS(c)
FOR THE YEAR DECEMBER 31 ENDED	NET ASSET VALUE END OF PERIOD		TOTAL RETURN(b)			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME (LOSS)			REBATE FROM MORGAN STANLEY AFFILIATE			PORTFOLIO TURNOVER RATE
MULTI CAP GROWTH CLASS X SHARES
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		18.41		(47.62	)		140,041		0.55	(i)		0.08	(i)		0.01	%		33
2009		31.42		71.32			202,279		0.55	(i)		0.44	(i)		0.00	(h)		23
2010		40.07		27.76			220,553		0.58	(i)		0.19	(i)		0.00	(h)		29
2011^		42.03		5.06	(l)		209,710		0.56	(i)(m)		0.07	(i)(m)		0.00	(h)(m)		15	(l)
CLASS Y SHARES
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		18.29		(47.75	)		45,671		0.80	(i)		(0.17	)(i)		0.01			33
2009		31.21		70.85			64,122		0.80	(i)		0.19	(i)		0.00	(h)		23
2010		39.77		27.43			67,303		0.83	(i)		(0.06	)(i)		0.00	(h)		29
2011^		41.73		4.93	(l)		60,531		0.81	(i)(m)		(0.18	)(i)(m)		0.00	(h)(m)		15	(l)
AGGRESSIVE EQUITY CLASS X SHARES
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		9.07		(48.86	)		10,289		0.90	(i)		(0.29	)(i)		0.00	(h)		33
2009		15.37		69.46			14,898		1.01	(i)		(0.02	)(i)		0.01			23
2010		19.37		26.02			15,413		1.09	(i)		(0.32	)(i)		0.00	(h)		27
2011^		20.28		4.70	(l)		14,523		1.03	(i)(m)		(0.40	)(i)(m)		0.00	(h)(m)		18	(l)
CLASS Y SHARES
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		8.92		(49.00	)		12,272		1.15	(i)		(0.54	)(i)		0.00	(h)		33
2009		15.08		69.06			17,541		1.26	(i)		(0.27	)(i)		0.01			23
2010		18.96		25.73			18,777		1.34	(i)		(0.57	)(i)		0.00	(h)		27
2011^		19.82		4.54	(l)		17,511		1.28	(i)(m)		(0.65	)(i)(m)		0.00	(h)(m)		18	(l)
STRATEGIST CLASS X SHARES
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		10.60		(23.98	)		134,668		0.54	(i)		2.28	(i)		0.02			52
2009		12.40		19.74			137,731		0.55	(i)		1.41	(i)		0.03			96
2010		12.96		6.81			128,254		0.59	(i)		1.89	(i)		0.02			119
2011^		11.42		1.07	(l)		117,117		0.58	(i)(m)		1.75	(i)(m)		0.01	(m)		59	(l)

113

Morgan Stanley Variable Investment Series

Financial Highlights continued

FOR THE YEAR DECEMBER 31 ENDED	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
STRATEGIST CLASS Y SHARES
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		15.53		0.27		(3.76	)		(3.49	)		(0.09	)		(1.39	)		(1.48	)
2009		10.56		0.13		1.89			2.02			(0.23	)		—			(0.23	)
2010		12.35		0.21		0.58			0.79			(0.17	)		(0.07	)		(0.24	)
2011^		12.90		0.10		0.03			0.13			(0.23	)		(1.41	)		(1.64	)

  ^  For the six months ended June 30, 2011 (unaudited).

(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. Performance shown does not reflect fees and expenses imposed by your insurance company. If performance information included the effect of these charges, the total returns would be lower.

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

(d)  The Investment Adviser fully reimbursed the Portfolio for the loss incurred resulting from the disposal of an investment. Without this reimbursement, the total return was 4.79% and 4.52% for Class X and Y, respectively.

(e)  Amount is less than $0.001.

(f)  Reflects fees paid in connection with the U.S. Treasury's Temporary Guarantee Program for Money Market Funds. This fee had an effect of 0.04% for the year ended 2009.

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

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT LOSS RATIO
June 30, 2011
Class X		0.60	%		(0.29	)%
Class Y		0.85			(0.54	)
December 31, 2010
Class X		0.62			(0.33	)
Class Y		0.87			(0.58	)
December 31, 2009
Class X		0.59			(0.16	)
Class Y		0.84			(0.42	)

(h)  Amount is less than 0.005%.

See Notes to Financial Statements
114

								RATIO TO AVERAGE NET ASSETS(c)
FOR THE YEAR DECEMBER 31 ENDED	NET ASSET VALUE END OF PERIOD		TOTAL RETURN(b)			NET ASSETS END OF PERIOD (000'S)		EXPENSES			NET INVESTMENT INCOME			REBATE FROM MORGAN STANLEY AFFILIATE			PORTFOLIO TURNOVER RATE
STRATEGIST CLASS Y SHARES
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		10.56		(24.20	)		53,046		0.79	(i)		2.03	(i)		0.02	%		52
2009		12.35		19.44			59,737		0.80	(i)		1.16	(i)		0.03			96
2010		12.90		6.50			56,361		0.84	(i)		1.64	(i)		0.02			119
2011^		11.39		1.00	(l)		48,609		0.83	(i)(m)		1.50	(i)(m)		0.01	(m)		59	(l)

(i)  The ratios reflect the rebate of certain Portfolio expenses in connection with investments in a Morgan Stanley affiliate during the period. The effect of the rebate on the ratios is disclosed in the above table as "Rebate from Morgan Stanley affiliate."

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

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT INCOME RATIO
June 30, 2011
Class X		1.15	%		3.66	%
Class Y		1.40			3.41
December 31, 2010
Class X		1.16			1.65
Class Y		1.41			1.40
December 31, 2009
Class X		1.12			2.55
Class Y		1.37			2.30
December 31, 2008
Class X		1.08			2.93
Class Y		1.33			2.68
December 31, 2007
Class X		1.04			1.69
Class Y		1.29			1.44
December 31, 2006
Class X		1.07			1.52
Class Y		1.32			1.27

(k)  During the year ended December 31, 2010, the Portfolio received a regulatory settlement from an unaffiliated third party which had an impact of approximately 0.14% and 0.14% for Class X and Y, respectively, on the total return. This was a one-time settlement, and as a result, the impact on the NAV and consequently the performance will not likely be repeated in the future. Had this settlement not occurred, the total return for Class X and Y shares would have been approximately 7.09% and 6.82%, respectively.

(l)  Not annualized.

(m)  Annualized.

115

Morgan Stanley Variable Investment Series

Change in Independent Registered Public Accounting Firm (unaudited)

On June 7, 2011, Deloitte & Touche LLP were dismissed as Independent Registered Public Accounting Firm of the Fund.

The reports of Deloitte & Touche LLP on the financial statements of the Fund for the past two fiscal years contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle.

In connection with its audits for the two most recent fiscal years, there have been no disagreements with Deloitte & Touche LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Deloitte & Touche LLP, would have caused them to make reference thereto in their reports on the financial statements for such years.

On June 7, 2011, the Fund, with the approval of its Board of Trustees and its Audit Committee, engaged Ernst & Young LLP as its new Independent Registered Public Accounting Firm.

116

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
Arthur Lev President and Principal Executive Officer
Mary Ann Picciotto Chief Compliance Officer
Stefanie V. Chang Yu Vice President
Francis J. Smith Treasurer and Principal Financial Officer
Mary E. Mullin Secretary
Transfer Agent	Custodian
Morgan Stanley Services Company Inc. P.O. Box 219886 Kansas City, Missouri 64121	State Street Bank and Trust Company One Lincoln Street Boston, Massachusetts 02111
Independent Registered Public Accounting Firm	Legal Counsel
Ernst & Young LLP 200 Clarendon Street Boston, Massachusetts 02116	Dechert LLP 1095 Avenue of the Americas New York, New York 10036
Counsel to the Independent Trustees	Investment Adviser
Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, New York 10036	Morgan Stanley Investment Advisors Inc. 522 Fifth Avenue New York, New York 10036
Sub-Adviser (Global Infrastructure and European Equity)
Morgan Stanley Investment Management Limited 25 Cabot Square, Canary Wharf London, E14 4QA, England
Morgan Stanley Investment Management Company 23 Church Street 16-01 Capital Square 049481 Singapore

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 Distributors Inc., member FINRA.

VARINSAN
IU11-01701P-Y06/11

#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/ Arthur Lev

Arthur Lev

Principal Executive Officer

August 25, 2011

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/ Arthur Lev

Arthur Lev

Principal Executive Officer

August 25, 2011

/s/ Francis Smith

Francis Smith

Principal Financial Officer

August 25, 2011

EX-99.CERT

Exhibit 99.CERT

EXHIBIT 12 B1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

CERTIFICATIONS

I, Arthur Lev, certify that:

1.I have reviewed this report on Form N-CSR of Morgan Stanley Variable Investment Series ;

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

3.Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

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

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

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

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

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

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

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

Date: August 25, 2011
	/s/ Arthur Lev
	Arthur Lev
	Principal Executive Officer

EXHIBIT 12 B2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

CERTIFICATIONS

I, Francis Smith, certify that:

1.I have reviewed this report on Form N-CSR of Morgan Stanley Variable Investment Series ;

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

3.Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

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

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

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

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

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

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

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

Date: August 25, 2011
	/s/ Francis Smith
	Francis Smith
	Principal Financial  Officer

EX-99.906CERT

Exhibit 99.906CERT

SECTION 906 CERTIFICATION

Certification Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Morgan Stanley Variable Investment Series

In connection with the Report on Form N-CSR (the “Report”) of the above-named issuer for the period ended June 30, 2011 that is accompanied by this certification, the undersigned hereby certifies that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Date: August 25, 2011	/s/ Arthur Lev
	Arthur Lev
	Principal Executive Officer

A signed original of this written statement required by Section 906 has been provided to Morgan Stanley Variable Investment Series and will be retained by Morgan Stanley Variable Investment Series and furnished to the Securities and Exchange Commission or its staff upon request.

SECTION 906 CERTIFICATION

Certification Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Morgan Stanley Variable Investment Series

In connection with the Report on Form N-CSR (the “Report”) of the above-named issuer for the period ended June 30, 2011 that is accompanied by this certification, the undersigned hereby certifies that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Date: August 25, 2011	/s/ Francis Smith
	Francis Smith
	Principal Financial Officer

A signed original of this written statement required by Section 906 has been provided to Morgan Stanley Variable Investment Series and will be retained by Morgan Stanley Variable Investment Series and furnished to the Securities and Exchange Commission or its staff upon request.