Total Return for the 6 Months Ended June 30, 2023
Class A			Class L			Class I			Class C			Bloomberg U.S. Long Treasury Index¹⁽ⁱ⁾
	0.58	%		0.30	%		0.61	%		0.05	%		3.72	%

Bloomberg U.S. Government/Mortgage/ Bloomberg U.S. Long Treasury Blended Index²				Bloomberg U.S. Government/Mortgage Index³				Lipper General U.S. Government Funds Index⁴
	2.31	%			1.69	%			1.13	%

The performance of Morgan Stanley Long Duration Government Opportunities Fund (the "Fund") four share classes varies because each has different expenses. The Fund's total returns assume the reinvestment of all distributions but do not reflect the deduction of any applicable sales charges. Such costs would lower performance. See Performance Summary for standardized performance and benchmark information.

Market Conditions

The price action for developed market rates in the first quarter of 2023 was staggering and historic. Early in the quarter, strong economic data and hawkish language from the Federal Reserve (Fed) saw yields continue their movement upwards; however, that was reversed in March as the collapse of Silicon Valley Bank and Signature Bank unfolded. After spiking, rate volatility slowly declined from the highs but remained elevated late in the quarter as the market digested news and tried to interpret the impact of the banking situation.

PORTFOLIO COMPOSITION as of 06/30/23
Agency Fixed Rate Mortgages	47.7	%
Short-Term Investments	22.0
Mortgages — Other	18.6
Commercial Mortgage-Backed Securities	5.2
U.S. Agency Security	2.6
U.S. Treasury Securities	2.0
Asset-Backed Securities	1.1
Agency Adjustable Rate Mortgages	0.3
Agency Bond — Finance (U.S. Government Guaranteed)	0.2
Agency Bond — Sovereign (U.S. Government Guaranteed)	0.2
Collateralized Mortgage Obligations — Agency Collateral Series	0.1

* Does not include open long/short futures contracts with a value of $232,196,625 and net unrealized depreciation of $3,358,279.

Subject to change daily. Provided for informational purposes only and should not be deemed as a recommendation to buy or sell the types of securities mentioned above. All percentages for portfolio composition are stated as a percentage of total investments.

Morgan Stanley is a full-service securities firm engaged in securities trading and brokerage activities, investment banking, research and analysis, financing and financial advisory services.

Average Annual Total Returns—Period Ended June 30, 2023

Symbol

Class A Shares*
(since 07/28/97)
USGAX

Class L Shares**
(since 07/28/97)
USGCX

Class I Shares***
(since 07/28/97)
USGDX

Class C Shares^†(since 04/30/15)
MSGVX

1 Year

–3.45
–6.62⁶

%⁵

–3.82
—

%⁵

–3.25
—

%⁵

–4.30
–5.23⁶

%⁵

5 Years

–0.55⁵–1.20⁶

–0.87⁵—

–0.22⁵—

–1.36⁵–1.36⁶

10 Years

0.69⁵0.36⁶

0.39⁵—

1.02⁵—

—
—

Since Inception

2.90⁵2.77⁶

2.48⁵—

3.17⁵—

–0.70⁵–0.70⁶

Gross Expense Ratio

1.05

1.33

0.80

1.79

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 visit www.morganstanley.com/im/shareholderreports or speak with your Financial Advisor. Investment returns and principal value will fluctuate and fund shares, when redeemed, may be worth more or less than their original cost. The table does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Performance for Class A, Class L, Class I and Class C shares will vary due to differences in sales charges and expenses. See the Fund's current prospectus for complete details on fees and sales charges. Expenses are as of each Fund's fiscal year end as outlined in the Fund's current prospectus. Fund's total returns are calculated based on the net asset value as of the last business day of the period.

* The maximum front-end sales charge for Class A is 3.25%.

** Class L has no sales charge. Class L shares are closed for new investments.

*** Class I has no sales charge.

† The maximum contingent deferred sales charge for Class C is 1.00% for shares redeemed within one year of purchase. Class C shares will generally convert to Class A shares appoximately eight years after the end of the calendar month in which the shares were purchased. Performance for periods greater than eight years reflects this conversion (beginning April 2023).

(1) The Bloomberg U.S. Long Treasury Index measures the performance of U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury with a maturity greater than 10 years. Separate trading of registered interest and principal of securities (STRIPS) are excluded from the index because their inclusion would result in double-counting. 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. Effective May 31, 2023, the Fund changed its primary benchmark to the Bloomberg U.S. Long Treasury Index because the Adviser believes it is a more appropriate benchmark for the Fund.

(2) The Bloomberg U.S. Government/Mortgage/Bloomberg U.S. Long Treasury Blended Index is a performance linked benchmark of the old and new benchmark of the Fund. The old benchmark represented by Bloomberg U.S. Government/Mortgage Index for periods from inception of the Fund to May 30, 2023 and the new benchmark represented by Bloomberg U.S. Long Treasury Index for periods thereafter. 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.

(3) The Bloomberg U.S. Government/Mortgage Index includes Treasurys, government-related issues, and agency mortgage-backed pass-through securities issued by Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC). 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.

(4) The Lipper General U.S. Government Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper General U.S. Government Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 10 funds represented in this Index. The Fund was in the Lipper General U.S. Government Funds classification as of the date of this report.

(5) Figure shown assumes reinvestment of all distributions and does not reflect the deduction of any sales charges.

(6) Figure shown assumes reinvestment of all distributions and the deduction of the maximum applicable sales charge. See the Fund's current prospectus for complete details on fees and sales charges.

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period 01/01/23 – 06/30/23.

Actual Expenses

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). 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 transactional costs were included, your costs would have been higher.

	Beginning Account Value		Ending Account Value		Expenses Paid During Period⁽¹⁾
	01/01/23		06/30/23		01/01/23 – 06/30/23
Class A
Actual (0.58% return)	$	1,000.00	$	1,005.80	$	4.18
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,020.63	$	4.21
Class L
Actual (0.30% return)	$	1,000.00	$	1,003.00	$	5.51
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,019.29	$	5.56
Class I
Actual (0.61% return)	$	1,000.00	$	1,006.10	$	2.49
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.32	$	2.51
Class C
Actual (0.05% return)	$	1,000.00	$	1,000.50	$	7.99
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,016.81	$	8.05

(1) Expenses are equal to the Fund's annualized expense ratios of 0.84%, 1.11%, 0.50% and 1.61% for Class A, Class L, Class I and Class C shares, respectively, multiplied by the average account value over the period and multiplied by 181/365 (to reflect the one-half year period). If the Fund had borne all of its expenses, the annualized expense ratios would have been 1.09%, 1.36%, 0.83%, and 1.82% for Class A, Class L, Class I and Class C shares, respectively.

PRINCIPAL AMOUNT (000)			COUPON RATE			MATURITY DATE	VALUE
		Agency Adjustable Rate Mortgages (0.3%)
		Federal Home Loan Mortgage Corporation Conventional Pools:
$	94	12 Month USD LIBOR + 1.73%		3.983	%	11/01/36	$	94,500
	148	12 Month USD LIBOR + 1.91%		4.155		10/01/36		150,004
	489	12 Month USD LIBOR + 1.82%		4.94		06/01/43		495,079
		Total Agency Adjustable Rate Mortgages (Cost $770,690)						739,583
		Agency Bond - Finance (U.S. Government Guaranteed) (0.3%)
	558	Washington Aircraft 1 Co., DAC (Ireland) (Cost $657,791)		2.637		09/15/26		624,450
		Agency Bond - Sovereign (U.S. Government Guaranteed) (0.3%)
	544	Petroleos Mexicanos (Mexico) (Cost $643,750)		2.46		12/15/25		616,048
		Agency Fixed Rate Mortgages (61.0%)
		Federal Home Loan Mortgage Corporation Conventional Pools:
	9,619			2.50		06/01/52 - 01/01/53		8,158,674
	87			3.00		12/01/49		75,812
	239			4.00		04/01/49		227,198
	267			4.50		11/01/48		259,857
		Gold Pools:
	1,880			3.00		03/01/47 - 06/01/49		1,683,959
	3,828			3.50		08/01/42 - 04/01/49		3,560,316
	1,322			4.00		12/01/41 - 10/01/45		1,267,635
	312			5.00		01/01/40		313,626
	415			5.50		11/01/39		425,667
	118			6.50		03/01/29 - 09/01/32		121,114
	95			7.50		05/01/35		99,871
	58			8.00		08/01/32		60,166
	71			8.50		08/01/31		74,559
		Federal National Mortgage Association
	2,604			2.00		11/01/51		2,047,100
	367			2.50		02/01/50		316,890
		Conventional Pools:
	4,165			2.50		03/01/51 - 04/01/52		3,538,970
	3,626			3.00		06/01/40 - 11/01/49		3,248,995
	8,114			3.50		12/01/42 - 07/01/49		7,521,195

PRINCIPAL AMOUNT (000)			COUPON RATE			MATURITY DATE	VALUE
$	8,663			4.00	%	11/01/41 - 09/01/48	$	8,302,679
	3,255			4.50		01/01/25 - 09/01/48		3,193,998
	1,022			5.00		05/01/35 - 02/01/41		1,023,286
	365			5.097		03/01/38		361,912
	1,057			5.50		03/01/35 - 10/01/35		1,071,994
	18			6.50		06/01/29 - 02/01/33		17,633
	1			7.00		05/01/31		634
	156			7.50		08/01/37		163,265
	121			8.00		04/01/33		126,882
	130			8.50		10/01/32		136,907
		July TBA
	8,375	(a)		2.50		07/01/53		7,100,101
	12,850	(a)		3.00		07/01/53		11,310,006
	1,275	(a)		3.50		07/01/53		1,161,744
	4,500	(a)		4.00		07/01/53		4,223,319
	8,500	(a)		4.50		07/01/53		8,170,628
	8,800	(a)		5.00		07/01/53		8,624,344
	21,750	(a)		5.50		07/01/53		21,652,277
		Government National Mortgage Association
	7,539			5.50		06/20/53		7,546,994
	6,077			6.00		04/20/53 - 06/20/53		6,186,511
	4,500			6.50		06/20/53		4,665,141
		Various Pools:
	2,078			3.50		08/20/45 - 07/20/49		1,946,352
	2,132			4.00		11/20/42 - 05/20/49		2,046,906
	35			4.50		04/20/49		33,697
	309			5.00		01/20/40 - 12/20/48		308,455
	32			5.125		11/20/37		31,842
	229			5.25		04/20/36 - 09/20/39		229,952
	497			5.375		02/20/36 - 08/20/40		502,723
	530			6.00		06/15/28 - 09/20/34		536,986
	34			7.00		03/20/26 - 07/20/29		34,470
	69			8.00		05/15/26 - 08/15/31		72,525
	36			8.50		07/15/30		36,284
	2			9.00		07/15/24 - 02/15/25		1,551
		Total Agency Fixed Rate Mortgages (Cost $138,767,365)						133,823,602

PRINCIPAL AMOUNT (000)			COUPON RATE			MATURITY DATE	VALUE
		Asset-Backed Securities (1.4%)
$	670	Arbor Realty Commercial Real Estate Notes 2021-FL3 Ltd. 1 Month USD LIBOR + 1.07% (b)(c)		6.263	%	08/15/34	$	655,704
	440	Octane Receivables Trust, Class A, Series 2023-1A (b)		5.87		05/21/29		438,198
		United States Small Business Administration
	691			2.42		06/01/32		627,684
	1,389			2.67		04/01/32		1,270,586
		Total Asset-Backed Securities (Cost $3,190,149)						2,992,172
		Collateralized Mortgage Obligations - Agency Collateral Series (0.1%)
		Federal Home Loan Mortgage Corporation
		IO REMIC
	1,613	6.00% - 1 Month USD LIBOR (d)		0.807		11/15/43		115,159
		Federal National Mortgage Association
		IO REMIC
	752	6.55% - 1 Month USD LIBOR (d)		1.40		08/25/41		13,754
		Government National Mortgage Association
		IO
	237			5.00		02/16/41		50,651
		Total Collateralized Mortgage Obligations - Agency Collateral Series (Cost $14,927)						179,564
		Commercial Mortgage-Backed Securities (6.7%)
	6,558	BANK 2019-BNK21, IO, (c)		0.96		10/17/52		264,130
	1,130	BPR Trust, 1 Month Term SOFR + 3.00% (b)(c)		8.147		05/15/39		1,133,534
	775	BSREP Commercial Mortgage Trust, 1 Month USD LIBOR + 0.95% (b)(c)		6.144		08/15/38		708,532
	1,500	BX Commercial Mortgage Trust, 1 Month Term SOFR + 0.81% (b)(c)		5.962		04/15/34		1,414,635
		Citigroup Commercial Mortgage Trust
		IO
	4,810	(c)		0.868		11/10/48		63,349
	12,801	(c)		1.023		09/10/58		190,618
	5,540	(c)		1.13		11/10/46		3,327
		Commercial Mortgage Trust
		IO
	21,325	(c)		0.648		02/10/47		22,461

PRINCIPAL AMOUNT (000)			COUPON RATE			MATURITY DATE	VALUE
$	2,218	(c)		1.108	%	08/10/46	$	1,917
	2,934	Federal Home Loan Mortgage Corp. Multifamily Structured Pass-Through Certificates, (c)		3.527		10/25/23		2,914,978
		IO
	24,107	(c)		0.436		04/25/32		610,216
	31,892	(c)		0.456		11/25/27		397,377
		GS Mortgage Securities Trust
		IO
	4,522	(c)		1.161		11/10/46		9,448
	11,488	(c)		1.169		04/10/47		43,578
	13,401	(c)		1.356		10/10/48		289,423
	7,394	JP Morgan Chase Commercial Mortgage Securities Trust, IO, (c)		0.712		12/15/49		110,920
		JPMBB Commercial Mortgage Securities Trust
		IO
	18,206	(c)		0.829		01/15/47		22,023
	1,775	(c)		1.121		11/15/45		36
		Natixis Commercial Mortgage Securities Trust
	1,170	1 Month USD LIBOR + 0.95% (b)(c)		6.143		08/15/38		1,110,591
	1,450	1 Month Term SOFR + 1.40% (b)(c)		6.548		01/15/39		1,395,032
	1,975	SFO Commercial Mortgage Trust, 1 Month Term SOFR + 1.26% (b)(c)		6.343		05/15/38		1,725,744
	1,375	Taubman Centers Commercial Mortgage Trust, 1 Month Term SOFR + 2.19% (b)(c)		7.333		05/15/37		1,340,793
		WFRBS Commercial Mortgage Trust
		IO
	3,890	(c)		0.359		08/15/46		2,419
	5,919	(c)		1.065		03/15/46		4,845
	10,737	(c)		1.15		12/15/46		9,626
	1,100	Worldwide Plaza Trust, (b)		3.526		11/10/36		902,635
		Total Commercial Mortgage-Backed Securities (Cost $15,646,060)						14,692,187
		Mortgages - Other (23.8%)
	430	BDS 2021-FL8 1 Month USD LIBOR + 0.92% (b)(c)		6.077		01/18/36		422,780
	464	Cascade Funding Mortgage Trust (b)(c)		4.00		10/25/68		449,011
	782	FARM Mortgage Trust, Class B (b)(c)		3.238		07/25/51		543,009

PRINCIPAL AMOUNT (000)			COUPON RATE			MATURITY DATE	VALUE
		Federal Home Loan Mortgage Corp. Whole Loan Securities Trust
$	1,233			3.00	%	09/25/45 - 05/25/47	$	1,073,836
	801			3.50		05/25/45 - 05/25/47		709,405
	23			4.00		05/25/45		19,653
	8,150	Federal Home Loan Mortgage Corporation, Class MZ		6.00		07/25/53		8,678,795
	29,878			6.00		05/20/53 - 06/20/53		30,755,585
		Seasoned Credit Risk Transfer Trust
	8,831			3.00		07/25/56 - 05/25/60		7,762,322
	713			4.00		08/25/58 - 02/25/59		652,128
	1,315			4.50		06/25/57		1,264,131
		Total Mortgages - Other (Cost $53,509,397)						52,330,655
		U.S. Agency Security (3.3%)
	6,935	Tennessee Valley Authority (Cost $7,102,268)		5.250		09/15/39		7,363,114
		U.S. Treasury Securities (2.5%)
		U.S. Treasury Notes,
	1,725			1.50		8/15/26		1,577,095
	2,250			1.625		5/15/26		2,076,504
	2,000			2.25		2/15/27		1,860,234
		Total U.S. Treasury Securities (Cost $5,737,193)						5,513,833
		Short-Term Investments (28.1%)
		U.S. Treasury Securities (26.5%)
		U.S. Treasury Bills,
	470	(e)		4.838		11/30/23		459,829
	2,370	(e)		5.01		11/30/23		2,318,713
	770	(e)		5.325		11/30/23		753,337
	300	(e)		5.355		11/30/23		293,508
	2,519	(e)		5.434		11/30/23		2,464,488
		U.S. Treasury Notes,
	24,000			0.25		11/15/23		23,558,861
	24,000			0.50		11/30/23		23,527,972
	4,875			0.75		12/31/23		4,766,569
		Total U.S. Treasury Securities (Cost $58,297,520)						58,143,277

NUMBER OF SHARES (000)					VALUE
		Investment Company (1.6%)
	3,445	Morgan Stanley Institutional Liquidity Funds - Government Portfolio - Institutional Class (See Note 9) (Cost $3,445,473)			$	3,445,473
Total Short-Term Investments (Cost $61,742,993)						61,588,750
Total Investments (Cost $287,782,583) (f)(g)			127.8	%		280,463,958
Liabilities in excess of Other Assets			(27.8	)		(61,055,659	)
Net Assets			100.0	%	$	219,408,299

(a) Security is subject to delayed delivery.

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

(c) Floating or variable rate securities: The rates disclosed are as of June 30, 2023. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description in the Portfolio of Investments. Certain variable rate securities may not be based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description in the Portfolio of Investments.

(d) Inverse Floating Rate Security - Interest rate fluctuates with an inverse relationship to an associated interest rate. Indicated rate is the effective rate at June 30, 2023.

(e) Rate shown is the yield to maturity at June 30, 2023.

(f) Securities are available for collateral in connection with securities purchased on a forward commitment basis and open futures contracts.

(g) At June 30, 2023, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $937,133 and the aggregate gross unrealized depreciation is $11,614,037, resulting in net unrealized depreciation of $10,676,904.

DAC Designated Activity Company.

IO Interest Only Security.

LIBOR London Interbank Offered Rate.

REMIC Real Estate Mortgage Investment Conduit.

SOFR Secured Overnight Financing Rate.

TBA To Be Announced.

Futures Contracts:

The Fund had the following futures contracts open at June 30, 2023:

	NUMBER OF CONTRACTS		EXPIRATION DATE	NOTIONAL AMOUNT (000)		VALUE		UNREALIZED APPRECIATION (DEPRECIATION)
Long:
U.S. Treasury 2 yr. Note (United States)		7	Sep-23	$	1,400	$	1,423,406	$	(21,055	)
U.S. Treasury 5 yr. Note (United States)		475	Sep-23		47,500		50,869,531		(1,077,490	)
U.S. Treasury 10 yr. Note (United States)		868	Sep-23		86,800		97,446,563		(1,910,297	)
U.S. Treasury 10 yr. Ultra Note (United States)		348	Sep-23		34,800		41,216,250		(416,875	)
U.S. Treasury Long Bond (United States)		223	Sep-23		22,300		28,300,094		(104,781	)
U.S. Treasury Ultra Long Bond (United States)		95	Sep-23		9,500		12,940,781		172,219
								$	(3,358,279	)

USD — United States Dollar

Statement of Assets and Liabilities June 30, 2023 (unaudited)

Assets:
Investments in securities, at value (cost $284,337,110)	$	277,018,485
Investment in affiliate, at value (cost $3,445,473)		3,445,473
Total investments in securities, at value (cost $287,782,583)		280,463,958
Receivable for:
Interest		854,574
Variation margin on open futures contracts		511,203
Due from broker		360,000
Dividends from affiliate		204,970
Shares of beneficial interest sold		20,233
Prepaid expenses and other assets		66,313
Total Assets		282,481,251
Liabilities:
Payable for:
Investments purchased		62,592,280
Shares of beneficial interest redeemed		115,350
Dividends to shareholders		98,944
Trustees' fees		50,474
Transfer and sub transfer agent fees		47,807
Distribution fee		43,872
Advisory fee		15,793
Administration fee		15,628
Accrued expenses and other payables		92,804
Total Liabilities		63,072,952
Net Assets	$	219,408,299
Composition of Net Assets:
Paid-in-Capital	$	255,862,494
Total Accumulated Loss		(36,454,195	)
Net Assets	$	219,408,299
Class A Shares:
Net Assets	$	175,616,597
Shares Outstanding (unlimited shares authorized, $0.01 par value)		24,575,672
Net Asset Value Per Share	$	7.15
Maximum Offering Price Per Share (net asset value plus 3.36% of net asset value)	$	7.39
Class L Shares:
Net Assets	$	3,548,390
Shares Outstanding (unlimited shares authorized, $0.01 par value)		492,647
Net Asset Value Per Share	$	7.20
Class I Shares:
Net Assets	$	36,709,905
Shares Outstanding (unlimited shares authorized, $0.01 par value)		5,134,459
Net Asset Value Per Share	$	7.15
Class C Shares:
Net Assets	$	3,533,407
Shares Outstanding (unlimited shares authorized, $0.01 par value)		490,560
Net Asset Value Per Share	$	7.20

Statement of Operations For the six months ended June 30, 2023 (unaudited)

Net Investment Income: Income
Interest	$	4,775,617
Dividends from affiliate (Note 9)		434,178
Total Income		5,209,795
Expenses
Advisory fee (Note 4)		487,272
Distribution fee (Class A Shares) (Note 5)		230,932
Distribution fee (Class L Shares) (Note 5)		9,649
Distribution fee (Class C Shares) (Note 5)		20,068
Transfer agent fees and expenses (Class A Shares) (Note 7)		86,052
Transfer agent fees and expenses (Class L Shares) (Note 7)		2,303
Transfer agent fees and expenses (Class I Shares) (Note 7)		10,350
Transfer agent fees and expenses (Class C Shares) (Note 7)		1,574
Professional fees		95,012
Administration fee (Note 4)		92,814
Sub transfer agent fees and expenses (Class A Shares)		61,250
Sub transfer agent fees and expenses (Class L Shares)		1,387
Sub transfer agent fees and expenses (Class I Shares)		19,876
Sub transfer agent fees and expenses (Class C Shares)		1,605
Shareholder reports and notices		26,063
Registration fees		26,003
Custodian fees (Note 6)		22,246
Trustees' fees and expenses		6,827
Other		29,413
Total Expenses		1,230,696
Less: waiver of Advisory fees		(188,407	)
Less: reimbursement of class specific expenses (Class A shares)		(68,723	)
Less: reimbursement of class specific expenses (Class L shares)		(1,592	)
Less: reimbursement of class specific expenses (Class I shares)		(30,218	)
Less: reimbursement of class specific expenses (Class C shares)		(994	)
Less: rebate from Morgan Stanley affiliated cash sweep (Note 9)		(12,494	)
Net Expenses		928,268
Net Investment Income		4,281,527
Realized and Unrealized Gain (Loss): Realized Gain (Loss) on:
Investments		(3,352,508	)
Futures contracts		65,765
Net Realized Loss		(3,286,743	)
Change in Unrealized Appreciation (Depreciation) on:
Investments		3,799,053
Futures contracts		(3,186,443	)
Net Change in Unrealized Appreciation (Depreciation)		612,610
Net Loss		(2,674,133	)
Net Increase in Net Assets Resulting from Operations	$	1,607,394

Statements of Changes in Net Assets

	FOR THE SIX MONTHS ENDED JUNE 30, 2023			FOR THE YEAR ENDED DECEMBER 31, 2022
	(unaudited)
Increase (Decrease) in Net Assets: Operations:
Net investment income	$	4,281,527		$	7,061,751
Net realized loss		(3,286,743	)		(14,810,703	)
Net change in unrealized appreciation (depreciation)		612,610			(30,818,971	)
Net Increase (Decrease) in Net Assets Resulting from Operations		1,607,394			(38,567,923	)
Dividends and Distributions to Shareholders from:
Class A Shares		(3,392,940	)		(5,862,624	)
Class L Shares		(64,932	)		(112,407	)
Class I Shares		(789,096	)		(1,363,158	)
Class C Shares		(57,359	)		(86,458	)
Total Dividends and Distributions to Shareholders		(4,304,327	)		(7,424,647	)
Net decrease from transactions in shares of beneficial interest		(17,661,576	)		(24,004,145	)
Net Decrease		(20,358,509	)		(69,996,715	)
Net Assets:
Beginning of Period		239,766,808			309,763,523
End of Period	$	219,408,299		$	239,766,808

1. Organization and Accounting Policies

Morgan Stanley Long Duration Government Opportunities Fund (the "Fund") (name changed on May 31, 2023, formerly Morgan Stanley U.S. Government Securities Trust) is registered under the Investment Company Act of 1940, as amended (the "Act"), as a diversified, open-end management investment company. The Fund applies investment company accounting and reporting guidance Accounting Standards Codification ("ASC") Topic 946. The Fund's investment objective is to seek a high level of current income consistent with safety of principal. The Fund was organized as a Massachusetts business trust on September 29, 1983 and commenced operations on June 29, 1984. On July 28, 1997, the Fund converted to a multiple class share structure.

The Fund offers Class A shares, Class L shares, Class I shares and Class C shares. The four classes are substantially the same except that most Class A shares are subject to a sales charge imposed at the time of purchase and some Class A shares and most Class C shares are subject to a contingent deferred sales charge imposed on shares redeemed within one year. Class L shares and Class I shares are not subject to a sales charge. Additionally, Class A shares, Class L shares and Class C shares incur distribution expenses.

The Fund suspended offering Class L shares to all investors (April 30, 2015). Class L shareholders of the Fund do not have the option of purchasing additional Class L shares. However, the existing Class L shareholders may invest through reinvestment of dividends and distributions. In addition, Class L shares of the Fund may be exchanged for Class L shares of any Morgan Stanley Multi-Class Fund, even though Class L shares are closed to investors.

The following is a summary of significant accounting policies:

A. Valuation of Investments — (1) Fixed income securities may be valued by an outside pricing service/vendor approved by the Fund's Board of Trustees (the "Trustees"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor does not reflect the security's fair value or is unable to provide a price, prices from brokers/dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers/dealers; (2) portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets; (3) when market quotations are not readily available, as defined by Rule 2a-5 under the Act, including circumstances under which the

Adviser determines that the market quotations are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures approved by and under the general supervision of the Trustees; (4) futures are valued at the settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; and (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

In connection with Rule 2a-5 of the Act, the Trustees have designated the Fund's Adviser as its valuation designee. The valuation designee has responsibility for determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Trustees. Under procedures approved by the Trustees, the Fund's Adviser, as valuation designee, has formed a Valuation Committee whose members are approved by the Trustees. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Trustees. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

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. Discounts are accreted and premiums are amortized over the life of the respective securities and are included in interest income. Interest income is accrued daily as earned.

C. Multiple Class Allocations — Investment income, realized and unrealized gain (loss) and non-class specific expenses are allocated daily based upon the proportion of net assets of each class. Class specific expenses are borne by the respective share classes and include Distribution, Transfer Agent and Sub Transfer Agent fees.

D. Dividends and Distributions to Shareholders — Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually.

E. When-Issued/Delayed Delivery Securities — The Fund may purchase or sell when-issued and delayed delivery securities. Securities purchased on a when-issued or delayed delivery basis are purchased for delivery beyond the normal settlement date at a stated price, and no income accrues to the Fund on such securities prior to delivery date. Payment and delivery for when-issued and delayed delivery securities can take place a month or more after the date of the transaction. When the Fund enters into a purchase transaction on a when-issued or delayed delivery basis, securities are available for collateral in an amount at least equal in value to the Fund's commitments to purchase such

securities. Purchasing securities on a when-issued or delayed delivery basis may involve a risk that the market price at the time of delivery may be lower than the agreed upon purchase price, in which case there could be an unrealized loss at the time of delivery. Purchasing investments on a when-issued or delayed delivery basis may be considered a form of leverage which may increase the impact that gains (losses) may have on the Fund.

F. 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.

G. 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") ASC 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the price that would be received to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. 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.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2023:

INVESTMENT TYPE	LEVEL 1 UNADJUSTED QUOTED PRICES			LEVEL 2 OTHER SIGNIFICANT OBSERVABLE INPUTS		LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS		TOTAL
Assets:
Fixed Income Securities
Agency Adjustable Rate Mortgages	$	—		$	739,583	$	—	$	739,583
Agency Bond — Finance (U.S. Government Guaranteed)		—			624,450		—		624,450
Agency Bond — Sovereign (U.S. Government Guaranteed)		—			616,048		—		616,048
Agency Fixed Rate Mortgages		—			133,823,602		—		133,823,602
Asset-Backed Securities		—			2,992,172		—		2,992,172
Collateralized Mortgage Obligations — Agency Collateral Series		—			179,564		—		179,564
Commercial Mortgage-Backed Securities		—			14,692,187		—		14,692,187
Mortgages — Other		—			52,330,655		—		52,330,655
U.S. Agency Security		—			7,363,114		—		7,363,114
U.S. Treasury Securities		—			5,513,833		—		5,513,833
Total Fixed Income Securities		—			218,875,208		—		218,875,208
Short-Term Investments
U.S. Treasury Securities		—			58,143,277		—		58,143,277
Investment Company		3,445,473			—		—		3,445,473
Total Short-Term Investments		3,445,473			58,143,277		—		61,588,750
Futures Contract		172,219			—		—		172,219
Total Assets		3,617,692			277,018,485		—		280,636,177
Liabilities:
Futures Contracts		(3,530,498	)		—		—		(3,530,498	)
Total	$	87,194		$	277,018,485	$	—	$	277,105,679

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3. Derivatives

The Fund may, but it is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivative instruments used by the Fund will be counted towards the Fund's exposure in the types of securities listed herein to the extent they have economic characteristics similar to such securities. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid, risks arising from margin and payment requirements, risks arising from mispricing or valuation complexity and operational and legal risks. 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 the Fund'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 magnifies the potential for gain and risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Futures — A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index 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. 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 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 contracts 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 contracts can be highly volatile, using futures contracts can lower total return and the potential loss from futures contracts can exceed the Fund's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time.

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

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2023:

PRIMARY RISK EXPOSURE

ASSET DERIVATIVES
STATEMENT OF ASSETS
AND LIABILITIES LOCATION

FAIR VALUE

LIABILITY DERIVATIVES
STATEMENT OF ASSETS
AND LIABILITIES LOCATION

FAIR VALUE

Interest Rate Risk

Variation margin on open
futures contracts

172,219

(a)

Variation margin on open
futures contracts

(3,530,499

)(a)

(a) Includes cumulative appreciation (depreciation) as reported in the Portfolio of Investments. Only current day's net variation margin is reported within the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2023 in accordance with ASC 815:

AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES

PRIMARY RISK EXPOSURE				FUTURES CONTRACTS
Interest Rate Risk				$	65,765

CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES

PRIMARY RISK EXPOSURE				FUTURES CONTRACTS
Interest Rate Risk				$	(3,186,443	)

For the six months ended June 30, 2023, the average monthly amount outstanding for each derivative type is as follows:

Futures Contracts:
Average monthly notional value				$	94,422,000

4. Advisory/Administration Agreements

Pursuant to an Investment Advisory Agreement with the Adviser, the Fund pays an advisory fee, accrued daily and paid monthly, by applying the following annual rates to the net assets of the Fund determined as of the close of each business day: 0.42% of the portion of the daily net assets not exceeding $1 billion; 0.395% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.37% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.345% of the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.32% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $5 billion; 0.295% of the portion of the daily net assets exceeding $5 billion but not exceeding $7.5 billion; 0.27% of the portion of the daily net assets exceeding $7.5 billion but not exceeding $10 billion; 0.245% of the portion of the daily net assets exceeding $10 billion but not exceeding $12.5 billion; and 0.22% of the portion of the daily net assets exceeding $12.5 billion. For the six months ended June 30, 2023, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.25% of the Fund's average daily net assets.

The Adviser also serves as the Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average 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.

The Adviser/Administrator has agreed to reduce its advisory fee, its administration fee and/or reimburse the Fund so that total annual operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.85% for Class A, 1.12% for Class L, 0.52% for Class I and 1.62% for Class C shares. Effective May 31, 2023, the Adviser has agreed to reduce its advisory fee, its administration fee and/or reimburse the Fund so that total annual Fund operating expenses will not exceed 0.49% for Class I shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time that the Trustees act to discontinue all or a portion of such waivers and/or expense reimbursements when they deem such action is appropriate. For the

six months ended June 30, 2023, $188,407 of advisory fees were waived and $101,527 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

5. Plan of Distribution

Shares of the Fund are distributed by Morgan Stanley Distribution, Inc. (the "Distributor"), an affiliate of the Adviser/Administrator. The Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan provides that the Fund will pay the Distributor a fee which is accrued daily and paid monthly at the following annual rates: (i) Class A — up to 0.25% of the average daily net assets of Class A shares; (ii) Class L — up to 0.50% of the average daily net assets of Class L shares; and (iii) Class C — up to 1.00% of the average daily net assets of Class C shares.

In the case of Class A shares, Class L shares and Class C shares, expenses incurred pursuant to the Plan in any calendar year in excess of 0.25%, 0.50% and 1.00% of the average daily net assets of Class A shares, Class L shares and Class C shares, respectively, will not be reimbursed by the Fund through payments in any subsequent year, except that expenses representing a gross sales commission credited to Financial Intermediaries at the time of sale may be reimbursed in the subsequent calendar year. For the six months ended June 30, 2023, the distribution fee was accrued for Class A shares, Class L shares and Class C shares at the annual rate of 0.25%, 0.50% and 1.00%, respectively.

The Distributor has informed the Fund that for the six months ended June 30, 2023, it received contingent deferred sales charges from certain redemptions of the Fund's Class A shares and Class C shares of $1,071 and $834, respectively, and received $4,860 in front-end sales charges from sales of the Fund's Class A shares. The respective shareholders pay such charges, which are not an expense of the Fund.

6. Custodian Fees

State Street (the "Custodian") also serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

7. Dividend Disbursing and Transfer/Co-Transfer Agent

The Fund's dividend disbursing and transfer agent is SS&C Global Investor & Distribution Solutions, Inc. ("SS&C GIDS, Inc."). Pursuant to a Transfer Agency Agreement, the Fund pays SS&C GIDS, Inc. a fee based on the number of classes, accounts and transactions relating to the Fund.

Eaton Vance Management ("EVM"), an affiliate of Morgan Stanley, provides co-transfer agency and related services to the Fund pursuant to a Co-Transfer Agency Services Agreement. For the six months ended June 30, 2023, co-transfer agency fees and expenses incurred to EVM, included in "Transfer Agency Fees" in the Statement of Operations, amounted to $5,084.

8. Shares of Beneficial Interest

Transactions in shares of beneficial interest were as follows:

	FOR THE SIX MONTHS ENDED JUNE 30, 2023						FOR THE YEAR ENDED DECEMBER 31, 2022
	(unaudited)
	SHARES			AMOUNT			SHARES			AMOUNT
CLASS A SHARES
Sold		285,385		$	2,104,134			1,315,356		$	9,961,119
Reinvestment of dividends and distributions		439,206			3,207,765			743,056			5,663,953
Redeemed		(2,440,301	)		(17,925,784	)		(4,977,427	)		(38,304,716	)
Net decrease — Class A		(1,715,710	)		(12,613,885	)		(2,919,015	)		(22,679,644	)
CLASS L SHARES
Sold		3			19			7,366			56,369
Reinvestment of dividends and distributions		8,526			62,793			14,479			111,237
Redeemed		(64,327	)		(477,137	)		(105,631	)		(816,705	)
Net decrease — Class L		(55,798	)		(414,325	)		(83,786	)		(649,099	)
CLASS I SHARES
Sold		367,347			2,703,282			983,081			7,571,940
Reinvestment of dividends and distributions		103,442			756,151			175,093			1,334,167
Redeemed		(917,467	)		(6,759,993	)		(1,269,977	)		(9,699,898	)
Net decrease — Class I		(446,678	)		(3,300,560	)		(111,803	)		(793,791	)
CLASS C SHARES
Sold		10,727			80,059			410,295			3,178,925
Reinvestment of dividends and distributions		7,613			56,076			11,243			86,389
Redeemed		(198,022	)		(1,468,941	)		(397,117	)		(3,146,925	)
Net increase (decrease) — Class C		(179,682	)		(1,332,806	)		24,421			118,389
Net decrease in Fund		(2,397,868	)	$	(17,661,576	)		(3,090,183	)	$	(24,004,145	)

9. Security Transactions and Transactions with Affiliates

The cost of purchases and proceeds from sales of investment securities, excluding short-term investments, for the six months ended June 30, 2023, aggregated $623,383,010 and $638,644,231, respectively. Included in the aforementioned are purchases and sales of U.S. Government securities of $621,743,420 and $568,981,332, respectively.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. 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. For the six months ended June 30, 2023, advisory fees paid were reduced by $12,494 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2023 is as follows:

AFFILIATED INVESTMENT COMPANY				VALUE DECEMBER 31, 2022				PURCHASES AT COST				PROCEEDS FROM SALES				DIVIDEND INCOME				REALIZED GAIN (LOSS)				CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)				VALUE JUNE 30, 2023
Liquidity Funds				$	—			$	111,176,131			$	107,730,658			$	434,178			$	—			$	—			$	3,445,473

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, 2023, included in "Trustees' fees and expenses" in the Statement of Operations amounted to $3,171. At June 30, 2023 the Fund had an accrued pension liability of $50,474, which is reflected as "Trustees' fees" in the Statement of Assets and Liabilities.

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 NAV of the Fund.

10. Federal Income Tax Status

It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2022 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2022 and 2021 was as follows:

2022 DISTRIBUTIONS PAID FROM:		2021 DISTRIBUTIONS PAID FROM:
ORDINARY INCOME		ORDINARY INCOME
$	7,424,647	$	8,038,713

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2022.

At December 31, 2022, the components of distributable earnings for the Fund on a tax basis were as follows:

UNDISTRIBUTED ORDINARY INCOME				UNDISTRIBUTED LONG-TERM CAPITAL GAIN
$	2,953,545			$	—

At December 31, 2022, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of $9,704,386 and $15,514,015, respectively, that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

11. Market Risk and Risks Relating to Certain Financial Instruments

The Fund may invest in mortgage securities, including securities issued by the 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 Fund. The risk of such defaults is generally higher in the case of mortgage pools that include sub-prime mortgages. Sub-prime mortgages refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments on their mortgages. The securities held by the Fund are not backed by sub-prime mortgages.

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.

An investment in the Fund is based on the values of the Fund's investments, which may change due to economic and other events that affect markets generally, as well as those that affect particular regions, countries, industries, companies or governments. Social, political, economic and other conditions and events, such as war, natural disasters, health emergencies (e.g., epidemics and pandemics), terrorism, conflicts, social unrest, recessions, inflation, rapid interest rate changes and supply chain disruptions, may occur and could significantly impact issuers, industries, governments and other systems, including the financial markets and global economy. It is difficult to predict when events affecting the U.S. or global financial markets and economies may occur, the effects that such events may have and the duration of those effects (which may last for extended periods). These events may be sudden and significant and may negatively impact broad segments of businesses and populations and have a significant and rapid negative impact on the performance of and/or income or yield from the Fund's

investments and exacerbate pre-existing risks to the Fund. The occurrence, duration and extent of these or other types of adverse economic and market conditions and uncertainty over the long term cannot be reasonably projected or estimated at this time. The ultimate impact of public health emergencies or other adverse economic or market developments and the extent to which the associated conditions impact the Fund and its investments will also depend on other future developments, which are highly uncertain, difficult to accurately predict and subject to change at any time. The financial performance of the Fund's investments (and, in turn, the Fund's investment results) as well as their liquidity may be adversely affected because of these and similar types of factors and developments.

12. Credit Facility

The Fund and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 17, 2023, the committed line amount increased to $500,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate for any funds drawn will be based on the federal funds rate or overnight bank funding rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility, which is allocated among participating funds based on relative net assets. During the six months ended June 30, 2023, the Fund did not have any borrowings under the Facility.

13. Other

At June 30, 2023, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 61.2%.

14. LIBOR Discontinuance or Unavailability Risk

The London Interbank Offering Rate ("LIBOR") was a leading floating rate benchmark used in loans, notes, derivatives and other instruments or investments. As a result of benchmark reforms, publication of most LIBOR settings has ceased. Some LIBOR settings continue to be published but only on a temporary, synthetic and non-representative basis. Regulated entities have generally ceased entering into new LIBOR contracts in connection with regulatory guidance or prohibitions. Public and private sector actors have worked to establish new or alternative reference rates to be used in place of LIBOR. There is no assurance that the composition or characteristics of any such new or alternative reference rate will be similar to or produce the same value or economic equivalence as LIBOR or that it will have

the same volume or liquidity as did LIBOR , which may affect the value or liquidity or return on certain of the Fund's investments and result in costs incurred in connection with closing out positions and entering into new trades.

Neither the effect of the LIBOR transition process nor its ultimate success can yet be known. The transition process might lead to increased volatility and illiquidity in markets for, and reduce the effectiveness of hedges placed against, instruments whose terms currently include (or previously included) LIBOR. While some LIBOR-based instruments contemplated a scenario where LIBOR is no longer available by providing for an alternative rate-setting methodology, there may be significant uncertainty regarding the effectiveness of any such alternative methodologies to replicate or replace LIBOR. Some of the Fund's investments may be so-called "tough legacy" LIBOR instruments which may not have effective alternative rate-setting provisions or may involve counterparties who are unwilling to add or exercise rights under alternative rate-setting provisions in such instruments. On March 15, 2022, the Adjustable Interest Rate (LIBOR) Act was signed into law. This law provides a statutory fallback mechanism on a nationwide basis to replace U.S. Dollar LIBOR with a benchmark rate that is selected by the Board of Governors of the Federal Reserve System based on the Secured Overnight Financing Rate ("SOFR") for tough legacy contracts. On February 27, 2023, the final rule in connection with this law became effective, establishing benchmark replacements based on SOFR and Term SOFR (a forward-looking measurement of market expectations of SOFR implied from certain derivatives markets) for applicable tough legacy contracts governed by U.S. law. In addition, the FCA has announced that it will require the publication of the one-month, three-month and six-month U.S. Dollar LIBOR settings on the basis of a changed methodology (known as "synthetic LIBOR"), after June 30, 2023 through at least September 30, 2024, addressing non-U.S. law governed U.S. Dollar LIBOR instruments, but this synthetic LIBOR will be designated by the FCA as unrepresentative of the underlying market that it seeks to measure and will be solely available for use in legacy transactions. The transition of investments from LIBOR to a new or replacement rate as a result of amendment, application of existing fallbacks, statutory requirements, the application of synthetic LIBOR or otherwise may also result in a reduction in the value of certain instruments held by the Fund or a reduction in the effectiveness of related Fund transactions such as hedges. In addition, a liquid market for newly-issued instruments that use a reference rate other than LIBOR is still developing. There may also be challenges for the Fund to enter into hedging transactions against such newly-issued instruments until a market for such hedging transactions more fully develops. All of the aforementioned may adversely affect the Fund's investments (including their volatility, value and liquidity) and, as a result, the performance or NAV.

	FOR THE SIX			FOR THE YEAR ENDED DECEMBER 31,
	MONTHS ENDED
	JUNE 30, 2023			2022			2021			2020			2019			2018
	(unaudited)
Class A Shares
Selected Per Share Data:
Net asset value, beginning of period	$	7.24		$	8.56		$	8.94		$	8.68		$	8.41		$	8.67
Income (loss) from investment operations:
Net investment income		0.13			0.20			0.18			0.20			0.27			0.25
Net realized and unrealized gain (loss)		(0.09	)		(1.31	)		(0.36	)		0.28			0.27			(0.26	)
Total income (loss) from investment operations		0.04			(1.11	)		(0.18	)		0.48			0.54			(0.01	)
Less distributions from:
Net investment income		(0.13	)		(0.21	)		(0.20	)		(0.22	)		(0.27	)		(0.25	)
Net asset value, end of period	$	7.15		$	7.24		$	8.56		$	8.94		$	8.68		$	18.41
Total Return⁽¹⁾		0.58	%⁽²⁾		(13.03	)%		(2.06	)%		5.55	%		6.43	%		(0.01	)%
Ratios to Average Net Assets:
Net expenses		0.84	%^(3)(4)(5)		0.85	%⁽⁴⁾⁽⁵⁾		0.85	%⁽⁴⁾⁽⁵⁾		0.85	%⁽⁴⁾⁽⁵⁾		0.85	%^(4)(5)(6)		0.87	%⁽⁴⁾⁽⁵⁾
Net investment income		3.65	%^(3)(4)(5)		2.61	%⁽⁴⁾⁽⁵⁾		1.98	%⁽⁴⁾⁽⁵⁾		2.32	%⁽⁴⁾⁽⁵⁾		2.97	%⁽⁴⁾⁽⁵⁾		3.01	%⁽⁴⁾⁽⁵⁾
Rebate from Morgan Stanley affiliate		0.01	%⁽³⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Supplemental Data:
Net assets, end of period, in thousands	$	175,617		$	190,426		$	249,990		$	289,964		$	295,522		$	34,504
Portfolio turnover rate		281	%⁽²⁾		321	%		376	%		189	%		167	%		159	%

(1) Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.

(2) Not annualized.

(3) Annualized.

(4) If the Fund had borne all of its expenses that were waived by the Adviser/Administrator, the annualized expense and net investment income ratios would have been as follows:

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT INCOME RATIO
June 30, 2023		1.09	%		3.40	%
December 31, 2022		1.05			2.41
December 31, 2021		0.98			1.85
December 31, 2020		0.97			2.20
December 31, 2019		0.99			2.83
December 31, 2018		1.02			2.86

(5) The ratios reflect the rebate of certain Fund 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."

(6) Effective February 28, 2019, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.85% for Class A shares. Prior to February 28, 2019, the maximum ratio was 0.87% for Class A shares.

(7) Amount is less than 0.005%.

	FOR THE SIX			FOR THE YEAR ENDED DECEMBER 31,
	MONTHS ENDED
	JUNE 30, 2023			2022			2021			2020			2019			2018
	(unaudited)
Class L Shares
Selected Per Share Data:
Net asset value, beginning of period	$	7.30		$	8.63		$	9.01		$	8.75		$	8.48		$	8.73
Income (loss) from investment operations:
Net investment income		0.12			0.18			0.16			0.18			0.24			0.23
Net realized and unrealized gain (loss)		(0.10	)		(1.32	)		(0.37	)		0.27			0.27			(0.25	)
Total income (loss) from investment operations		0.02			(1.14	)		(0.21	)		0.45			0.51			(0.02	)
Less distributions from:
Net investment income		(0.12	)		(0.19	)		(0.17	)		(0.19	)		(0.24	)		(0.23	)
Net asset value, end of period	$	7.20		$	7.30		$	8.63		$	9.01		$	8.75		$	8.48
Total Return⁽¹⁾		0.30	%⁽²⁾		(13.28	)%		(2.32	)%		5.21	%		6.09	%		(0.25	)%
Ratios to Average Net Assets:
Net expenses		1.11	%^(3)(4)(5)		1.12	%⁽⁴⁾⁽⁵⁾		1.12	%⁽⁴⁾⁽⁵⁾		1.12	%⁽⁴⁾⁽⁵⁾		1.12	%⁽⁴⁾⁽⁵⁾		1.10	%⁽⁴⁾⁽⁵⁾
Net investment income		3.38	%^(3)(4)(5)		2.31	%⁽⁴⁾⁽⁵⁾		1.69	%⁽⁴⁾⁽⁵⁾		2.02	%⁽⁴⁾⁽⁵⁾		2.73	%⁽⁴⁾⁽⁵⁾		2.74	%⁽⁴⁾⁽⁵⁾
Rebate from Morgan Stanley affiliate		0.01	%⁽³⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Supplemental Data:
Net assets, end of period, in thousands	$	3,548		$	4,004		$	5,454		$	6,259		$	6,668		$	7,411
Portfolio turnover rate		281	%⁽²⁾		321	%		376	%		189	%		167	%		159	%

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

(2) Not annualized.

(3) Annualized.

(4) If the Fund had borne all of its expenses that were waived by the Adviser/Administrator, the annualized expense and net investment income ratios would have been as follows:

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT INCOME RATIO
June 30, 2023		1.36	%		3.13	%
December 31, 2022		1.33			2.10
December 31, 2021		1.25			1.56
December 31, 2020		1.24			1.90
December 31, 2019		1.25			2.60
December 31, 2018		1.20			2.64

(6) Amount is less than 0.005%.

	FOR THE SIX			FOR THE YEAR ENDED DECEMBER 31,
	MONTHS ENDED
	JUNE 30, 2023			2022			2021			2020			2019			2018
	(unaudited)
Class I Shares
Selected Per Share Data:
Net asset value, beginning of period	$	7.25		$	8.56		$	8.94		$	8.69		$	8.41		$	8.67
Income (loss) from investment operations:
Net investment income		0.14			0.23			0.21			0.23			0.29			0.28
Net realized and unrealized gain (loss)		(0.09	)		(1.30	)		(0.36	)		0.27			0.28			(0.26	)
Total income (loss) from investment operations		0.05			(1.07	)		(0.15	)		0.50			0.57			0.02
Less distributions from:
Net investment income		(0.15	)		(0.24	)		(0.23	)		(0.25	)		(0.29	)		(0.28	)
Net asset value, end of period	$	7.15		$	7.25		$	8.56		$	8.94		$	8.69		$	8.41
Total Return⁽¹⁾		0.61	%⁽²⁾		(12.63	)%		(1.74	)%		5.77	%		6.90	%		0.34	%
Ratios to Average Net Assets:
Net expenses		0.50	%^(3)(4)(5)(6)		0.52	%⁽⁴⁾⁽⁵⁾		0.52	%⁽⁴⁾⁽⁵⁾		0.52	%⁽⁴⁾⁽⁵⁾		0.52	%⁽⁴⁾⁽⁵⁾		0.52	%⁽⁴⁾⁽⁵⁾
Net investment income		3.98	%^(3)(4)(5)		2.95	%⁽⁴⁾⁽⁵⁾		2.33	%⁽⁴⁾⁽⁵⁾		2.61	%⁽⁴⁾⁽⁵⁾		3.35	%⁽⁴⁾⁽⁵⁾		3.36	%⁽⁴⁾⁽⁵⁾
Rebate from Morgan Stanley affiliate		0.01	%⁽³⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾		0.00	%⁽⁷⁾
Supplemental Data:
Net assets, end of period, in thousands	$	36,710		$	40,444		$	48,749		$	91,971		$	65,594		$	67,487
Portfolio turnover rate		281	%⁽²⁾		321	%		376	%		189	%		167	%		159	%

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

(2) Not annualized.

(3) Annualized.

(4) If the Fund had borne all of its expenses that were waived by the Adviser/Administrator, the annualized expense and net investment income ratios would have been as follows:

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT INCOME RATIO
June 30, 2023		0.83	%		3.65	%
December 31, 2022		0.80			2.67
December 31, 2021		0.72			2.13
December 31, 2020		0.73			2.40
December 31, 2019		0.74			3.13
December 31, 2018		0.72			3.16

(6) Effective May 31, 2023, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.49% for Class I shares. Prior to May 31, 2023, the maximum ratio was 0.52% for Class I shares.

(7) Amount is less than 0.005%.

	FOR THE SIX			FOR THE YEAR ENDED DECEMBER 31,
	MONTHS ENDED
	JUNE 30, 2023			2022			2021			2020			2019			2018
	(unaudited)
Class C Shares
Selected Per Share Data:
Net asset value, beginning of period	$	7.30		$	8.63		$	9.01		$	8.75		$	8.48		$	8.74
Income (loss) from investment operations:
Net investment income		0.11			0.14			0.12			0.13			0.20			0.19
Net realized and unrealized gain (loss)		(0.10	)		(1.32	)		(0.37	)		0.28			0.27			(0.26	)
Total income (loss) from investment operations		0.01			(1.18	)		(0.25	)		0.41			0.47			(0.07	)
Less distributions from:
Net investment income		(0.11	)		(0.15	)		(0.13	)		(0.15	)		(0.20	)		(0.19	)
Net asset value, end of period	$	7.20		$	7.30		$	8.63		$	9.01		$	8.75		$	8.48
Total Return⁽¹⁾		0.05	%⁽²⁾		(13.72	)%		(2.81	)%		4.69	%		5.56	%		(0.76	)%
Ratios to Average Net Assets:
Net expenses		1.61	%^(3)(4)(5)		1.62	%⁽⁴⁾⁽⁵⁾		1.62	%⁽⁴⁾⁽⁵⁾		1.62	%⁽⁴⁾⁽⁵⁾		1.62	%⁽⁴⁾⁽⁵⁾		1.62	%⁽⁴⁾⁽⁵⁾
Net investment income		2.88	%^(3)(4)(5)		1.79	%⁽⁴⁾⁽⁵⁾		1.21	%⁽⁴⁾⁽⁵⁾		1.40	%⁽⁴⁾⁽⁵⁾		2.23	%⁽⁴⁾⁽⁵⁾		2.24	%⁽⁴⁾⁽⁵⁾
Rebate from Morgan Stanley affiliate		0.01	%⁽³⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾		0.00	%⁽⁶⁾
Supplemental Data:
Net assets, end of period, in thousands	$	3,533		$	4,893		$	5,571		$	10,397		$	2,163		$	2,012
Portfolio turnover rate		281	%⁽²⁾		321	%		376	%		189	%		167	%		159	%

(1) Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.

(2) Not annualized.

(3) Annualized.

(4) If the Fund had borne all of its expenses that were waived by the Adviser/Administrator, the annualized expense and net investment income ratios would have been as follows:

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT INCOME RATIO
June 30, 2023		1.83	%		2.66	%
December 31, 2022		1.79			1.62
December 31, 2021		1.73			1.10
December 31, 2020		1.72			1.30
December 31, 2019		1.85			2.00
December 31, 2018		1.96			1.90

(6) Amount is less than 0.005%.

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2022, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one- and five-year periods but below its peer group average for the three-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group

averages. After discussion, the Board concluded that the Fund's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes 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 Fund 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/or potential economies of scale of the Fund 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 Fund 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 direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Trustees (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on March 1-2, 2023, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from January 1, 2022, through December 31, 2022, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

FACTS				WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?				Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?				The types of personal information we collect and share depend on the product or service you have with us. This information can include: ◼ Social Security number and income ◼ investment experience and risk tolerance ◼ checking account number and wire transfer instructions
How?				All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our investment management affiliates' everyday business purposes — information about your transactions, experiences, and creditworthiness	Yes	Yes
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our investment management affiliates to market to you	Yes	Yes
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

To limit our sharing				Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com Please note: If you are a new customer, we can begin sharing your information 30 days from the date we sent this notice. When you are no longer our customer, we continue to share your information as described in this notice. However, you can contact us at any time to limit our sharing.
Questions?				Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

Who we are

Who is providing this notice?

Morgan Stanley Investment Management Inc. and its investment management affiliates ("MSIM") (see Investment Management Affiliates definition below)

What we do

How does MSIM protect my personal information?				To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?				We collect your personal information, for example, when you ◼ open an account or make deposits or withdrawals from your account ◼ buy securities from us or make a wire transfer ◼ give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.

What we do

Why can't I limit all sharing?

Federal law gives you the right to limit only
◼ sharing for affiliates' everyday business purposes — information about your creditworthiness
◼ affiliates from using your information to market to you
◼ sharing for non-affiliates to market to you
State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Investment Management Affiliates				MSIM Investment Management Affiliates include registered investment advisers, registered broker/dealers, and registered and unregistered funds in the Investment Management Division. Investment Management Affiliates does not include entities associated with Morgan Stanley Wealth Management, such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Affiliates				Companies related by common ownership or control. They can be financial and non-financial companies. ◼ Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates				Companies not related by common ownership or control. They can be financial and non-financial companies. ◼ MSIM does not share with non-affiliates so they can market to you.
Joint marketing				A formal agreement between non-affiliated financial companies that together market financial products or services to you. ◼ MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

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) See Item 1.

(b) Not applicable.

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

Not applicable.

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

Applicable only to annual reports filed by closed-end funds.

Item 9. Closed-End Fund Repurchases

Applicable only to reports filed by closed-end funds.

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

There have been no material changes to the procedures by which shareholders may recommend nominee to the Fund’s Board of Trustees since the Fund last provided disclosure in response to this item.

Item 11. Controls and Procedures

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the registrant 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 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. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not Applicable

Item 13. 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 as part of EX-99.CERT.

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

Welcome Shareholder		3
Fund Report		4
Performance Summary		9
Expense Example		10
Portfolio of Investments		12
Statement of Assets and Liabilities		19
Statement of Operations		20
Statements of Changes in Net Assets		21
Notes to Financial Statements		22
Financial Highlights		36
Investment Advisory Agreement Approval		40
Liquidity Risk Management Program		43
U.S. Customer Privacy Notice		44
Trustees and Officers Information	Back Cover