Morgan Stanley Value Fund (MVUAX) N-CSRS Certified semi-annual shareholder report (management investment company)

                                  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: 811-08861


Morgan Stanley Value Fund
               (Exact name of registrant as specified in charter)


1221 Avenue of the Americas, New York, New York                10020
         (Address of principal executive offices)            (Zip code)


Ronald E. Robison
1221 Avenue of the Americas, New York, New York 10020
                     (Name and address of agent for service)


Registrant's telephone number, including area code: 212-762-4000


Date of fiscal year end: September 30, 2007


Date of reporting period: March 31, 2007


Item 1 - Report to Shareholders

Welcome, Shareholder:

In this report, you’ll learn about how your investment in Morgan Stanley Value Fund performed during the semiannual period. We will provide an overview of the market conditions, and discuss some of the factors that affected performance during the reporting period. In addition, this report includes the Fund’s financial statements and a list of Fund investments.

This material must be preceded or accompanied by a prospectus for the fund being offered.

Market forecasts provided in this report may not necessarily come to pass. There is no assurance that the Fund will achieve its investment objective. The Fund is subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund’s shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

	Fund Report
	For the six months ended March 31, 2007

Total Return for the 6 Months Ended March 31, 2007

Class A						Class B						Class C						Class D						Russell 1000® Value Index1						S&P 500® Index2						Lipper Large-Cap Value Funds Index3
6.96%							6.61	%					6.60	%					7.14	%					9.34	%					7.38	%					7.82	%

The performance of the Fund’s 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

Following a turbulent May and June, the broad stock market resumed its forward progress in the second half of 2006. For most of the reporting period, stocks posted decent gains as investors grew more comfortable with the pace of economic moderation. Inflation levels seemed to be under control but remained slightly above the Federal Open Market Committee’s (the ‘‘Fed’’) acceptable range. Retreating energy prices gave consumers some relief at the gas pump, which helped bolster retail sales despite a declining housing market. On the corporate front, global merger and acquisition activity continued to fuel positive sentiment for stocks.

However, the market faced a significant downturn in late February 2007. A sharp sell-off in China’s equity market rippled through the global markets. Further exacerbating recessionary fears in the U.S. were problems in the subprime mortgage market and former Fed Chairman Alan Greenspan’s comments about the U.S. economy’s potential for recession later in the year. Market conditions stabilized in March, but the market did not return to its February high by the end of the reporting period.

Performance Analysis

Morgan Stanley Value Fund underperformed the Russell 1000^® Value Index, the S&P 500^® Index and the Lipper Large-Cap Value Funds Index for the six months ended March 31, 2007, assuming no deduction of applicable sales charges.

The Fund’s underperformance during the period was driven mainly by underweights in the energy and utilities sectors. The energy sector has performed very well for the past two years amid high commodity prices, but expensive valuations, in our view, have kept the Fund from investing meaningfully in energy stocks. A lack of exposure to electric utilities stocks, which performed very well during the period on a merger and acquisition announcement, detracted from returns. As with energy stocks, our concerns about what we believe to be lofty valuations among many utilities stocks have resulted in their meager representation within the Fund.

Nonetheless, the negative impact of these areas was partially offset by a positive contribution from the consumer discretionary sector during the period. Within the consumer discretionary sector, several of the Fund’s holdings in the media industry, especially cable television providers, saw improved performance after a multi-year slump.

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

TOP 10 HOLDINGS
Citigroup, Inc.					3.7	%
Bank of America Corp.					3.7
International Paper Co.					3.4
Verizon Communications, Inc.					3.1
Bristol-Myers Squibb Co.					3.0
Wachovia Corp.					2.5
Du Pont (E.I.) de Nemours & Co.					2.5
Alcoa, Inc.					2.4
Freddie Mac					2.4
Wal-Mart Stores, Inc.					2.4

TOP FIVE INDUSTRIES
Pharmaceuticals: Major					17.0	%
Major Banks					11.0
Major Telecommunications					5.2
Media Conglomerates					5.2
Financial Conglomerates					4.9

Data as of March 31, 2007. Subject to change daily. All percentages for top 10 holdings and top five industries are as a percentage of net assets. These data are provided for informational purposes only and should not be deemed a recommendation to buy or sell the securities mentioned. 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.

Investment Strategy

The Fund normally invests at least 65 percent of its assets in common stock that the Fund’s ‘‘Investment Adviser,’’ Morgan Stanley Investment Advisors Inc., believes is undervalued and currently is not being recognized within the marketplace. In deciding which securities to buy, hold or sell, the Investment Adviser begins with a universe of companies that have attributes that may qualify them as value companies. The Investment Adviser then screens these companies for liquidity and then relative value using an appropriate valuation measure for each sector or industry. The Investment Adviser evaluates the companies relative to competitive and market conditions within each industry. The Investment Adviser then conducts a fundamental analysis of each company to identify those companies believed to be attractively valued relative to other companies within the industry.

For More Information About Portfolio Holdings

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semiannual and annual reports within 60 days of the end of the fund’s second and fourth fiscal quarters. The semiannual reports and the annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semiannual and annual reports to fund shareholders and makes these reports available on its public web site, www.morganstanley.com. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund’s first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to

3

the Morgan Stanley public web site. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC’s web site, http://www.sec.gov. You may also review and copy them at the SEC’s public reference room in Washington, DC. Information on the operation of the SEC’s public reference room may be obtained by calling the SEC at (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC’s e-mail address (publicinfo@sec.gov) or by writing the public reference section of the SEC, Washington, DC 20549-0102.

Proxy Voting Policy and Procedures and Proxy Voting Record

You may obtain a copy of the Fund’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 Securities and Exchange Commission’s Web site at http://www.sec.gov.

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

Householding Notice

To reduce printing and mailing costs, the Fund attempts to eliminate duplicate mailings to the same address. The Fund delivers a single copy of certain shareholder documents, including shareholder reports, prospectuses and proxy materials, to investors with the same last name who reside at the same address. Your participation in this program will continue for an unlimited period of time unless you instruct us otherwise. You can request multiple copies of these documents by calling (800) 350-6414, 8:00 a.m. to 8:00 p.m., ET. Once our Customer Service Center has received your instructions, we will begin sending individual copies for each account within 30 days.

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	Performance Summary

Average Annual Total Returns — Period Ended March 31, 2007

						Class A Shares* (since 11/25/98)						Class B Shares** (since 11/25/98)						Class C Shares† (since 11/25/98)						Class D Shares†† (since 11/25/98)
Symbol						VLUAX						VLUBX						VLUCX						VLUDX
1 Year							14.27%	4					13.42%	4					13.41%	4					14.52%	4
							8.27	5					8.42	5					12.41	5					—
5 Years							6.82	4					6.02	4					6.06	4					7.10	4
							5.67	5					5.70	5					6.06	5					—
Since Inception							6.22	4					5.60	4					5.44	4					6.49	4
							5.53	5					5.60	5					5.44	5					—

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 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 B, Class C, and Class D shares will vary due to differences in sales charges and expenses.

* The maximum front-end sales charge for Class A is 5.25%.

** The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%. The CDSC declines to 0% after six years. Effective April 2005, Class B shares will generally convert to Class A shares approximately 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 2005).

† The maximum contingent deferred sales charge for Class C is 1.0% for shares redeemed within one year of purchase.

†† Class D has no sales charge.

(1) The Russell 1000^® Value Index measures the performance of those companies in the Russell 1000^® Index with lower price-to-book ratios and lower forecasted growth values. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

(2) The Standard & Poor’s 500^® Index (S&P 500^®) is a broad-based index, the performance of which is based on the performance of 500 widely-held common stocks chosen for market size, liquidity and industry group representation. The Index is unmanaged and its returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

(3) The Lipper Large-Cap Value Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Large-Cap Value 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 30 funds represented in this Index. The Fund is in the Lipper Large-Cap Value Funds classification as of the date of this report.

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

(5) 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.

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	Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees; and (2) ongoing costs, including advisory fees; distribution and service (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.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period 10/01/06 – 03/31/07.

Actual Expenses

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

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical expenses based on the 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) and redemption fees. 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*
				10/01/06				03/31/07				10/01/06 – 03/31/07
Class A
Actual (6.96% return)				$	1,000.00			$	1,069.60			$	5.16
Hypothetical (5% annual return before expenses)				$	1,000.00			$	1,019.95			$	5.04
Class B
Actual (6.61% return)				$	1,000.00			$	1,066.10			$	9.12
Hypothetical (5% annual return before expenses)				$	1,000.00			$	1,016.11			$	8.90
Class C
Actual (6.60% return)				$	1,000.00			$	1,066.00			$	8.91
Hypothetical (5% annual return before expenses)				$	1,000.00			$	1,016.31			$	8.70
Class D
Actual (7.14% return)				$	1,000.00			$	1,071.40			$	3.98
Hypothetical (5% annual return before expenses)				$	1,000.00			$	1,021.09			$	3.88

* Expenses are equal to the Fund’s annualized expense ratios of 1.00%, 1.77%, 1.73% and 0.77% for Class A, Class B, Class C and Class D shares, respectively, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).

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Morgan Stanley Value Fund

Portfolio of Investments March 31, 2007 (unaudited)

NUMBER OF SHARES								VALUE
				Common Stocks (94.0%)
				Aerospace & Defense (0.1%)
	2,900			L-3 Communications Holdings, Inc.				$	253,663
				Airlines (0.4%)
	71,600			Southwest Airlines Co.					1,052,520
				Aluminum (2.4%)
	213,200			Alcoa, Inc.					7,227,480
				Beverages: Alcoholic (0.7%)
	38,740			Anheuser-Busch Companies, Inc.					1,954,820
				Beverages: Non-Alcoholic (2.3%)
	144,300			Coca-Cola Co. (The)					6,926,400
				Broadcasting (0.6%)
	51,199			Clear Channel Communications, Inc.					1,794,013
				Cable/Satellite TV (2.2%)
	248,650			Comcast Corp. (Class A)*					6,452,467
				Catalog/Specialty Distribution (1.0%)
	121,750			Liberty Media Corp – Interactive (Series A)*					2,900,085
				Chemicals: Major Diversified (3.2%)
	148,000			Du Pont (E.I.) de Nemours & Co.					7,315,640
	43,000			Rohm & Haas Co.					2,223,960
									9,539,600
				Computer Communications (0.3%)
	35,100			Cisco Systems, Inc.*					896,103
				Computer Processing Hardware (1.5%)
	141,900			Dell Inc.*					3,293,499
	29,000			Hewlett-Packard Co.					1,164,060
									4,457,559
				Data Processing Services (0.7%)
	33,600			First Data Corp.					903,840
	48,000			Western Union Co.					1,053,600
									1,957,440
				Discount Stores (2.4%)
	150,200			Wal-Mart Stores, Inc.				$	7,051,890
				Drugstore Chains (1.3%)
	113,200			CVS/Caremark Corp.					3,864,648
				Electric Utilities (0.2%)
	15,100			American Electric Power Co., Inc.					736,125
				Electronic Components (0.2%)
	64,700			Flextronics International Ltd. (Singapore)*					707,818
				Electronic Production Equipment (0.3%)
	17,300			KLA-Tencor Corp.					922,436
				Finance/Rental/Leasing (2.9%)
	27,700			Fannie Mae					1,511,866
	121,000			Freddie Mac					7,198,290
									8,710,156
				Financial Conglomerates (4.9%)
	214,100			Citigroup, Inc.					10,991,894
	73,200			JPMorgan Chase & Co.					3,541,416
									14,533,310
				Food: Major Diversified (3.4%)
	129,400			Kraft Foods Inc. (Class A)					4,096,804
	205,500			Unilever N.V. (NY Registered Shares) (Netherlands)					6,004,710
									10,101,514
				Food: Specialty/Candy (1.7%)
	99,700			Cadbury Schweppes PLC (ADR) (United Kingdom)					5,121,589
				Home Improvement Chains (0.7%)
	27,500			Home Depot, Inc. (The)					1,010,350
	30,900			Lowe’s Companies, Inc.					973,041
									1,983,391
				Household/Personal Care (1.9%)
	82,800			Kimberly-Clark Corp.					5,670,972
				Industrial Conglomerates (1.0%)
	87,400			General Electric Co.					3,090,464

See Notes to Financial Statements

7

Morgan Stanley Value Fund

Portfolio of Investments March 31, 2007 (unaudited) continued

NUMBER OF SHARES								VALUE
				Information Technology Services (0.7%)
	23,600			International Business Machines Corp.				$	2,224,536
				Investment Banks/Brokers (1.0%)
	37,200			Merrill Lynch & Co., Inc.					3,038,124
				Life/Health Insurance (2.2%)
	31,600			AFLAC, Inc.					1,487,096
	27,800			Genworth Financial Inc. (Class A)					971,332
	36,700			MetLife, Inc.					2,317,605
	28,400			Torchmark Corp.					1,862,756
									6,638,789
				Major Banks (11.0%)
	214,700			Bank of America Corp.					10,953,994
	94,000			Bank of New York Co., Inc. (The)					3,811,700
	12,200			Barclays PLC (ADR) (United Kingdom)					694,668
	38,500			PNC Financial Services Group					2,770,845
	11,300			SunTrust Banks, Inc.					938,352
	41,400			U.S. Bancorp					1,447,758
	133,446			Wachovia Corp.					7,346,202
	142,500			Wells Fargo & Co.					4,906,275
									32,869,794
				Major Telecommunications (5.2%)
	133,100			AT&T Inc.					5,248,133
	62,800			Sprint Nextel Corp.					1,190,688
	242,500			Verizon Communications, Inc.					9,195,600
									15,634,421
				Media Conglomerates (5.2%)
	7,800			Disney (Walt) Co. (The)					268,554
	126,100			News Corp. (Class B)					3,085,667
	293,300			Time Warner, Inc.					5,783,876
	150,900			Viacom, Inc. (Class B)*					6,203,499
									15,341,596
				Medical Distributors (0.9%)
	38,000			Cardinal Health, Inc.					2,772,100
				Medical Specialties (0.7%)
	147,900			Boston Scientific Corp.*				$	2,150,466
				Movies/Entertainment (0.9%)
	24,350			Liberty Media Corp. – Capital (Series A)*					2,692,867
				Multi-Line Insurance (1.3%)
	41,500			American International Group, Inc.					2,789,630
	11,200			Hartford Financial Services Group, Inc. (The)					1,070,496
									3,860,126
				Packaged Software (0.9%)
	40,500			McAfee Inc.*					1,177,740
	53,800			Microsoft Corp.					1,499,406
									2,677,146
				Pharmaceuticals: Major (17.0%)
	74,400			Abbott Laboratories					4,151,520
	322,600			Bristol-Myers Squibb Co.					8,955,376
	103,300			Eli Lilly & Co.					5,548,243
	126,500			GlaxoSmithKline PLC (ADR) (United Kingdom)					6,990,390
	184,300			Pfizer, Inc.					4,655,418
	54,500			Roche Holdings Ltd. (ADR) (Switzerland)					4,834,150
	54,700			Sanofi-Aventis (ADR) (France)					2,379,997
	244,800			Schering-Plough Corp.					6,244,848
	135,400			Wyeth					6,774,062
									50,534,004
				Property – Casualty Insurers (3.5%)
	800			Berkshire Hathaway Inc. (Class B)*					2,912,000
	107,880			Chubb Corp. (The)					5,574,160
	40,225			Travelers Companies, Inc. (The)					2,082,448
									10,568,608
				Publishing: Newspapers (0.4%)
	22,000			Gannett Co., Inc.					1,238,380

See Notes to Financial Statements

8

Morgan Stanley Value Fund

Portfolio of Investments March 31, 2007 (unaudited) continued

NUMBER OF SHARES								VALUE
				Pulp & Paper (3.4%)
	276,442			International Paper Co.				$	10,062,489
				Semiconductors (1.4%)
	139,100			Intel Corp.					2,660,983
	49,100			Texas Instruments Inc.					1,477,910
									4,138,893
				Telecommunication Equipment (0.3%)
	25,500			Telefonaktiebolaget LM Ericsson (ADR) (Sweden)					945,795
				Tobacco (1.7%)
	56,700			Altria Group, Inc.					4,978,827
				Total Common Stocks (Cost $230,233,127)					280,273,424

PRINCIPAL AMOUNT IN THOUSANDS								VALUE
				Short-Term Investment (5.7%)
				Repurchase Agreement
$	16,888			Joint repurchase agreement account 5.330% due 04/02/07 (dated 03/30/07; proceeds $16,895,501) (a) (Cost $16,888,000)				$	16,888,000

Total Investments (Cost $247,121,127) (b)					99.7	%			297,161,424
Other Assets in Excess of Liabilities					0.3				852,820
Net Assets					100.0	%		$	298,014,244

ADR American Depositary Receipt.

* Non-income producing security.

(a) Collateralized by federal agency and U.S. Treasury obligations.

(b) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $55,844,725 and the aggregate gross unrealized depreciation is $5,804,428, resulting in net unrealized appreciation of $50,040,297.

See Notes to Financial Statements

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Morgan Stanley Value Fund

Summary of Investments March 31, 2007 (unaudited)

INDUSTRY				VALUE				PERCENT OF TOTAL INVESTMENTS
Pharmaceuticals: Major				$	50,534,004				17.0	%
Major Banks					32,869,794				11.1
Repurchase Agreement					16,888,000				5.7
Major Telecommunications					15,634,421				5.3
Media Conglomerates					15,341,596				5.2
Financial Conglomerates					14,533,310				4.9
Property – Casualty Insurers					10,568,608				3.6
Food: Major Diversified					10,101,514				3.4
Pulp & Paper					10,062,489				3.4
Chemicals: Major Diversified					9,539,600				3.2
Finance/Rental/Leasing					8,710,156				2.9
Aluminum					7,227,480				2.4
Discount Stores					7,051,890				2.4
Beverages: Non-Alcoholic					6,926,400				2.3
Life/Health Insurance					6,638,789				2.2
Cable/Satellite TV					6,452,467				2.2
Household/Personal Care					5,670,972				1.9
Food: Specialty/Candy					5,121,589				1.7
Tobacco					4,978,827				1.7
Computer Processing Hardware					4,457,559				1.5
Semiconductors					4,138,893				1.4
Drugstore Chains					3,864,648				1.3
Multi-Line Insurance					3,860,126				1.3
Industrial Conglomerates				$	3,090,464				1.0	%
Investment Banks/Brokers					3,038,124				1.0
Catalog/Specialty Distribution					2,900,085				1.0
Medical Distributors					2,772,100				0.9
Movies/Entertainment					2,692,867				0.9
Packaged Software					2,677,146				0.9
Information Technology Services					2,224,536				0.7
Medical Specialties					2,150,466				0.7
Home Improvement Chains					1,983,391				0.7
Data Processing Services					1,957,440				0.7
Beverages: Alcoholic					1,954,820				0.7
Broadcasting					1,794,013				0.6
Publishing: Newspapers					1,238,380				0.4
Airlines					1,052,520				0.4
Telecommunication Equipment					945,795				0.3
Electronic Production Equipment					922,436				0.3
Computer Communications					896,103				0.3
Electric Utilities					736,125				0.2
Electronic Components					707,818				0.2
Aerospace & Defense					253,663				0.1
				$	297,161,424				100.0	%

See Notes to Financial Statements

10

Morgan Stanley Value Fund

Financial Statements

Statement of Assets and Liabilities

March 31, 2007 (unaudited)

Assets:
Investments in securities, at value (cost $247,121,127)				$	297,161,424
Receivable for:
Investments sold					1,778,193
Dividends					438,529
Shares of beneficial interest sold					27,636
Foreign withholding taxes reclaimed					17,395
Interest					5,001
Prepaid expenses and other assets					44,591
Total Assets					299,472,769
Liabilities:
Payable for:
Investments purchased					658,868
Shares of beneficial interest redeemed					414,403
Distribution fee					175,817
Investment advisory fee					105,838
Administration fee					20,159
Transfer agent fee					15,789
Accrued expenses and other payables					67,651
Total Liabilities					1,458,525
Net Assets				$	298,014,244
Composition of Net Assets:
Paid-in-capital				$	238,787,956
Net unrealized appreciation					50,040,297
Accumulated undistributed net investment income					1,247,836
Accumulated undistributed net realized gain					7,938,155
Net Assets				$	298,014,244
Class A Shares:
Net Assets				$	106,325,707
Shares Outstanding (unlimited authorized, $.01 par value)					7,039,496
Net Asset Value Per Share				$	15.10
Maximum Offering Price Per Share, (net asset value plus 5.54% of net asset value)				$	15.94
Class B Shares:
Net Assets				$	158,386,211
Shares Outstanding (unlimited authorized, $.01 par value)					10,811,218
Net Asset Value Per Share				$	14.65
Class C Shares:
Net Assets				$	21,485,747
Shares Outstanding (unlimited authorized, $.01 par value)					1,469,452
Net Asset Value Per Share				$	14.62
Class D Shares:
Net Assets				$	11,816,579
Shares Outstanding (unlimited authorized, $.01 par value)					771,810
Net Asset Value Per Share				$	15.31

See Notes to Financial Statements

11

Morgan Stanley Value Fund

Financial Statements continued

Statement of Operations

For the six months ended March 31, 2007 (unaudited)

Net Investment Income:
Income
Dividends (net of $34,638 foreign withholding tax)				$	3,491,455
Interest					559,014
Total Income					4,050,469
Expenses
Distribution fee (Class A shares)					108,935
Distribution fee (Class B shares)					892,105
Distribution fee (Class C shares)					105,975
Investment advisory fee					643,448
Transfer agent fees and expenses					241,477
Administration fee					122,562
Shareholder reports and notices					93,728
Professional fees					33,094
Custodian fees					13,815
Registration fees					10,275
Trustees’ fees and expenses					2,788
Other					14,639
Total Expenses					2,282,841
Less: expense offset					(1,359	)
Net Expenses					2,281,482
Net Investment Income					1,768,987
Net Realized and Unrealized Gain:
Net realized gain					11,034,799
Net change in unrealized appreciation					7,368,726
Net Gain					18,403,525
Net Increase				$	20,172,512

See Notes to Financial Statements

12

Morgan Stanley Value Fund

Financial Statements continued

Statements of Changes in Net Assets

				FOR THE SIX MONTHS ENDED MARCH 31, 2007				FOR THE YEAR ENDED SEPTEMBER 30, 2006
				(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income				$	1,768,987			$	3,926,030
Net realized gain					11,034,799				33,437,691
Net change in unrealized appreciation					7,368,726				5,990,815
Net Increase					20,172,512				43,354,536
Dividends and Distributions to Shareholders from:
Net investment income
Class A shares					(1,556,421	)			(1,480,914	)
Class B shares					(1,238,181	)			(2,682,519	)
Class C shares					(195,802	)			(279,290	)
Class D shares					(209,600	)			(357,291	)
Net realized gain
Class A shares					(3,341,067	)			—
Class B shares					(6,292,790	)			—
Class C shares					(781,928	)			—
Class D shares					(401,036	)			—
Total Dividends and Distributions					(14,016,825	)			(4,800,014	)
Net decrease from transactions in shares of beneficial interest					(14,664,250	)			(155,295,056	)
Net Decrease					(8,508,563	)			(116,740,534	)
Net Assets:
Beginning of period					306,522,807				423,263,341
End of Period (Including accumulated undistributed net investment income of $1,247,836 and $2,678,853, respectively)				$	298,014,244			$	306,522,807

See Notes to Financial Statements

13

Morgan Stanley Value Fund

Notes to Financial Statements March 31, 2007 (unaudited)

1.   Organization and Accounting Policies

Morgan Stanley Value Fund (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’s investment objective is total return. The Fund was organized as a Massachusetts business trust on June 9, 1998 and commenced operations on November 25, 1998.

The Fund offers Class A shares, Class B shares, Class C shares and Class D 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 B shares and Class C shares are subject to a contingent deferred sales charge imposed on shares redeemed within eighteen months, six years and one year, respectively. Class D shares are not subject to a sales charge. Additionally, Class A shares, Class B shares and Class C shares incur distribution expenses.

The Fund will assess a 2% redemption fee, on Class A shares, Class B shares, Class C shares, and Class D shares, which is paid directly to the Fund, for shares redeemed within seven days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading.

The following is a summary of significant accounting policies:

A.   Valuation of Investments — (1) an equity portfolio security listed or traded on the New York Stock Exchange (‘‘NYSE’’) or American Stock Exchange or other exchange is valued at its latest sale price prior to the time when assets are valued; if there were no sales that day, the security is valued at the mean between the last reported bid and asked price; (2) an equity portfolio security listed or traded on the Nasdaq is valued at the Nasdaq Official Closing Price; if there were no sales that day, the security is valued at the mean between the last reported bid and asked price; (3) all other portfolio securities for which over-the-counter market quotations are readily available are valued at the mean between the last reported bid and asked price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as th e primary market; (4) 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; (5) when market quotations are not readily available including circumstances under which Morgan Stanley Investment Advisors Inc. (the ‘‘Investment Adviser’’) determines that the latest sale price, the bid price or the mean between the last reported bid and asked price do not reflect a security’s market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund’s Trustees. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which 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

14

Morgan Stanley Value Fund

Notes to Financial Statements March 31, 2007 (unaudited) continued

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; (6) certain portfolio securities may be valued by an outside pricing service approved by the Fund’s Trustees; and (7) 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.

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. Interest income is accrued daily.

C.   Repurchase Agreements — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated entities managed by the Investment Adviser, may transfer uninvested cash balances into one or more joint repurchase agreement accounts. These balances are invested in one or more repurchase agreements and are collateralized by cash, U.S. Treasury or federal agency obligations. The Fund may also invest directly with institutions in repurchase agreements. The Fund’s custodian receives the collateral, which is marked-to-market daily to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest.

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

E.   Federal Income Tax Policy — It is the Fund’s policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Accordingly, no federal income tax provision is required.

F.   Dividends and Distributions to Shareholders — Dividends and distributions to shareholders are recorded on the ex-dividend date.

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

2.   Investment Advisory/Administration Agreements

Pursuant to an Investment Advisory Agreement, the Fund pays the Investment Adviser an advisory fee, accrued daily and payable monthly, by applying the following annual rates to the net assets of the Fund

15

Morgan Stanley Value Fund

Notes to Financial Statements March 31, 2007 (unaudited) continued

determined as of the close of each business day: 0.42% to the portion of the daily net assets not exceeding $1 billion; 0.37% to the portion of the daily net assets exceeding $1 billion but not exceeding $2 billion; 0.32% to the portion of the daily net assets exceeding $2 billion but not exceeding $3 billion; and 0.27% to the portion of the daily net assets exceeding $3 billion.

Pursuant to an Administration Agreement with Morgan Stanley Services Company Inc. (the ‘‘Administrator’’), an affiliate of the Investment Adviser, the Fund pays an administration fee, accrued daily and payable monthly, by applying the annual rate of 0.08% to the Fund’s daily net assets.

For the period November 18, 2005 through November 17, 2006, the Investment Adviser had agreed to cap the Fund’s operating expenses (except for brokerage and 12b-1 fees) by assuming the Fund’s ‘‘other expenses’’ and/or waiving the Fund’s advisory fees, and the Administrator had agreed to waive the Fund’s administrative fees, to the extent such operating expenses on an annualized basis exceed 0.75% of the average daily net assets of the Fund.

3.   Plan of Distribution

Shares of the Fund are distributed by Morgan Stanley Distributors Inc. (the ‘‘Distributor’’), an affiliate of the Investment Adviser and 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 B – up to 1.0% of the average daily net assets of Class B shares; and (iii) Class C – up to 1.0% of the average daily net assets of Class C shares.

In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by the Distributor but not yet recovered may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares. Although there is no legal obligation for the Fund to pay expenses incurred in excess of payments made to the Distributor under the Plan and the proceeds of contingent deferred sales charges paid by investors upon redemption of shares, if for any reason the Plan is terminated, the Trustees will consider at that time the manner in which to treat such expenses. The Distributor has advised the Fu nd that such excess amounts totaled $4,293,492 at March 31, 2007.

In the case of Class A shares and Class C shares, expenses incurred pursuant to the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily net assets of Class A or Class C, respectively, will not be reimbursed by the Fund through payments in any subsequent year, except that expenses representing a gross sales credit to Morgan Stanley Financial Advisors and other authorized financial representatives at the time of sale may be reimbursed in the subsequent calendar year. For the six months ended March 31, 2007, the distribution fee was accrued for Class A shares and Class C shares at the annual rate of 0.23% and 0.96%, respectively.

16

Morgan Stanley Value Fund

Notes to Financial Statements March 31, 2007 (unaudited) continued

The Distributor has informed the Fund that for the six months ended March 31, 2007, it received contingent deferred sales charges from certain redemptions of the Fund’s Class A shares, Class B shares and Class C shares of $897, $131,411 and $718, respectively and received $19,589 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.

4.   Security Transactions and Transactions with Affiliates

The cost of purchases and proceeds from sales of portfolio securities, excluding short-term investments, for the six months ended March 31, 2007, aggregated $23,899,865 and $50,952,382, respectively.

For the year six months ended March 31, 2007, the Fund incurred brokerage commissions of $1,619 with Morgan Stanley & Co., an affiliate of the Investment Adviser, Administrator and Distributor, for portfolio transactions executed on behalf of the Fund.

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

The Fund has an unfunded Deferred Compensation Plan (the ‘‘Compensation Plan’’) which allows each independent Trustee to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Trustees. Each eligible Trustee generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the net asset value of the Fund.

5.   Federal Income Tax Status

The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These ‘‘book/tax’’ differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the 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 September 30, 2006, the Fund had temporary book/tax differences primarily attributable to capital loss deferrals on wash sales.

17

Morgan Stanley Value Fund

Notes to Financial Statements March 31, 2007 (unaudited) continued

6.   Shares of Beneficial Interest

Transactions in shares of beneficial interest were as follows:

				FOR THE SIX MONTHS ENDED MARCH 31, 2007								FOR THE YEAR ENDED SEPTEMBER 30, 2006
				(unaudited)
				SHARES				AMOUNT				SHARES				AMOUNT
CLASS A SHARES
Sold					543,151			$	8,266,239				444,791			$	6,192,647
Conversion from Class B					1,867,895				28,316,601				927,909				12,924,224
Reinvestment of dividends and distributions					291,737				4,361,471				95,731				1,303,852
Redeemed					(850,508	)			(12,889,610	)			(1,825,145	)			(25,244,513	)
Net increase (decrease) – Class A					1,852,275				28,054,701				(356,714	)			(4,823,790	)
CLASS B SHARES
Sold					351,913				5,181,184				442,594				5,918,933
Conversion to Class A					(1,931,188	)			(28,316,601	)			(958,162	)			(12,924,224	)
Reinvestment of dividends and distributions					449,345				6,528,987				180,304				2,387,231
Redeemed					(1,715,568	)			(25,166,546	)			(5,496,674	)			(73,423,510	)
Net decrease – Class B					(2,845,498	)			(41,772,976	)			(5,831,938	)			(78,041,570	)
CLASS C SHARES
Sold					60,799				892,715				102,042				1,373,757
Reinvestment of dividends and distributions					62,137				900,995				19,947				263,903
Redeemed					(177,666	)			(2,608,546	)			(514,122	)			(6,808,545	)
Net decrease – Class C					(54,730	)			(814,836	)			(392,133	)			(5,170,885	)
CLASS D SHARES
Sold					15,923				243,925				104,304				1,438,481
Reinvestment of dividends and distributions					31,308				474,005				15,223				209,776
Redeemed					(55,206	)			(849,069	)			(4,980,467	)			(68,907,068	)
Net decrease – Class D					(7,975	)			(131,139	)			(4,860,940	)			(67,258,811	)
Net decrease in Fund					(1,055,928	)		$	(14,664,250	)			(11,441,725	)		$	(155,295,056	)

7.   Expense Offset

The expense offset represents a reduction of the fees and expenses for interest earned on cash balances maintained by the Fund with the transfer agent.

8.   Accounting Pronouncements

In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement 109 (FIN 48). FIN 48 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position must meet

18

Morgan Stanley Value Fund

Notes to Financial Statements March 31, 2007 (unaudited) continued

before being recognized in the financial statements. FIN 48 is effective for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. The impact to the Fund’s financial statements, if any, is currently being assessed.

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

19

Morgan Stanley Value Fund

Financial Highlights

Selected ratios and per share data for a share of beneficial interest outstanding throughout each period:

				FOR THE SIX MONTHS ENDED MARCH 31, 2007				FOR THE YEAR ENDED SEPTEMBER 30,
								2006				2005				2004				2003				2002
				(unaudited)
Class A Shares
Selected Per Share Data:
Net asset value, beginning of period				$	14.85			$	13.27			$	12.23			$	10.10			$	7.86			$	10.74
Income (loss) from investment operations:
Net investment income‡					0.12				0.23				0.19				0.12				0.07				0.04
Net realized and unrealized gain (loss)					0.91				1.63				1.00				2.10				2.17				(2.92	)
Total income (loss) from investment     operations					1.03				1.86				1.19				2.22				2.24				(2.88	)
Less dividends and distributions from:
Net investment income					(0.25	)			(0.28	)			(0.15	)			(0.09	)			—				—
Net realized gain					(0.53	)			—				—				—				—				—
Total dividends and distributions					(0.78	)			(0.28	)			(0.15	)			(0.09	)			—				—
Net asset value, end of period				$	15.10			$	14.85			$	13.27			$	12.23			$	10.10			$	7.86
Total Return†					6.96	%(1)			14.20	%			9.71	%			22.06	%			28.50	%			(26.82)	%
Ratios to Average Net Assets(3):
Total expenses (before expense offset)					1.00	%(2)			1.00	%(4)			0.97	%			1.28	%			1.53	%			1.42	%
Net investment income					1.64	%(2)			1.69	%(4)			1.50	%			1.06	%			0.78	%			0.36	%
Supplemental Data:
Net assets, end of period, in thousands					$106,326				$77,032				$73,559				$16,621				$12,972				$11,396
Portfolio turnover rate					8	%(1)			13	%			31	%			83	%			61	%			56	%

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

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

(1) Not annualized.

(2) Annualized.

(3) Reflects overall Fund ratios for investment income and non-class specific expenses.

(4) If the Fund had borne all expenses that were reimbursed or waived by the Investment Adviser and Administrator, the annualized expense and net investment income ratios, before expense offset, would have been 1.01% and 1.68%, respectively.

See Notes to Financial Statements

20

Morgan Stanley Value Fund

Financial Highlights continued

				FOR THE SIX MONTHS ENDED MARCH 31, 2007				FOR THE YEAR ENDED SEPTEMBER 30,
								2006				2005				2004				2003				2002
				(unaudited)
Class B Shares
Selected Per Share Data:
Net asset value, beginning of period				$	14.34			$	12.79			$	11.80			$	9.74			$	7.64			$	10.52
Income (loss) from investment operations:
Net investment income (loss)‡					0.06				0.12				0.09				0.03				0.00				(0.04	)
Net realized and unrealized gain (loss)					0.88				1.58				0.95				2.03				2.10				(2.84	)
Total income (loss) from investment     operations					0.94				1.70				1.04				2.06				2.10				(2.88	)
Less dividends and distributions from:
Net investment income					(0.10	)			(0.15	)			(0.05	)			—				—				—
Net realized gain					(0.53	)			—				—				—				—				—
Total dividends and distributions					(0.63	)			(0.15	)			(0.05	)			—				—				—
Net asset value, end of period				$	14.65			$	14.34			$	12.79			$	11.80			$	9.74			$	7.64
Total Return†					6.61	%(1)			13.37	%			8.85	%			21.15	%			27.49	%			(27.38	)%
Ratios to Average Net Assets(3):
Total expenses (before expense offset)					1.77	%(2)			1.75	%(4)			1.72	%			2.03	%			2.28	%			2.18	%
Net investment income (loss)					0.87	%(2)			0.94	%(4)			0.75	%			0.31	%			0.03	%			(0.40)	%
Supplemental Data:
Net assets, end of period, in thousands					$158,386				$195,893				$249,346				$334,125				$304,486				$321,210
Portfolio turnover rate					8	%(1)			13	%			31	%			83	%			61	%			56	%

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

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

(1) Not annualized.

(2) Annualized.

(3) Reflects overall Fund ratios for investment income and non-class specific expenses.

(4) If the Fund had borne all expenses that were reimbursed or waived by the Investment Adviser and Administrator, the annualized expense and net investment income ratios, before expense offset, would have been 1.76% and 0.93%, respectively.

See Notes to Financial Statements

21

Morgan Stanley Value Fund

Financial Highlights continued

				FOR THE SIX MONTHS ENDED MARCH 31, 2007				FOR THE YEAR ENDED SEPTEMBER 30,
								2006				2005				2004				2003				2002
				(unaudited)
Class C Shares
Selected Per Share Data:
Net asset value, beginning of period				$	14.34			$	12.80			$	11.81			$	9.75			$	7.64			$	10.52
Income (loss) from investment operations:
Net investment income (loss)‡					0.07				0.13				0.10				0.04				0.01				(0.04	)
Net realized and unrealized gain (loss)					0.87				1.57				0.95				2.02				2.10				(2.84	)
Total income (loss) from investment     operations					0.94				1.70				1.05				2.06				2.11				(2.88	)
Less dividends and distributions from:
Net investment income					(0.13	)			(0.16	)			(0.06	)			—				—				—
Net realized gain					(0.53	)			—				—				—				—				—
Total dividends and distributions					(0.66	)			(0.16	)			(0.06	)			—				—				—
Net asset value, end of period				$	14.62			$	14.34			$	12.80			$	11.81*			$	9.75			$	7.64
Total Return†					6.60	%(1)			13.38%				8.93	%			21.15	%			27.62	%			(27.38)	%
Ratios to Average Net Assets(3):
Total expenses (before expense offset)					1.73	%(2)			1.72	%(4)			1.71	%			2.00	%			2.21	%			2.18	%
Net investment income (loss)					0.91	%(2)			0.97	%(4)			0.76	%			0.34	%			0.10	%			(0.40)	%
Supplemental Data:
Net assets, end of period, in thousands					$21,486				$21,859				$24,526				$26,297				$22,068				$21,688
Portfolio turnover rate					8	%(1)			13	%			31	%			83	%			61	%			56	%

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

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

* Includes the effect of dividends from net investment income of $0.002 per share.

(1) Not annualized.

(2) Annualized.

(3) Reflects overall Fund ratios for investment income and non-class specific expenses.

(4) If the Fund had borne all expenses that were reimbursed or waived by the Investment Adviser and Administrator, the annualized expense and net investment income ratios, before expense offset, would have been 1.73% and 0.96%, respectively.

See Notes to Financial Statements

22

Morgan Stanley Value Fund

Financial Highlights continued

				FOR THE SIX MONTHS ENDED MARCH 31, 2007				FOR THE YEAR ENDED SEPTEMBER 30,
								2006				2005				2004				2003				2002
				(unaudited)
Class D Shares
Selected Per Share Data:
Net asset value, beginning of period				$	15.05			$	13.44			$	12.39			$	10.23			$	7.94			$	10.83
Income (loss) from investment operations:
Net investment income‡					0.14				0.29				0.23				0.16				0.09				0.06
Net realized and unrealized gain (loss)					0.93				1.63				0.99				2.12				2.20				(2.95	)
Total income (loss) from investment     operations					1.07				1.92				1.22				2.28				2.29				(2.89	)
Less dividends and distributions from:
Net investment income					(0.28	)			(0.31	)			(0.17	)			(0.12	)			—				—
Net realized gain					(0.53	)			—				—				—				—				—
Total dividends and distributions					(0.81	)			(0.31	)			(0.17	)			(0.12	)			—				—
Net asset value, end of period				$	15.31			$	15.05			$	13.44			$	12.39			$	10.23			$	7.94
Total Return†					7.14	%(1)			14.47	%			9.91	%			22.42	%			28.84	%			(26.69)	%
Ratios to Average Net Assets(3):
Total expenses (before expense offset)					0.77	%(2)			0.75	%(4)			0.72	%			1.03	%			1.28	%			1.18	%
Net investment income					1.87	%(2)			1.94	%(4)			1.75	%			1.31	%			1.03	%			0.60	%
Supplemental Data:
Net assets, end of period, in thousands					$11,816				$11,739				$75,832				$68,870				$45,204				$25,424
Portfolio turnover rate					8	%(1)			13	%			31	%			83	%			61	%			56	%

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

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

(1) Not annualized.

(2) Annualized.

(3) Reflects overall Fund ratios for investment income and non-class specific expenses.

(4) If the Fund had borne all expenses that were reimbursed or waived by the Investment Adviser and Administrator, the annualized expense and net investment income ratios, before expense offset, would have been 0.76% and 1.93%, respectively.

See Notes to Financial Statements

23

Trustees Frank L. Bowman Michael Bozic Kathleen A. Dennis James F. Higgins Dr. Manuel H. Johnson Joseph J. Kearns Michael F. Klein Michael E. Nugent W. Allen Reed Fergus Reid Officers Michael E. Nugent Chairperson of the Board Ronald E. Robison President and Principal Executive Officer J. David Germany Vice President Dennis F. Shea Vice President Amy R. Doberman Vice President Carsten Otto Chief Compliance Officer Stefanie V. Chang Yu Vice President Francis J. Smith Treasurer and Chief Financial Officer Mary E. Mullin Secretary Transfer Agent Morgan Stanley Trust Harborside Financial Center, Plaza Two Jersey City, New Jersey 07311 Independent Registered Public Accounting Firm Deloitte & Touche LLP Two World Financial Center New York, New York 10281 Legal Counsel Clifford Chance US LLP 31 West 52nd Street New York, New York 10019 Counsel to the Independent Trustees Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, New York 10036 Investment Adviser Morgan Stanley Investment Advisors Inc. 1221 Avenue of the Americas New York, New York 10020 The financial statements included herein have been taken from the records of the Fund without examination by the independent auditors and accordingly they do not express an opinion thereon. This report is submitted for the general information of the 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 NASD. © 2007 Morgan Stanley VLUSAR-IU07-01020P-Y03/07		MORGAN STANLEY FUNDS
		Morgan Stanley Value Fund Semiannual Report March 31, 2007

Item 2.  Code of Ethics.

Not applicable for semiannual reports.


Item 3.  Audit Committee Financial Expert.

Not applicable for semiannual reports.


Item 4. Principal Accountant Fees and Services

Not applicable for semiannual reports.


Item 5. Audit Committee of Listed Registrants.

Not applicable for semiannual reports.


Item 6.

Refer to Item 1.


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

Not applicable for semiannual reports.


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

Applicable only to reports filed by closed-end funds.


Item 9. Closed-End Fund Repurchases

Applicable to reports filed by closed-end funds.


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

Not applicable.







Item 11. Controls and Procedures

(a) The Fund's principal executive officer and principal financial officer have
concluded that the Fund's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Fund in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.

(b) There were no changes in the registrant's internal control over financial
reporting that
occurred during the second fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.

Item 12. Exhibits

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

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















                                       2





                                   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 Value Fund


/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
May 22, 2007


         Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.


/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
May 22, 2007


/s/ Francis Smith
Francis Smith
Principal Financial Officer
May 22, 2007













                                       3







                                                                   EXHIBIT 12 B1

                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

                                 CERTIFICATIONS
                                 --------------

I, Ronald E. Robison, certify that:

1.   I have reviewed this report on Form N-CSR of Morgan Stanley Value Fund;

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):




                                       4







     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: May 22, 2007
                                          /s/ Ronald E. Robison
                                          Ronald E. Robison
                                          Principal Executive Officer




















                                       5




                                                                   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 Value Fund;

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):





                                       6







     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: May 22, 2007
                                        /s/ Francis Smith
                                        Francis Smith
                                        Principal Financial  Officer















                                       7






                            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 Value Fund

         In connection with the Report on Form N-CSR (the "Report") of the
above-named issuer for the period ended March 31, 2007 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: May 22, 2007                          /s/ Ronald E. Robison
                                            ---------------------------
                                            Ronald E. Robison
                                            Principal Executive Officer


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












                                       8






                            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 Value Fund

         In connection with the Report on Form N-CSR (the "Report") of the
above-named issuer for the period ended March 31, 2007 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: May 22, 2007                            /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 Value Fund and will be retained by Morgan Stanley
Value Fund and furnished to the Securities and Exchange Commission or its staff
upon request.













                                       9