Morgan Stanley Total Market Index Fund 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			811-09259
Morgan Stanley Total Market Index Fund
(Exact name of registrant as specified in charter)
522 Fifth Avenue, New York, New York					10036
(Address of principal executive offices)					(Zip code)
Ronald E. Robison 522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)
Registrant’s telephone number, including area code:				212-296-6990
Date of fiscal year end:	July 31, 2008
Date of reporting period:		January 31, 2008

Item 1 - Report to Shareholders

Welcome, Shareholder:

In this report, you'll learn about how your investment in Morgan Stanley Total Market Index 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 January 31, 2008

Total Return for the 6 Months Ended January 31, 2008
Class A			Class B			Class C			Class D			Dow Jones Wilshire 5000 Composite Index1			Lipper Multi-Cap Core Funds Index2
	-4.72	%		-5.00	%		-5.00	%		-4.60	%		-4.51	%		-5.09	%

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

For the six-months ended January 31, 2008, the broad U.S. stock market declined as worries about the condition of the U.S. economy led to considerable volatility. By the third quarter of 2007, the subprime mortgage market's troubles spilled into the credit market and the broader economy. A tightening in credit standards, mortgage lender bankruptcies and hedge fund implosions were followed by multi-billion dollar losses reported at several large financial institutions in the fourth quarter. At the same time, a cross current of unfavorable data buffeted the market, indicating a languishing housing market, declining consumer spending, rising oil prices and negative year-over-year corporate profit growth.

The Federal Open Market Committee (the "Fed") responded to the turbulence by lowering its target federal funds rate five times between September and January. Although the quick action by the Fed did bolster investor confidence at times, rallies were short-lived as negative economic news continued to pummel the market. Gross domestic product (GDP) growth slowed to 0.6% in the fourth quarter, down from 4.9% in the third quarter. Weak manufacturing and employment data released in January showed further evidence of a much slower economy, and rising commodity prices and a weak U.S. dollar contributed to mounting inflationary pressures. By the end of the period, the probability of recession appeared very high, although the potential length and severity continued to be debated.

Performance Analysis

All share classes of Morgan Stanley Total Market Index Fund underperformed the Dow Jones Wilshire 5000 Composite Index (the "Index") and outperformed the Lipper Multi-Cap Core Funds Index for the six months ended January 31, 2008, assuming no deduction of applicable sales charges.

The weakest performing sectors in the Index and the Fund for the period were consumer discretionary, telecommunication services and financials. With consumer spending levels already slowing and the deteriorating housing market hampering the prospects for future consumer spending, the consumer discretionary sector was hit hard, particularly in the retail, automobiles, media and household durables segments. The telecommunication services sector, which represents a relatively small sector in the Fund and Index, was dragged down by declining returns from both the diversified telecommunications and wireless

2

telecommunications industries during the period. Finally, the financials sector suffered losses across the board, with those stocks exposed to the mortgage and real estate businesses being the primary areas of weakness, including thrifts and mortgage finance, real estate management and development, and consumer finance.

However, the Fund and Index achieved positive returns in other sectors. The utilities sector benefited from its electric and gas utilities segments, which gained pricing power from high energy prices. Within the consumer staples sector, the tobacco, household products and beverages industries were standout performers. Moreover, because the consumer staples sector is traditionally viewed as a "defensive" area of the market — that is, a sector that can generate earnings regardless of economic environment — investors favored the sector during the period. The materials sector was the third highest returning sector, due to strong performance from the chemicals group.

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
Exxon Mobil Corp.	3.3	%
General Electric Co.	2.3
Microsoft Corp.	1.9
AT&T Inc.	1.5
Procter & Gamble Co. (The)	1.4
Bank of America Corp.	1.3
Chevron Corp.	1.2
Johnson & Johnson	1.2
Pfizer, Inc.	1.1
International Business Machines Corp.	1.1
TOP FIVE INDUSTRIES
Integrated Oil	5.8	%
Pharmaceuticals: Major	4.6
Major Banks	4.1
Industrial Conglomerates	3.9
Packaged Software	3.3

Data as of January 31, 2008. 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.

3

Investment Strategy

The Dow Jones Wilshire 5000 Composite Index consists of substantially all of the stocks which are actively traded in the United States (currently, approximately 5,000). The Index consists of large capitalization, mid capitalization and small capitalization stocks. Because the Index is weighted by float-adjusted market capitalizations, currently large capitalization stocks in the Index represent approximately 85 percent of its value. The Index may include some foreign companies. The Fund will normally invest at least 80 percent of its assets in stocks included in the Index.

For More Information About Portfolio Holdings

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semiannual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters. The semiannual reports and the annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semiannual and annual reports to fund shareholders and makes these reports available on its public web site, www.morganstanley.com. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public web site. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by access ing 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) 869-NEWS, 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.

4

Performance Summary

Average Annual Total Returns—Period Ended January 31, 2008
Symbol	Class A Shares* (since 09/28/99) TMIAX		Class B Shares** (since 09/28/99) TMIBX		Class C Shares† (since 09/28/99) TMICX		Class D Shares†† (since 09/28/99) TMIDX
1 Year	(3.19%) (8.28)	3 4	(3.84%) (8.64)	3 4	(3.76%) (4.71)	3 4	(2.94%) —	3
5 Years	12.29 11.08	3 4	11.46 11.20	3 4	11.47 11.47	3 4	12.59 —	3
Since Inception	2.94 2.27	3 4	2.19 2.19	3 4	2.19 2.19	3 4	3.20 —	3

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/msim 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.

†  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 Dow Jones Wilshire 5000 (float adj) Composite Index measures the performance of all U.S. headquartered equity securities and is the best measure of the entire U.S. stock market. Over 5,000 capitalization weighted security returns are used to adjust the Index. The Index is weighted by float-adjusted market capitalization. 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 Lipper Multi-Cap Core Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Multi-Cap Core 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 Multi-Cap Core Funds classification as of the date of this report.

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

(4)  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.

5

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 08/01/07 – 01/31/08.

Actual Expenses

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

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any 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 *
	08/01/07		01/31/08		08/01/07 – 01/31/08
Class A
Actual (-4.72% return)	$	1,000.00	$	952.80	$	3.04
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,022.02	$	3.15
Class B
Actual (-5.00% return)	$	1,000.00	$	950.00	$	6.86
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,018.10	$	7.10
Class C
Actual (-5.00% return)	$	1,000.00	$	950.00	$	6.86
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,018.10	$	7.10
Class D
Actual (-4.60% return)	$	1,000.00	$	954.00	$	1.96
Hypothetical (5% annual return before expenses)	$	1,000.00	$	1,023.13	$	2.03

*  Expenses are equal to the Fund's annualized expense ratios of 0.62%, 1.40%, 1.40% and 0.40% for Class A, Class B, Class C and Class D shares, respectively, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). If the Fund had borne all its expenses, the annualized expense ratios would have been 0.77%, 1.54%, 1.54% and 0.54% for Class A, Class B, Class C and Class D, respectively.

6

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited)

NUMBER OF SHARES			VALUE
		Common Stocks (99.1%)
		Advertising/Marketing Services (0.3%)
	365	Arbitron Inc.*	$	14,589
	4,218	Gemstar-TV Guide International, Inc.*		18,180
	622	Getty Images, Inc.*		15,550
	1,016	Harris Interactive Inc.*		3,221
	860	Harte-Hanks Inc.		13,777
	965	infoUSA, Inc.		8,482
	4,404	Interpublic Group of Companies, Inc. (The)*		39,328
	879	Lamar Advertising Co. (Class A)*		37,902
	636	Nautilus Group, Inc.		2,957
	3,239	Omnicom Group, Inc.		146,953
	614	R.H. Donnelley Corp.*		18,463
	693	Valassis Communications, Inc.*		6,625
	1,398	ValueClick, Inc.*		30,518
				356,545
		Aerospace & Defense (1.7%)
	620	AAR Corp.*		18,265
	441	Alliant Techsystems, Inc.*		46,680
	6,579	Boeing Co.		547,241
	481	Cubic Corp.		12,920
	710	Curtiss-Wright Corp.		29,607
	483	DRS Technologies, Inc.		25,923
	308	ESCO Technologies Inc.*		11,547
	409	Esterline Corp.*		19,055
	1,862	FLIR Systems, Inc.*		56,381
	804	GenCorp Inc.*		9,439
	3,143	General Dynamics Corp.		265,458
	1,163	Goodrich Corp.		72,746
	1,132	L-3 Communications Holdings, Inc.		125,460
	3,169	Lockheed Martin Corp.		341,998
	573	Moog Inc. (Class A)*		26,381
	2,983	Northrop Grumman Corp.		236,731
	874	Orbital Sciences Corp. (c)*		20,364
	1,281	Precision Castparts Corp.		145,778

NUMBER OF SHARES			VALUE
	4,182	Raytheon Co.	$	272,415
	1,592	Rockwell Collins, Inc.		100,614
	490	Teledyne Technologies Inc.*		25,299
	309	Triumph Group, Inc.*		16,686
				2,426,988
		Agricultural Commodities/ Milling (0.3%)
	5,604	Archer-Daniels-Midland Co.		246,856
	1,130	Bunge Ltd.		133,871
	987	Corn Products International, Inc.		33,361
				414,088
		Air Freight/Couriers (0.6%)
	1,681	C.H. Robinson Worldwide, Inc.		93,363
	628	Con-way Inc.		30,577
	2,006	Expeditors International of Washington, Inc.		94,864
	2,651	FedEx Corp.		247,815
	383	Forward Air Corp.		11,873
	613	Pacer International, Inc.		10,501
	5,650	United Parcel Service, Inc. (Class B)		413,354
	600	UTI Worldwide Inc.		11,220
				913,567
		Airlines (0.2%)
	1,447	AirTran Holdings, Inc.*		12,488
	520	Alaska Air Group, Inc.*		13,156
	1,710	AMR Corp.*		23,837
	995	Continental Airlines, Inc. (Class B)*		27,074
	625	ExpressJet Holdings, Inc.*		1,713
	678	Frontier Airlines Holdings		2,034
	2,132	JetBlue Airways Corp.*		14,732
	615	Mesa Air Group, Inc.*		2,159
	787	SkyWest, Inc.		20,478
	7,255	Southwest Airlines Co.		85,101
	950	UAL Corp.		36,052
	477	US Airways Group Inc.*		6,587
				245,411

See Notes to Financial Statements
7

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Alternative Power Generation (0.0%)
	1,401	Covanta Holding Corp.	$	35,571
	1,140	Plug Power, Inc.*		3,124
				38,695
		Aluminum (0.2%)
	7,959	Alcoa, Inc.		263,443
		Apparel/Footwear (0.4%)
	733	Brown Shoe Co., Inc.		12,608
	3,579	Coach, Inc.*		114,707
	269	Columbia Sportswear Co.*		11,742
	716	Finish Line, Inc. (Class A)		1,604
	510	Guess ? Inc.*		19,028
	1,023	Hanesbrands, Inc.		26,199
	1,303	Jones Apparel Group, Inc.		21,890
	290	Kellwood Co.		5,794
	158	Kenneth Cole Productions, Inc. (Class A)		2,735
	337	K-Swiss, Inc. (Class A)		6,120
	1,053	Liz Claiborne, Inc.		23,050
	3,294	Nike, Inc. (Class B)		203,437
	314	Oxford Industries, Inc.		7,150
	592	Phillips-Van Heusen Corp.		24,947
	653	Polo Ralph Lauren Corp.		39,565
	1,543	Quiksilver, Inc.		14,705
	726	Timberland Co. (Class A)*		11,914
	817	V.F. Corp.		63,211
	893	Wolverine World Wide, Inc.		22,602
				633,008
		Apparel/Footwear Retail (0.6%)
	873	Abercrombie & Fitch Co. (Class A)		69,569
	1,123	Aeropostale*		31,635
	1,983	American Eagle Outfitters, Inc.*		45,668
	755	AnnTaylor Stores Corp.*		18,988
	295	bebe stores, inc.		3,398
	213	Buckle (The), Inc.		8,859
	594	Cato Corp. (The) (Class A)		9,724
	1,567	Charming Shoppes, Inc.*		10,107

NUMBER OF SHARES			VALUE
	1,998	Chico's FAS, Inc.*	$	21,558
	320	Children's Place Retail Stores, Inc. (The)*		5,933
	443	Christopher & Banks Corp.		5,657
	925	Collective Brands Inc.*		16,299
	595	Dress Barn, Inc.*		7,253
	1,790	Foot Locker, Inc.		24,505
	5,688	Gap, Inc. (The)		108,755
	575	Gymboree Corp. (The)*		21,977
	896	Hot Topic, Inc.*		4,973
	3,250	Limited Brands, Inc.		62,043
	593	Men's Wearhouse, Inc. (The)*		15,116
	2,188	Nordstrom, Inc.		85,113
	1,050	Pacific Sunwear of California, Inc.*		11,676
	1,529	Ross Stores, Inc.		44,570
	484	Stage Stores, Inc.		5,793
	437	Stein Mart, Inc.		2,792
	421	Talbot's, Inc. (The)		4,071
	4,286	TJX Companies, Inc. (The)		135,266
	558	Tween Brands Inc.*		17,873
	1,436	Urban Outfitters, Inc.*		41,644
				840,815
		Auto Parts: O.E.M. (0.3%)
	676	American Axle & Manufacturing Holdings, Inc.		14,703
	760	ArvinMeritor, Inc.		10,321
	1,304	BorgWarner, Inc.		65,995
	1,403	Eaton Corp.		116,112
	2,135	Gentex Corp.		33,861
	5,589	Johnson Controls, Inc.		197,683
	934	Lear Corp.		27,422
	531	Modine Manufacturing Co.		8,199
	125	Proliance International Inc.*		250
	226	Sauer-Danfoss, Inc.		4,879
	356	Superior Industries International, Inc.		6,486
	1,979	Visteon Corp.*		7,916
	1	WABCO Holdings Inc.		40
				493,867

See Notes to Financial Statements
8

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Automotive Aftermarket (0.1%)
	464	Barnes Group, Inc.	$	12,366
	679	CLARCOR Inc.		25,469
	2,203	Goodyear Tire & Rubber Co. (The)*		55,449
				93,284
		Beverages: Alcoholic (0.3%)
	6,690	Anheuser-Busch Companies, Inc.		311,219
	702	Brown-Forman Corp. (Class B)		44,212
	1,978	Constellation Brands Inc. (Class A)*		41,340
	1,316	Molson Coors Brewing Co. (Class B)		58,786
				455,557
		Beverages: Non-Alcoholic (1.6%)
	19,965	Coca-Cola Co. (The)		1,181,329
	2,482	Coca-Cola Enterprises Inc.		57,260
	500	Hansen Natural Corp.		19,280
	1,389	Pepsi Bottling Group, Inc. (The)		48,406
	937	PepsiAmericas, Inc.		23,088
	15,159	PepsiCo, Inc.		1,033,692
				2,363,055
		Biotechnology (1.8%)
	80	Abraxis Bioscience Inc.*		4,780
	618	Adolor Corp.*		2,491
	890	Affymetrix, Inc.*		17,853
	426	Alexion Pharmaceuticals, Inc.*		27,826
	1,236	Alkermes, Inc.*		16,464
	10,761	Amgen Inc.*		501,355
	1,091	Amylin Pharmaceuticals, Inc.*		32,348
	721	Antigenics Inc.*		1,565
	837	ARIAD Pharmaceuticals, Inc.*		2,871
	3,202	Biogen Idec Inc.*		195,162
	1,340	BioMarin Pharmaceutical, Inc.*		49,660
	1,529	Bruker BioSciences Corp.*		15,672
	3,221	Celgene Corp.*		180,730
	717	Cell Genesys, Inc.*		1,298

NUMBER OF SHARES			VALUE
	664	Cephalon, Inc.*	$	43,578
	864	Charles River Laboratories International, Inc.*		53,654
	728	Cubist Pharmaceuticals, Inc.*		12,369
	689	CV Therapeutics, Inc.*		5,774
	809	Dendreon Corp.*		5,008
	773	Discovery Laboratories, Inc.*		1,469
	807	Enzo Biochem, Inc.*		7,537
	1,051	Enzon Pharmaceuticals, Inc.*		8,797
	1,339	Exelixis, Inc.*		9,801
	4,231	Genentech, Inc.*		296,974
	624	Gen-Probe Inc.*		35,662
	2,391	Genzyme Corp.*		186,809
	647	Geron Corp.*		3,216
	8,445	Gilead Sciences, Inc.*		385,852
	2,017	Human Genome Sciences, Inc.*		11,255
	920	ImClone Systems, Inc.*		39,992
	924	Immunomedics, Inc.*		2,107
	1,354	Incyte Corp.*		16,221
	713	InterMune Inc.*		11,957
	610	Invitrogen Corp.*		52,259
	1,222	Lexicon Genetics Inc.*		2,896
	532	Martek Biosciences Corp.*		15,162
	677	Maxygen Inc.*		5,084
	1,463	Medarex, Inc.*		14,615
	686	Medicines Company (The)*		11,744
	3,589	Millennium Pharmaceuticals, Inc.*		54,445
	617	Millipore Corp.*		43,283
	527	Myriad Genetics, Inc.*		22,666
	849	Nabi Biopharmaceuticals*		2,997
	533	Neurocrine Biosciences, Inc.*		2,873
	812	NPS Pharmaceuticals, Inc.*		3,207
	569	Onyx Pharmaceuticals, Inc.*		27,045
	755	OSI Pharmaceuticals Inc.*		30,109
	1,403	PDL BioPharrma Inc.		20,947
	968	Regeneron Pharmaceuticals, Inc.*		19,631
	814	SciClone Pharmaceuticals, Inc.*		1,652

See Notes to Financial Statements
9

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	690	SuperGen, Inc.*	$	2,263
	486	Techne Corp.*		31,590
	700	Telik, Inc.*		1,757
	456	Trimeris, Inc.*		2,914
	563	Vermillion Inc.*		343
	1,071	Vertex Pharmaceuticals Inc.*		21,806
	1,445	XOMA Ltd.*		3,902
	660	ZymoGenetics, Inc.*		6,659
				2,589,956
		Broadcasting (0.2%)
	1,952	Citadel Broadcasting Corp.		2,850
	4,374	Clear Channel Communications, Inc.		134,325
	450	Cox Radio, Inc. (Class A)*		5,373
	996	Cumulus Media, Inc. (Class A)*		6,384
	521	Emmis Communications Corp. (Class A)*		1,454
	644	Entercom Communications Corp.*		7,928
	854	Entravision Communications Corp. (Class A)*		6,012
	168	Fisher Communications, Inc.*		5,519
	805	Gray Television, Inc.		6,102
	502	Hearst-Argyle Television, Inc.		10,698
	567	Lin TV Corp. (Class A)*		7,399
	1,395	Radio One, Inc. (Class A)*		2,176
	350	Salem Communications Corp.*		1,319
	1,141	Sinclair Broadcast Group, Inc. (Class A) **		10,269
	13,086	Sirius Satellite Radio Inc.*		41,875
	671	Spanish Broadcasting System, Inc. (Class A)*		1,215
	1,299	Westwood One, Inc.		2,052
	2,704	XM Satellite Radio Holdings Inc. (Class A)*		33,530
				286,480
		Building Products (0.2%)
	577	Griffon Corp.*		6,289
	731	Lennox International Inc.		27,164
	3,718	Masco Corp.		85,254

NUMBER OF SHARES			VALUE
	448	Simpson Manufacturing Co., Inc.	$	12,342
	1,638	Trane Inc.		73,350
	345	Watsco, Inc.		12,724
				217,123
		Cable/Satellite TV (0.7%)
	1,894	Cablevision Systems New York Group (Class A)*		44,471
	5,608	Charter Communications, Inc. (Class A)*		6,561
	27,595	Comcast Corp. (Class A)*		501,125
	7,892	DIRECTV Group, Inc. (The)*		178,201
	2,109	Dish Network Corp. (Class A)*		59,558
	421	Ecostar Corp. (Class A)*		12,302
	4,301	Liberty Global Inc. (Class A)*		173,803
	961	Mediacom Communications Corp.*		4,767
				980,788
		Casino/Gaming (0.4%)
	434	Ameristar Casinos, Inc.		9,539
	575	Bally Technologies Inc.*		27,393
	676	Boyd Gaming Corp.		18,069
	258	Churchill Downs Inc.		13,150
	3,147	International Game Technology		134,282
	272	Isle of Capri Casinos, Inc.*		3,025
	961	Las Vegas Sands Corp.*		84,251
	1,189	MGM Mirage*		87,059
	512	Multimedia Games, Inc.*		3,958
	841	Penn National Gaming, Inc.*		43,858
	455	Shuffle Master, Inc.*		4,341
	694	Wynn Resorts, Ltd.*		79,796
				508,721
		Catalog/Specialty Distribution (0.1%)
	852	Insight Enterprises, Inc.*		14,714
	6,556	Liberty Media Corp - Interactive (Series A)*		104,306
	701	Valuevision Media Inc. (Class A)*		4,402
				123,422

See Notes to Financial Statements
10

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Chemicals: Agricultural (0.5%)
	4,939	Monsanto Co.	$	555,341
	657	Scotts Miracle - Gro Company (The) (Class A)		25,649
	1,613	The Mosaic Company*		146,799
				727,789
		Chemicals: Major Diversified (0.6%)
	747	Cabot Corp.		22,208
	8,808	Dow Chemical Co. (The)		340,517
	8,395	Du Pont (E.I.) de Nemours & Co.		379,286
	789	Eastman Chemical Co.		52,129
	1,505	Hercules Inc.		26,383
	1,428	Rohm & Haas Co.		76,184
				896,707
		Chemicals: Specialty (0.6%)
	1,954	Air Products & Chemicals, Inc.		175,899
	875	Airgas, Inc.		40,609
	930	Albemarle Corp.		33,722
	439	Arch Chemicals, Inc.		14,781
	682	Ashland Inc.		31,051
	324	Cambrex Corp.		3,078
	3,217	Chemtura Corp.		21,554
	538	Cytec Industries, Inc.		30,456
	1,010	FMC Corp.		53,692
	689	Georgia Gulf Corp.		5,374
	114	Kronos Worldwide, Inc.		2,218
	737	Lubrizol Corp. (The)		38,774
	133	NL Industries, Inc.		1,496
	554	OM Group, Inc.*		31,789
	1,634	Polyone Corp.*		10,065
	3,038	Praxair, Inc.		245,805
	576	Schulman (A.), Inc.		11,745
	671	Sensient Technologies Corp.		17,822
	1,249	Sigma-Aldrich Corp.		62,025
	288	Tronox Inc. (Class B)		2,108
	214	Valhi, Inc.		3,531
	834	Verenium Corp.		3,419
				841,013

NUMBER OF SHARES			VALUE
		Coal (0.3%)
	1,338	Arch Coal, Inc.	$	58,872
	1,768	CONSOL Energy, Inc.		129,064
	200	Foundation Coal Holdings, Inc.		10,460
	1,061	Massey Energy Co.		39,448
	245	Patriot Coal Corp.*		9,739
	2,453	Peabody Energy Corp.		132,511
				380,094
		Commercial Printing/ Forms (0.1%)
	659	Bowne & Co., Inc.		8,106
	671	Deluxe Corp.		16,319
	2,170	Donnelley (R.R.) & Sons Co.		75,711
	552	Standard Register Co.		5,365
				105,501
		Computer Communications (1.2%)
	4,882	3Com Corp.*		20,163
	1,325	Adaptec, Inc.*		4,134
	597	Avocent Corp.*		9,910
	4,867	Brocade Communications Systems, Inc.		33,534
	56,126	Cisco Systems, Inc.*		1,375,087
	528	Echelon Corp.*		6,938
	1,137	Emulex Corp.*		17,737
	2,762	Extreme Networks, Inc.*		9,529
	1,052	F5 Networks, Inc.*		24,754
	851	FalconStor Software, Inc.*		7,506
	3,935	Finisar Corp.*		6,296
	1,763	Foundry Networks, Inc.*		24,329
	539	Ixia*		3,989
	5,437	Juniper Networks, Inc.*		147,614
	1,890	MRV Communications, Inc.*		3,345
	552	NETGEAR, Inc.*		14,716
	1,974	QLogic Corp.*		28,228
				1,737,809	��
		Computer Peripherals (0.5%)
	608	Avid Technology, Inc.*		15,759
	759	Dot Hill Systems Corp.*		2,968
	718	Electronics for Imaging, Inc.*		10,598
	21,590	EMC Corp.*		342,633

See Notes to Financial Statements
11

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	453	Imation Corp.	$	11,737
	999	Lexmark International, Inc. (Class A)*		36,174
	3,603	Network Appliance, Inc.*		83,662
	3,104	Quantum Corp. - DLT & Storage Systems*		7,139
	4,926	Seagate Technology (Cayman Islands)*		99,850
	6,106	Seagate Technology (Escrow) (a)*		—
	417	Sonic Solutions*		3,736
	2,285	Western Digital Corp.*		60,438
	942	Zebra Technologies Corp. (Class A)*		28,929
				703,623
		Computer Processing Hardware (1.9%)
	7,744	Apple Inc.*		1,048,228
	338	Cray Inc.*		1,845
	18,324	Dell Inc.*		367,213
	25,455	Hewlett-Packard Co.		1,113,656
	1,707	NCR Corp.*		36,666
	1,188	Palm, Inc.*		6,439
	8,185	Sun Microsytems*		143,238
				2,717,285
		Construction Materials (0.2%)
	553	AMCOL International Corp.		13,560
	685	Eagle Materials Inc.		25,824
	499	Martin Marietta Materials, Inc.		61,237
	412	Texas Industries, Inc.		23,348
	392	Trex Co., Inc.*		3,234
	472	USG Corp.*		17,275
	917	Vulcan Materials Co.		71,948
				216,426
		Consumer Sundries (0.0%)
	658	American Greetings Corp. (Class A)		13,502
	597	Blyth Industries, Inc.		13,009

NUMBER OF SHARES			VALUE
	351	Central Garden & Pet Co.*	$	1,927
	702	Central Garden & Pet Co. (Class A)		3,489
				31,927
		Containers/Packaging (0.4%)
	882	Aptargroup, Inc.		33,269
	1,043	Ball Corp.		47,863
	1,247	Bemis Company, Inc.		33,893
	543	Caraustar Industries, Inc.*		1,618
	1,968	Crown Holdings, Inc.*		48,255
	480	Greif, Inc.		31,584
	644	Myers Industries, Inc.		7,567
	1,751	Owens-Illinois, Inc.*		88,250
	1,051	Packaging Corp. of America		25,476
	1,526	Pactiv Corp.*		43,659
	681	Rock-Tenn Co. (Class A)		19,470
	1,629	Sealed Air Corp.		42,598
	370	Silgan Holdings, Inc.		17,523
	2,934	Smurfit-Stone Container Corp.*		27,844
	1,114	Sonoco Products Co.		34,378
	1,095	Temple-Inland Inc.		20,531
				523,779
		Contract Drilling (0.6%)
	652	Diamond Offshore Drilling, Inc.		73,630
	1,443	ENSCO International Inc.		73,766
	2,538	Grey Wolf, Inc.*		15,126
	1,238	Helmerich & Payne, Inc.		48,554
	2,892	Nabors Industries, Ltd. (Bermuda)*		78,720
	2,503	Noble Corp. (Cayman Islands)		109,556
	1,844	Patterson-UTI Energy, Inc.*		36,106
	1,622	Pride International, Inc.*		51,434
	1,244	Rowan Companies, Inc.		42,346
	3,148	Transocean Inc.*		385,945
				915,183
		Data Processing Services (0.8%)
	1,023	Acxiom Corp.		10,854
	1,071	Affiliated Computer Services, Inc. (Class A)*		52,211

See Notes to Financial Statements
12

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	671	Alliance Data Systems Corp.*	$	33,932
	5,398	Automatic Data Processing, Inc.		218,997
	1,424	Broadridge Financial Solutions Inc.		30,844
	1,733	Computer Sciences Corp.*		73,341
	1,697	Convergys Corp.*		26,320
	737	CSG Systems International, Inc.*		9,404
	630	DST Systems, Inc.*		45,045
	524	Euronet Worldwide, Inc.*		13,855
	1,621	Fidelity National Information Services, Inc.		68,811
	1,645	Fiserv, Inc.*		84,504
	959	Global Payments Inc.		35,867
	643	Hewitt Associates, Inc.*		23,900
	634	Metavante Technologies*		14,050
	500	NeuStar, Inc. (Class A)*		14,855
	3,152	Paychex, Inc.		103,133
	1,931	Total System Services, Inc.		44,606
	742	Tyler Technologies, Inc.*		9,928
	7,153	Western Union Co.		160,227
				1,074,684
		Department Stores (0.3%)
	908	Dillard's, Inc. (Class A)		18,006
	2,865	Kohl's Corp.*		130,758
	5,207	Macy's, Inc.		143,921
	1,921	Penney (J.C.) Co., Inc.		91,075
	1,655	Saks, Inc.*		29,873
				413,633
		Discount Stores (1.5%)
	736	99 Cents Only Stores*		6,123
	1,617	Big Lots, Inc.*		28,071
	949	BJ's Wholesale Club, Inc.*		30,785
	4,420	Costco Wholesale Corp.		300,295
	1,274	Dollar Tree Stores, Inc.*		35,685
	1,520	Family Dollar Stores, Inc.		31,966
	628	Fred's, Inc.		5,922
	892	Sears Holdings Corp.*		98,557

NUMBER OF SHARES			VALUE
	7,202	Target Corp.	$	400,287
	23,569	Wal-Mart Stores, Inc.		1,199,191
				2,136,882
		Drugstore Chains (0.6%)
	14,245	CVS Caremark Corp.		556,552
	364	Longs Drug Stores Corp.		16,748
	6,011	Rite Aid Corp.*		17,792
	951	Sally Beauty Holdings, Inc.		7,760
	9,235	Walgreen Co.		324,241
				923,093
		Electric Utilities (3.3%)
	6,141	AES Corp. (The)*		117,170
	1,556	Allegheny Energy, Inc.*		85,253
	425	Allete Inc.		16,358
	1,196	Alliant Energy, Inc.		44,132
	1,981	Ameren Corp.		88,769
	3,685	American Electric Power Co., Inc.		157,829
	3,556	Aquila, Inc.*		12,482
	746	Avista Corp.		15,032
	533	Black Hills Corp.		20,648
	2,946	CenterPoint Energy, Inc.		47,165
	308	CH Energy Group, Inc.		11,886
	762	Cleco Corp.		19,698
	2,472	CMS Energy Corp.		38,736
	2,269	Consolidated Edison, Inc.		98,883
	1,754	Constellation Energy Group		164,806
	6,340	Dominion Resources, Inc.		272,620
	1,303	DPL, Inc.		36,171
	1,732	DTE Energy Co.		73,870
	11,276	Duke Energy Corp.		210,410
	2,788	Edison International		145,422
	772	El Paso Electric Co.*		18,088
	445	Empire District Electric Co. (The)		9,866
	1,677	Energy East Corp.		42,344
	1,935	Entergy Corp.		209,328
	6,119	Exelon Corp.		466,207
	3,082	FirstEnergy Corp.		219,500

See Notes to Financial Statements
13

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	3,559	FPL Group, Inc.	$	229,484
	993	Great Plains Energy Inc.		27,685
	1,103	Hawaiian Electric Industries, Inc.		24,795
	519	IDACORP, Inc.		16,940
	939	Integrys Energy Group, Inc.		45,654
	350	MGE Energy Inc.		11,466
	2,794	Mirant Corp.*		102,931
	1,631	Northeast Utilities		45,211
	1,860	NRG Energy, Inc.*		71,777
	1,217	NSTAR		39,467
	943	OGE Energy Corp.		30,864
	422	Otter Tail Power Co.		13,745
	1,921	Pepco Holdings, Inc.		48,909
	3,231	PG&E Corp.		132,600
	1,039	Pinnacle West Capital Corp.		39,918
	930	PNM Resources Inc.		17,968
	3,558	PPL Corp.		174,057
	2,329	Progress Energy, Inc.		105,201
	2,302	Public Service Enterprise Group Inc.		220,992
	1,476	Puget Energy, Inc.		38,597
	3,153	Reliant Energy, Inc.*		67,064
	1,137	SCANA Corp.		42,399
	1,533	Sierra Pacific Resources*		22,949
	6,954	Southern Co. (The)		252,778
	2,298	TECO Energy, Inc.		38,308
	380	UIL Holdings Corp.		12,977
	425	UniSource Energy Corp.		12,487
	1,177	Westar Energy, Inc.		28,672
	1,164	Wisconsin Energy Corp.		52,997
	3,960	Xcel Energy, Inc.		82,328
				4,693,893
		Electrical Products (0.5%)
	650	Acuity Brands, Inc.		29,581
	527	Baldor Electric Co.		15,958
	563	Belden CDT Inc.		23,815
	499	C&D Technologies, Inc.		2,954
	1,841	Cooper Industries Ltd. (Class A) (Bermuda)		81,998
	7,496	Emerson Electric Co.		381,097

NUMBER OF SHARES			VALUE
	638	Energizer Holdings, Inc.*	$	59,730
	507	Energy Conversion Devices, Inc.*		11,702
	273	Franklin Electric Co., Inc.		10,276
	366	Greatbatch, Inc.		8,264
	671	Hubbell, Inc. (Class B)*		31,993
	426	Littelfuse, Inc.*		12,946
	1,383	Molex Inc.		33,247
	1,848	Power-One, Inc.*		4,232
	736	Thomas & Betts Corp.*		33,304
				741,097
		Electronic Components (0.4%)
	1,892	Amphenol Corporation (Class A)		75,566
	878	AVX Corp.		11,440
	728	Benchmark Electronics, Inc.*		12,922
	1,039	Cree, Inc.*		30,702
	675	CTS Corp.		7,155
	428	Hutchinson Technology Inc.*		6,750
	1,787	Jabil Circuit, Inc.		23,678
	1,536	Kemet Corp.*		8,002
	1,307	Kopin Corp.*		4,405
	1,489	MEMC Electronic Materials, Inc.*		106,404
	696	Methode Electronics, Inc.		8,436
	682	OmniVision Technologies, Inc.*		9,657
	386	Park Electrochemical Corp.		9,140
	572	Plexus Corp.*		12,921
	1,817	SanDisk Corp.*		46,243
	7,066	Sanmina-SCI Corp.*		11,094
	126	Superconductor Technologies Inc.*		698
	607	Technitrol, Inc.		13,755
	733	TTM Technologies, Inc.*		7,455
	4,736	Tyco Electronics Ltd. (Bermuda)		160,124
	307	Vicor Corp.		3,779
	2,215	Vishay Intertechnology, Inc.*		23,235
				593,561

See Notes to Financial Statements
14

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Electronic Distributors (0.1%)
	519	Anixter International, Inc.	$	36,361
	1,216	Arrow Electronics, Inc.*		41,612
	1,471	Avnet, Inc.*		52,382
	1,646	Ingram Micro Inc. (Class A)*		29,266
	2,178	Safeguard Scientifics, Inc.*		4,182
	478	ScanSource, Inc.*		15,133
	800	Tech Data Corp.*		27,504
				206,440
		Electronic Equipment/ Instruments (0.4%)
	4,118	Agilent Technologies, Inc.*		139,641
	640	Checkpoint Systems, Inc.*		15,206
	588	Coherent, Inc.*		15,288
	760	Diebold, Inc.		19,669
	243	Dionex Corp.*		17,034
	267	DTS, Inc.*		5,823
	682	Intermec Inc.		13,585
	400	Itron, Inc.*		32,960
	2,304	JDS Uniphase Corp.*		23,985
	413	Mercury Computer Systems, Inc.*		3,428
	707	National Instruments Corp.		18,990
	605	Newport Corp.*		6,353
	1,537	Rockwell Automation, Inc.		87,640
	525	SeaChange International, Inc.*		3,686
	377	Varian, Inc.*		20,452
	8,598	Xerox Corp.*		132,409
				556,149
		Electronic Production Equipment (0.5%)
	630	Advanced Energy Industries, Inc.*		6,810
	1,452	Amkor Technology, Inc.*		11,093
	14,853	Applied Materials, Inc.		266,166
	716	Asyst Technologies, Inc.*		2,112
	560	ATMI, Inc.*		14,728
	1,781	Axcelis Technologies, Inc.*		7,106
	1,240	Brooks Automation Inc.*		15,240

NUMBER OF SHARES			VALUE
	2,861	Cadence Design Systems, Inc.*	$	29,039
	685	Cognex Corp.		10,480
	414	Cohu, Inc.		6,189
	1,182	Credence Systems Corp.*		1,548
	499	Cymer, Inc.*		13,478
	544	Electro Scientific Industries, Inc.*		8,943
	1,637	Entegris Inc.*		12,605
	427	FEI Co.*		9,676
	477	FormFactor Inc.*		11,553
	1,874	KLA-Tencor Corp.		78,296
	927	Kulicke & Soffa Industries, Inc.*		4,996
	1,343	Lam Research Corp.*		51,558
	917	LTX Corp.*		2,476
	828	Mattson Technology, Inc.*		4,720
	1,407	Mentor Graphics Corp.*		11,608
	588	MKS Instruments, Inc.*		10,937
	1,316	Novellus Systems, Inc.*		31,268
	316	Photon Dynamics, Inc.*		2,819
	525	Photronics, Inc.*		6,400
	1,704	Synopsys, Inc.*		37,522
	2,345	Teradyne, Inc.*		25,725
	686	Tessera Technologies, Inc.*		26,871
	446	Ultratech Stepper, Inc.*		4,237
	1,093	Varian Semiconductor Equipment Associates, Inc.*		35,205
	319	Veeco Instruments, Inc.*		4,517
				765,921
		Electronics/Appliance Stores (0.2%)
	3,718	Best Buy Co., Inc.		181,476
	683	Blockbuster, Inc. (Class A)		2,131
	1,980	Circuit City Stores - Circuit City Group		10,771
	658	Movie Gallery, Inc.		14
	1,723	RadioShack Corp.		29,894
				224,286

See Notes to Financial Statements
15

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Electronics/Appliances (0.1%)
	2,834	Eastman Kodak Co.	$	56,482
	620	Harman International Industries, Inc.		28,873
	551	Helen of Troy Ltd.*		9,367
	758	Whirlpool Corp.		64,513
				159,235
		Engineering & Construction (0.4%)
	486	Dycom Industries, Inc.*		11,479
	968	EMCOR Group, Inc.*		21,228
	788	Fluor Corp.		95,876
	1,200	Foster Wheeler Ltd. (Bermuda)		82,164
	531	Granite Construction Inc.		20,215
	516	Insituform Technologies, Inc. (Class A)*		6,553
	1,143	Jacobs Engineering Group, Inc.*		87,371
	1,991	McDermott International, Inc. (Panama)*		93,935
	1,439	Quanta Services, Inc.*		31,543
	987	Shaw Group Inc. (The)*		55,766
	636	URS Corp.*		27,920
				534,050
		Environmental Services (0.2%)
	2,852	Allied Waste Industries, Inc.*		28,092
	1,425	Newpark Resources, Inc.*		6,940
	1,844	Republic Services, Inc.		55,320
	993	Tetra Tech, Inc.*		19,552
	947	Waste Connections, Inc.*		27,614
	5,165	Waste Management, Inc.		167,553
				305,071
		Finance/Rental/Leasing (0.9%)
	144	Amerco*		10,005
	1,420	AmeriCredit Corp.*		18,900
	1,080	Avis Budget Group, Inc.		14,418
	4,393	Capital One Financial Corp.		240,780
	1,323	CapitalSource, Inc.		21,710
	504	Cash American International, Inc.		16,385
	756	Centerline Holding Co.		4,302

NUMBER OF SHARES			VALUE
	1,938	CIT Group, Inc.	$	54,186
	299	CompuCredit Corp.*		4,395
	5,689	Countrywide Financial Corp.		39,595
	6,070	Discover Financial Services		106,225
	281	Dollar Thrifty Automotive Group, Inc.*		6,859
	78	Doral Financial Corp.*		1,544
	8,832	Fannie Mae		299,052
	543	Financial Federal Corp.		13,054
	6,465	Freddie Mac		196,471
	909	Fremont General Corp.		3,000
	601	GATX Corp.		22,598
	124	Great Lakes Bancorp Inc.*		1,649
	751	IndyMac Bancorp, Inc.		6,136
	456	Mastercard Inc. Class A*		94,392
	477	Ocwen Financial Corp.*		2,976
	700	PHH Corp.		13,153
	792	Rent-A-Center, Inc.*		13,543
	671	Ryder System, Inc.		34,932
	3,866	SLM Corp.		84,086
	71	Student Loan Corp. (The)		8,408
	897	United Rentals, Inc.*		16,370
				1,349,124
		Financial Conglomerates (2.7%)
	10,076	American Express Co.		496,948
	45,365	Citigroup, Inc.		1,280,200
	1,678	Conseco Inc.*		20,203
	31,707	JPMorgan Chase & Co.		1,507,668
	1,733	Leucadia National Corp.*		76,547
	468	National Financial Partners Corp.		16,895
	2,603	Principal Financial Group, Inc.		155,165
	4,509	Prudential Financial, Inc.		380,424
	25	Wesco Financial Corp.		9,900
				3,943,950
		Financial Publishing/ Services (0.3%)
	365	Advent Software, Inc.*		16,483
	662	Dun & Bradstreet Corp.*		60,891
	1,343	Equifax, Inc.		49,812
	553	FactSet Research Systems Inc.		30,929

See Notes to Financial Statements
16

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	632	Interactive Data Corp.*	$	18,296
	3,348	McGraw-Hill Companies, Inc. (The)		143,160
	2,290	Moody's Corp.		80,127
	1,578	SEI Investments Co.		43,711
	21	Value Line, Inc.		822
				444,231
		Food Distributors (0.1%)
	583	Performance Food Group Co.*		18,440
	5,806	SYSCO Corp.		168,664
	539	United Natural Foods, Inc.*		12,925
				200,029
		Food Retail (0.3%)
	721	Casey's General Stores, Inc.		18,746
	6,350	Kroger Co. (The)		161,608
	624	Ruddick Corp.		21,266
	4,178	Safeway Inc.		129,476
	2,000	SUPERVALU, Inc.		60,120
	137	Weis Markets, Inc.		5,122
	1,330	Whole Foods Market, Inc.		52,455
				448,793
		Food: Major Diversified (0.8%)
	2,365	Campbell Soup Co.		74,758
	4,856	ConAgra Foods Inc.		104,550
	2,659	Del Monte Foods Co.*		23,851
	3,326	General Mills, Inc.		181,633
	2,983	Heinz (H.J.) Co.		126,956
	2,327	Kellogg Co.		111,463
	15,539	Kraft Foods Inc. (Class A)		454,671
	7,115	Sara Lee Corp.		100,037
	525	TreeHouse Foods, Inc.*		10,957
				1,188,876
		Food: Meat/Fish/Dairy (0.1%)
	1,336	Dean Foods Co.		37,408
	830	Hormel Foods Corp.		32,154
	537	Pilgrim's Pride Corp. (Class B)		13,119
	379	Sanderson Farms, Inc.		12,738
	1,111	Smithfield Foods, Inc.*		30,941
	2,527	Tyson Foods, Inc. (Class A)		36,010
				162,370

NUMBER OF SHARES			VALUE
		Food: Specialty/Candy (0.3%)
	340	American Italian Pasta Co. (Class A)	$	2,312
	729	Chiquita Brands International, Inc.		13,618
	104	Farmer Brothers Co.		2,449
	1,160	Flowers Foods Inc.		27,840
	448	Fresh Del Monte Produce, Inc.		14,354
	490	Hain Celestial Group, Inc.*		13,230
	1,561	Hershey Foods Co. (The)		56,508
	454	Lancaster Colony Corp.		15,826
	567	Lance, Inc.		10,393
	1,236	McCormick & Co., Inc. (Non-Voting)		41,678
	880	NBTY, Inc.*		21,314
	355	Ralcorp Holdings, Inc.*		19,315
	683	Smucker (J.M.) Co.		31,917
	455	Tootsie Roll Industries, Inc.		11,366
	2,186	Wrigley (Wm.) Jr. Co.		125,542
				407,662
		Forest Products (0.1%)
	1,351	Louisiana-Pacific Corp.		20,630
	346	Universal Forest Products, Inc.		12,525
	2,310	Weyerhaeuser Co.		156,433
				189,588
		Gas Distributors (0.7%)
	923	AGL Resources, Inc.		34,935
	1,109	Atmos Energy Corp.		31,850
	4,342	Dynegy, Inc. (Class A)*		30,481
	770	Energen Corp.		48,433
	500	Energy Transfer Partners LP		25,075
	1,183	Equitable Resources, Inc.		65,952
	372	Laclede Group, Inc. (The)		12,492
	1,852	MDU Resources Group, Inc.		48,004
	871	National Fuel Gas Co.		37,549
	336	New Jersey Resources Corp.		15,755
	632	Nicor Inc.		25,912
	2,746	NiSource, Inc.		52,146
	502	Northwest Natural Gas Co.		23,765
	1,061	ONEOK, Inc.		49,867

See Notes to Financial Statements
17

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	983	Piedmont Natural Gas Co., Inc.	$	24,644
	1,678	Questar Corp.		85,427
	2,159	Sempra Energy		120,688
	490	South Jersey Industries, Inc.		17,165
	1,325	Southern Union Co.*		36,014
	642	Southwest Gas Corp.		18,329
	5,637	Spectra Energy Corp.		128,749
	1,303	UGI Corp.		34,686
	1,063	Vectren Corp.		29,179
	698	WGL Holdings Inc.		22,504
				1,019,601
		Home Building (0.2%)
	573	Beazer Homes USA Inc.		4,996
	219	Brookfield Homes Corp.		3,712
	132	Cavco Industries, Inc.*		4,339
	1,145	Centex Corp.		31,808
	1,069	Champion Enterprises, Inc.*		10,444
	2,777	D.R. Horton, Inc.		47,903
	502	Hovnanian Enterprises, Inc.*		4,965
	881	KB Home		24,228
	1,368	Lennar Corp. (Class A)		28,181
	291	Levitt Corp. (Class A)		681
	472	M.D.C. Holdings, Inc.		21,839
	188	M/I Homes, Inc.		2,805
	360	Meritage Homes Corp.*		5,778
	70	NVR, Inc.*		44,205
	446	Palm Harbor Homes, Inc.*		3,340
	2,197	Pulte Homes, Inc.		35,899
	694	Ryland Group, Inc. (The)		23,395
	924	Standard Pacific Corp.		3,520
	1,374	Toll Brothers, Inc.*		31,987
	261	TOUSA, Inc.		37
	632	WCI Communities, Inc.*		3,824
				337,886
		Home Furnishings (0.1%)
	383	Ethan Allen Interiors, Inc.		11,854
	766	Furniture Brands International, Inc.		7,315
	698	Jarden Corp.*		17,478
	814	La-Z-Boy, Inc.		6,203

NUMBER OF SHARES			VALUE
	2,038	Leggett & Platt, Inc.	$	38,763
	265	Libbey, Inc.		4,102
	587	Mohawk Industries, Inc.*		46,913
	2,801	Newell Rubbermaid, Inc.		67,560
	919	Select Comfort Corp.*		7,223
				207,411
		Home Improvement Chains (0.7%)
	1,419	Fastenal Co.		57,342
	18,863	Home Depot, Inc. (The)		578,528
	14,019	Lowe's Companies, Inc.		370,662
	1,062	Sherwin-Williams Co.		60,757
				1,067,289
		Hospital/Nursing Management (0.1%)
	475	Amsurg Corp.*		12,236
	1,019	Community Health Systems Inc.*		32,710
	2,532	Health Management Associates, Inc. (Class A)		13,647
	438	Kindred Healthcare, Inc.*		12,063
	701	LifePoint Hospitals, Inc.*		18,927
	600	Psychiatric Solutions, Inc.		18,102
	682	Sunrise Senior Living, Inc.*		19,580
	5,324	Tenet Healthcare Corp.*		23,585
	602	Universal Health Services, Inc. (Class B)		28,372
				179,222
		Hotels/Resorts/ Cruiselines (0.4%)
	4,001	Carnival Corp (Panama) (Units)†		178,004
	511	Choice Hotels International, Inc.		17,067
	567	Gaylord Entertainment Co.*		16,551
	576	Marcus Corp. (The)		10,201
	3,382	Marriott International, Inc. (Class A)		121,617
	1,975	Royal Caribbean Cruises Ltd. (Liberia)		79,553

See Notes to Financial Statements
18

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	2,028	Starwood Hotels & Resorts Worldwide, Inc.	$	91,767
	542	Vail Resorts, Inc.*		25,658
	1,941	Wyndham Worldwide Corp.*		45,730
				586,148
		Household/Personal Care (2.1%)
	951	Alberto-Culver Co.		25,477
	4,216	Avon Products, Inc.		147,644
	833	Church & Dwight Co., Inc.		44,332
	1,428	Clorox Co. (The)		87,565
	4,727	Colgate-Palmolive Co.		363,979
	1,253	Estee Lauder Companies, Inc. (The) (Class A)		52,877
	948	International Flavors & Fragrances, Inc.		40,394
	4,209	Kimberly-Clark Corp.		276,321
	861	Nu Skin Enterprises, Inc. (Class A)		14,146
	30,017	Procter & Gamble Co. (The)		1,979,621
	634	Spectrum Brands, Inc.*		2,973
				3,035,329
		Industrial Conglomerates (4.0%)
	6,318	3M Co.		503,229
	2,225	Danaher Corp.		165,651
	94,889	General Electric Co.**		3,360,019
	6,911	Honeywell International, Inc.		408,233
	3,093	Ingersoll-Rand Co. Ltd. (Class A) (Bermuda)		122,235
	1,777	ITT Corp.		105,607
	641	SPX Corp.		64,485
	2,022	Textron, Inc.		113,333
	4,736	Tyco International Ltd. (Bermuda)		186,409
	8,510	United Technologies Corp.		624,719
	489	Walter Industries, Inc.		20,499
				5,674,419
		Industrial Machinery (0.5%)
	716	Actuant Corp. (Class A)		19,568
	652	Flowserve Corp.*		53,542
	719	FuelCell Energy, Inc.*		6,047
	767	Graco Inc.		26,247

NUMBER OF SHARES			VALUE
	952	IDEX Corp.	$	29,731
	4,562	Illinois Tool Works Inc.		229,925
	1,068	Kennametal Inc.		32,713
	518	Lincoln Electric Holdings, Inc.		31,935
	758	Mueller Water Products, Inc. (Class B Shares)		6,503
	467	Nordson Corp.		23,294
	1,657	Parker Hannifin Corp.		112,030
	489	Regal-Beloit Corp.		18,543
	931	Roper Industries, Inc.		52,061
	377	Tecumseh Products Co. (Class A)		8,792
	303	Watts Water Technologies, Inc. (Class A)		8,996
	462	Woodward Governor Co.		29,004
				688,931
		Industrial Specialties (0.3%)
	669	Buckeye Technologies Inc.*		8,797
	407	Cabot Microelectronics Corp.*		14,074
	995	Donaldson Co., Inc.		41,691
	1,708	Ecolab Inc.		82,411
	963	Evergreen Energy Inc.		2,215
	689	Ferro Corp.		12,182
	870	Fuller (H.B.) Co.		18,061
	1,256	GrafTech International Ltd..*		18,903
	543	Headwaters Inc.*		6,120
	331	Minerals Technologies, Inc.		18,006
	1,546	PPG Industries, Inc.		102,175
	315	Rogers Corp.*		9,831
	1,514	RPM International, Inc.		32,763
	651	Spartech Corp.		9,589
	611	Symyx Technologies, Inc.*		4,008
	1,300	Valspar Corp. (The)		26,039
	325	WD-40 Co.		10,972
	325	Zep Inc.		5,369
				423,206
		Information Technology Services (1.5%)
	5,309	Accenture Ltd. (Class A) (Bermuda)		183,798
	2,587	BearingPoint, Inc.*		5,071

See Notes to Financial Statements
19

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	288	Black Box Corp.	$	9,579
	413	CACI International Inc. (Class A)*		18,003
	1,186	CIBER, Inc.*		5,716
	1,813	Citrix Systems, Inc.*		62,766
	2,686	Cognizant Technology Solutions Corp. (Class A)*		74,939
	4,883	Electronic Data Systems Corp.		98,148
	807	Epicor Software Corp.*		8,917
	1,044	Henry (Jack) & Associates, Inc.		25,662
	14,148	International Business Machines Corp.		1,518,646
	557	JDA Software Group, Inc.*		9,909
	8,056	Level 3 Communications, Inc.*		27,713
	320	ManTech International Corp. (Class A)*		13,088
	543	MICROS Systems, Inc.*		33,438
	944	Perot Systems Corp. (Class A)*		11,460
	639	QAD, Inc.		5,668
	1,268	Sapient Corp.*		8,889
	275	SRA International, Inc. (Class A)*		7,543
	120	Syntel, Inc.		3,556
	1,707	Teradata Corp.*		40,661
	4,627	Unisys Corp.*		19,248
	282	Verint Systems Inc.*		5,217
	1,408	Wind River Systems, Inc.*		11,813
				2,209,448
		Insurance Brokers/ Services (0.3%)
	2,653	AON Corp.		115,458
	1,351	Brown & Brown, Inc.		30,411
	1,040	ChoicePoint, Inc.*		34,622
	898	Crawford & Co. (Class B)		4,490
	1,278	Gallagher (Arthur J.) & Co.		32,474
	521	Hilb, Rogal & Hobbs Co.		18,850
	5,225	Marsh & McLennan Companies, Inc.		144,210
				380,515

NUMBER OF SHARES			VALUE
		Integrated Oil (5.8%)
	20,561	Chevron Corp.	$	1,737,405
	942	Cimarex Energy Co.*		38,443
	14,063	ConocoPhillips		1,129,540
	55,723	Exxon Mobil Corp.		4,814,467
	2,340	Hess Corp.		212,542
	6,667	Marathon Oil Corp.		312,349
	1,657	Murphy Oil Corp.		121,856
				8,366,602
		Internet Retail (0.3%)
	2,819	Amazon.com, Inc.*		219,036
	1,314	Drugstore.com, Inc.*		3,719
	1,349	Gamestop Corp (Class A)*		69,784
	2,486	IAC/InterActiveCorp.*		64,487
	436	Netflix Inc.*		10,965
				367,991
		Internet Software/Services (1.2%)
	1,482	Akamai Technologies, Inc.*		44,756
	962	Ariba, Inc.*		9,591
	4,054	BEA Systems, Inc.*		75,769
	1,677	Borland Software Corp.*		4,193
	857	CMGI Inc.*		11,055
	1,798	CNET Networks, Inc.*		14,186
	600	Digital River, Inc.*		22,500
	1,966	Earthlink, Inc.*		13,388
	1,807	Google Inc. (Class A)*		1,019,690
	282	GSI Commerce, Inc.*		4,591
	393	Internap Network Services Corp.*		3,466
	603	J2 Global Communications, Inc.*		13,212
	847	Lionbridge Technologies, Inc.*		2,778
	141	MicroStrategy Inc. (Class A)*		10,282
	1,087	NIC Inc.*		7,772
	1,181	Openwave Systems, Inc.*		2,445
	620	Packeteer, Inc.*		3,075
	698	Progress Software Corp.*		20,605
	1,661	RealNetworks, Inc.*		9,684
	1,319	S1 Corp.*		7,466
	627	Secure Computing Corp.*		5,612

See Notes to Financial Statements
20

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	1,271	SonicWALL, Inc.*	$	11,159
	670	Supportsoft, Inc.*		2,439
	1,144	United Online, Inc.*		12,778
	2,480	VeriSign, Inc.*		84,122
	685	Vignette Corporation*		9,638
	658	Websense, Inc.*		13,489
	12,143	Yahoo! Inc.*		232,903
				1,672,644
		Investment Banks/ Brokers (2.1%)
	2,039	Ameriprise Financial, Inc.		112,777
	1,066	Bear Stearns Companies, Inc. (The)		96,260
	9,902	Charles Schwab Corp. (The)		220,815
	372	CME Group Inc.		230,231
	4,153	E*TRADE Group, Inc.*		20,640
	590	eSPEED, Inc (Class A)*		6,903
	3,366	Goldman Sachs Group, Inc. (The)		675,792
	589	Investment Technology Group, Inc.*		27,665
	1,261	Jefferies Group, Inc.		25,497
	1,363	Knight Capital Group, Inc.*		22,830
	1,305	LaBranche & Co., Inc.*		7,452
	5,062	Lehman Brothers Holdings Inc.		324,828
	8,447	Merrill Lynch & Co., Inc.		476,411
	12,534	Morgan Stanley		619,556
	818	Nasdaq Stock Market Inc.*		37,849
	488	NYSE Euronext		38,381
	1,160	Raymond James Financial, Inc.		32,584
	3,184	TD AmeriTrade Holding Corp.		59,732
	752	Tradestation Group Inc.*		8,197
				3,044,400
		Investment Managers (0.7%)
	374	Affiliated Managers Group, Inc.*		36,768
	362	AllianceBernstein Holding LP		24,033
	144	BlackRock, Inc. (Class A)		31,838
	1,439	Eaton Vance Corp. (Non-Voting)		53,632
	1,104	Federated Investors, Inc. (Class B)		46,997

NUMBER OF SHARES			VALUE
	1,663	Franklin Resources, Inc.	$	173,334
	2,132	Janus Capital Group, Inc.		57,585
	1,124	Legg Mason, Inc.		80,928
	2,444	Price (T.) Rowe Group, Inc.		123,642
	3,760	State Street Corp.		308,771
	1,134	Waddell & Reed Financial, Inc. (Class A)		37,626
				975,154
		Investment Trusts/ Mutual Funds (0.0%)
	244	BP Prudhoe Bay Royalty Trust		19,313
	28	Cross Timbers Royalty Trust		1,232
				20,545
		Life/Health Insurance (0.8%)
	4,706	AFLAC, Inc.		288,619
	181	American National Insurance Co.		22,699
	729	Citizens, Inc.*		4,403
	513	Delphi Financial Group, Inc. (Class A)		16,098
	222	FBL Financial Group, Inc. (Class A)		7,315
	4,241	Genworth Financial Inc. (Class A)		103,226
	67	Kansas City Life Insurance Co.		3,151
	2,611	Lincoln National Corp.		141,934
	4,137	MetLife, Inc.		243,959
	65	National Western Life Insurance Co. (Class A)		12,206
	1,429	Phoenix Companies Ltd.		15,476
	261	Presidential Life Corp.		4,787
	789	Protective Life Corp.		31,355
	351	Reinsurance Group of America, Inc.		20,347
	682	StanCorp Financial Group, Inc.		33,561
	949	Torchmark Corp.		57,946
	514	Universal American Financial Corp.*		10,758
	2,953	UnumProvident Corp.		66,797
				1,084,637

See Notes to Financial Statements
21

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Major Banks (4.1%)
	41,643	Bank of America Corp.	$	1,846,867
	10,335	Bank of New York Mellon Corp.		481,921
	5,149	BB&T Corp.		186,806
	1,597	Comerica, Inc.		69,661
	3,841	Huntington Bancshares, Inc.		51,661
	3,810	KeyCorp		99,631
	6,647	National City Corp.		118,250
	3,250	PNC Financial Services Group, Inc.		213,265
	2,542	Popular, Inc.		34,368
	6,728	Regions Financial Corp.		169,815
	3,378	SunTrust Banks, Inc.		232,913
	16,243	U.S. Bancorp		551,450
	679	UnionBanCal Corp.		33,312
	18,349	Wachovia Corp.		714,327
	31,113	Wells Fargo & Co.		1,058,153
				5,862,400
		Major Telecommunications (2.5%)
	57,981	AT&T Inc.		2,231,689
	3,739	Cincinnati Bell Inc.*		14,507
	1,422	Embarq Corp.		64,417
	1,276	Primus Telecommunications Group, Inc.*		472
	27,076	Sprint Nextel Corp.		285,110
	26,725	Verizon Communications, Inc.		1,037,999
				3,634,194
		Managed Health Care (1.3%)
	5,354	Aetna, Inc.		285,154
	748	AMERIGROUP Corp.*		28,065
	716	Centene Corp.*		17,141
	3,364	CIGNA Corp.		165,374
	1,563	Coventry Health Care, Inc.*		88,435
	1,131	Health Net Inc.*		52,580
	1,546	Humana, Inc.*		124,144
	621	Sierra Health Services, Inc.*		26,691
	12,292	UnitedHealth Group Inc.		624,925
	200	Wellcare Health Plans Inc.*		9,398
	5,816	WellPoint Inc.*		454,811
				1,876,718

NUMBER OF SHARES			VALUE
		Marine Shipping (0.1%)
	603	Alexander & Baldwin, Inc.	$	27,521
	334	General Maritime Corp.		8,297
	642	Kirby Corp.*		29,519
	391	Overseas Shipholding Group, Inc.		25,501
	600	Teekay Shipping Corp.		28,380
	663	Tidewater, Inc.		35,112
				154,330
		Media Conglomerates (1.4%)
	6,410	CBS Corp. (Class B)		161,468
	2,866	Discovery Holding Company (Class A)*		66,549
	18,783	Disney (Walt) Co. (The)		562,175
	21,526	News Corp. (Class A)		406,841
	39,077	Time Warner, Inc.		615,072
	5,981	Viacom Inc. (Class B)*		231,824
				2,043,929
		Medical Distributors (0.4%)
	1,962	AmerisourceBergen Corp.		91,527
	3,910	Cardinal Health, Inc.		226,663
	914	Henry Schein, Inc.*		53,131
	2,755	McKesson Corp.		172,986
	649	Owens & Minor, Inc.		26,817
	1,252	Patterson Companies, Inc.*		40,114
	750	PSS World Medical, Inc.*		12,968
				624,206
		Medical Specialties (2.4%)
	783	Advanced Medical Optics, Inc.*		16,466
	1,178	Align Technology, Inc.*		13,877
	977	American Medical System Holdings, Inc.*		13,961
	181	Analogic Corp.		10,690
	1,868	Applera Corp. - Applied Biosystems Group		58,898
	1,150	Applera Corp. - Celera Genomics Group*		17,618
	403	ArthroCare Corp.*		16,132
	961	Bard (C.R.), Inc.		92,804
	5,833	Baxter International, Inc.		354,296

See Notes to Financial Statements
22

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	682	Beckman Coulter, Inc.	$	45,353
	2,192	Becton, Dickinson & Co.		189,674
	31	Bio-Rad Laboratories, Inc. (Class A)*		2,952
	11,863	Boston Scientific Corp.*		143,898
	639	CONMED Corp.*		15,528
	570	Cooper Companies, Inc. (The)		22,447
	4,736	Covidien Ltd.		211,368
	435	Cyberonics Inc.*		5,220
	288	Datascope Corp.		9,337
	1,561	DENTSPLY International, Inc.		64,485
	702	Edwards Lifesciences Corp.*		32,482
	470	Haemonetics Corp.*		28,125
	690	Hillenbrand Industries, Inc.		35,687
	1,278	Hologic, Inc.*		82,252
	1,504	Hospira, Inc.*		61,829
	748	IDEXX Laboratories, Inc.*		42,165
	773	Immucor, Inc.*		22,293
	296	Integra LifeSciences Holding, Inc.*		12,314
	395	Intuitive Surgical, Inc.*		100,330
	494	Invacare Corp.		12,024
	699	Kinetic Concepts, Inc.*		34,796
	11,038	Medtronic, Inc.		514,040
	510	Mentor Corp.		17,656
	499	Merit Medical Systems, Inc.*		8,024
	1,250	Nektar Therapeutics*		8,912
	702	OraSure Technologies, Inc.*		5,553
	1,245	Pall Corp.		45,928
	355	Penwest Pharmaceuticals Co.*		1,807
	1,615	PerkinElmer, Inc.		40,197
	908	ResMed, Inc.*		42,295
	890	Respironics, Inc.*		58,304
	3,432	St. Jude Medical, Inc.*		139,030
	936	STERIS Corp.		23,194
	2,595	Stryker Corp.		173,787
	378	SurModics, Inc.*		16,503
	3,932	Thermo Fisher Scientific, Inc.*		202,459
	691	Thoratec Corp.*		11,056
	1,325	Varian Medical Systems, Inc.*		68,887
	517	Ventana Medical Systems, Inc.*		46,039

NUMBER OF SHARES			VALUE
	99	Vital Signs, Inc.	$	4,801
	984	Waters Corp.*		56,531
	566	West Pharmaceutical Services, Inc.		22,131
	422	Wright Medical Group, Inc.*		11,521
	2,283	Zimmer Holdings, Inc.*		178,690
				3,466,646
		Medical/Nursing Services (0.2%)
	830	Apria Healthcare Group, Inc.*		17,613
	1,033	DaVita, Inc.*		55,111
	489	Healthways Inc.*		27,531
	1,215	Hooper Holmes, Inc.		1,750
	1,005	Lincare Holdings, Inc.*		33,577
	653	Pediatrix Medical Group, Inc.*		44,463
	1,018	VCA Antech, Inc.*		39,356
				219,401
		Metal Fabrications (0.1%)
	1,444	Commercial Metals Co.		40,937
	500	General Cable Corp.*		29,005
	905	Harsco Corp.		51,513
	504	Kaydon Corp.		22,020
	444	Mueller Industries, Inc.		12,432
	1,053	Timken Co. (The)		31,832
				187,739
		Miscellaneous (0.0%)
	4,389	TeleCorp PCS, Inc. (Escrow) (a)		—
		Miscellaneous Commercial Services (0.3%)
	721	ABM Industries Inc.		14,939
	496	Bright Horizons Family Solutions, Inc.*		21,115
	570	Brink's Co. (The)		34,559
	808	CBIZ, Inc.*		7,603
	1,372	Cintas Corp.		45,029
	909	Copart, Inc.*		37,160
	495	Corporate Executive Board Co. (The)		28,487

See Notes to Financial Statements
23

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	1,648	Corrections Corporation of America*	$	43,738
	312	Costar Group, Inc.*		13,210
	673	Diamond Management & Technology Consultants, Inc.		3,129
	686	FTI Consulting Inc.*		37,943
	366	G & K Services, Inc. (Class A)		14,629
	1,135	IKON Office Solutions, Inc.		9,284
	1,766	Iron Mountain Inc.*		60,733
	1,044	Kratos Defense & Security Solutions, Inc.*		2,318
	697	L-1 Identity Solutions, Inc.		9,486
	304	MAXIMUS, Inc.		10,725
	799	Navigant Consulting, Inc.*		9,460
	278	StarTek, Inc.		2,405
	634	TeleTech Holdings, Inc.*		12,509
	428	Viad Corp.		11,449
	489	Voyager Learning Co.		3,457
				433,367
		Miscellaneous Manufacturing (0.2%)
	1,244	Ametek, Inc.		54,786
	604	Brady (W.H.) Co. (Class A)		18,343
	840	Carlisle Companies, Inc.		27,972
	686	Crane Co.		28,037
	1,911	Dover Corp.		77,128
	478	Mine Safety Appliances Co.		21,333
	1,210	Pentair, Inc.		38,430
	382	Smith (A.O.) Corp.		13,370
	465	Teleflex Inc.		27,491
	693	Tredegar Corp.		9,605
	253	Valmont Industries, Inc.		21,176
				337,671
		Motor Vehicles (0.2%)
	17,812	Ford Motor Co.*		118,272
	3,954	General Motors Corp.		111,938
	2,555	Harley-Davidson, Inc.		103,682
	567	Monaco Coach Corp.		5,766
				339,658

NUMBER OF SHARES			VALUE
		Movies/Entertainment (0.1%)
	715	Cedar Fair, L.P.	$	15,716
	241	Crown Media Holdings, Inc. (Class A)*		1,395
	497	International Speedway Corp. (Class A)		20,347
	1,351	Liberty Media Holdings (Ser A)*		145,395
	654	Regal Entertainment Group (Class A)*		12,125
	962	Six Flags, Inc.		1,876
	244	Speedway Motorsports, Inc.		7,405
	1,282	TiVo Inc.*		11,243
				215,502
		Multi-Line Insurance (1.3%)
	20,799	American International Group, Inc.		1,147,273
	1,262	Axis Capital Holdings Ltd.		50,530
	403	CNA Financial Corp.*		13,698
	2,797	Hartford Financial Services Group, Inc. (The)		225,914
	1,345	HCC Insurance Holdings, Inc.		37,472
	688	Horace Mann Educators Corp.		12,638
	4,101	Loews Corp.		191,476
	681	Nationwide Financial Services, Inc. (Class A)		30,080
	620	PartnerRe Ltd.		49,154
	1,137	SAFECO Corp.*		60,682
	653	Unitrin, Inc.		26,871
	393	Zenith National Insurance Corp.		15,649
				1,861,437
		Office Equipment/ Supplies (0.1%)
	1,003	Avery Dennison Corp.		51,975
	640	HNI Corp.		21,542
	588	Kimball International, Inc. (Class B)		7,279
	994	Miller (HERMAN), Inc.		31,589
	2,090	Pitney Bowes Inc.		76,703
	805	Steelcase, Inc. (Class A)		12,341
				201,429

See Notes to Financial Statements
24

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Oil & Gas Pipelines (0.5%)
	480	Buckeye Partners, L.P.	$	24,014
	6,535	El Paso Corp.		107,697
	244	Enbridge Energy Management, LLC*		12,886
	500	Enbridge Energy Partners LP		25,455
	2,509	Enterprise Products Partners L.P.		78,306
	834	Kinder Morgan Energy Partners, LP		47,755
	732	Kinder Morgan Management, LLC*		39,540
	752	Magellan Midstream Parners, L.P.		32,547
	462	NuStar L.P.		25,216
	674	Plains All American Pipeline, L.P.		33,558
	323	TC Pipelines, L.P.		11,467
	863	TEPPCO Partners, L.P.		33,493
	5,717	Williams Companies, Inc. (The)		182,772
				654,706
		Oil & Gas Production (2.0%)
	4,354	Anadarko Petroleum Corp.		255,101
	2,988	Apache Corp.		285,175
	594	Berry Petroleum Co. (Class A)		22,257
	1,279	Cabot Oil & Gas Corp.		49,485
	3,452	Chesapeake Energy Corp.		128,518
	625	Comstock Resources Inc.*		19,813
	2,624	Denbury Resources Inc.*		66,387
	3,826	Devon Energy Corp.		325,133
	647	Encore Acquisition Co.*		21,092
	479	Energy Partners, Ltd.*		5,810
	2,233	EOG Resources, Inc.		195,388
	718	Forest Oil Corp.*		32,468
	621	Mariner Energy Inc.		15,562
	1,273	Newfield Exploration Co.*		63,497
	1,717	Noble Energy, Inc.		124,620
	7,783	Occidental Petroleum Corp.		528,232
	528	Penn Virginia Corp.		22,498
	1,278	Petrohawk Energy Corp.*		20,129

NUMBER OF SHARES			VALUE
	1,270	Pioneer Natural Resources Co.*	$	53,213
	956	Plains Exploration & Production Co.*		46,499
	760	Quicksilver Resources Inc.*		43,191
	1,343	Range Resources Corp.		70,131
	1,712	Southwestern Energy Co.*		95,718
	776	St. Mary Land & Exploration Co.		27,338
	413	Stone Energy Corp.*		16,933
	353	Swift Energy Co.*		15,232
	1,493	Ultra Petroleum Corp. (Canada)*		102,718
	565	Unit Corp.*		28,318
	500	Whiting Petroleum Corp.*		26,870
	4,348	XTO Energy, Inc.		225,835
				2,933,161
		Oil Refining/Marketing (0.4%)
	1,307	Frontier Oil Corp.		46,098
	610	Holly Corp.		29,536
	1,236	Sunoco, Inc.		76,879
	1,448	Tesoro Corp.		56,544
	5,645	Valero Energy Corp.		334,128
				543,185
		Oilfield Services/ Equipment (1.7%)
	3,199	Baker Hughes Inc.		207,711
	3,009	BJ Services Co.		65,446
	440	Bristow Group Inc.*		22,154
	2,302	Cameron International Corp.*		92,679
	316	CARBO Ceramics, Inc.		10,855
	691	Cheniere Energy Inc.*		20,806
	466	Compagnie General de Geophysique-Veritas (ADR) (France)		21,753
	654	Exterran Holdings Inc.*		42,667
	1,426	FMC Technologies, Inc.*		68,676
	1,213	Global Industries Ltd.*		21,422
	1,270	Grant Prideco, Inc.*		63,221
	9,361	Halliburton Co.		310,504

See Notes to Financial Statements
25

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	1,010	Helix Energy Solutions Group Inc.*	$	37,340
	3,232	National-Oilwell Varco, Inc.*		194,663
	648	Oceaneering International, Inc.*		37,312
	562	Oil States International Inc.*		19,704
	10,761	Schlumberger Ltd. (Netherlands Antilles)		812,025
	251	SEACOR Holdings, Inc.*		22,138
	1,998	Smith International, Inc.		108,312
	1,027	Superior Energy Services, Inc.*		41,172
	836	TETRA Technologies, Inc.*		13,083
	3,253	Weatherford International Ltd. (Bermuda)*		201,068
	389	W-H Energy Services Inc.*		18,925
				2,453,636
		Other Consumer Services (0.6%)
	1,393	Apollo Group, Inc. (Class A)*		111,078
	674	Autobytel Inc.*		1,624
	3,059	Block (H&R), Inc.		58,947
	1,161	Career Education Corp.*		25,240
	995	Corinthian Colleges, Inc.*		8,408
	936	DeVry, Inc.*		51,658
	9,637	eBay Inc.*		259,139
	2,758	Expedia, Inc.*		63,489
	678	First Marblehead Corp. (The)		11,146
	331	HealthExtras, Inc.*		9,152
	505	ITT Educational Services, Inc.*		46,132
	983	MoneyGram International, Inc.		5,249
	2,409	Move Inc.*		5,782
	200	Nutri/System Inc.*		5,724
	339	Pre-Paid Legal Services, Inc.*		18,831
	396	Priceline.com Inc.		42,974
	107	Renaissance Learning, Inc.		1,474
	931	Rollins, Inc.		16,562
	3,398	Service Corp. International		40,878
	708	Sotheby's Holdings, Inc. (Class A)*		21,998

NUMBER OF SHARES			VALUE
	1,895	Stewart Enterprises, Inc. (Class A)	$	13,492
	199	Strayer Education, Inc.		34,343
	79	TravelCenters of America LLC		1,165
	531	Weight Watchers International, Inc.		22,621
				877,106
		Other Consumer Specialties (0.1%)
	1,413	Fortune Brands, Inc.		98,797
	690	Fossil, Inc.*		23,446
	518	Matthews International Corp. (Class A)		25,315
	335	RC2 Corp.*		6,291
	449	Russ Berrie & Co., Inc.		6,479
				160,328
		Other Metals/Minerals (0.1%)
	1,993	Hecla Mining Co.*		18,535
	825	Olin Corp.		16,904
	698	Southern Copper Corp.		65,500
	102	Titanium Metals Corp.		2,217
	1,335	USEC Inc.		10,773
				113,929
		Packaged Software (3.3%)
	451	ACI Worldwide, Inc.		6,720
	5,628	Adobe Systems, Inc.*		196,586
	780	ANSYS, Inc.*		27,230
	2,181	Autodesk, Inc.*		89,748
	2,251	BMC Software, Inc.*		72,122
	4,377	CA Inc.		96,425
	4,482	Compuware Corp.*		38,097
	875	Fair Isaac Corp.		22,313
	1,372	Informatica Corp.*		26,493
	2,980	Intuit Inc.*		91,456
	746	Macrovision Corp.*		12,525
	695	Magma Design Automation, Inc.*		7,923
	611	Manhattan Associates, Inc.*		15,147
	1,759	McAfee Inc.*		59,208
	82,795	Microsoft Corp.		2,699,117

See Notes to Financial Statements
26

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	1,023	NAVTEQ Corp.*	$	75,600
	4,759	Novell, Inc.*		30,267
	1,777	Nuance Communications Inc.*		28,237
	37,377	Oracle Corp.*		768,097
	1,488	Parametric Technology Corp.*		24,478
	869	Quest Software, Inc.*		12,992
	1,869	Red Hat, Inc.*		34,913
	969	Salesforce.com Inc.*		50,659
	1,237	Sybase, Inc.*		34,908
	9,766	Symantec Corp.*		175,104
	2,646	TIBCO Software, Inc.*		19,686
	198	Ulticom, Inc.*		1,416
				4,717,467
		Personnel Services (0.2%)
	390	AMN Healthcare Services, Inc.*		6,092
	380	CDI Corp.		7,391
	485	Gentiva Health Services, Inc.*		8,963
	405	Kelly Services, Inc. (Class A)		6,974
	682	Korn/Ferry International*		10,973
	868	Manpower, Inc.		48,834
	1,216	Monster Worldwide Inc.*		33,866
	1,580	MPS Group, Inc.*		15,879
	584	Resources Connection Inc.*		12,223
	1,755	Robert Half International, Inc.		48,754
	1,113	Spherion Corp.*		7,435
	735	TrueBlue, Inc.*		10,488
				217,872
		Pharmaceuticals: Generic Drugs (0.1%)
	667	Alpharma Inc. (Class A)		13,687
	1,015	Barr Pharmaceuticals Inc.*		52,973
	2,311	Mylan Laboratories, Inc.		34,457
	706	Par Pharmaceutical Cos Inc.*		13,541
	1,262	Valeant Pharmaceuticals International		14,286
	1,312	Watson Pharmaceuticals, Inc.*		34,256
				163,200

NUMBER OF SHARES			VALUE
		Pharmaceuticals: Major (4.6%)
	14,040	Abbott Laboratories	$	790,452
	320	APP Pharmaceuticals Inc.*		3,363
	17,832	Bristol-Myers Squibb Co.		413,524
	27,134	Johnson & Johnson		1,716,497
	8,824	Lilly (Eli) & Co.		454,612
	20,105	Merck & Co., Inc.		930,459
	66,865	Pfizer, Inc.		1,563,972
	13,461	Schering-Plough Corp		263,432
	12,175	Wyeth		484,565
				6,620,876
		Pharmaceuticals: Other (0.4%)
	2,859	Allergan, Inc.		192,096
	717	Columbia Laboratories, Inc.*		1,592
	1,310	Endo Pharmaceuticals Holdings, Inc.*		34,243
	3,044	Forest Laboratories, Inc.*		121,060
	620	Inspire Pharmaceuticals, Inc.*		2,771
	330	Inverness Medical Innovations, Inc.*		14,867
	2,592	King Pharmaceuticals, Inc.*		27,190
	671	KV Pharmaceutical Co. (Class A)*		17,433
	730	Medicis Pharmaceutical Corp. (Class A)		14,826
	1,028	Perrigo Co.		31,704
	554	POZEN Inc.*		6,781
	631	Salix Pharmaceuticals, Ltd.*		4,385
	680	Sciele Pharma, Inc.*		16,266
	1,115	Sepracor, Inc.*		31,488
	314	United Therapeutics Corp.*		26,370
				543,072
		Precious Metals (0.4%)
	3,814	Coeur D'Alene Mines Corp.*		17,430
	2,909	Freeport-McMoRan Copper & Gold, Inc. (Class B)		258,988
	2,195	Goldcorp Inc. (Canada)		81,698
	3,885	Newmont Mining Corp.		211,111
	668	Stillwater Mining Co.*		6,961
	2,576	Yamana Gold Inc.		42,453
				618,641

See Notes to Financial Statements
27

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Property - Casualty Insurers (2.2%)
	3,037	ACE Ltd. (Cayman Islands)	$	177,179
	715	Alfa Corp.		15,651
	90	Alleghany Corp.*		34,020
	5,843	Allstate Corp. (The)		287,885
	809	American Financial Group, Inc.		22,434
	418	Arch Capital Group Ltd.*		29,452
	1,675	Berkley (W.R.) Corp.		50,686
	9	Berkshire Hathaway, Inc. (Class A)*		1,224,000
	3,855	Chubb Corp. (The)		199,650
	1,517	Cincinnati Financial Corp.		58,465
	826	Commerce Group, Inc. (The)		29,860
	798	Endurance Specialty Holdings Ltd. (Bermuda)		32,335
	456	Erie Indemnity Co. (Class A)		23,087
	652	Everest Re Group, Ltd. (ADR) (Bermuda)		66,302
	709	Hanover Insurance Group		32,295
	221	Harleysville Group, Inc.		7,879
	400	Infinity Property & Casualty Corp.		15,948
	378	Mercury General Corp.		18,178
	164	Midland Co. (The)		10,499
	1,139	Montpelier Re Holdings Ltd.		19,522
	226	Odyssey Re Holdings Corp.		8,583
	2,215	Old Republic International Corp.		33,070
	621	Philadelphia Consolidated Holding Corp.*		22,232
	700	Platinum Underwriters Holdings Ltd. (ADR) (Bermuda)		23,625
	612	PMA Capital Corp. (Class A)*		4,920
	6,772	Progressive Corp. (The)		125,688
	641	RenaissanceRe Holdings Ltd. (ADR) (Bermuda)		36,531
	364	RLI Corp.		20,530
	714	Selective Insurance Group, Inc.		17,072

NUMBER OF SHARES			VALUE
	200	State Auto Financial Corp.	$	5,586
	363	Transatlantic Holdings, Inc.		24,757
	6,319	Travelers Companies, Inc. (The)		303,944
	89	White Mountains Insurance Group, Ltd. (Bermuda)		43,165
	1,674	XL Capital Ltd. (Class A) (Cayman Islands)		75,330
				3,100,360
		Publishing: Books/ Magazines (0.1%)
	635	John Wiley & Sons, Inc. (Class A)		25,032
	570	Meredith Corp.		26,784
	430	Primedia Inc.*		3,509
	484	Scholastic Corp.*		16,587
				71,912
		Publishing: Newspapers (0.2%)
	1,355	Belo Corp. (Series A)		22,507
	2,196	Gannett Co., Inc.		81,252
	674	Journal Register Co.		1,011
	585	Lee Enterprises, Inc.		6,985
	757	McClatchy Co. (The) (Class A)		8,153
	381	Media General, Inc. (Class A)		7,247
	1,803	New York Times Co. (The) (Class A)		30,182
	926	Scripps (E.W.) Co. (Class A)		37,707
	703	Sun-Times Media Group Inc.		1,019
	85	Triple Crown Media, Inc.		414
	66	Washington Post Co. (The) (Class B)		49,104
				245,581
		Pulp & Paper (0.2%)
	388	Abitibibowater Inc		9,611
	616	Glatfelter (P.H.) Co.		8,907
	4,590	International Paper Co.		148,028
	1,869	MeadWestvaco Corp.		52,332
	271	Neenah Paper Inc.		7,344
	549	Potlatch Corp.		23,569

See Notes to Financial Statements
28

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	288	Schweitzer-Mauduit International, Inc.	$	6,866
	581	Wausau Paper Corp.		5,200
				261,857
		Railroads (0.7%)
	3,413	Burlington Northern Santa Fe Corp.		295,293
	4,093	CSX Corp.		198,429
	1,032	Kansas City Southern Industries, Inc.*		37,028
	3,860	Norfolk Southern Corp.		209,945
	2,419	Union Pacific Corp.		302,448
				1,043,143
		Real Estate Development (0.1%)
	1,523	Brookfield Properties Corp. (Canada)		30,932
	1,876	CB Richard Ellis Group, Inc. (Class A)*		36,413
	731	Forest City Enterprises, Inc. (Class A)		29,130
	365	Forestar Real Estate Group*		8,337
	420	Getty Realty Corp.		11,046
	368	Jones Lang LaSalle, Inc.		28,630
	775	St. Joe Co. (The)		30,086
	144	Tejon Ranch Co.*		5,446
	492	W.P. Carey & Co., LLC		16,718
				196,738
		Real Estate Investment Trusts (1.8%)
	532	Acadia Realty Trust		13,327
	33	Alexander's, Inc.*		11,553
	273	Alexandria Real Estate Equities, Inc.		26,817
	861	AMB Property Corp.		43,567
	1,530	American Financial Realty Trust		12,592
	1,607	Annaly Mortgage Management Inc.		31,690
	807	Anthracite Capital, Inc.		6,061

NUMBER OF SHARES			VALUE
	657	Anworth Mortgage Asset Corp.	$	5,828
	1,005	Apartment Investment & Management Co. (Class A)		39,838
	701	AvalonBay Communities, Inc.		65,859
	500	BioMed Realty Trust, Inc.		11,540
	1,036	Boston Properties, Inc.		95,229
	743	BPP Liquidating Trust (a)*		37
	1,119	Brandywine Realty Trust		21,093
	570	BRE Properties, Inc.		24,846
	607	Camden Property Trust		29,955
	808	CBL & Associates Properties, Inc.		21,477
	656	Colonial Properties Trust		16,164
	574	Corporate Office Properties Trust		18,385
	643	Cousins Properties, Inc.		17,104
	1,041	Developers Diversified Realty Corp.		42,837
	1,291	Duke Realty Corp.		30,519
	358	EastGroup Properties, Inc.		14,818
	393	Entertainment Properties Trust		19,454
	263	Equity Lifestyle Properties, Inc.		11,485
	649	Equity One, Inc.		15,323
	2,711	Equity Residential		101,419
	278	Essex Property Trust, Inc.		28,804
	567	Federal Realty Investment Trust		41,845
	703	FelCor Lodging Trust, Inc.		9,498
	620	First Industrial Realty Trust, Inc.		21,595
	2,226	Friedman, Billings, Ramsey Group, Inc.		7,190
	2,137	General Growth Properties, Inc.		78,043
	583	Glimcher Realty Trust		7,731
	1,431	HCP INC		43,517
	758	Health Care REIT, Inc.		32,511
	675	Healthcare Realty Trust, Inc.		17,435
	719	Highwoods Properties, Inc.		21,520
	419	Home Properties, Inc.		20,108
	747	Hospitality Properties Trust		25,361

See Notes to Financial Statements
29

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	4,575	Host Hotels & Resorts Inc.	$	76,586
	2,742	HRPT Properties Trust		21,799
	1,085	Impac Mortgage Holdings, Inc.		1,595
	672	Investors Real Estate Trust		6,586
	1,205	iStar Financial Inc.		32,149
	357	Kilroy Realty Corp.		17,504
	2,048	Kimco Realty Corp.		73,339
	600	KKR Financial Holdings LLC		9,744
	200	LaSalle Hotel Properties		5,482
	686	Lexington Corporate Properties Trust		10,256
	919	Liberty Property Trust		29,509
	634	Macerich Co. (The)		43,347
	687	Mack-Cali Realty Corp.		24,402
	597	Maguire Properties, Inc.		16,465
	381	Mid-America Apartment Communities, Inc.		17,454
	522	National Health Investors, Inc.		15,430
	845	National Retail Properties Inc.		19,198
	919	Nationwide Health Properties, Inc.		29,004
	617	New Century Financial Corp.		12
	124	NovaStar Financial, Inc.		149
	202	Parkway Properties, Inc.		7,256
	541	Pennsylvania Real Estate Investment Trust		14,418
	1,828	Plum Creek Timber Co., Inc.		76,319
	585	Post Properties, Inc.		24,728
	2,240	ProLogis		132,944
	264	PS Business Parks, Inc. (Class A)		13,266
	1,262	Public Storage, Inc.		98,752
	486	RAIT Investment Trust		4,500
	912	Rayonier Inc.		38,596
	1,151	Realty Income Corp.		28,061
	375	Redwood Trust, Inc.		15,566
	672	Regency Centers Corp.		41,281
	134	Saul Centers, Inc.		6,865
	913	Senior Housing Properties Trust		20,442

NUMBER OF SHARES			VALUE
	2,079	Simon Property Group, Inc.	$	185,821
	515	SL Green Realty Corp.		47,797
	261	Sovran Self Storage, Inc.		10,341
	359	Sun Communities, Inc.		6,939
	500	Sunstone Hotel Investors, Inc.		8,320
	404	Tanger Factory Outlet Centers, Inc.		15,178
	712	Taubman Centers, Inc.		35,707
	1,220	Thornburg Mortgage Asset Corp.		13,664
	1,431	UDR, Inc.		32,670
	1,141	Ventas, Inc.		50,432
	1,230	Vornado Realty Trust		111,192
	686	Washington Real Estate Investment Trust		21,582
	915	Weingarten Realty Investors		30,762
				2,647,384
		Recreational Products (0.4%)
	2,944	Activision, Inc.*		76,161
	426	Arctic Cat, Inc.		3,941
	225	Atari, Inc.		308
	1,150	Brunswick Corp.		21,839
	1,019	Callaway Golf Co.		18,260
	2,828	Electronic Arts Inc.*		133,962
	1,752	Hasbro, Inc.		45,499
	594	Leapfrog Enterprises, Inc. (Class A)*		3,867
	705	Marvel Entertainment, Inc.*		19,881
	3,772	Mattel, Inc.		79,250
	635	Polaris Industries Inc.		27,584
	914	Scientific Games Corp. (Class A)*		21,753
	1,136	Take-Two Interactive Software, Inc.*		18,676
	559	Thor Industries, Inc.		19,744
	914	THQ, Inc.*		16,461
	549	Winnebago Industries, Inc.		11,562
	501	WMS Industries, Inc.*		18,737
				537,485

See Notes to Financial Statements
30

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Regional Banks (1.2%)
	162	1st Source Corp.	$	3,159
	191	Alabama National BanCorporation		14,946
	450	Amcore Financial, Inc.		9,977
	1,284	Associated Banc-Corp.		36,183
	983	BancorpSouth, Inc.		24,103
	617	Bank of Hawaii Corp.		31,078
	376	BOK Financial Corp.		20,484
	444	Boston Private Financial Holdings, Inc.		10,137
	322	Capital City Bank Group, Inc.		9,406
	612	Cathay General Bancorp, Inc.		15,869
	313	Central Pacific Financial Corp		5,947
	507	Chemical Financial Corp.		14,034
	1,264	Citizens Banking Corp.		17,873
	325	City Holding Co.		12,487
	513	City National Corp.		29,179
	1,687	Colonial BancGroup, Inc. (The)		26,486
	1,729	Commerce Bancorp, Inc.		65,892
	759	Commerce Bancshares, Inc.		33,707
	506	Community Bank System, Inc.		11,041
	546	Corus Bankshares, Inc.		6,945
	690	Cullen/Frost Bankers, Inc.		37,564
	1,132	CVB Financial Corp.		12,622
	712	East West Bancorp, Inc.		17,131
	852	F.N.B. Corp.		13,266
	4,406	Fifth Third Bancorp		119,403
	1,175	First Bancorp (Puerto Rico)		11,233
	627	First Charter Corp.		17,186
	94	First Citizens BancShares, Inc. (Class A)		12,816
	1,068	First Commonwealth Financial Corp.		12,389
	309	First Community Bancorp		10,979
	753	First Financial Bancorp		8,765
	216	First Financial Bankshares, Inc		8,048
	264	First Financial Corp. (Indiana)		7,862
	1,286	First Horizon National Corp.		27,868
	361	First Merchants Corp.		9,747
	724	First Midwest Bancorp, Inc.		22,589
	1,073	FirstMerit Corp.		24,003

NUMBER OF SHARES			VALUE
	509	Flagstar Bancorp	$	4,199
	697	Frontier Financial Corp.		14,191
	2,148	Fulton Financial Corp.		27,086
	832	Glacier Bancorp, Inc.		15,484
	365	Guaranty Financial Group, Inc.*		5,074
	394	Hancock Holding Co.		16,351
	537	Harleysville National Corp.		8,136
	285	Independent Bank Corp.- Massachusetts		8,276
	751	International Bancshares Corp.		15,576
	291	Irwin Financial Corp.		3,344
	700	M&T Bank Corp.		64,239
	1,903	Marshall & Ilsley Corp.		53,094
	348	Midwest Banc Holdings, Inc.		3,992
	716	National Penn Bancshares, Inc.		12,394
	536	NBT Bancorp, Inc.		12,103
	1,904	Northern Trust Corp.		139,677
	942	Old National Bancorp		15,826
	416	Oriental Financial Group, Inc.		6,644
	619	Pacific Capital Bancorp		13,309
	190	Park National Corp.		13,680
	370	Prosperity Bancshares, Inc.		10,638
	543	Provident Bankshares Corp.		11,256
	528	R&G Financial Corp. (Class B) (Puerto Rico)		634
	380	S & T Bancorp, Inc.		11,822
	283	Sandy Spring Bancorp, Inc.		8,476
	94	Santander BanCorp. (Puerto Rico)		962
	1,093	South Financial Group, Inc. (The)		18,887
	366	Sterling Bancorp		5,237
	1,244	Sterling Bancshares, Inc.		12,477
	516	Sterling Financial Corp.		7,972
	215	Suffolk Bancorp		6,564
	726	Susquehanna Bancshares, Inc.		15,406
	509	SVB Financial Group*		24,636
	2,602	Synovus Financial Corp.		34,372
	1,479	TCF Financial Corp.		31,429
	1,233	Trustco Bank Corp. of New York		12,700

See Notes to Financial Statements
31

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	597	Trustmark Corp.	$	13,737
	1,259	UCBH Holdings, Inc.		17,777
	540	UMB Financial Corp.		22,750
	704	Umpqua Holdings Corp.		11,546
	591	United Bankshares, Inc.		19,007
	625	United Community Banks, Inc.		12,069
	1,489	Valley National Bancorp		30,152
	391	WesBanco, Inc.		10,737
	456	Westamerica Bancorporation		22,581
	831	Whitney Holding Corp.		22,304
	750	Wilmington Trust Corp.		26,153
	364	Wintrust Financial Corp.		13,847
	1,004	Zions Bancorporation		54,959
				1,716,166
		Restaurants (0.9%)
	580	Bob Evans Farms, Inc.		17,249
	1,470	Brinker International, Inc.		27,357
	390	CBRL Group, Inc.		12,195
	419	CEC Entertainment, Inc.*		9,775
	1,089	Cheesecake Factory, Inc. (The)*		23,795
	1,074	CKE Restaurants, Inc.*		14,091
	1,410	Darden Restaurants, Inc.		39,931
	195	IHOP Corp.		10,382
	1,006	Jack in the Box Inc.*		29,405
	1,074	Krispy Kreme Doughnuts, Inc.*		2,954
	287	Landry's Restaurants, Inc.		5,886
	11,645	McDonald's Corp.		623,590
	397	P.F. Chang's China Bistro, Inc.*		11,291
	419	Panera Bread Co. (Class A)*		15,830
	396	Papa John's International, Inc.*		10,015
	297	Red Robin Gourmet Burgers Inc.*		10,359
	900	Ruby Tuesday, Inc.		6,921
	1,222	Sonic Corp.*		27,104
	7,194	Starbucks Corp.*		136,039
	528	The Steak n Shake Co.*		4,615
	1,634	Tim Hortons, Inc. (Canada)		55,965
	545	Triarc Companies, Inc. (Class B)		5,069

NUMBER OF SHARES			VALUE
	1,245	Wendy's International, Inc.	$	30,403
	5,077	Yum! Brands, Inc.		173,430
				1,303,651
		Savings Banks (0.4%)
	355	Anchor Bancorp Wisconsin, Inc.		8,875
	1,061	Astoria Financial Corp.		28,838
	688	Bank Mutual Corp.		8,456
	713	BankAtlantic Bancorp, Inc. (Class A)		4,028
	578	BankUnited Financial Corp.		3,428
	963	Brookline Bancorp, Inc.		10,063
	376	Capitol Federal Financial		12,145
	70	Charter Financial Corp.		2,368
	778	Dime Community Bancshares		11,693
	252	Downey Financial Corp.		8,694
	1,427	First Niagara Financial Group, Inc.		18,151
	270	Firstfed Financial Corp.*		11,327
	5,028	Hudson City Bancorp, Inc.		82,359
	470	MB Financial, Inc.		14,617
	984	Net.B@nk, Inc.		25
	2,581	New York Community Bancorp, Inc.		47,878
	1,488	Newalliance Bancshares Inc.		18,302
	221	Northwest Bancorp, Inc.		6,420
	1,697	People's United Financial Inc.		28,662
	263	PFF Bancorp, Inc.		3,290
	589	Provident Financial Services, Inc.		8,099
	3,803	Sovereign Bancorp, Inc.		47,423
	475	Sterling Financial Corp.*		8,450
	2,027	W. Holding Co., Inc. (Puerto Rico)		2,939
	1,218	Washington Federal, Inc.		29,744
	9,287	Washington Mutual, Inc.		184,997
	666	Webster Financial Corp.		22,557
				633,828

See Notes to Financial Statements
32

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
		Semiconductors (2.0%)
	487	Actel Corp.*	$	5,800
	4,527	Advanced Micro Devices, Inc.*		34,586
	3,563	Altera Corp.		60,179
	584	Amis Holdings, Inc.*		4,269
	3,435	Analog Devices, Inc.		97,417
	5,629	Atmel Corp.*		17,788
	4,094	Broadcom Corp. (Class A)*		90,396
	1,500	Cirrus Logic, Inc.*		6,375
	5,973	Conexant Systems, Inc.*		4,121
	1,767	Cypress Semiconductor Corp.*		37,549
	564	DSP Group, Inc.*		6,458
	755	ESS Technology, Inc.*		936
	738	Exar Corp.*		6,059
	1,563	Fairchild Semiconductor Corp. (Class A)*		19,147
	2,283	Integrated Device Technology, Inc.*		17,008
	546	Integrated Silicon Solution, Inc.*		3,194
	53,077	Intel Corp.		1,125,232
	808	International Rectifier Corp.*		22,487
	1,470	Intersil Corp. (Class A)		33,854
	1,569	Lattice Semiconductor Corp.*		4,158
	2,863	Linear Technology Corp.		79,219
	9,133	LSI Logic Corp.*		47,674
	4,413	Marvell Technology Group, Ltd. (Bermuda)*		52,382
	2,995	Maxim Integrated Products, Inc.		58,882
	1,205	Micrel, Inc.*		7,351
	2,118	Microchip Technology Inc.		67,585
	6,730	Micron Technology, Inc.*		47,312
	860	Microsemi Corp.*		19,539
	1,972	Mindspeed Technologies Inc.*		1,611
	3,156	National Semiconductor Corp.		58,165
	4,841	NVIDIA Corp.*		119,040
	1,616	ON Semiconductor Corp.*		10,472
	2,635	PMC - Sierra, Inc.*		12,358
	1,228	Rambus Inc.*		23,897
	2,259	RF Micro Devices, Inc.*		7,297

NUMBER OF SHARES			VALUE
	834	Semtech Corp.*	$	10,650
	655	Sigmatel Corp.*		1,120
	1,328	Silicon Image, Inc.*		5,870
	564	Silicon Laboratories Inc.*		17,619
	1,703	Silicon Storage Technology, Inc.*		4,837
	2,306	Skyworks Solutions, Inc.*		18,563
	328	Standard Microsystems Corp.*		9,814
	14,217	Texas Instruments Inc.		439,732
	2,107	TriQuint Semiconductor, Inc.*		9,987
	5,450	Vitesse Semiconductor Corp.*		4,060
	3,214	Xilinx, Inc.		70,290
	743	Zoran Corp.*		8,767
				2,811,106
		Services to the Health Industry (0.7%)
	262	Advisory Board Co. (The)*		16,695
	621	Albany Molecular Research, Inc.*		6,682
	759	Cerner Corp.*		39,772
	672	Covance, Inc.*		55,884
	840	Eclipsys Corp.*		21,622
	914	eResearch Technology, inc.*		8,884
	2,396	Express Scripts, Inc.*		161,706
	3,125	Hlth Corp.		34,969
	1,938	IMS Health Inc.		46,299
	1,152	Laboratory Corp. of America Holdings*		85,110
	5,622	Medco Health Solutions Inc.*		281,550
	775	Odyssey Healthcare, Inc.*		6,828
	1,200	Omnicare, Inc.		26,568
	501	PAREXEL International Corp.*		27,259
	1,083	Pharmaceutical Product Development, Inc.		46,959
	1,492	Quest Diagnostics Inc.		73,585
	1,018	Stericycle, Inc.*		60,327
	306	VistaCare, Inc. (Class A)*		2,613
				1,003,312
		Specialty Insurance (0.2%)
	998	Ambac Financial Group, Inc.		11,697
	1,031	Assurant, Inc.		66,902

See Notes to Financial Statements
33

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES				VALUE
	256		CNA Surety Corp.*	$	4,564
	2,149		Fidelity National Financial, Inc. (Class A)		42,314
	943		First American Financial Corp.		41,068
	191		LandAmerica Financial Group, Inc.		9,963
	95		Markel Corp.*		43,985
	1,289		MBIA Inc.		19,980
	821		MGIC Investment Corp.		15,189
	909		PMI Group, Inc. (The)		8,636
	482		Proassurance Corp.*		27,811
	799		Radian Group, Inc.		7,303
	349		Stewart Information Services Corp.		11,946
	279		Triad Guaranty, Inc.*		1,950
					313,308
			Specialty Stores (0.6%)
	376		AC Moore Arts & Crafts, Inc.*		4,504
	1,162		Advance Auto Parts, Inc.*		41,460
	249		Asbury Automotive Group Inc.*		3,531
	1,573		AutoNation, Inc.*		25,608
	589		AutoZone, Inc.*		71,198
	722		Barnes & Noble, Inc.		24,512
	2,623		Bed Bath & Beyond Inc.*		84,566
	997		Borders Group, Inc.		11,226
	2,237		CarMax Inc.*		49,885
	445		Cost Plus, Inc.*		1,780
	987	��	CSK Auto Corp.*		5,892
	802		Dick's Sporting Goods, Inc.*		26,105
	295		Group 1 Automotive, Inc.*		7,800
	428		Haverty Furniture Companies, Inc.		4,378
	675		Hibbett Sports, Inc.		12,548
	450		Jo-Ann Stores, Inc.*		5,702
	2,764		Office Depot, Inc.*		40,990
	794		OfficeMax Inc.		19,667
	1,273		O'Reilly Automotive, Inc.*		37,464
	694		Penske Automotive Group, Inc.		12,603
	1,002		Pep Boys-Manny Moe & Jack		10,952
	1,481		PetSmart, Inc.		33,870

NUMBER OF SHARES			VALUE
1,229 Pier 1 Imports, Inc.				8,419
	635	Regis Corp.		16,085
	295	Sharper Image Corp.*		664
	673	Sonic Automotive, Inc.		13,494
	6,847	Staples, Inc.		163,917
	1,417	Tiffany & Co.		56,538
	466	Tractor Supply Co.*		17,960
	457	Tuesday Morning Corp.		2,760
	388	West Marine, Inc.*		3,314
	1,100	Williams-Sonoma, Inc.*		29,568
	581	Zale Corp.*		9,528
				858,488
		Specialty Telecommunications (0.4%)
	3,941	American Tower Corp. (Class A)*		147,906
	1,071	CenturyTel, Inc.		39,531
	3,731	Citizens Communications Co.		42,795
	2,127	Crown Castle International Corp.*		76,976
	1,043	General Communication, Inc. (Class A)*		7,520
	889	MasTec, Inc.*		7,423
	1,006	Premiere Global Services Inc*		12,263
	14,416	Qwest Communications International, Inc.*		84,766
	284	SureWest Communications		4,391
	907	Time Warner Telecom Inc. (Class A)*		15,854
	2,279	Virgin Media Inc.		38,105
	4,283	Windstream Corp.		49,726
				527,256
		Steel (0.4%)
	1,360	AK Steel Holding Corp.*		64,981
	855	Allegheny Technologies, Inc.		60,192
	500	Carpenter Technology Corp.		30,820
	615	Cleveland-Cliffs, Inc.		62,632
	2,630	Nucor Corp.		152,014
	454	Quanex Corp.		23,794
	736	Reliance Steel & Aluminum Co.		36,219

See Notes to Financial Statements
34

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	319	Schnitzer Steel Industries, Inc.	$	18,075
	1,080	Steel Dynamics, Inc.		56,322
	1,001	United States Steel Corp.		102,212
	1,117	Worthington Industries, Inc.		18,308
				625,569
		Telecommunication Equipment (1.2%)
	1,422	ADC Telecommunications, Inc.*		21,031
	783	ADTRAN, Inc.		16,294
	1,739	Arris Group, Inc.*		15,286
	2,292	Avanex Corp.*		2,177
	1,047	Ciena Corp.*		28,405
	719	CommScope, Inc.*		31,888
	408	Comtech Telecommunications Corp.*		18,278
	14,121	Corning Inc.*		339,892
	605	Ditech Networks, Inc.*		1,888
	1,109	Garmin Ltd. (Cayman Islands)		80,014
	1,130	Harmonic, Inc.*		12,340
	1,314	Harris Corp.		71,863
	380	Harris Stratex Networks, Inc. (Class B Shares)		4,138
	878	InterDigital, Inc.		17,744
	668	Intervoice, Inc.*		4,342
	22,731	Motorola, Inc.		262,088
	442	Oplink Communications Inc.*		5,644
	803	Plantronics, Inc.		15,337
	1,008	Polycom, Inc.*		25,452
	1,357	Powerwave Technologies, Inc.*		5,157
	15,691	QUALCOMM, Inc.		665,612
	4,391	Sonus Networks, Inc.*		17,959
	3,173	Sycamore Networks, Inc.*		10,725
	983	Tekelec*		11,786
	4,343	Tellabs, Inc.*		29,619
	1,501	Trimble Navigation Ltd.*		39,701
	512	ViaSat, Inc.*		10,634
	911	Westell Technologies, Inc. (Class A)*		1,649
				1,766,943

NUMBER OF SHARES			VALUE
		Textiles (0.0%)
	328	Albany International Corp. (Class A)	$	11,483
		Tobacco (1.2%)
	18,899	Altria Group, Inc.		1,432,922
	831	Loews Corp. - Carolina Group		68,250
	1,540	Reynolds American, Inc.		97,528
	461	Universal Corp.		22,962
	1,596	UST, Inc.		82,928
	394	Vector Group Ltd.		7,289
				1,711,879
		Tools/Hardware (0.1%)
	705	Black & Decker Corp.		51,141
	689	Briggs & Stratton Corp.		14,366
	699	Snap-On, Inc.		34,335
	903	Stanley Works (The)		46,378
	620	Toro Co. (The)		30,591
				176,811
		Trucking (0.1%)
	369	Arkansas Best Corp.		11,362
	1,040	Heartland Express, Inc.		16,900
	1,513	Hunt (J.B.) Tansport Services, Inc.		47,054
	672	Knight Transportation, Inc.		11,532
	760	Landstar System, Inc.		38,023
	398	Old Dominion Freight Line, Inc.*		11,602
	927	Werner Enterprises, Inc.		18,883
	750	YRC Worldwide Inc.		13,733
				169,089
		Trucks/Construction/Farm Machinery (1.0%)
	1,181	AGCO Corp.*		71,120
	6,122	Caterpillar Inc.		435,519
	1,426	Cummins Inc.		68,847
	4,230	Deere & Co.		371,225
	869	Federal Signal Corp.		10,072
	500	Gardner Denver Inc.*		16,220
	1,191	Joy Global Inc.		75,093
	1,362	Manitowoc Co., Inc.		51,919

See Notes to Financial Statements
35

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

NUMBER OF SHARES			VALUE
	28	NACCO Industries, Inc. (Class A)	$	2,802
	778	OshKosh Truck Corp.		35,601
	3,469	PACCAR, Inc.		162,765
	1,014	Terex Corp.*		59,583
	868	Trinity Industries, Inc.		24,582
	504	Wabash National Corp.		4,632
	592	Wabtec Corp.		20,359
				1,410,339
		Water Utilities (0.0%)
	1,456	Aqua America Inc.		29,018
	331	California Water Service Group		11,529
	1,158	Nalco Holding Co.*		24,249
				64,796
		Wholesale Distributors (0.2%)
	489	Applied Industries Technologies, Inc.		14,763
	1,731	Genuine Parts Co.		76,043
	797	Grainger (W.W.), Inc.		63,417
	485	Handleman Co.		679
	657	MSC Industrial Direct Co., Inc. (Class A)		26,983
	724	Pool Corp.		17,839
	366	School Specialty, Inc.*		11,880
	453	United Stationers, Inc.*		25,033
	572	WESCO International, Inc.*		24,161
				260,798
		Wireless Telecommunications (0.1%)
	472	Centennial Communications Corp. (Class A)*		2,700
	200	Leap Wireless Intl Inc.*		8,270
	1,300	NII Holdings Inc.*		55,458
	1,106	SBA Communications Corp.*		32,749
	118	SunCom Wireless Holdings, Inc. (Class A)		3,152

NUMBER OF SHARES			VALUE
	1,068	Telephone & Data Systems, Inc.	$	56,326
	301	United States Cellular Corp.*		21,401
				180,056
		Total Common Stocks (Cost $102,662,503)		142,771,088
NUMBER OF WARRANTS
		Warrants (0.0%)
		Aerospace & Defense (0.0%)
	237	Raytheon Co*		6,769
		Internet Retail (0.0%)
	488	IAC/InterActiveCorp.*		5,385
		Other Consumer Services (0.0%)
	488	Expedia Inc.*		5,702
		Total Warrants (Cost $7,459)		17,856
NUMBER OF SHARES (000)
		Short-Term Investment (b) (1.0%)
		Investment Company
	1,389	Morgan Stanley Institutional Liquidity Money Market Portfolio - Institutional Class (Cost $1,389,279)		1,389,279

Total Investments (Cost $104,059,241) (c)(d)	100.1	%		144,178,223
Liabilities in Excess of Other Assets	(0.1	)		(134,761	)
Net Assets	100.0	%	$	144,043,462

See Notes to Financial Statements
36

Morgan Stanley Total Market Index Fund

Portfolio of Investments  n  January 31, 2008 (unaudited) continued

  ADR  American Depositary Receipt.

  *  Non-income producing security.

  **  A portion of this security has been physically segregated in connection with open futures contracts in the amount of $57,000.

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

  (a)  Securities with total market value equal to $37 have been valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Trustees.

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

  (c)  Securities have been designated as collateral in an amount equal to $1,060,100 in connection with open futures contracts.

  (d)  The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $57,331,776 and the aggregate gross unrealized depreciation is $17,212,794, resulting in net unrealized appreciation of $40,118,982.

Summary of Investments

SECTOR	VALUE			PERCENT OF TOTAL INVESTMENTS
Finance	$	27,109,401			18.8	%
Electronic Technology		14,086,154			9.8
Health Technology		13,383,750			9.3
Energy Minerals		12,223,042			8.5
Consumer Non-Durables		9,988,059			6.9
Producer Manufacturing		9,983,206			6.9
Technology Services		9,674,243			6.7
Retail Trade		7,411,681			5.1
Consumer Services		7,125,520			4.9
Utilities		5,816,985			4.0
Industrial Services		4,862,646			3.4
Communications		4,341,506			3.0
Process Industries		4,099,921			2.8
Health Services		3,278,653			2.3
Transportation		2,525,540			1.8
Non-Energy Minerals		2,027,596			1.4
Consumer Durables		1,981,507			1.4
Commercial Services		1,557,516			1.1
Investment Company		1,389,279			1.0
Distribution Services		1,291,473			0.9
Miscellaneous		20,545			0.0
	$	144,178,223	*		100.0	%

  *  Does not include open futures contracts with an underlying face amount of $1,047,300 with unrealized   depreciation of $69,823.

Futures Contracts Open at January 31, 2008:

NUMBER OF CONTRACTS		LONG/SHORT	DESCRIPTION, DELIVERY MONTH AND YEAR	UNDERLYING FACE AMOUNT AT VALUE		UNREALIZED DEPRECIATION
	10	Long	S&P 500 E-Mini Index	$	689,800	$	(49,365	)
			March2008
	5	Long	Russell 2000 E-Mini Index		357,500		(20,458	)
			March2008
			Total Unrealized Depreciation			$	(69,823	)

See Notes to Financial Statements
37

Morgan Stanley Total Market Index Fund

Financial Statements

Statement of Assets and Liabilities

January 31, 2008 (unaudited)

Assets:
Investments in securities, at value (cost $102,205,869)	$	142,169,388
Investment in affiliate, at value (cost $1,853,372)		2,008,835
Receivable for:
Dividends		143,687
Shares of beneficial interest sold		47,045
Variation margin		26,000
Dividends from affiliate		8,968
Prepaid expenses and other assets		20,714
Receivable from Investment Adviser		5,634
Total Assets		144,430,271
Liabilities:
Payable for:
Shares of beneficial interest redeemed		208,812
Distribution fee		69,726
Transfer agent fee		20,690
Accrued expenses and other payables		87,581
Total Liabilities		386,809
Net Assets	$	144,043,462
Composition of Net Assets:
Paid-in-capital	$	148,073,617
Net unrealized appreciation		40,049,159
Accumulated undistributed net investment income		298,267
Accumulated net realized loss		(44,377,581	)
Net Assets	$	144,043,462
Class A Shares:
Net Assets	$	59,559,047
Shares Outstanding (unlimited authorized, $.01 par value)		4,985,208
Net Asset Value Per Share	$	11.95
Maximum Offering Price Per Share, (net asset value plus 5.54% of net asset value)	$	12.60
Class B Shares:
Net Assets	$	50,393,539
Shares Outstanding (unlimited authorized, $.01 par value)		4,284,764
Net Asset Value Per Share	$	11.76
Class C Shares:
Net Assets	$	23,611,065
Shares Outstanding (unlimited authorized, $.01 par value)		2,023,248
Net Asset Value Per Share	$	11.67
Class D Shares:
Net Assets	$	10,479,811
Shares Outstanding (unlimited authorized, $.01 par value)		868,783
Net Asset Value Per Share	$	12.06

See Notes to Financial Statements
38

Morgan Stanley Total Market Index Fund

Financial Statements continued

Statement of Operations

For the six months ended January 31, 2008 (unaudited)

Net Investment Income: Income
Dividends (net of $162 foreign withholding tax)	$	1,492,850
Dividends from affiliates		79,748
Total Income		1,572,598
Expenses
Distribution fee (Class A shares)		55,391
Distribution fee (Class B shares)		364,171
Distribution fee (Class C shares)		127,861
Transfer agent fees and expenses		129,315
Investment advisory fee		95,563
Administration fee		63,709
Custodian fees		54,181
Shareholder reports and notices		31,909
Professional fees		23,798
Registration fees		22,045
Trustees' fees and expenses		1,326
Other		12,546
Total Expenses		981,815
Less: amounts waived/reimbursed		(115,199	)
Less: expense offset		(584	)
Net Expenses		866,032
Net Investment Income		706,566
Net Realized and Unrealized Gain (Loss): Net Realized Gain (Loss) on:
Investments		3,227,256
Futures contracts		(350,071	)
Net Realized Gain		2,877,185
Net Change in Unrealized Appreciation/Depreciation on:
Investments		(10,843,176	)
Investment in affiliate		(180,991	)
Futures contracts		134,196
Net Change in Unrealized Appreciation/Depreciation		(10,889,971	)
Net Loss		(8,012,786	)
Net Decrease	$	(7,306,220	)

See Notes to Financial Statements
39

Morgan Stanley Total Market Index Fund

Financial Statements continued

Statements of Changes in Net Assets

	FOR THE SIX MONTHS ENDED JANUARY 31, 2008			FOR THE YEAR ENDED JULY 31, 2007
	(unaudited)
Increase (Decrease) in Net Assets: Operations:
Net investment income	$	706,566		$	1,246,568
Net realized gain		2,877,185			6,640,754
Net change in unrealized appreciation/depreciation		(10,899,971	)		17,053,745
Net Increase (Decrease)		(7,306,220	)		24,941,067
Dividends to Shareholders from Net Investment Income:
Class A shares		(900,956	)		(338,306	)
Class B shares		(51,006	)		(490,197	)
Class C shares		(176,499	)		(152,612	)
Class D shares		(181,548	)		(133,888	)
Total Dividends		(1,310,009	)		(1,115,003	)
Net decrease from transactions in shares of beneficial interest		(10,824,562	)		(33,882,395	)
Net Decrease		(19,440,791	)		(10,056,331	)
Net Assets:
Beginning of period		163,484,253			173,540,584
End of Period (Including accumulated undistributed net investment income of $298,267 and $901,710, respectively)	$	144,043,462		$	163,484,253

See Notes to Financial Statements
40

Morgan Stanley Total Market Index Fund

Notes to Financial Statements  nJanuary 31, 2008 (unaudited)

1. Organization and Accounting Policies

Morgan Stanley Total Market Index 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 to provide investment results that, before expenses, correspond to the total return of the Dow Jones Wilshire 5000 Composite Index (the "Index"). The Fund was organized as a Massachusetts business trust on March 11, 1999 and commenced operations on September 28, 1999.

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 or exchanged 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 the primary market; (4) for equity securities traded on foreign e xchanges, the last reported sale price or the latest bid price may be used if there were no sales on a particular day; (5) futures are valued at the latest price published by the commodities exchange on which they trade; (6) 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

41

Morgan Stanley Total Market Index Fund

Notes to Financial Statements  nJanuary 31, 2008 (unaudited) continued

may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business on the NYSE. If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Fund's Trustees or by the Investment Adviser using a pricing service and/or procedures approved by the Trustees of the Fund; (7) certain portfolio securities may be valued by an outside pricing service approved by the Fund's Trustees; (8) investments in open-end mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (9) 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 and are included in interest income. Interest income is accrued daily.

C. 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.

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

E. Federal Income Tax Policy — It is the Fund's policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no provision for federal income taxes is required. The Fund files tax returns with the U.S. Internal Revenue Service, New York State and New York City. The Fund adopted the provisions of the Financial Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN

42

Morgan Stanley Total Market Index Fund

Notes to Financial Statements  nJanuary 31, 2008 (unaudited) continued

48") Accounting for Uncertainty in Income Taxes on June 29, 2007. FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in other expenses in the Statement of Operations. Each of the tax years in the four year period ended January 31, 2008, remains subject to examination by taxing authorities.

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 asset of the Fund determined as of the close of each business day: 0.12% to the portion of the daily net assets not exceeding $2 billion and 0.10% to the portion of the daily net assets in excess of $2 billion.

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.

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

The Investment Adviser has 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 has agreed to waive the Fund's administrative fees, to the extent that such operating expenses exceed 0.40% of the average daily net assets of the Fund on an annualized basis.

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

43

Morgan Stanley Total Market Index Fund

Notes to Financial Statements  nJanuary 31, 2008 (unaudited) continued

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 Fund that such excess amounts totaled $9,929,633 at January 31, 2008.

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 January 31, 2008, the distribution fee was accrued for Class A shares and Class C shares at the annual rate of 0.22% and 1.00%, respectively.

The Distributor has informed the Fund that for the six months ended January 31, 2008, it received contingent deferred sales charges from certain redemptions of the Fund's Class B shares and Class C shares of $30,855 and $504 , respectively and received $9,154 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 Fund invests in Morgan Stanley Institutional Liquidity Money Market Portfolio — Institutional Class, an open-ended management investment company managed by the Investment Adviser. Advisory fees paid by the Fund are reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Money Market Portfolio — Institutional Class with respect to assets invested by the Fund in Morgan Stanley Institutional Liquidity Money Market Portfolio — Institutional Class. For the six months ended January 31, 2008, advisory fees paid were reduced by $1,866 relating to the Fund's investment in Morgan Stanley Institutional Liquidity Money Market Portfolio — Institutional Class. Income distributions earned by the Fund are recorded as dividends from affiliate in the Statement of Operations and totaled $72,980 for the six months ended January 31, 2008. During the six months ended January 31, 2008, cost of purchases and sales of

44

Morgan Stanley Total Market Index Fund

Notes to Financial Statements  nJanuary 31, 2008 (unaudited) continued

investments in Morgan Stanley Institutional Liquidity Money Market Portfolio — Institutional Class aggregated $8,684,324 and $9,876,560, respectively.

The cost of purchases and proceeds from sales of portfolio securities, excluding short-term investments, for the six months ended January 31, 2008 aggregated $155,743 and $2,528,520, respectively.

During the period ended January 31, 2008, the Fund did not have any purchases or sales of Morgan Stanley common stock.

Morgan Stanley Trust, an affiliate of 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. 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.

6. 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 July 31, 2007, the Fund had a net capital loss carryforward of $47,331,764 of which $3,637,150 will expire on July 31, 2010, $32,841,558 will expire on July 31, 2011 and $10,853,056 will expire on July 31, 2012 to offset future capital gains to the extent provided by regulations.

45

Morgan Stanley Total Market Index Fund

Notes to Financial Statements  nJanuary 31, 2008 (unaudited) continued

As of July 31, 2007, the Fund had temporary book/tax differences primarily attributable to capital loss deferrals on wash sales, the mark-to market of open futures contracts and tax adjustments on real estate investment trust ("REITs") and partnership investments held by the Fund.

7. Shares of Beneficial Interest

Transactions in shares of beneficial interest were as follows:

	FOR THE SIX MONTHS ENDED JANUARY 31, 2008						FOR THE YEAR ENDED JULY 31, 2007
	(unaudited)
	SHARES			AMOUNT			SHARES			AMOUNT
CLASS A SHARES
Sold		149,956		$	1,927,820			367,640		$	4,543,183
Conversion from Class B		2,852,470			37,583,892			270.605			3,382,941
Reinvestment of dividends		63,631			815,758			25,388			311,759
Redeemed		(350,351	)		(4,429,215	)		(625,243	)		(7,676.995	)
Net increase — Class A		2,715,706			35,898,255			38,090			560,888
CLASS B SHARES
Sold		94,388			1,191,128			257,050			3,103,649
Conversion to Class A		(2,927,754	)		(37,583,892	)		(277,425	)		(3,382,941	)
Reinvestment of dividends		3,564			45,018			36,770			441,976
Redeemed		(797,053	)		(9,997,262	)		(2,531,597	)		(30,460,236	)
Net decrease — Class B		(3,626,855	)		(46,345,008	)		(2,515,202	)		(30,297,552	)
CLASS C SHARES
Sold		57,376		$	705,914			179,002		$	2,170,068
Reinvestment of dividends		12,877			161,476			11,599			139,075
Redeemed		(118,736	)		(1,472,891	)		(777,830	)		(9,411,723	)
Net decrease — Class C		(48,483	)		(605,501	)		(587,229	)		(7,102,580	)
CLASS D SHARES
Sold		94,524			1,222,350			401,592			5,046,644
Reinvestment of dividends		10,238			132,485			8,465			104,791
Redeemed		(86,791	)		(1,127,143	)		(175,107	)		(2,194,586	)
Net increase — Class D		17,971			227,692			234,950			2,956,849
Net decrease in Fund		(941,661	)	$	(10,824,562	)		(2,829,391	)	$	(33,882,395	)

8. Purposes of and Risks Relating to Certain Financial Instruments

To hedge against adverse interest rate, foreign currency and market risks, the Fund may purchase and sell interest rate, currency and index futures ("futures contracts").

Futures contracts involve elements of market risk in excess of the amount reflected in the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the value of the underlying

46

Morgan Stanley Total Market Index Fund

Notes to Financial Statements  nJanuary 31, 2008 (unaudited) continued

securities. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

9. Accounting Pronouncement

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.

47

Morgan Stanley Total Market Index Fund

Financial Highlights

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

	FOR THE SIX			FOR THE YEAR ENDED JULY 31,
	MONTHS ENDED
	JANUARY 31, 2008			2007			2006			2005			2004			2003
	(unaudited)
Class A Shares
Selected Per Share Data:
Net asset value, beginning of period	$	12.72		$	11.13		$	10.74		$	9.32		$	8.33		$	7.52
Income (loss) from investment operations:
Net investment income‡		0.08			0.16			0.13			0.13			0.08			0.08
Net realized and unrealized gain (loss)		(0.66	)		1.58			0.39			1.41			0.98			0.76
Total income (loss) from investment operations		(0.59	)		1.74			0.52			1.54			1.06			0.84
Less dividends from net investment income		(0.19	)		(0.15	)		(0.13	)		(0.12	)		(0.07	)		(0.03	)
Net asset value, end of period	$	11.94		$	12.72		$	11.13		$	10.74		$	9.32		$	8.33
Total Return†		(4.72	)%(1)		15.70	%		4.86	%		16.53	%		12.79	%		11.23	%
Ratios to Average Net Assets(3)(5):
Total expenses (before expense offset)		0.62	%(2)(4)		0.65	%(4)		0.65	%		0.65	%		0.72	%		0.75	%
Net investment income		1.35	%(2)(4)		1.28	%(4)		1.22	%		1.33	%		0.91	%		1.01	%
Supplemental Data:
Net assets, end of period, in thousands	$	59,559		$	28,873		$	24,833		$	26,673		$	11,383		$	12,865
Portfolio turnover rate		0	%(1)		0	%		2	%		5	%		3	%		4	%

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

  (5)  If the Fund had borne all its 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 as follows:

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT INCOME RATIO
January 31, 2008		0.77	%		1.20	%
July 31, 2007		0.77			1.16
July 31, 2006		0.77			1.10
July 31, 2005		0.84			1.14
July 31, 2004		0.87			0.76
July 31, 2003		0.94			0.82

See Notes to Financial Statements
48

Morgan Stanley Total Market Index Fund

Financial Highlights continued

	FOR THE SIX			FOR THE YEAR ENDED JULY 31,
	MONTHS ENDED
	JANUARY 31, 2008			2007			2006			2005			2004			2003
	(unaudited)
Class B Shares
Selected Per Share Data:
Net asset value, beginning of period	$	12.39		$	10.84		$	10.44		$	9.07		$	8.11		$	7.35
Income (loss) from investment operations:
Net investment income‡		0.04			0.06			0.05			0.06			0.01			0.02
Net realized and unrealized gain (loss)		(0.66	)		1.54			0.38			1.35			0.97			0.75
Total income (loss) from investment operations		(0.62	)		1.60			0.43			1.41			0.98			0.77
Less dividends from net investment income		(0.01	)		(0.05	)		(0.03	)		(0.04	)		(0.02	)		(0.01	)
Net asset value, end of period	$	11.76		$	12.39		$	10.84		$	10.44		$	9.07		$	8.11
Total Return†		(5.00	)%(1)		14.80	%		4.15	%		15.53	%		12.05	%		10.46	%
Ratios to Average Net Assets(3)(5):
Total expenses (before expense offset)		1.40	%(2)(4)		1.40	%(4)		1.40	%		1.40	%		1.47	%		1.50	%
Net investment income		0.57	%(2)(4)		0.53	%(4)		0.47	%		0.58	%		0.16	%		0.26	%
Supplemental Data:
Net assets, end of period, in thousands	$	50,393		$	98,048		$	113,008		$	153,897		$	183,031		$	182,932
Portfolio turnover rate		0	%(1)		0	%		2	%		5	%		3	%		4	%

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

  (5)  If the Fund had borne all its 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 as follows:

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT INCOME RATIO
January 31, 2008		1.54	%		0.43	%
July 31, 2007		1.53			0.40
July 31, 2006		1.52			0.35
July 31, 2005		1.59			0.39
July 31, 2004		1.62			0.01
July 31, 2003		1.69			0.07

See Notes to Financial Statements
49

Morgan Stanley Total Market Index Fund

Financial Highlights continued

	FOR THE SIX			FOR THE YEAR ENDED JULY 31,
	MONTHS ENDED
	JANUARY 31, 2008			2007			2006			2005			2004			2003
	(unaudited)
Class C Shares
Selected Per Share Data:
Net asset value, beginning of period	$	12.37		$	10.82		$	10.44		$	9.07		$	8.11		$	7.36
Income (loss) from investment operations:
Net investment income‡		0.04			0.07			0.05			0.06			0.01			0.02
Net realized and unrealized gain (loss)		(0.65	)		1.54			0.38			1.35			0.97			0.74
Total income (loss) from investment operations		(0.61	)		1.61			0.43			1.41			0.98			0.76
Less dividends from net investment income		(0.09	)		(0.06	)		(0.05	)		(0.04	)		(0.02	)		(0.01	)
Net asset value, end of period	$	11.67		$	12.37		$	10.82		$	10.44		$	9.07		$	8.11
Total Return†		(5.00	)%(1)		14.92	%		4.10	%		15.57	%		12.13	%		10.31	%
Ratios to Average Net Assets(3)(5) :
Total expenses (before expense offset)		1.40	%(2)(4)		1.34	%(4)		1.39	%		1.38	%		1.47	%		1.50	%
Net investment income		0.57	%(2)(4)		0.59	%(4)		0.48	%		0.60	%		0.16	%		0.26	%
Supplemental Data:
Net assets, end of period, in thousands	$	23,611		$	25,635		$	28,779		$	30,513		$	29,514		$	23,483
Portfolio turnover rate		0	%(1)		0	%		2	%		5	%		3	%		4	%

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

  (5)  If the Fund had borne all its 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 as follows:

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT INCOME RATIO
January 31, 2008		1.54	%		0.43	%
July 31, 2007		1.47			0.46
July 31, 2006		1.51			0.36
July 31, 2005		1.57			0.41
July 31, 2004		1.62			0.01
July 31, 2003		1.69			0.07

See Notes to Financial Statements
50

Morgan Stanley Total Market Index Fund

Financial Highlights continued

	FOR THE SIX			FOR THE YEAR ENDED JULY 31,
	MONTHS ENDED
	JANUARY 31, 2008			2007			2006			2005			2004			2003
	(unaudited)
Class D Shares
Selected Per Share Data:
Net asset value, beginning of period	$	12.85		$	11.24		$	10.83		$	9.40		$	8.40		$	7.57
Income (loss) from investment operations:
Net investment income‡		0.10			0.19			0.16			0.16			0.11			0.09
Net realized and unrealized gain (loss)		(0.68	)		1.60			0.40			1.41			0.99			0.78
Total income (loss) from investment operations		(0.58	)		1.79			0.56			1.57			1.10			0.87
Less dividends from net investment income		(0.21	)		(0.18	)		(0.15	)		(0.14	)		(0.10	)		(0.04	)
Net asset value, end of period	$	12.06		$	12.85		$	11.24		$	10.83		$	9.40		$	8.40
Total Return†		(4.60	)%(1)		15.99	%		5.24	%		16.75	%		13.11	%		11.54	%
Ratios to Average Net Assets(3)(5) :
Total expenses (before expense offset)		0.40	%(2)(4)		0.40	%(4)		0.40	%		0.40	%		0.47	%		0.50	%
Net investment income		1.57	%(2)(4)		1.53	%(4)		1.47	%		1.58	%		1.16	%		1.26	%
Supplemental Data:
Net assets, end of period, in thousands	$	10,480		$	10,929		$	6,920		$	25,918		$	21,458		$	13,347
Portfolio turnover rate		0	%(1)		0	%		2	%		5	%		3	%		4	%

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

  (5)  If the Fund had borne all its 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 as follows:

PERIOD ENDED	EXPENSE RATIO			NET INVESTMENT INCOME RATIO
January 31, 2008		0.54	%		1.43	%
July 31, 2007		0.53			1.40
July 31, 2006		0.52			1.35
July 31, 2005		0.59			1.39
July 31, 2004		0.62			1.01
July 31, 2003		0.69			1.07

See Notes to Financial Statements
51

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.
522 Fifth Avenue
New York, New York 10036

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 FINRA.

© 2008 Morgan Stanley

MORGAN STANLEY FUNDS

Morgan Stanley
Total Market
Index Fund

Semiannual Report

January 31, 2008

TMISAN
IU08-01536P-Y01/08

Item 2.  Code of Ethics.

Not applicable for semiannual reports.

Item 3.  Audit Committee Financial Expert.

Not applicable for semiannual reports.

Item 4. Principal Accountant Fees and Services

Not applicable for semiannual reports.

Item 5. Audit Committee of Listed Registrants.

Not applicable for semiannual reports.

Item 6.

Refer to Item 1.

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

Not applicable for semiannual reports.

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

Applicable only to reports filed by closed-end funds.

Item 9. Closed-End Fund Repurchases

Applicable to reports filed by closed-end funds.

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

Not applicable.

Item 11. Controls and Procedures

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

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

Item 12. Exhibits

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

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Morgan Stanley Total Market Index Fund

/s/ Ronald E. Robison

Ronald E. Robison

Principal Executive Officer

March 20, 2008

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

/s/ Ronald E. Robison

Ronald E. Robison

Principal Executive Officer

March 20, 2008

/s/ Francis Smith

Francis Smith

Principal Financial Officer

March 20, 2008