of the Fund; (6) certain portfolio securities may be valued by an outside pricing service approved by the Fund's Trustees; (7) short-term debt securities having a maturity date of more than sixty days at time of purchase are valued on a mark-to-market basis until sixty days prior to maturity and thereafter at amortized cost based on their value on the 61st day. Short-term debt securities having a maturity date of sixty days or less at the time of purchase are valued at amortized cost.
Morgan Stanley International Value Equity Fund
Notes to Financial Statements 
February 29, 2004 (unaudited) continued
F. Federal Income Tax Policy — It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Accordingly, no federal income tax provision is required.
G. Dividends and Distributions to Shareholders — Dividends and distributions to shareholders are recorded on the ex-dividend date.
H. 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 Management and Sub Advisory Agreements
Pursuant to an Investment Management Agreement, the Fund pays the Investment Manager a management fee, accrued daily and payable monthly, by applying the annual rate of 1.0% to the net assets of the Fund determined as of the close of each business day.
Under a Sub-Advisory Agreement between the Sub-Advisor and the Investment Manager, the Sub-Advisor provides the Fund with investment advice and portfolio management relating to the Fund's investments in securities, subject to the overall supervision of the Investment Manager. As compensation for its services provided pursuant to the Sub-Advisory Agreement, the Investment Manager paid the Sub-Advisor compensation of $1,118,069 for the six months ended February 29, 2004.
3. Plan of Distribution
Shares of the Fund are distributed by Morgan Stanley Distributors Inc. (the "Distributor"), an affiliate of the Investment Manager and Sub-Advisor. The Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan provides that the Fund will pay the Distributor a fee which is accrued daily and paid monthly at the following annual rates: (i) Class A – up to 0.25% of the average daily net assets of Class A; (ii) Class B – 1.0% of the average daily net assets of Class B; and (iii) Class C – up to 1.0% of the average daily net assets of Class C.
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 $4,916,131 at February 29, 2004.
15
Morgan Stanley International Value Equity Fund
Notes to Financial Statements February 29, 2004 (unaudited) continued
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 or other selected broker-dealer representatives may be reimbursed in the subsequent calendar year. For the six months ended February 29, 2004, the distribution fee was accrued for Class A shares and Class C shares at the annual rate of 0.25% and 1.0%, respectively.
The Distributor has informed the Fund that for the six months ended February 29, 2004, it received contingent deferred sales charges from certain redemptions of the Fund's Class B shares and Class C shares of $188,895 and $1,743, respectively and received $95,006 in front-end sales charges from sales of the Fund's Class A shares. The respective shareholders pay such charges which are not an expense of the Fund.
4. Security Transactions and Transactions with Affiliates
The cost of purchases and proceeds from sales of portfolio securities, excluding short-term investments, for the six months ended February 29, 2004 aggregated $168,577,371, and $112,669,183, respectively.
Morgan Stanley Trust, an affiliate of the Investment Manager and Distributor, is the Fund's transfer agent.
5. Purposes of and Risks Relating to Certain Financial Instruments
The Fund may enter into forward contracts to facilitate settlement of foreign currency denominated portfolio transactions or to manage foreign currency exposure associated with foreign currency denominated securities.
Forward contracts involve elements of market risk in excess of the amounts reflected in the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the foreign exchange rates underlying the forward contracts. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.
At February 29, 2004 investments in securities of issuers in the United Kingdom were 33.0% of the Fund's net assets. These investments, as well as other non-U.S. securities, may be affected by economic or political developments in this region.
At February 29, 2004 the Fund's cash balance consisted principally of interest bearing deposits with J.P. Morgan Chase, the Fund's custodian.
16
Morgan Stanley International Value Equity Fund
Notes to Financial Statements February 29, 2004 (unaudited) continued
6. Shares of Beneficial Interest
Transactions in shares of beneficial interest were as follows:
| | | | | | | | | | | | | | | | | | |
| | | FOR THE SIX
MONTHS ENDED
FEBRUARY 29, 2004 | | FOR THE YEAR
ENDED
AUGUST 31, 2003 | |
| | | (unaudited) | |
| | | SHARES | | AMOUNT | | SHARES | | AMOUNT |
| CLASS A SHARES | | | | | | | | | | | | | | | | |
| Sold | | | 745,711 | | | $ | 8,265,935 | | | | 7,815,592 | | | $ | 73,357,894 | |
| Reinvestment of dividends | | | 14,970 | | | | 168,115 | | | | 6,532 | | | | 57,093 | |
| Redeemed | | | (1,139,064 | ) | | | (11,762,984 | ) | | | (6,807,908 | ) | | | (64,466,822 | ) |
| Net increase (decrease) – Class A | | | (378,383 | ) | | | (3,328,934 | ) | | | 1,014,216 | | | | 8,948,165 | |
| CLASS B SHARES | | | | | | | | | | | | | | | | |
| Sold | | | 3,182,013 | | | | 35,155,560 | | | | 4,376,290 | | | | 38,333,996 | |
| Reinvestment of dividends | | | 64,267 | | | | 719,145 | | | | 10,636 | | | | 92,543 | |
| Redeemed | | | (1,741,351 | ) | | | (19,207,753 | ) | | | (5,082,826 | ) | | | (44,130,517 | ) |
| Net increase (decrease) – Class B | | | 1,504,929 | | | | 16,666,952 | | | | (695,900 | ) | | | (5,703,978 | ) |
| CLASS C SHARES | | | | | | | | | | | | | | | | |
| Sold | | | 833,856 | | | | 9,162,450 | | | | 1,601,607 | | | | 13,774,538 | |
| Reinvestment of dividends | | | 17,791 | | | | 198,545 | | | | 5,021 | | | | 43,632 | |
| Redeemed | | | (244,503 | ) | | | (2,669,251 | ) | | | (1,281,761 | ) | | | (10,945,201 | ) |
| Net increase – Class C | | | 607,144 | | | | 6,691,744 | | | | 324,867 | | | | 2,872,969 | |
| CLASS D SHARES | | | | | | | | | | | | | | | | |
| Sold | | | 6,298,839 | | | | 69,298,189 | | | | 20,304,374 | | | | 179,785,600 | |
| Reinvestment of dividends | | | 316,234 | | | | 3,551,312 | | | | 106,487 | | | | 930,697 | |
| Redeemed | | | (2,211,963 | ) | | | (24,842,978 | ) | | | (6,357,467 | ) | | | (56,229,043 | ) |
| Net increase – Class D | | | 4,403,110 | | | | 48,006,523 | | | | 14,053,394 | | | | 124,487,254 | |
| Net increase in Fund | | | 6,136,800 | | | $ | 68,036,285 | | | | 14,696,577 | | | $ | 130,604,410 | |
|
7. Federal Income Tax Status
The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from 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.
17
Morgan Stanley International Value Equity Fund
Notes to Financial Statements February 29, 2004 (unaudited) continued
As of August 31, 2003, the Fund had a net capital loss carryforward of $5,215,772 of which $2,443,651 will expire on August 31, 2010, and $2,772,121 will expire on August 21, 2011 to offset future capital gains to the extent provided by regulations.
As of August 31, 2003, the Fund had temporary book/tax differences primarily attributable to post-October losses (capital losses incurred after October 31 within the taxable year which are deemed to arise on the first business day of the Fund's next taxable year), capital loss deferrals on wash sales and mark-to-market of open forward foreign currency exchange contracts.
8. Legal Matters
The Investment Manager, certain affiliates of the Investment Manager, certain officers of such affiliates and certain investment companies advised by the Investment Manager or its affiliates, including the Fund, are named as defendants in a number of similar class action complaints which were recently consolidated. This consolidated action also names as defendants certain individual Trustees and Directors of the Morgan Stanley funds. The consolidated amended complaint generally alleges that defendants, including the Fund, violated their statutory disclosure obligations and fiduciary duties by failing properly to disclose (i) that the Investment Manager and certain affiliates of the Investment Manager allegedly offered economic incentives to brokers and others to recommend the funds advised by the Investment Manager or its affiliates to investors rather than funds managed by other companies, and (ii) that the funds advised by the Investment Manager or its affiliates, including the Fund, allegedly paid excessive commissions to brokers in return for their efforts to recommend these funds to investors. The complaint seeks, among other things, unspecified compensatory damages, rescissionary damages, fees and costs. The defendants intend to move to dismiss the action and otherwise vigorously to defend it. While the Fund believes that it has meritorious defenses, the ultimate outcome of this matter is not presently determinable at this early stage of the litigation, and no provision has been made in the Fund's financial statements for the effect, if any, of this matter.
18
Morgan Stanley International Value Equity Fund
Financial Highlights
Selected ratios and per share data for a share of beneficial interest outstanding throughout each period:
| | | | | | | | | | | | | | | | | | |
| | | FOR THE SIX
MONTHS ENDED
FEBRUARY 29, 2004 | | FOR THE YEAR
ENDED
AUGUST 31, 2003 | | FOR THE YEAR
ENDED
AUGUST 31, 2002 | | FOR THE PERIOD
APRIL 26, 2001*
THROUGH
AUGUST 31, 2001 |
| | | (unaudited) |
| Class A Shares |
| Selected Per Share Data: |
| Net asset value, beginning of period | | $ | 9.80 | | | $ | 9.21 | | | $ | 9.60 | | | $ | 10.00 | |
| Income (loss) from investment operations: |
| Net investment income (loss)‡ | | | (0.01 | ) | | | 0.09 | | | | 0.03 | | | | 0.03 | |
| Net realized and unrealized gain (loss) | | | 2.45 | | | | 0.57 | | | | (0.33 | ) | | | (0.43 | ) |
| Total income (loss) from investment operations | | | 2.44 | | | | 0.66 | | | | (0.30 | ) | | | (0.40 | ) |
| Less dividends from net investment income | | | (0.14 | ) | | | (0.07 | ) | | | (0.09 | ) | | | — | |
| Net asset value, end of period | | $ | 12.10 | | | $ | 9.80 | | | $ | 9.21 | | | $ | 9.60 | |
| Total Return† | | | 25.04 | %(1) | | | 7.12 | % | | | (3.03 | )% | | | (4.00) | % (1) |
| Ratios to Average Net Assets(3): |
| Expenses | | | 1.52 | %(2) | | | 1.59 | % | | | 1.70 | % | | | 1.88 | %(2) |
| Net investment income (loss) | | | (0.27) | % (2) | | | 1.02 | % | | | 0.47 | % | | | 0.87 | %(2) |
| Supplemental Data: |
| Net assets, end of period, in thousands | | | $19,905 | | | | $19,827 | | | | $9,297 | | | | $9,013 | |
| Portfolio turnover rate | | | 24 | %(1) | | | 32 | % | | | 52 | % | | | 13 | %(1) |
|
| * | Commencement of operations. |
| ‡ | Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period. |
| † | The per share amounts were computed using an average number of shares outstanding during the period. |
| (1) | Not annualized. |
| (2) | Annualized. |
| (3) | Reflects overall Fund ratios for investment income and non-class specific expenses. |
See Notes to Financial Statements
19
Morgan Stanley International Value Equity Fund
Financial Highlights continued
| | | | | | | | | | | | | | | | | | |
| | | FOR THE SIX
MONTHS ENDED
FEBRUARY 29, 2004 | | FOR THE YEAR
ENDED
AUGUST 31, 2003 | | FOR THE YEAR
ENDED
AUGUST 31, 2002 | | FOR THE PERIOD
APRIL 26, 2001*
THROUGH
AUGUST 31, 2001 |
| | | (unaudited) |
| Class B Shares |
| Selected Per Share Data: |
| Net asset value, beginning of period | | $ | 9.71 | | | $ | 9.14 | | | $ | 9.57 | | | $ | 10.00 | |
| Income (loss) from investment operations: |
| Net investment income (loss)‡ | | | (0.06 | ) | | | 0.01 | | | | (0.03 | ) | | | 0.00 | |
| Net realized and unrealized gain (loss) | | | 2.44 | | | | 0.57 | | | | (0.33 | ) | | | (0.43 | ) |
| Total income (loss) from investment operations | | | 2.38 | | | | 0.58 | | | | (0.36 | ) | | | (0.43 | ) |
| Less dividends from net investment income | | | (0.05 | ) | | | (0.01 | ) | | | (0.07 | ) | | | — | |
| Net asset value, end of period | | $ | 12.04 | | | $ | 9.71 | | | $ | 9.14 | | | $ | 9.57 | |
| Total Return† | | | 24.57 | %(1) | | | 6.32 | % | | | (3.74 | )% | | | (4.30) | % (1) |
| Ratios to Average Net Assets(3): |
| Expenses | | | 2.27 | %(2) | | | 2.36 | % | | | 2.45 | % | | | 2.63 | %(2) |
| Net investment income (loss) | | | (1.02) | % (2) | | | 0.25 | % | | | (0.28 | )% | | | 0.12 | %(2) |
| Supplemental Data: |
| Net assets, end of period, in thousands | | | $198,450 | | | | $145,382 | | | | $143,200 | | | | $114,541 | |
| Portfolio turnover rate | | | 24 | %(1) | | | 32 | % | | | 52 | % | | | 13 | %(1) |
|
| * | Commencement of operations. |
| † | Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period. |
| ‡ | The per share amounts were computed using an average number of shares outstanding during the period. |
| (1) | Not annualized. |
| (2) | Annualized. |
| (3) | Reflects overall Fund ratios for investment income and non-class specific expenses. |
See Notes to Financial Statements
20
Morgan Stanley International Value Equity Fund
Financial Highlights continued
| | | | | | | | | | | | | | | | | | |
| | | FOR THE SIX
MONTHS ENDED
FEBRUARY 29, 2004 | | FOR THE YEAR
ENDED
AUGUST 31, 2003 | | FOR THE YEAR
ENDED
AUGUST 31, 2002 | | FOR THE PERIOD
APRIL 26, 2001*
THROUGH
AUGUST 31, 2001 |
| | | (unaudited) |
| Class C Shares |
| Selected Per Share Data: |
| Net asset value, beginning of period | | $ | 9.69 | | | $ | 9.13 | | | $ | 9.57 | | | $ | 10.00 | |
| Income (loss) from investment operations: |
| Net investment income (loss)‡ | | | (0.06 | ) | | | 0.02 | | | | (0.03 | ) | | | 0.00 | |
| Net realized and unrealized gain (loss) | | | 2.45 | | | | 0.56 | | | | (0.34 | ) | | | (0.43 | ) |
| Total income (loss) from investment operations | | | 2.39 | | | | 0.58 | | | | (0.37 | ) | | | (0.43 | ) |
| Less dividends from net investment income | | | (0.07 | ) | | | (0.02 | ) | | | (0.07 | ) | | | — | |
| Net asset value, end of period | | $ | 12.01 | | | $ | 9.69 | | | $ | 9.13 | | | $ | 9.57 | |
| Total Return† | | | 24.67 | %(1) | | | 6.24 | % | | | (3.73 | )% | | | (4.30) | % (1) |
| Ratios to Average Net Assets(3): |
| Expenses | | | 2.27 | %(2) | | | 2.36 | % | | | 2.45 | % | | | 2.63 | %(2) |
| Net investment income (loss) | | | (1.02) | % (2) | | | 0.25 | % | | | (0.28 | )% | | | 0.12 | %(2) |
| Supplemental Data: |
| Net assets, end of period, in thousands | | | $42,666 | | | | $28,556 | | | | $23,946 | | | | $15,558 | |
| Portfolio turnover rate | | | 24 | %(1) | | | 32 | % | | | 52 | % | | | 13 | %(1) |
|
| * | Commencement of operations. |
| † | Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period. |
| ‡ | The per share amounts were computed using an average number of shares outstanding during the period. |
| (1) | Not annualized. |
| (2) | Annualized. |
| (3) | Reflects overall Fund ratios for investment income and non-class specific expenses. |
See Notes to Financial Statements
21
Morgan Stanley International Value Equity Fund
Financial Highlights continued
| | | | | | | | | | | | | | | | | | |
| | | FOR THE SIX
MONTHS ENDED
FEBRUARY 29, 2004 | | FOR THE YEAR
ENDED
AUGUST 31, 2003 | | FOR THE YEAR
ENDED
AUGUST 31, 2002 | | FOR THE PERIOD
APRIL 26, 2001*
THROUGH
AUGUST 31, 2001 |
| | | (unaudited) |
| Class D Shares |
| Selected Per Share Data: |
| Net asset value, beginning of period | | $ | 9.81 | | | $ | 9.23 | | | $ | 9.60 | | | $ | 10.00 | |
| Income (loss) from investment operations: |
| Net investment income‡ | | | (0.00 | ) | | | 0.12 | | | | 0.10 | | | | 0.04 | |
| Net realized and unrealized gain (loss) | | | 2.47 | | | | 0.55 | | | | (0.37 | ) | | | (0.44 | ) |
| Total income (loss) from investment operations | | | 2.47 | | | | 0.67 | | | | (0.27 | ) | | | (0.40 | ) |
| Less dividends from net investment income | | | (0.17 | ) | | | (0.09 | ) | | | (0.10 | ) | | | — | |
| Net asset value, end of period | | $ | 12.11 | | | $ | 9.81 | | | $ | 9.23 | | | $ | 9.60 | |
| Total Return† | | | 25.31 | %(1) | | | 7.39 | % | | | (2.82 | )% | | | (4.00) | % (1) |
| Ratios to Average Net Assets(3): | | | | |
| Expenses | | | 1.27 | %(2) | | | 1.36 | % | | | 1.45 | % | | | 1.63 | %(2) |
| Net investment income (loss) | | | (0.02) | % (2) | | | 1.25 | % | | | 0.72 | % | | | 1.12 | %(2) |
| Supplemental Data: |
| Net assets, end of period, in thousands | | | $322,939 | | | | $218,574 | | | | $75,903 | | | | $12,128 | |
| Portfolio turnover rate | | | 24 | %(1) | | | 32 | % | | | 52 | % | | | 13 | %(1) |
|
| * | Commencement of operations. |
| † | Calculated based on the net asset value as of the last business day of the period. |
| ‡ | The per share amounts were computed using an average number of shares outstanding during the period. |
| (1) | Not annualized. |
| (2) | Annualized. |
| (3) | Reflects overall Fund ratios for investment income and non-class specific expenses. |
See Notes to Financial Statements
22
(This page has been left blank intentionally.)
| | |
Trustees Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
James F. Higgins
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael E. Nugent
Philip J. Purcell
Fergus Reid Officers Charles A. Fiumefreddo
Chairman of the Board Mitchell M. Merin
President Ronald E. Robison
Executive Vice President and Principal Executive Officer Barry Fink
Vice President and General Counsel Joseph J. McAlinden
Vice President Stefanie V. Chang
Vice President Francis J. Smith
Treasurer and Chief Financial Officer Thomas F. Caloia
Vice President Mary E. Mullin
Secretary Transfer Agent Morgan Stanley Trust
Harborside Financial Center, Plaza Two
Jersey City, New Jersey 07311 Independent Auditors Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281 Investment Manager Morgan Stanley Investment Advisors Inc.
1221 Avenue of the Americas
New York, New York 10020 Sub-Advisor Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, United Kingdom E14 4QA 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. Investments and services offered through Morgan Stanley DW Inc., member SIPC. Morgan Stanley Distributors Inc., member NASD. © 2004 Morgan Stanley 
39906RPT-RA04-00028P-AO2/04 | | MORGAN STANLEY FUNDS |
Morgan Stanley
International Value
Equity Fund
Semiannual Report
February 29, 2004
|
 |
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. [Reserved.]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable for semiannual reports.
Item 8. [Reserved.]
Item 9 - 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.
There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Fund's internal controls
or in other factors that could significantly affect the Fund's internal controls
subsequent to the date of their evaluation.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 10 Exhibits
(a) Code of Ethics - Not applicable for semiannual reports.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant are attached hereto as part of EX-99.CERT.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
Morgan Stanley International Value Equity Fund
/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
April 20, 2004
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
April 20, 2004
/s/ Francis Smith
Francis Smith
Principal Financial Officer
April 20, 2004
3
EXHIBIT 10 B1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
CERTIFICATIONS
I, Ronald E. Robison, certify that:
1. I have reviewed this report on Form N-CSR of Morgan Stanley International
Value Equity Fund;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net
assets, and cash flows (if the financial statements are required to include
a statement of cash flows) of the registrant as of, and for, the periods
presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940) for the
registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
[b) Omitted.]
c) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date
within 90 days prior to the filing date of this report based on such
evaluation; and
d) disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal half-year (the registrant's second fiscal half-year in the case of
an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer(s) and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
4
a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls
over financial reporting.
Date: April 20, 2004
/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
5
EXHIBIT 10 B2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
CERTIFICATIONS
I, Francis Smith, certify that:
6. I have reviewed this report on Form N-CSR of Morgan Stanley International
Value Equity Fund;
7. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
8. Based on my knowledge, the financial statements and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net
assets, and cash flows (if the financial statements are required to include
a statement of cash flows) of the registrant as of, and for, the periods
presented in this report;
9. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940) for the
registrant and have:
b) designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
[b) Omitted.]
e) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date
within 90 days prior to the filing date of this report based on such
evaluation; and
f) disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal half-year (the registrant's second fiscal half-year in the case of
an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
10. The registrant's other certifying officer(s) and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
c) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize, and report financial information; and
6
d) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls
over financial reporting.
Date: April 20, 2004
/s/ Francis Smith
Francis Smith
Principal Financial Officer
7
SECTION 906 CERTIFICATION
Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Morgan Stanley International Value Equity Fund
In connection with the Report on Form N-CSR (the "Report") of the
above-named issuer for the period ended February 29, 2004 that is accompanied by
this certification, the undersigned hereby certifies that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Issuer.
Date: April 20, 2004 /s/ Ronald E. Robison
---------------------------
Ronald E. Robison
Principal Executive Officer
A signed original of this written statement required by Section 906 has been
provided to Morgan Stanley International Value Equity Fund and will be retained
by Morgan Stanley International Value Equity Fund and furnished to the
Securities and Exchange Commission or its staff upon request.
8
SECTION 906 CERTIFICATION
Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Morgan Stanley International Value Equity Fund
In connection with the Report on Form N-CSR (the "Report") of the
above-named issuer for the period ended February 29, 2004 that is accompanied by
this certification, the undersigned hereby certifies that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Issuer.
Date: April 20, 2004 /s/ Francis Smith
----------------------
Francis Smith
Principal Financial Officer
A signed original of this written statement required by Section 906 has been
provided to Morgan Stanley International Value Equity Fund and will be retained
by Morgan Stanley International Value Equity Fund and furnished to the
Securities and Exchange Commission or its staff upon request.
9
