Morgan Stanley International Value Equity Fund Inactive
Filed: 21 Dec 06, 12:00am
MORGAN STANLEY INTERNATIONAL VALUE EQUITY FUND 1221 Avenue of the Americas New York, NY 10020 December 20, 2006 Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 Attention: Larry Greene, Division of Investment Management RE: MORGAN STANLEY INTERNATIONAL VALUE EQUITY FUND (FILE NOS. 333-53546 AND 811-10273) Dear Mr. Greene: Thank you for your telephonic comments regarding the registration statement on Form N-1A for Morgan Stanley International Value Equity Fund (the "Fund") filed with the Securities and Exchange Commission (the "SEC") on October 26, 2006. Below, we describe the changes made to the registration statement in response to the Staff's comments and provide any responses to or any supplemental explanations of such comments, as requested. These changes will be reflected in post-effective amendment number 33 to the Fund's registration statement on Form N-1A, which will be filed via EDGAR on or about December 21, 2006. GENERAL COMMENTS TO FORM N-1A COMMENT 1. PLEASE FILE A RESPONSE LETTER TO THESE COMMENTS VIA EDGAR, INCLUDING THE "TANDY" PROVISION. Response 1. This response letter addressing the Staff's comments has been filed via EDGAR correspondence, including the "Tandy" provision, separate from the corresponding Post-Effective Amendment. COMMENTS TO THE PROSPECTUS COMMENT 2. IN THE FIRST PARAGRAPH OF THE SECTION "PRINCIPAL INVESTMENT STRATEGIES", THE PROSPECTUS STATES THAT "[T]HE FUND INVESTS IN AT LEAST THREE DIFFERENT COUNTRIES LOCATED OUTSIDE OF THE UNITED STATES." THE SECURITIES AND EXCHANGE COMMISSION TAKES THE POSITION THAT A FUND THAT HAS THE WORD "INTERNATIONAL" IN ITS NAME, SUCH AS THE FUND, NEEDS TO BE INVESTED BROADLY THROUGHOUT THE WORLD IN A FAIRLY SUBSTANTIAL NUMBER OF COUNTRIES, AT A MINIMUM, THREE COUNTRIES THROUGHOUT THE WORLD ON A NORMAL BASIS. Response 2. We believe that the current disclosure complies with the SEC's position. COMMENT 3. PLEASE CONFIRM THAT THERE IS RISK DISCLOSURE REGARDING INVESTMENT IN EMERGING MARKET SECURITIES. 1 Response 3. The disclosure has been included. COMMENT 4. IN THE SECTION "PRINCIPAL INVESTMENT STRATEGIES," THERE NEEDS TO BE A DISCUSSION THAT CORRESPONDS TO THE SUB-CAPTIONS "SMALL & MEDIUM CAPITALIZATION COMPANIES," "CONVERTIBLE SECURITIES" AND "EMERGING MARKET COUNTRIES," INCLUDED IN THE "PRINCIPAL RISKS" SECTION. Response 4. We respectfully acknowledge the comment and believe the disclosure is already included. COMMENT 5. IN THE SECTION "PRINCIPAL RISKS - CONVERTIBLE SECURITIES", PLEASE CLARIFY WHETHER THE CONVERTIBLE SECURITIES IN WHICH THE FUND INVESTS MAY INCLUDE PREFERRED STOCK AND CONVERTIBLE SECURITIES THAT ARE BELOW INVESTMENT GRADE. Response 5. The disclosure has been updated to include a reference to preferred stock. We respectfully acknowledge the comment relating to below investment grade convertible securities but since the Fund's investments in below investment grade convertible securities is limited to 5%, we believe the disclosure in the Statement of Additional Information is appropriate. COMMENT 6. IN THE "FEES AND EXPENSES" SECTION OF THE PROSPECTUS, CONSIDER MOVING THE FOOTNOTES TO AFTER THE EXAMPLE. Response 6. We respectfully acknowledge the comment, but believe the current placement of the footnotes is appropriate. We believe to move the footnotes to below the Example would diminish the impact of the information and could result in a shareholder being unable to locate the footnotes. COMMENT 7. PLEASE INCLUDE THE ORDER PROCESSING FEE IN THE FEE TABLE AS REQUIRED BY FORM N-1A IF AN INVESTOR WILL INCUR THIS CHARGE WHEN IT INVESTS IN THE FUND. Response 7. Form N-1A requires that the costs and expenses that an investor will bear directly or indirectly be included in the fee table. The order processing fee that Morgan Stanley DW Inc. charges clients when a client purchases or tenders shares of the Fund is not required to be included in the fee table because only investors that purchase shares through Morgan Stanley DW Inc. would be subject to that fee. As you have requested and consistent with SEC Release 2004-89, the Fund hereby acknowledges that: o the Fund is responsible for the adequacy and accuracy of the disclosure in the filings; o the Staff's comments or changes to disclosure in response to Staff comments in the filings reviewed by the Staff do not foreclose the Commission from taking any action with respect to the filings; and 2 o the Fund may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. If you would like to discuss any of these responses in further detail or if you have any questions, please feel free to contact me at (212) 762-7546. Thank you. Sincerely, /s/ Alice J. Gerstel Alice J. Gerstel 3