At July 31, 2022, the Fund had sufficient cash and/or securities to cover commitments under open derivative contracts.
In the normal course of pursuing its investment objective, the Fund is subject to the following risks:
Equity Price Risk: During the period ended July 31, 2022, the Fund entered into equity futures contracts on securities indices to gain or limit exposure to certain markets, particularly in connection with engaging in the dividend capture trading strategy.
Foreign Exchange Risk: The Fund engages in forward foreign currency exchange contracts to seek to hedge against fluctuations in currency exchange rates.
Affiliated Investments
The Fund invested in issuers that may be deemed to be affiliated with Morgan Stanley. At July 31, 2022, the value of the Fund's investment in affiliated issuers and funds was $17,936,734, which represents 1.3% of the Fund's net assets. Transactions in affiliated issuers and funds by the Fund for the fiscal year to date ended July 31, 2022 were as follows:
| Name | Value,
beginning
of period | Purchases | Sales
proceeds | Net
realized
gain (loss) | Change in
unrealized
appreciation
(depreciation) | Value, end
of period | Dividend
income | Units/Shares,
end of period |
| Common Stocks |
| Mitsubishi UFJ Financial Group, Inc. | $9,679,338 | $ — | $(10,560,862) | $1,976,377 | $(1,094,853) | $ — | $ — | — |
| Short-Term Investments |
| Eaton Vance Cash Reserves Fund, LLC | — | 192,118,366 | (192,115,423) | (2,943) | — | — | 2,879 | — |
| Liquidity Fund, Institutional Class(1) | — | 155,359,475 | (137,422,741) | — | — | 17,936,734 | 35,540 | 17,936,734 |
| Total | | | | $1,973,434 | $(1,094,853) | $17,936,734 | $38,419 | |
| (1) | Represents investment in Morgan Stanley Institutional Liquidity Funds - Government Portfolio. |
Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
| • | Level 1 – quoted prices in active markets for identical investments |
| • | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| • | Level 3 – significant unobservable inputs (including a fund's own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
At July 31, 2022, the hierarchy of inputs used in valuing the Fund’s investments and open derivative instruments, which are carried at value, were as follows:
| Asset Description | Level 1 | Level 2 | Level 3 | Total |
| Common Stocks: | | | | |
| Communication Services | $ 90,578,304 | $ 19,066,265 | $ — | $ 109,644,569 |
| Consumer Discretionary | 73,861,363 | 98,091,145 | — | 171,952,508 |
| Consumer Staples | 60,924,183 | 64,195,431 | — | 125,119,614 |
| Energy | 68,549,288 | — | — | 68,549,288 |
| Financials | 87,342,137 | 71,903,413 | — | 159,245,550 |
| Health Care | 108,044,154 | 131,911,773 | — | 239,955,927 |
| Industrials | 66,916,597 | 122,331,809 | — | 189,248,406 |
| Information Technology | 269,961,680 | 80,170,755 | — | 350,132,435 |
