Morgan Stanley Institutional 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			811-05624
Morgan Stanley Institutional Fund, Inc.
(Exact name of registrant as specified in charter)
522 Fifth Avenue, New York, New York					10036
(Address of principal executive offices)					(Zip code)
John H. Gernon 522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)
Registrant’s telephone number, including area code:				212-296-0289
Date of fiscal year end:	December 31,
Date of reporting period:		June 30, 2020

Item 1 - Report to Shareholders

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Active International Allocation Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	7
Statement of Operations	9
Statements of Changes in Net Assets	10
Financial Highlights	12
Notes to Financial Statements	18
Investment Advisory Agreement Approval	29
Liquidity Risk Management Program	31
Privacy Notice	32
Director and Officer Information	34

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Active International Allocation Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Active International Allocation Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Active International Allocation Portfolio Class I	$	1,000.00	$	957.50	$	1,020.44	$	4.33	$	4.47		0.89	%
Active International Allocation Portfolio Class A		1,000.00		955.80		1,018.95		5.79		5.97		1.19
Active International Allocation Portfolio Class L		1,000.00		953.00		1,016.21		8.45		8.72		1.74
Active International Allocation Portfolio Class C		1,000.00		952.30		1,014.97		9.66		9.97		1.99
Active International Allocation Portfolio Class IS		1,000.00		957.50		1,020.69		4.09		4.22		0.84
Active International Allocation Portfolio Class IR		1,000.00		957.50		1,020.69		4.09		4.22		0.84

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

  Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Active International Allocation Portfolio

	Shares		Value (000)
Common Stocks (97.3%)
Argentina (0.1%)
Despegar.com Corp. (a)(b)		28,000	$	201
Belgium (1.0%)
Anheuser-Busch InBev SA N.V.		35,512		1,751
Brazil (2.4%)
Ambev SA ADR (b)		1,191,706		3,146
Petroleo Brasileiro SA (Preference)		230,481		913
				4,059
Canada (4.5%)
Agnico Eagle Mines Ltd.		39,382		2,522
Altus Group Ltd. (b)		15,498		465
First Quantum Minerals Ltd.		525,944		4,192
Gildan Activewear, Inc.		34,390		533
				7,712
China (6.2%)
Alibaba Group Holding Ltd. ADR (a)		14,974		3,230
China Resources Beer Holdings Co., Ltd. (c)		122,000		681
Tencent Holdings Ltd. (c)		57,100		3,659
Tencent Music Entertainment Group ADR (a)		106,800		1,437
Trip.com Group Ltd. ADR (a)		58,933		1,528
				10,535
Colombia (0.2%)
Banco Davivienda SA (Preference)		45,317		338
Denmark (2.2%)
Maersk Drilling A/S (a)		14,139		300
Novo Nordisk A/S Series B		51,579		3,360
				3,660
France (9.8%)
Air Liquide SA		5,440		787
Airbus SE (a)		44,566		3,193
Capgemini SE		10,908		1,259
Dassault Systemes SE		5,767		1,001
EssilorLuxottica SA (a)		4,581		589
Hermes International		463		389
Kering SA		2,026		1,108
L'Oreal SA (BSRM) (a)		1,420		458
L'Oreal SA (PAR)		2,311		746
Legrand SA		6,555		498
LVMH Moet Hennessy Louis Vuitton SE		1,997		882
Pernod Ricard SA		7,755		1,221
Remy Cointreau SA (b)		5,608		765
Safran SA (a)		3,213		323
Sanofi		20,368		2,077
Vivendi SA		48,795		1,261
				16,557
Germany (9.5%)
Adidas AG (a)		5,217		1,375
Bayer AG (Registered)		59,423		4,405
Bayerische Motoren Werke AG		4,266		272
Continental AG (a)		2,122		209

	Shares		Value (000)
Duerr AG		34,808	$	909
Infineon Technologies AG		47,928		1,123
Jungheinrich AG (Preference)		31,250		735
KION Group AG		13,916		857
Linde PLC (a)		5,356		1,134
SAP SE		23,453		3,278
Siemens Healthineers AG		39,100		1,879
				16,176
India (1.9%)
Apollo Hospitals Enterprise Ltd.		45,661		817
ICICI Bank Ltd.		129,188		602
ICICI Prudential Life Insurance Co., Ltd.		144,760		819
Maruti Suzuki India Ltd.		12,004		929
				3,167
Ireland (0.3%)
Kerry Group PLC, Class A		4,867		605
Japan (9.7%)
FANUC Corp.		5,150		923
Hoya Corp.		7,800		747
Keyence Corp.		5,600		2,347
Murata Manufacturing Co., Ltd.		8,700		513
Nexon Co., Ltd.		120,400		2,716
Nintendo Co., Ltd.		1,808		808
Shimano, Inc.		4,350		836
Shiseido Co., Ltd.		10,300		656
SMC Corp.		2,105		1,082
Sony Corp.		38,793		2,678
Sony Corp. ADR (b)		30,312		2,096
Tokio Marine Holdings, Inc.		11,620		509
Unicharm Corp.		13,300		545
				16,456
Korea, Republic of (3.8%)
Samsung Electronics Co., Ltd.		104,272		4,616
SK Hynix, Inc.		26,843		1,916
				6,532
Malta (0.0%)
BGP Holdings PLC (a)(d)		72,261		—	@
Netherlands (6.0%)
Akzo Nobel N.V.		4,230		380
ASML Holding N.V.		7,180		2,627
Koninklijke Philips N.V. (a)		75,492		3,527
Unilever N.V. CVA		38,935		2,076
Wolters Kluwer N.V.		19,131		1,495
				10,105
Norway (0.1%)
Subsea 7 SA (a)		36,850		235
Singapore (8.0%)
Sea Ltd. ADR (a)		126,399		13,555

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

	Shares		Value (000)
Spain (1.0%)
Aena SME SA (a)		4,497	$	602
Amadeus IT Group SA		19,720		1,035
				1,637
Sweden (1.6%)
Atlas Copco AB, Class A		12,660		539
Epiroc AB, Class A		35,510		445
Telefonaktiebolaget LM Ericsson, Class B		181,320		1,681
				2,665
Switzerland (4.0%)
Givaudan SA (Registered)		246		919
Nestle SA (Registered)		52,421		5,812
				6,731
Taiwan (2.7%)
Airtac International Group		32,000		565
Taiwan Semiconductor Manufacturing Co., Ltd.		246,000		2,627
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		24,292		1,379
				4,571
Thailand (0.5%)
Muangthai Capital PCL (Foreign Shares) (a)		532,400		904
United Kingdom (8.8%)
AstraZeneca PLC		21,371		2,224
Diageo PLC		44,549		1,481
Intertek Group PLC		3,793		255
Keywords Studios PLC (b)		60,698		1,362
RELX PLC (LSE)		17,420		403
Royal Dutch Shell PLC, Class A		42,335		678
Royal Dutch Shell PLC, Class B		31,111		472
Ryanair Holdings PLC ADR (a)		54,515		3,617
Sage Group PLC (The)		72,435		601
Smith & Nephew PLC		35,901		669
Spectris PLC		16,492		515
Unilever PLC		44,586		2,405
Weir Group PLC (The)		25,917		341
				15,023
United States (13.0%)
Booking Holdings, Inc. (a)		1,543		2,457
Bristol-Myers Squibb Co.		9,280		546
Charles River Laboratories International, Inc. (a)		6,040		1,053
Cognex Corp.		7,900		472
Estee Lauder Cos., Inc. (The), Class A		5,577		1,052
Farfetch Ltd., Class A (a)(b)		104,568		1,806
ICON PLC (a)		4,120		694
Mastercard, Inc., Class A		2,067		611
Medtronic PLC		6,287		577
Micron Technology, Inc. (a)		106,199		5,471
Mondelez International, Inc., Class A		7,637		391
Newmont Corp.		32,659		2,016
Newmont Goldcorp Corp. (TSX) (b)		29,323		1,812
Palo Alto Networks, Inc. (a)		1,464		336
Schlumberger Ltd.		46,230		850

	Shares		Value (000)
Transocean Ltd. (a)(b)		545,595	$	998
Visa, Inc., Class A		3,356		648
Xilinx, Inc.		1,930		190
				21,980
Total Common Stocks (Cost $132,192)				165,155
Investment Company (0.7%)
United States (0.7%)
Morgan Stanley China A Share Fund, Inc. (See Note G) (Cost $1,324)		56,878		1,110
Short-Term Investments (4.8%)
Securities held as Collateral on Loaned Securities (3.0%)
Investment Company (2.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $4,000)		3,999,909		4,000
	Face Amount (000)
Repurchase Agreements (0.6%)
HSBC Securities USA, Inc., (0.07%, dated 6/30/20, due 7/1/20; proceeds $393; fully collateralized by a U.S. Government obligation; 0.5% due 3/15/23; valued at $401)	$	393		393
Merrill Lynch & Co., Inc., (0.07%, dated 6/30/20, due 7/1/20; proceeds $692; fully collateralized by U.S. Government obligations; 1.38% – 3.88% due 9/30/20 – 8/15/40; valued at $706)		692		692
				1,085
Total Securities held as Collateral on Loaned Securities (Cost $5,085)				5,085
	Shares
Investment Company (1.8%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $3,056)		3,055,648		3,056
Total Short-Term Investments (Cost $8,141)				8,141
Total Investments (102.8%) (Cost $141,657) Including $7,447 of Securities Loaned (e)(f)(g)				174,406
Liabilities in Excess of Other Assets (–2.8%)				(4,803	)
Net Assets (100.0%)			$	169,603

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

@  Value is less than $500.

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2020.

(c)  Security trades on the Hong Kong exchange.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

(d)  At June 30, 2020, the Fund held a fair valued security valued at less than $500, representing less than 0.05% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(e)  Securities are available for collateral in connection with open foreign currency forward exchange contracts.

(f)  The approximate fair value and percentage of net assets, $101,586,000 and 59.9%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(g)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $45,641,000 and the aggregate gross unrealized depreciation is approximately $12,937,000, resulting in net unrealized appreciation of approximately $32,704,000.

ADR  American Depositary Receipt.

CVA  Certificaten Van Aandelen.

BSRM  Berlin Second Regulated Market.

LSE  London Stock Exchange.

PAR  Paris Stock Exchange.

TSX  Toronto Stock Exchange.

Foreign Currency Forward Exchange Contracts:

The Fund had the following foreign currency forward exchange contracts open at June 30, 2020:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
Citibank NA	EUR	1,593	$	1,794	9/17/20	$	1
State Street Bank and Trust Co.	HKD	4,194	$	541	9/17/20		(—	@)
State Street Bank and Trust Co.	$	2,381	GBP	1,894	9/17/20		(34	)
State Street Bank and Trust Co.	$	1,983	JPY	212,626	9/17/20		(12	)
						$	(45	)

@  —  Value is less than $500.

EUR  —  Euro

GBP  —  British Pound

HKD  —  Hong Kong Dollar

JPY  —  Japanese Yen

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		54.8	%
Entertainment		11.7
Semiconductors & Semiconductor Equipment		9.1
Pharmaceuticals		7.5
Metals & Mining		6.2
Internet & Direct Marketing Retail		5.4
Beverages		5.3
Total Investments		100.0	%***

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2020.

**  Industries and/or investment types representing less than 5% of total investments.

***  Does not include open foreign currency forward exchange contracts with net unrealized depreciation of approximately $45,000.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Active International Allocation Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $133,277)	$	166,240
Investments in Securities of Affiliated Issuer, at Value (Cost $8,380)		8,166
Total Investments in Securities, at Value (Cost $141,657)		174,406
Foreign Currency, at Value (Cost $107)		108
Tax Reclaim Receivable		426
Dividends Receivable		131
Receivable for Fund Shares Sold		25
Receivable from Securities Lending Income		2
Unrealized Appreciation on Foreign Currency Forward Exchange Contract		1
Receivable from Affiliate		—	@
Other Assets		100
Total Assets		175,199
Liabilities:
Collateral on Securities Loaned, at Value		5,085
Payable for Advisory Fees		183
Payable for Fund Shares Redeemed		143
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		46
Payable for Professional Fees		43
Payable for Sub Transfer Agency Fees — Class I		18
Payable for Sub Transfer Agency Fees — Class A		7
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Shareholder Services Fees — Class A		11
Payable for Distribution and Shareholder Services Fees — Class L		3
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Custodian Fees		13
Payable for Administration Fees		11
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Transfer Agency Fees — Class IR		—	@
Other Liabilities		29
Total Liabilities		5,596
Net Assets	$	169,603
Net Assets Consist of:
Paid-in-Capital	$	143,585
Total Distributable Earnings		26,018
Net Assets	$	169,603

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Active International Allocation Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	112,977
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		8,088,024
Net Asset Value, Offering and Redemption Price Per Share	$	13.97
CLASS A:
Net Assets	$	52,031
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,643,354
Net Asset Value, Redemption Price Per Share	$	14.28
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.79
Maximum Offering Price Per Share	$	15.07
CLASS L:
Net Assets	$	4,522
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		318,393
Net Asset Value, Offering and Redemption Price Per Share	$	14.20
CLASS C:
Net Assets	$	53
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,764
Net Asset Value, Offering and Redemption Price Per Share	$	14.18
CLASS IS:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		734
Net Asset Value, Offering and Redemption Price Per Share	$	13.97
CLASS IR:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		734
Net Asset Value, Offering and Redemption Price Per Share	$	13.97
(1) Including: Securities on Loan, at Value:	$	7,447

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Active International Allocation Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $160 of Foreign Taxes Withheld)	$	1,263
Income from Securities Loaned — Net		5
Dividends from Security of Affiliated Issuer (Note G)		3
Total Investment Income		1,271
Expenses:
Advisory Fees (Note B)		533
Professional Fees		83
Shareholder Services Fees — Class A (Note D)		63
Distribution and Shareholder Services Fees — Class L (Note D)		16
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Administration Fees (Note C)		66
Sub Transfer Agency Fees — Class I		36
Sub Transfer Agency Fees — Class A		22
Sub Transfer Agency Fees — Class L		2
Sub Transfer Agency Fees — Class C		—	@
Registration Fees		41
Custodian Fees (Note F)		26
Shareholder Reporting Fees		25
Transfer Agency Fees — Class I (Note E)		3
Transfer Agency Fees — Class A (Note E)		5
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Transfer Agency Fees — Class IR (Note E)		1
Pricing Fees		6
Directors' Fees and Expenses		2
Other Expenses		11
Expenses Before Non Operating Expenses		945
Bank Overdraft Expense		1
Total Expenses		946
Waiver of Advisory Fees (Note B)		(98	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(11	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(10	)
Net Expenses		824
Net Investment Income		447
Realized Gain (Loss):
Investments Sold		(2,341	)
Investments in Affiliates		(295	)
Foreign Currency Forward Exchange Contracts		(136	)
Foreign Currency Translation		(152	)
Futures Contracts		(2,898	)
Options Written		4,601
Net Realized Loss		(1,221	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of $67)		(8,447	)
Investments in Affiliates		135
Foreign Currency Forward Exchange Contracts		(68	)
Foreign Currency Translation		19
Futures Contracts		5
Net Change in Unrealized Appreciation (Depreciation)		(8,356	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(9,577	)
Net Decrease in Net Assets Resulting from Operations	$	(9,130	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Active International Allocation Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	447		$	2,002
Net Realized Gain (Loss)		(1,221	)		6,934
Net Change in Unrealized Appreciation (Depreciation)		(8,356	)		27,852
Net Increase (Decrease) in Net Assets Resulting from Operations		(9,130	)		36,788
Dividends and Distributions to Shareholders:
Class I		—			(1,578	)
Class A		—			(537	)
Class L		—			(19	)
Class C		—			(—	@)
Class IS		—			(—	@)
Class IR		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(2,134	)
Capital Share Transactions:(1)
Class I:
Subscribed		3,559			8,659
Distributions Reinvested		—			1,571
Redeemed		(11,480	)		(26,981	)
Class A:
Subscribed		1,810			9,097
Distributions Reinvested		—			531
Redeemed		(5,124	)		(12,119	)
Class L:
Exchanged		334			29
Distributions Reinvested		—			18
Redeemed		(288	)		(632	)
Class C:
Subscribed		17			7
Distributions Reinvested		—			—	@
Redeemed		(5	)		(12	)
Class IS:
Subscribed		—			10	(a)
Distributions Reinvested		—			—	@(a)
Class IR:
Subscribed		—			10	(a)
Distributions Reinvested		—			—	@(a)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(11,177	)		(19,812	)
Redemption Fees		—			—	@
Total Increase (Decrease) in Net Assets		(20,307	)		14,842
Net Assets:
Beginning of Period		189,910			175,068
End of Period	$	169,603		$	189,910

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Active International Allocation Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		284			654
Shares Issued on Distributions Reinvested		—			109
Shares Redeemed		(892	)		(2,005	)
Net Decrease in Class I Shares Outstanding		(608	)		(1,242	)
Class A:
Shares Subscribed		131			654
Shares Issued on Distributions Reinvested		—			36
Shares Redeemed		(393	)		(890	)
Net Decrease in Class A Shares Outstanding		(262	)		(200	)
Class L:
Shares Exchanged		29			3
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(22	)		(47	)
Net Increase (Decrease) in Class L Shares Outstanding		7			(43	)
Class C:
Shares Subscribed		1			1
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(—	@@)		(1	)
Net Increase (Decrease) in Class C Shares Outstanding		1			(—	@@)
Class IS:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—			—	@@
Net Increase in Class IS Shares Outstanding		—			1	(a)
Class IR:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—			—	@@
Net Increase in Class IR Shares Outstanding		—			1	(a)

(a)  For the period October 31, 2019 through December 31, 2019.

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Active International Allocation Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	14.59		$	12.07		$	14.46		$	11.83		$	12.20		$	12.52
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.04			0.16			0.23			0.19			0.26			0.22
Net Realized and Unrealized Gain (Loss)		(0.66	)		2.54			(2.41	)		2.74			(0.34	)		(0.42	)
Total from Investment Operations		(0.62	)		2.70			(2.18	)		2.93			(0.08	)		(0.20	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.18	)		(0.21	)		(0.30	)		(0.29	)		(0.12	)
Redemption Fees		—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	13.97		$	14.59		$	12.07		$	14.46		$	11.83		$	12.20
Total Return(4)		(4.25	)%(6)		22.41	%		(15.14	)%		24.76	%		(0.67	)%		(1.63	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	112,977		$	126,860		$	119,925		$	155,550		$	169,589		$	197,733
Ratio of Expenses Before Expense Limitation		1.04	%(7)		0.97	%		0.97	%		1.14	%		0.94	%		0.92	%
Ratio of Expenses After Expense Limitation		0.89	%(5)(7)		0.89	%(5)		0.88	%(5)		0.88	%(5)		0.76	%(5)		0.89	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		0.89	%(5)(7)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.66	%(5)(7)		1.22	%(5)		1.67	%(5)		1.44	%(5)		2.18	%(5)		1.66	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.02	%		0.02	%		0.01	%		0.01	%
Portfolio Turnover Rate		29	%(6)		34	%		43	%		22	%		40	%		30	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been 0.13% higher and the Ratio of Net Investment Income would have been 0.13% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Active International Allocation Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	14.94		$	12.36		$	14.79		$	12.10		$	12.47		$	12.79
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.02			0.11			0.19			0.14			0.21			0.17
Net Realized and Unrealized Gain (Loss)		(0.68	)		2.61			(2.46	)		2.80			(0.34	)		(0.42	)
Total from Investment Operations		(0.66	)		2.72			(2.27	)		2.94			(0.13	)		(0.25	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.14	)		(0.16	)		(0.25	)		(0.24	)		(0.07	)
Redemption Fees		—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	14.28		$	14.94		$	12.36		$	14.79		$	12.10		$	12.47
Total Return(4)		(4.42	)%(6)		22.00	%		(15.38	)%		24.29	%		(1.05	)%		(1.95	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	52,031		$	58,339		$	50,726		$	65,710		$	56,934		$	64,482
Ratio of Expenses Before Expense Limitation		1.33	%(7)		1.25	%		1.26	%		1.48	%		1.32	%		1.28	%
Ratio of Expenses After Expense Limitation		1.19	%(5)(7)		1.22	%(5)		1.19	%(5)		1.23	%(5)		1.14	%(5)		1.24	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.19	%(5)(7)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.35	%(5)(7)		0.82	%(5)		1.37	%(5)		1.02	%(5)		1.79	%(5)		1.31	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.02	%		0.02	%		0.01	%		0.01	%
Portfolio Turnover Rate		29	%(6)		34	%		43	%		22	%		40	%		30	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.10% higher and the Ratio of Net Investment Income would have been 0.10% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Active International Allocation Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	14.90		$	12.32		$	14.73		$	12.04		$	12.41		$	12.74
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.01	)		0.05			0.13			0.07			0.14			0.11
Net Realized and Unrealized Gain (Loss)		(0.69	)		2.59			(2.46	)		2.79			(0.35	)		(0.42	)
Total from Investment Operations		(0.70	)		2.64			(2.33	)		2.86			(0.21	)		(0.31	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.06	)		(0.08	)		(0.17	)		(0.16	)		(0.02	)
Redemption Fees		—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	14.20		$	14.90		$	12.32		$	14.73		$	12.04		$	12.41
Total Return(4)		(4.70	)%(6)		21.43	%		(15.87	)%		23.80	%		(1.68	)%		(2.44	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,522		$	4,644		$	4,375		$	6,463		$	6,053		$	7,495
Ratio of Expenses Before Expense Limitation		1.87	%(7)		1.81	%		1.76	%		2.07	%		1.93	%		1.87	%
Ratio of Expenses After Expense Limitation		1.74	%(5)(7)		1.74	%(5)		1.69	%(5)		1.73	%(5)		1.74	%(5)		1.74	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.74	%(5)(7)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.17	)%(5)(7)		0.35	%(5)		0.92	%(5)		0.54	%(5)		1.20	%(5)		0.82	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.02	%		0.02	%		0.01	%		0.01	%
Portfolio Turnover Rate		29	%(6)		34	%		43	%		22	%		40	%		30	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Active International Allocation Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	14.89		$	12.34		$	14.77		$	12.15		$	12.38		$	13.94
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		(0.03	)		0.00	(4)		0.09			(0.00	)(4)		0.14			(0.00	)(4)
Net Realized and Unrealized Gain (Loss)		(0.68	)		2.59			(2.45	)		2.83			(0.37	)		(1.53	)
Total from Investment Operations		(0.71	)		2.59			(2.36	)		2.83			(0.23	)		(1.53	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.04	)		(0.07	)		(0.21	)		—			(0.03	)
Redemption Fees		—			0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	14.18		$	14.89		$	12.34		$	14.77		$	12.15		$	12.38
Total Return(5)		(4.77	)%(7)		21.03	%		(16.04	)%		23.42	%		(1.94	)%		(10.96	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	53		$	45		$	42		$	23		$	9		$	32
Ratio of Expenses Before Expense Limitation		6.01	%(8)		7.49	%		7.18	%		20.06	%		8.58	%		4.26	%(8)
Ratio of Expenses After Expense Limitation		1.99	%(6)(8)		1.99	%(6)		1.98	%(6)		1.97	%(6)		1.99	%(6)		1.99	%(6)(8)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.99	%(6)(8)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.42	)%(6)(8)		0.03	%(6)		0.67	%(6)		(0.03	)%(6)		1.19	%(6)		(0.04	)%(6)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.02	%		0.03	%		0.01	%		0.01	%(8)
Portfolio Turnover Rate		29	%(7)		34	%		43	%		22	%		40	%		30	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Active International Allocation Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Period from October 31, 2019(1) to December 31, 2019
Net Asset Value, Beginning of Period	$	14.59		$	13.79
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.05			0.00	(3)
Net Realized and Unrealized Gain (Loss)		(0.67	)		0.98
Total from Investment Operations		(0.62	)		0.98
Distributions from and/or in Excess of:
Net Investment Income		—			(0.18	)
Net Asset Value, End of Period	$	13.97		$	14.59
Total Return(4)		(4.25	)%(6)		7.15	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10		$	11
Ratio of Expenses Before Expense Limitation		19.53	%(7)		14.33	%(7)
Ratio of Expenses After Expense Limitation		0.84	%(5)(7)		0.84	%(5)(7)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		0.84	%(5)(7)		N/A
Ratio of Net Investment Income		0.72	%(5)(7)		0.18	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%(7)
Portfolio Turnover Rate		29	%(6)		34	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Active International Allocation Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Period from October 31, 2019(1) to December 31, 2019
Net Asset Value, Beginning of Period	$	14.59		$	13.79
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.06			0.00	(3)
Net Realized and Unrealized Gain (Loss)		(0.68	)		0.98
Total from Investment Operations		(0.62	)		0.98
Distributions from and/or in Excess of:
Net Investment Income		—			(0.18	)
Net Asset Value, End of Period	$	13.97		$	14.59
Total Return(4)		(4.25	)%(6)		7.15	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	10		$	11
Ratio of Expenses Before Expense Limitation		19.32	%(7)		14.33	%(7)
Ratio of Expenses After Expense Limitation		0.84	%(5)(7)		0.84	%(5)(7)
Ratios of Expenses After Expense Limitation Excluding Non-Operating Expenses		0.84	%(5)(7)		N/A
Ratio of Net Investment Income		0.71	%(5)(7)		0.18	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%(7)
Portfolio Turnover Rate		29	%(6)		34	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Active International Allocation Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official

exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) futures are valued at the settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	—	$	3,516	$	—		$	3,516
Airlines		3,617		—		—			3,617
Auto Components		—		209		—			209
Automobiles		—		1,201		—			1,201
Banks		338		602		—			940
Beverages		3,146		5,899		—			9,045
Chemicals		—		3,220		—			3,220
Communications Equipment		—		1,681		—			1,681
Consumer Finance		—		904		—			904
Electrical Equipment		—		498		—			498
Electronic Equipment, Instruments & Components		472		3,375		—			3,847
Energy Equipment & Services		1,848		535		—			2,383
Entertainment		14,992		4,785		—			19,777
Food Products		391		6,417		—			6,808
Health Care Equipment & Supplies		577		6,822		—			7,399
Health Care Providers & Services		—		817		—			817
Household Durables		2,096		2,678		—			4,774
Household Products		—		545		—			545
Information Technology Services		1,259		3,656		—			4,915
Insurance		—		1,328		—			1,328
Interactive Media & Services		—		3,659		—			3,659
Internet & Direct Marketing Retail		9,222		—		—			9,222
Leisure Products		—		836		—			836
Life Sciences Tools & Services		1,747		—		—			1,747
Machinery		—		6,396		—			6,396
Metals & Mining		10,542		—		—			10,542
Oil, Gas & Consumable Fuels		913		1,150		—			2,063
Personal Products		1,052		6,341		—			7,393
Pharmaceuticals		546		12,066		—			12,612
Professional Services		—		2,153		—			2,153
Real Estate Management & Development		465		—		—	@		465
Semiconductors & Semiconductor Equipment		7,040		8,293		—			15,333
Software		336		4,880		—			5,216
Tech Hardware, Storage & Peripherals		—		4,616		—			4,616
Textiles, Apparel & Luxury Goods		533		4,343		—			4,876
Transportation Infrastructure		—		602		—			602
Total Common Stocks		61,132		104,023		—	@		165,155

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)			Total (000)
Investment Company	$	1,110	$	—		$	—		$	1,110
Short-Term Investments
Investment Company		7,056		—			—			7,056
Repurchase Agreements		—		1,085			—			1,085
Total Short-Term Investments		7,056		1,085			—			8,141
Foreign Currency Forward Exchange Contract		—		1			—			1
Total Assets		69,298		105,109			—	@		174,407
Liabilities:
Foreign Currency Forward Exchange Contracts		—		(46	)		—			(46	)
Total	$	69,298	$	105,063		$	—	@	$	174,361

@  Value is less than $500.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stock (000)
Beginning Balance	$	—	@
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		—	@
Realized gains (losses)		—
Ending Balance	$	—	@
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2020	$	—	@

@  Value is less than $500.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

5.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into

purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. The Fund may write call and put options on stock indexes, futures, securities or currencies it owns or in which it may invest. Writing put options tend to increase the Fund's exposure to the underlying instrument. Writing call options tend to decrease the Fund's exposure to the underlying instruments. When the Fund writes a call or put option, an amount equal to the premium received is recorded as a liability. Any liability recorded is subsequently adjusted to reflect the current value of the options written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or are closed are added to or offset against the proceeds or amount paid on the transaction to determine the net realized gain or loss. The Fund as a writer of an option has no control over whether the underlying future, security or currency may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the future, security or currency underlying the written option. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

As of June 30, 2020, the Fund did not have any outstanding purchased or written options.

Futures: A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return and the potential loss from futures contracts can exceed the Fund's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

As of June 30, 2020, the Fund did not have any open futures contracts.

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency

contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contract	Unrealized Appreciation on Foreign Currency Forward Exchange Contract	Currency Risk	$	1
	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Depreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	(46	)

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(136	)
Equity Risk	Futures Contracts		(2,898	)
Currency Risk	Purchased Options		(3,757	)
Currency Risk	Written Options		4,601
	Total	$	(2,190	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(68	)
Equity Risk	Futures Contracts		5
	Total	$	(63	)

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives(a)	Assets(b) (000)		Liabilities(b) (000)
Foreign Currency Forward Exchange Contracts	$	1	$	(46	)

(a) Excludes exchange-traded derivatives.

(b) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master

Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
Citibank NA	$	1	$	—	$	—	$	1
Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Pledged (000)		Net Amount (not less than $0) (000)
State Street Bank and Trust Co.	$	46	$	—	$	—	$	46

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	10,676,000
Futures Contracts:
Average monthly notional value	$	35,428,000
Purchased Options:
Average monthly notional amount		12,000
Written Options:
Average monthly notional amount		12,000

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

6.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	7,447	(c)	$	—	$	(7,447	)(d)(e)	$	0

(c) Represents market value of loaned securities at period end.

(d) The Fund received cash collateral of approximately $5,085,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $2,707,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(e) The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2020:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	5,085	$	—	$	—	$	—	$	5,085
Total Borrowings	$	5,085	$	—	$	—	$	—	$	5,085
Gross amount of recognized liabilities for securities lending transactions									$	5,085

7.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares, Class IS shares and Class IR shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets. Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

8.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

9.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

10.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.65	%		0.60	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.52% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.90% for Class I shares, 1.25% for Class A shares, 1.75% for Class L shares, 2.00% for Class C shares, 0.85% for Class IS shares and 0.85% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $98,000 of advisory fees were waived and

approximately $14,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $47,970,000 and $63,610,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

The Fund invests in Morgan Stanley China A Share Fund, Inc., a closed-end management investment company advised by an affiliate of the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Morgan Stanley China A Share Fund, Inc.. For the six month period ended June 30, 2020, advisory fees paid were reduced by approximately $9,000 relating to the Fund's investment in the Morgan Stanley China A Share Fund, Inc.

The Fund had transactions with Morgan Stanley China A Shares Fund, Inc., Mitsubishi UFJ Financial Group, Inc., and

its affiliated broker-dealers, which may be deemed affiliates of the Adviser/Administrator and Distributor under Section 17 the Act.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company/Issuer	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	6,898	$	30,386	$	30,228	$	3
Morgan Stanley China A Share Fund, Inc.		1,235		—		—		—
Mitsubishi UFJ Financial Group, Inc.		250		—		215		—
Total	$	8,383	$	30,386	$	30,443	$	3

Affiliated Investment Company/Issuer (cont'd)	Realized Gain (Loss) (000)			Change in Unrealized Appreciation (Depreciation) (000)			Value June 30, 2020 (000)
Liquidity Funds	$	—		$	—		$	7,056
Morgan Stanley China A Share Fund, Inc.		—			(125	)		1,110
Mitsubishi UFJ Financial Group, Inc.		(295	)		260			—
Total	$	(295	)	$	135		$	8,166

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From: Ordinary Income (000)		2018 Distributions Paid From: Ordinary Income (000)
$	2,134	$	2,725

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2019.

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	86	$	—

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $3,660,000 and $1,365,000, respectively that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

During the year ended December 31, 2019, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $6,515,000.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 83.4%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

29

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

30

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

31

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

32

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

33

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

34

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIAIASAN
3178681 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Advantage
Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	16
Investment Advisory Agreement Approval	25
Liquidity Risk Management Program	27
Privacy Notice	28
Director and Officer Information	30

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Advantage Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Advantage Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Advantage Portfolio Class I	$	1,000.00	$	1,322.30	$	1,020.69	$	4.85	$	4.22		0.84	%
Advantage Portfolio Class A		1,000.00		1,320.20		1,019.10		6.69		5.82		1.16
Advantage Portfolio Class L		1,000.00		1,321.80		1,020.09		5.54		4.82		0.96
Advantage Portfolio Class C		1,000.00		1,316.00		1,015.56		10.77		9.37		1.87
Advantage Portfolio Class IS		1,000.00		1,323.10		1,020.93		4.56		3.97		0.79

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Advantage Portfolio

	Shares		Value (000)
Common Stocks (96.6%)
Aerospace & Defense (2.3%)
HEICO Corp., Class A		178,154	$	14,473
Capital Markets (1.6%)
Intercontinental Exchange, Inc.		53,746		4,923
S&P Global, Inc.		16,660		5,489
				10,412
Chemicals (4.2%)
Ecolab, Inc.		96,036		19,107
Sherwin-Williams Co. (The)		13,592		7,854
				26,961
Containers & Packaging (0.9%)
Ball Corp.		81,034		5,631
Entertainment (8.5%)
Activision Blizzard, Inc.		113,926		8,647
Spotify Technology SA (a)		156,228		40,337
Take-Two Interactive Software, Inc. (a)		38,829		5,419
				54,403
Food & Staples Retailing (1.3%)
Costco Wholesale Corp.		26,824		8,133
Health Care Equipment & Supplies (5.4%)
Danaher Corp.		35,325		6,246
Intuitive Surgical, Inc. (a)		49,690		28,315
				34,561
Health Care Technology (5.0%)
Veeva Systems, Inc., Class A (a)		135,336		31,725
Hotels, Restaurants & Leisure (1.1%)
Starbucks Corp.		93,773		6,901
Industrial Conglomerates (1.4%)
Roper Technologies, Inc.		22,422		8,706
Information Technology Services (23.0%)
Adyen N.V. (Netherlands) (a)		8,941		13,027
Okta, Inc. (a)		115,100		23,047
Shopify, Inc., Class A (Canada) (a)		57,397		54,481
Square, Inc., Class A (a)		316,480		33,211
Twilio, Inc., Class A (a)		106,492		23,367
				147,133
Interactive Media & Services (10.0%)
Alphabet, Inc., Class C (a)		5,865		8,291
Facebook, Inc., Class A (a)		124,024		28,162
Match Group, Inc. (a)(b)		98,953		10,593
Twitter, Inc. (a)		574,331		17,109
				64,155
Internet & Direct Marketing Retail (8.1%)
Amazon.com, Inc. (a)		15,870		43,782
Chewy, Inc., Class A (a)		185,469		8,289
				52,071
Metals & Mining (0.2%)
Royal Gold, Inc.		9,747		1,212
Oil, Gas & Consumable Fuels (0.2%)
Texas Pacific Land Trust		2,722		1,619

	Shares		Value (000)
Pharmaceuticals (4.1%)
Royalty Pharma PLC, Class A (United Kingdom) (a)		200,280	$	9,724
Zoetis, Inc.		118,761		16,275
				25,999
Software (18.1%)
Autodesk, Inc. (a)		71,496		17,101
Coupa Software, Inc. (a)		88,199		24,435
ServiceNow, Inc. (a)		72,419		29,334
Slack Technologies, Inc., Class A (a)		541,334		16,830
Workday, Inc., Class A (a)		87,165		16,331
Zoom Video Communications, Inc., Class A (a)		44,850		11,371
				115,402
Textiles, Apparel & Luxury Goods (1.2%)
NIKE, Inc., Class B		80,483		7,891
Total Common Stocks (Cost $396,543)				617,388
Short-Term Investments (4.5%)
Securities held as Collateral on Loaned Securities (1.7%)
Investment Company (1.3%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		8,313,261		8,313
	Face Amount (000)
Repurchase Agreements (0.4%)
HSBC Securities USA, Inc. (0.07%, dated 6/30/20, due 7/1/20; proceeds $818; fully collateralized by a U.S. Government obligation; 0.5% due 3/15/23; valued at $834)	$	817,698		818
Merrill Lynch & Co., Inc. (0.07%, dated 6/30/20, due 7/1/20; proceeds $1,438; fully collateralized by U.S. Government obligations; 1.38% – 3.88% due 9/30/20 – 8/15/40; valued at $1,467)		1,437,922		1,438
				2,256
Total Securities held as Collateral on Loaned Securities (Cost $10,569)				10,569
	Shares
Investment Company (2.8%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $18,201)		18,200,879		18,201
Total Short-Term Investments (Cost $28,770)				28,770
Total Investments Excluding Purchased Options (101.1%) (Cost $425,313)				646,158
Total Purchased Options Outstanding (0.1%) (Cost $1,466)				481
Total Investments (101.2%) (Cost $426,779) Including $10,593 of Securities Loaned (c)(d)				646,639
Liabilities in Excess of Other Assets (–1.2%)				(7,725	)
Net Assets (100.0%)			$	638,914

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Advantage Portfolio

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2020.

(c)  The approximate fair value and percentage of net assets, $13,027,000 and 2.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $221,338,000 and the aggregate gross unrealized depreciation is approximately $1,478,000, resulting in net unrealized appreciation of approximately $219,860,000.

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
Royal Bank of Scotland	USD/CNH	CNH	7.75	Jan-21		105,617,492		105,617	$	270	$	461	$	(191	)
Royal Bank of Scotland	USD/CNH	CNH	8.09	Sep-20		81,340,578		81,341		13		439		(426	)
Royal Bank of Scotland	USD/CNH	CNH	8.48	May-21		90,639,683		90,640		198		566		(368	)
									$	481	$	1,466	$	(985	)

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Information Technology Services		23.1	%
Other**		21.4
Software		18.2
Interactive Media & Services		10.1
Entertainment		8.6
Internet & Direct Marketing Retail		8.2
Health Care Equipment & Supplies		5.4
Health Care Technology		5.0
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2020.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Advantage Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $400,265)	$	620,125
Investment in Security of Affiliated Issuer, at Value (Cost $26,514)		26,514
Total Investments in Securities, at Value (Cost $426,779)		646,639
Foreign Currency, at Value (Cost $1)		1
Receivable for Investments Sold		3,361
Receivable for Fund Shares Sold		1,991
Receivable from Securities Lending Income		98
Dividends Receivable		85
Tax Reclaim Receivable		21
Receivable from Affiliate		1
Other Assets		114
Total Assets		652,311
Liabilities:
Collateral on Securities Loaned, at Value		10,569
Payable for Fund Shares Redeemed		1,054
Payable for Advisory Fees		813
Due to Broker		740
Payable for Shareholder Services Fees — Class A		18
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		40
Payable for Sub Transfer Agency Fees — Class I		41
Payable for Sub Transfer Agency Fees — Class A		11
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		5
Payable for Administration Fees		40
Payable for Professional Fees		37
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Custodian Fees		3
Other Liabilities		23
Total Liabilities		13,397
Net Assets	$	638,914
Net Assets Consist of:
Paid-in-Capital	$	407,892
Total Distributable Earnings		231,022
Net Assets	$	638,914

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Advantage Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	468,690
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		13,599,142
Net Asset Value, Offering and Redemption Price Per Share	$	34.46
CLASS A:
Net Assets	$	89,212
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,657,942
Net Asset Value, Redemption Price Per Share	$	33.56
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.86
Maximum Offering Price Per Share	$	35.42
CLASS L:
Net Assets	$	4,155
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		121,125
Net Asset Value, Offering and Redemption Price Per Share	$	34.30
CLASS C:
Net Assets	$	51,052
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,571,794
Net Asset Value, Offering and Redemption Price Per Share	$	32.48
CLASS IS:
Net Assets	$	25,805
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		746,704
Net Asset Value, Offering and Redemption Price Per Share	$	34.56
(1) Including: Securities on Loan, at Value:	$	10,593

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Advantage Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $2 of Foreign Taxes Withheld)	$	573
Income from Securities Loaned — Net		206
Dividends from Security of Affiliated Issuer (Note G)		73
Total Investment Income		852
Expenses:
Advisory Fees (Note B)		1,589
Shareholder Services Fees — Class A (Note D)		99
Distribution and Shareholder Services Fees — Class L (Note D)		15
Distribution and Shareholder Services Fees — Class C (Note D)		211
Sub Transfer Agency Fees — Class I		172
Sub Transfer Agency Fees — Class A		44
Sub Transfer Agency Fees — Class L		1
Sub Transfer Agency Fees — Class C		13
Administration Fees (Note C)		196
Professional Fees		57
Registration Fees		41
Shareholder Reporting Fees		24
Transfer Agency Fees — Class I (Note E)		3
Transfer Agency Fees — Class A (Note E)		4
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		5
Transfer Agency Fees — Class IS (Note E)		1
Custodian Fees (Note F)		10
Directors' Fees and Expenses		4
Pricing Fees		2
Other Expenses		13
Total Expenses		2,506
Reimbursement of Class Specific Expenses — Class I (Note B)		(77	)
Rebate from Morgan Stanley Affiliate (Note G)		(19	)
Distribution Fees — Class L Shares Waived (Note D)		(14	)
Net Expenses		2,396
Net Investment Loss		(1,544	)
Realized Gain (Loss):
Investments Sold		10,448
Foreign Currency Translation		(15	)
Net Realized Gain		10,433
Change in Unrealized Appreciation (Depreciation):
Investments		142,827
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		142,827
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		153,260
Net Increase in Net Assets Resulting from Operations	$	151,716

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Advantage Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(1,544	)	$	(1,207	)
Net Realized Gain		10,433			14,608
Net Change in Unrealized Appreciation (Depreciation)		142,827			59,735
Net Increase in Net Assets Resulting from Operations		151,716			73,136
Dividends and Distributions to Shareholders:
Class I		—			(5,355	)
Class A		—			(1,499	)
Class L		—			(82	)
Class C		—			(792	)
Class IS		—			(548	)
Total Dividends and Distributions to Shareholders		—			(8,276	)
Capital Share Transactions:(1)
Class I:
Subscribed		142,967			196,712
Distributions Reinvested		—			5,237
Redeemed		(80,953	)		(102,075	)
Class A:
Subscribed		20,567			52,689
Distributions Reinvested		—			1,446
Redeemed		(35,011	)		(26,447	)
Class L:
Exchanged		6			—
Distributions Reinvested		—			81
Redeemed		(1,239	)		(361	)
Class C:
Subscribed		5,706			16,430
Distributions Reinvested		—			762
Redeemed		(8,606	)		(15,239	)
Class IS:
Subscribed		639			2,008
Distributions Reinvested		—			548
Redeemed		(9,864	)		(6,464	)
Net Increase in Net Assets Resulting from Capital Share Transactions		34,212			125,327
Total Increase in Net Assets		185,928			190,187
Net Assets:
Beginning of Period		452,986			262,799
End of Period	$	638,914		$	452,986

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Advantage Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		5,223			7,750
Shares Issued on Distributions Reinvested		—			205
Shares Redeemed		(3,014	)		(4,038	)
Net Increase in Class I Shares Outstanding		2,209			3,917
Class A:
Shares Subscribed		730			2,101
Shares Issued on Distributions Reinvested		—			58
Shares Redeemed		(1,249	)		(1,074	)
Net Increase (Decrease) in Class A Shares Outstanding		(519	)		1,085
Class L:
Shares Exchanged		—	@@		—
Shares Issued on Distributions Reinvested		—			3
Shares Redeemed		(47	)		(14	)
Net Decrease in Class L Shares Outstanding		(47	)		(11	)
Class C:
Shares Subscribed		214			675
Shares Issued on Distributions Reinvested		—			31
Shares Redeemed		(346	)		(629	)
Net Increase (Decrease) in Class C Shares Outstanding		(132	)		77
Class IS:
Shares Subscribed		23			78
Shares Issued on Distributions Reinvested		—			21
Shares Redeemed		(386	)		(255	)
Net Decrease in Class IS Shares Outstanding		(363	)		(156	)

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Advantage Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	26.06		$	20.98		$	21.45		$	17.47		$	17.40		$	16.83
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.07	)		(0.04	)		(0.01	)		0.00	(3)		0.07			0.01
Net Realized and Unrealized Gain		8.47			5.61			0.87			5.57			0.42			2.11
Total from Investment Operations		8.40			5.57			0.86			5.57			0.49			2.12
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.04	)		(0.02	)
Net Realized Gain		—			(0.49	)		(1.33	)		(1.59	)		(0.38	)		(1.53	)
Total Distributions		—			(0.49	)		(1.33	)		(1.59	)		(0.42	)		(1.55	)
Net Asset Value, End of Period	$	34.46		$	26.06		$	20.98		$	21.45		$	17.47		$	17.40
Total Return(4)		32.23	%(8)		26.60	%		3.74	%		32.06	%		2.82	%		12.56	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	468,690		$	296,843		$	156,782		$	54,002		$	42,695		$	24,718
Ratio of Expenses Before Expense Limitation		0.90	%(9)		0.93	%		1.01	%		1.09	%		1.15	%		1.49	%
Ratio of Expenses After Expense Limitation		0.84	%(5)(9)		0.84	%(5)		0.84	%(5)		0.84	%(5)		0.84	%(5)		0.86	%(5)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.84	%(5)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.49	)%(5)(9)		(0.15	)%(5)		(0.02	)%(5)		0.02	%(5)		0.38	%(5)		0.06	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%(7)
Portfolio Turnover Rate		37	%(8)		70	%		79	%		65	%		79	%		51	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.85% for Class I shares. Prior to January 23, 2015, the maximum ratio was 1.05% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Advantage Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	25.42		$	20.54		$	21.10		$	17.26		$	17.22		$	16.70
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.11	)		(0.13	)		(0.08	)		(0.06	)		0.01			(0.06	)
Net Realized and Unrealized Gain		8.25			5.50			0.85			5.49			0.41			2.11
Total from Investment Operations		8.14			5.37			0.77			5.43			0.42			2.05
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.49	)		(1.33	)		(1.59	)		(0.38	)		(1.53	)
Net Asset Value, End of Period	$	33.56		$	25.42		$	20.54		$	21.10		$	17.26		$	17.22
Total Return(3)		32.02	%(6)		26.20	%		3.37	%		31.64	%		2.47	%		12.20	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	89,212		$	80,743		$	42,959		$	23,715		$	19,850		$	11,939
Ratio of Expenses Before Expense Limitation		N/A			1.21	%		1.29	%		1.39	%		1.43	%		1.87	%
Ratio of Expenses After Expense Limitation		1.16	%(4)(7)		1.19	%(4)		1.17	%(4)		1.19	%(4)		1.19	%(4)		1.18	%(4)(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.19	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.81	)%(4)(7)		(0.50	)%(4)		(0.37	)%(4)		(0.32	)%(4)		0.04	%(4)		(0.31	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		37	%(6)		70	%		79	%		65	%		79	%		51	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.20% for Class A shares. Prior to January 23, 2015, the maximum ratio was 1.40% for Class A shares.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Advantage Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	25.95		$	20.92		$	21.42		$	17.46		$	17.40		$	16.82
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.08	)		(0.06	)		(0.05	)		(0.02	)		0.04			(0.01	)
Net Realized and Unrealized Gain		8.43			5.58			0.88			5.57			0.43			2.12
Total from Investment Operations		8.35			5.52			0.83			5.55			0.47			2.11
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.03	)		—
Net Realized Gain		—			(0.49	)		(1.33	)		(1.59	)		(0.38	)		(1.53	)
Total Distributions		—			(0.49	)		(1.33	)		(1.59	)		(0.41	)		(1.53	)
Net Asset Value, End of Period	$	34.30		$	25.95		$	20.92		$	21.42		$	17.46		$	17.40
Total Return(3)		32.18	%(6)		26.44	%		3.61	%		31.96	%		2.72	%		12.47	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,155		$	4,363		$	3,751		$	4,077		$	3,684		$	5,369
Ratio of Expenses Before Expense Limitation		1.68	%(7)		1.69	%		1.82	%		1.87	%		1.85	%		2.33	%
Ratio of Expenses After Expense Limitation		0.96	%(4)(7)		0.95	%(4)		0.98	%(4)		0.96	%(4)		0.91	%(4)		0.97	%(4)(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.95	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.61	)%(4)(7)		(0.25	)%(4)		(0.21	)%(4)		(0.10	)%(4)		0.26	%(4)		(0.03	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		37	%(6)		70	%		79	%		65	%		79	%		51	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.99% for Class L shares. Prior to January 23, 2015, the maximum ratio was 1.19% for Class L shares.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Advantage Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	24.68		$	20.10		$	20.82		$	17.16		$	17.25		$	18.08
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.20	)		(0.29	)		(0.24	)		(0.20	)		(0.12	)		(0.14	)
Net Realized and Unrealized Gain		8.00			5.36			0.85			5.45			0.41			0.86
Total from Investment Operations		7.80			5.07			0.61			5.25			0.29			0.72
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.02	)
Net Realized Gain		—			(0.49	)		(1.33	)		(1.59	)		(0.38	)		(1.53	)
Total Distributions		—			(0.49	)		(1.33	)		(1.59	)		(0.38	)		(1.55	)
Net Asset Value, End of Period	$	32.48		$	24.68		$	20.10		$	20.82		$	17.16		$	17.25
Total Return(4)		31.60	%(6)		25.27	%		2.64	%		30.77	%		1.71	%		3.91	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	51,052		$	42,054		$	32,706		$	11,835		$	6,376		$	1,776
Ratio of Expenses Before Expense Limitation		N/A			1.93	%		2.00	%		2.10	%		2.20	%		2.83	%(7)
Ratio of Expenses After Expense Limitation		1.87	%(5)(7)		1.90	%(5)		1.88	%(5)		1.90	%(5)		1.94	%(5)		1.94	%(5)(7)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.90	%(5)		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.52	)%(5)(7)		(1.20	)%(5)		(1.08	)%(5)		(1.01	)%(5)		(0.72	)%(5)		(1.15	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%(7)
Portfolio Turnover Rate		37	%(6)		70	%		79	%		65	%		79	%		51	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Advantage Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	26.12		$	21.02		$	21.49		$	17.48		$	17.42		$	16.84
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.06	)		(0.03	)		(0.01	)		0.01			0.08			0.02
Net Realized and Unrealized Gain		8.50			5.62			0.87			5.59			0.41			2.11
Total from Investment Operations		8.44			5.59			0.86			5.60			0.49			2.13
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.05	)		(0.02	)
Net Realized Gain		—			(0.49	)		(1.33	)		(1.59	)		(0.38	)		(1.53	)
Total Distributions		—			(0.49	)		(1.33	)		(1.59	)		(0.43	)		(1.55	)
Net Asset Value, End of Period	$	34.56		$	26.12		$	21.02		$	21.49		$	17.48		$	17.42
Total Return(3)		32.31	%(7)		26.64	%		3.74	%		32.22	%		2.79	%		12.65	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	25,805		$	28,983		$	26,601		$	17,542		$	13,273		$	12
Ratio of Expenses Before Expense Limitation		N/A			0.83	%		0.93	%		1.01	%		1.05	%		14.53	%
Ratio of Expenses After Expense Limitation		0.79	%(4)(8)		0.80	%(4)		0.80	%(4)		0.80	%(4)		0.80	%(4)		0.82	%(4)(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.80	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.45	)%(4)(8)		(0.10	)%(4)		(0.04	)%(4)		0.07	%(4)		0.46	%(4)		0.10	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%(6)
Portfolio Turnover Rate		37	%(7)		70	%		79	%		65	%		79	%		51	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.81% for Class IS shares. Prior to January 23, 2015, the maximum ratio was 1.01% for Class IS shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Advantage Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.   Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if

such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the NAV as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's

valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	14,473	$	—	$	—	$	14,473
Capital Markets		10,412		—		—		10,412
Chemicals		26,961		—		—		26,961
Containers & Packaging		5,631		—		—		5,631
Entertainment		54,403		—		—		54,403
Food & Staples Retailing		8,133		—		—		8,133
Health Care Equipment & Supplies		34,561		—		—		34,561
Health Care Technology		31,725		—		—		31,725
Hotels, Restaurants & Leisure		6,901		—		—		6,901
Industrial Conglomerates		8,706		—		—		8,706
Information Technology Services		134,106		13,027		—		147,133
Interactive Media & Services		64,155		—		—		64,155
Internet & Direct Marketing Retail		52,071		—		—		52,071
Metals & Mining		1,212		—		—		1,212
Oil, Gas & Consumable Fuels		1,619		—		—		1,619
Pharmaceuticals		25,999		—		—		25,999
Software		115,402		—		—		115,402
Textiles, Apparel & Luxury Goods		7,891		—		—		7,891
Total Common Stocks		604,361		13,027		—		617,388
Call Options Purchased		—		481		—		481
Short-Term Investments
Investment Company		26,514		—		—		26,514
Repurchase Agreements		—		2,256		—		2,256
Total Short-Term Investments		26,514		2,256		—		28,770
Total Assets	$	630,875	$	15,764	$	—	$	646,639

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a

bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

5.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative

instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	481	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments
	(Purchased Options)	$	(661	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments
	(Purchased Options)	$	(24	)(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	481	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	481	(a)	$	—	$	(481	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	278,676,000

6.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund.

The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent,

to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	10,593	(f)	$	—	$	(10,593	)(g)(h)	$	0

(f) Represents market value of loaned securities at period end.

(g) The Fund received cash collateral of approximately $10,569,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $143,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(h) The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2020:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	10,569	$	—	$	—	$	—	$	10,569
Total Borrowings	$	10,569	$	—	$	—	$	—	$	10,569
Gross amount of recognized liabilities for securities lending transactions									$	10,569

7.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

9.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under

the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $750 million			Next $750 million			Over $1.5 billion
	0.65	%		0.60	%		0.55	%

For the six months ended June 30, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.64% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.85% for Class I shares, 1.20% for Class A shares, 0.99% for Class L shares, 1.95% for Class C shares and 0.81% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $77,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares. The Distributor has agreed to waive for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate, the 12b-1 fees on Class L shares of the Fund to the extent it exceeds 0.04% of the average daily net assets of such shares on an annualized basis. For the six months ended June 30, 2020, this waiver amounted to approximately $14,000.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $218,036,000 and $179,311,000, respectively. There were no purchases and sales of long-term

U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $19,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	30,479	$	104,280	$	108,245	$	73

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	26,514

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	1,435	$	6,841	$	542	$	8,397

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to equalization debits and a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	8	$	(8	)

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	1,088	$	2,444

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 29.4%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the three- and five-year periods but below its peer group average for the one-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's management fee and total expense ratio were higher than but close to its peer group averages and actual management fee was higher than its peer group average. After discussion, the Board concluded that the Fund's (i) performance and total expense ratio were competitive with its peer group averages and (ii) the management fee was acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

27

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

28

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

29

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

30

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIADVSAN
3179794 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Asia Opportunity Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	10
Notes to Financial Statements	14
Investment Advisory Agreement Approval	23
Liquidity Risk Management Program	25
Privacy Notice	26
Director and Officer Information	28

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Asia Opportunity Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Asia Opportunity Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Asia Opportunity Portfolio Class I	$	1,000.00	$	1,115.60	$	1,019.59	$	5.58	$	5.32		1.06	%
Asia Opportunity Portfolio Class A		1,000.00		1,114.50		1,018.15		7.10		6.77		1.35
Asia Opportunity Portfolio Class C		1,000.00		1,110.10		1,014.42		11.02		10.52		2.10
Asia Opportunity Portfolio Class IS		1,000.00		1,115.50		1,019.74		5.42		5.17		1.03

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Asia Opportunity Portfolio

	Shares			Value (000)
Common Stocks (90.9%)
China (58.5%)
Alibaba Group Holding Ltd. ADR (a)		67,997		$	14,667
China East Education Holdings Ltd. (b)		2,697,500			4,904
China Resources Beer Holdings Co., Ltd. (b)		2,010,300			11,221
Foshan Haitian Flavouring & Food Co., Ltd., Class A		734,718			12,941
Haidilao International Holding Ltd. (b)(c)		939,000			3,991
Hangzhou Tigermed Consulting Co., Ltd., Class A		432,163			6,221
Huazhu Group Ltd. ADR		56,488			1,980
HUYA, Inc. ADR (a)(c)		403,647			7,536
Inner Mongolia Yili Industrial Group Co., Ltd., Class A		1,142,786			5,046
Kweichow Moutai Co., Ltd., Class A		48,194	��		10,008
Meituan Dianping, Class B (a)(b)		701,500			15,676
New Frontier Health Corp. (a)(c)		93,794			777
Shenzhou International Group Holdings Ltd. (b)		595,700			7,242
TAL Education Group ADR (a)		289,564			19,800
Tencent Holdings Ltd. (b)		210,900			13,514
Trip.com Group Ltd. ADR (a)		429,810			11,141
Tsingtao Brewery Co., Ltd. H Shares (b)		658,000			4,911
					151,576
Hong Kong (5.1%)
AIA Group Ltd.		1,165,100			10,903
Alphamab Oncology (a)(c)		1,043,000			2,427
					13,330
India (13.2%)
HDFC Bank Ltd.		49,503			696
HDFC Bank Ltd. ADR		284,113			12,915
ICICI Bank Ltd. ADR		902,142			8,381
IndusInd Bank Ltd.		635,914			4,007
Kotak Mahindra Bank Ltd.		458,887			8,283
					34,282
Korea, Republic of (5.4%)
NAVER Corp.		61,905			13,927
Taiwan (8.7%)
Nien Made Enterprise Co., Ltd.		425,000			4,166
Silergy Corp.		92,000			6,027
Taiwan Semiconductor Manufacturing Co., Ltd.		1,147,000			12,249
					22,442
Total Common Stocks (Cost $182,933)					235,557

	Shares		Value (000)
Short-Term Investment (9.1%)
Investment Company (9.1%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $23,645)		23,644,632	$	23,645
Total Investments Excluding Purchased Options (100.0%) (Cost $206,578)				259,202
Total Purchased Options Outstanding (0.0%) (Cost $80)				2
Total Investments (100.0%) (Cost $206,658) Including $11,074 of Securities Loaned (d)(e)				259,204
Liabilities in Excess of Other Assets (0.0%) (f)				(117	)
Net Assets (100.0%)			$	259,087

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  All or a portion of this security was on loan at June 30, 2020.

(d)  The approximate fair value and percentage of net assets, $158,360,000 and 61.1%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $56,737,000 and the aggregate gross unrealized depreciation is approximately $4,191,000, resulting in net unrealized appreciation of approximately $52,546,000.

(f)  Amount is less than 0.05%.

ADR  American Depositary Receipt.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Asia Opportunity Portfolio

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2020:

Counterparty	Description		Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
Royal Bank of Scotland		USD/CNH	CNH	8.09	Sep-20		14,875,913		14,876	$	2	$	80	$	(78	)

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		17.5	%
Internet & Direct Marketing Retail		16.0
Banks		13.2
Interactive Media & Services		10.6
Beverages		10.1
Diversified Consumer Services		9.5
Short-Term Investment		9.1
Semiconductors & Semiconductor Equipment		7.1
Food Products		6.9
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2020.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Asia Opportunity Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $183,013)	$	235,559
Investment in Security of Affiliated Issuer, at Value (Cost $23,645)		23,645
Total Investments in Securities, at Value (Cost $206,658)		259,204
Foreign Currency, at Value (Cost —@)		—	@
Receivable for Fund Shares Sold		766
Dividends Receivable		122
Receivable from Securities Lending Income		27
Receivable from Affiliate		1
Other Assets		97
Total Assets		260,217
Liabilities:
Payable for Fund Shares Redeemed		503
Payable for Advisory Fees		408
Deferred Capital Gain Country Tax		149
Payable for Professional Fees		29
Payable for Shareholder Services Fees — Class A		9
Payable for Distribution and Shareholder Services Fees — Class C		8
Payable for Administration Fees		16
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Other Liabilities		8
Total Liabilities		1,130
Net Assets	$	259,087
Net Assets Consist of:
Paid-in-Capital	$	211,918
Total Distributable Earnings		47,169
Net Assets	$	259,087

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Asia Opportunity Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	181,015
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		7,718,398
Net Asset Value, Offering and Redemption Price Per Share	$	23.45
CLASS A:
Net Assets	$	47,384
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,045,462
Net Asset Value, Redemption Price Per Share	$	23.17
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.28
Maximum Offering Price Per Share	$	24.45
CLASS C:
Net Assets	$	9,614
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		425,586
Net Asset Value, Offering and Redemption Price Per Share	$	22.59
CLASS IS:
Net Assets	$	21,074
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		897,753
Net Asset Value, Offering and Redemption Price Per Share	$	23.47
(1) Including: Securities on Loan, at Value:	$	11,074

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Asia Opportunity Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $76 of Foreign Taxes Withheld)	$	869
Income from Securities Loaned — Net		59
Dividends from Security of Affiliated Issuer (Note G)		58
Total Investment Income		986
Expenses:
Advisory Fees (Note B)		743
Shareholder Services Fees — Class A (Note D)		54
Distribution and Shareholder Services Fees — Class C (Note D)		46
Administration Fees (Note C)		74
Professional Fees		57
Sub Transfer Agency Fees — Class I		25
Sub Transfer Agency Fees — Class A		15
Sub Transfer Agency Fees — Class C		2
Registration Fees		37
Custodian Fees (Note F)		28
Shareholder Reporting Fees		10
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		4
Pricing Fees		1
Other Expenses		11
Total Expenses		1,112
Rebate from Morgan Stanley Affiliate (Note G)		(17	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Net Expenses		1,094
Net Investment Loss		(108	)
Realized Loss:
Investments Sold		(1,632	)
Foreign Currency Translation		(69	)
Net Realized Loss		(1,701	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $149)		28,358
Foreign Currency Translation		(1	)
Net Change in Unrealized Appreciation (Depreciation)		28,357
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		26,656
Net Increase in Net Assets Resulting from Operations	$	26,548

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Asia Opportunity Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(108	)	$	(49	)
Net Realized Loss		(1,701	)		(1,070	)
Net Change in Unrealized Appreciation (Depreciation)		28,357			24,040
Net Increase in Net Assets Resulting from Operations		26,548			22,921
Dividends and Distributions to Shareholders:
Class I		—			(37	)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(37	)
Capital Share Transactions:(1)
Class I:
Subscribed		117,025			49,930
Distributions Reinvested		—			37
Redeemed		(38,420	)		(7,719	)
Class A:
Subscribed		21,192			46,014
Redeemed		(23,488	)		(13,086	)
Class C:
Subscribed		2,645			4,940
Redeemed		(2,323	)		(653	)
Class IS:
Subscribed		18,500			—
Distributions Reinvested		—			—	@
Net Increase in Net Assets Resulting from Capital Share Transactions		95,131			79,463
Redemption Fees		26			29
Total Increase in Net Assets		121,705			102,376
Net Assets:
Beginning of Period		137,382			35,006
End of Period	$	259,087		$	137,382
(1) Capital Share Transactions:
Class I:
Shares Subscribed		5,565			2,659
Shares Issued on Distributions Reinvested		—			2
Shares Redeemed		(1,833	)		(428	)
Net Increase in Class I Shares Outstanding		3,732			2,233
Class A:
Shares Subscribed		1,029			2,421
Shares Redeemed		(1,153	)		(732	)
Net Increase (Decrease) in Class A Shares Outstanding		(124	)		1,689
Class C:
Shares Subscribed		130			269
Shares Redeemed		(119	)		(36	)
Net Increase in Class C Shares Outstanding		11			233
Class IS:
Shares Subscribed		897			—
Shares Issued on Distributions Reinvested		—			—	@@
Net Increase in Class IS Shares Outstanding		897			—	@@

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Asia Opportunity Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from December 29, 2015(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016			December 31, 2015
Net Asset Value, Beginning of Period	$	21.02		$	14.53		$	16.92		$	9.68		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.00	(3)		0.02			0.01			(0.04	)		(0.03	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		2.43			6.47			(2.30	)		7.47			(0.10	)		0.03
Total from Investment Operations		2.43			6.49			(2.29	)		7.43			(0.13	)		0.03
Distributions from and/or in Excess of:
Net Investment Income		—			(0.01	)		—			—			(0.08	)		—
Net Realized Gain		—			—			(0.10	)		(0.19	)		—			—
Paid-in-Capital		—			—			—			—			(0.14	)		—
Total Distributions		—			(0.01	)		(0.10	)		(0.19	)		(0.22	)		—
Redemption Fees		0.00	(3)		0.01			0.00	(3)		0.00	(3)		—			—
Net Asset Value, End of Period	$	23.45		$	21.02		$	14.53		$	16.92		$	9.68		$	10.03
Total Return(4)		11.56	%(7)		44.74	%		(13.65	)%		76.82	%		(1.34	)%		0.30	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	181,015		$	83,805		$	25,479		$	15,913		$	5,405		$	5,587
Ratio of Expenses Before Expense Limitation		N/A			1.28	%		1.67	%		3.10	%		5.28	%		125.50	%(8)
Ratio of Expenses After Expense Limitation		1.06	%(5)(8)		1.08	%(5)		1.09	%(5)		1.06	%(5)		1.08	%(5)		1.03	%(5)(8)
Ratio of Net Investment Income (Loss)		0.00	%(5)(6)(8)		0.11	%(5)		0.04	%(5)		(0.27	)%(5)		(0.31	)%(5)		(0.71	)%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(8)		0.02	%		0.01	%		0.01	%		0.01	%		0.04	%(8)
Portfolio Turnover Rate		36	%(7)		27	%		63	%		50	%		44	%		0	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Asia Opportunity Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from December 29, 2015(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016			December 31, 2015
Net Asset Value, Beginning of Period	$	20.79		$	14.42		$	16.84		$	9.67		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.04	)		(0.06	)		(0.04	)		(0.10	)		(0.08	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		2.42			6.42			(2.28	)		7.46			(0.09	)		0.03
Total from Investment Operations		2.38			6.36			(2.32	)		7.36			(0.17	)		0.03
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.05	)		—
Net Realized Gain		—			—			(0.10	)		(0.19	)		—			—
Paid-in-Capital		—			—			—			—			(0.14	)		—
Total Distributions		—			—			(0.10	)		(0.19	)		(0.19	)		—
Redemption Fees		0.00	(3)		0.01			0.00	(3)		0.00	(3)		—			—
Net Asset Value, End of Period	$	23.17		$	20.79		$	14.42		$	16.84		$	9.67		$	10.03
Total Return(4)		11.45	%(6)		44.17	%		(13.89	)%		76.17	%		(1.67	)%		0.30	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	47,384		$	45,111		$	6,930		$	2,873		$	535		$	10
Ratio of Expenses Before Expense Limitation		N/A			1.56	%		2.05	%		3.50	%		6.36	%		139.50	%(7)
Ratio of Expenses After Expense Limitation		1.35	%(5)(7)		1.37	%(5)		1.44	%(5)		1.44	%(5)		1.44	%(5)		1.40	%(5)(7)
Ratio of Net Investment Loss		(0.41	)%(5)(7)		(0.33	)%(5)		(0.22	)%(5)		(0.69	)%(5)		(0.78	)%(5)		(1.09	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.01	%		0.01	%		0.01	%		0.05	%(7)
Portfolio Turnover Rate		36	%(6)		27	%		63	%		50	%		44	%		0	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Asia Opportunity Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from December 29, 2015(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016			December 31, 2015
Net Asset Value, Beginning of Period	$	20.35		$	14.21		$	16.73		$	9.68		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.12	)		(0.17	)		(0.15	)		(0.22	)		(0.14	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		2.36			6.30			(2.27	)		7.46			(0.10	)		0.03
Total from Investment Operations		2.24			6.13			(2.42	)		7.24			(0.24	)		0.03
Distributions from and/or in Excess of:
Net Realized Gain		—			—			(0.10	)		(0.19	)		—			—
Paid-in-Capital		—			—			—			—			(0.11	)		—
Total Distributions		—			—			(0.10	)		(0.19	)		(0.11	)		—
Redemption Fees		0.00	(3)		0.01			0.00	(3)		0.00	(3)		—			—
Net Asset Value, End of Period	$	22.59		$	20.35		$	14.21		$	16.73		$	9.68		$	10.03
Total Return(4)		11.01	%(6)		43.21	%		(14.58	)%		74.85	%		(2.44	)%		0.30	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9,614		$	8,445		$	2,582		$	431		$	10		$	10
Ratio of Expenses Before Expense Limitation		N/A			2.33	%		2.80	%		5.26	%		27.34	%		140.25	%(7)
Ratio of Expenses After Expense Limitation		2.10	%(5)(7)		2.14	%(5)		2.19	%(5)		2.19	%(5)		2.19	%(5)		2.17	%(5)(7)
Ratio of Net Investment Loss		(1.18	)%(5)(7)		(0.95	)%(5)		(0.92	)%(5)		(1.51	)%(5)		(1.42	)%(5)		(1.84	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.01	%		0.01	%		0.01	%		0.03	%(7)
Portfolio Turnover Rate		36	%(6)		27	%		63	%		50	%		44	%		0	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Asia Opportunity Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from December 29, 2015(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016			December 31, 2015
Net Asset Value, Beginning of Period	$	21.04		$	14.54		$	16.92		$	9.68		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.15			0.03			0.01			(0.02	)		(0.03	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		2.28			6.48			(2.29	)		7.45			(0.10	)		0.03
Total from Investment Operations		2.43			6.51			(2.28	)		7.43			(0.13	)		0.03
Distributions from and/or in Excess of:
Net Investment Income		—			(0.02	)		—			—			(0.08	)		—
Net Realized Gain		—			—			(0.10	)		(0.19	)		—			—
Paid-in-Capital		—			—			—			—			(0.14	)		—
Total Distributions		—			(0.02	)		(0.10	)		(0.19	)		(0.22	)		—
Redemption Fees		0.00	(3)		0.01			0.00	(3)		0.00	(3)		—			—
Net Asset Value, End of Period	$	23.47		$	21.04		$	14.54		$	16.92		$	9.68		$	10.03
Total Return(4)		11.55	%(6)		44.82	%		(13.59	)%		76.82	%		(1.29	)%		0.30	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	21,074		$	21		$	15		$	17		$	10		$	10
Ratio of Expenses Before Expense Limitation		1.07	%(7)		11.85	%		13.31	%		17.65	%		25.20	%		139.25	%(7)
Ratio of Expenses After Expense Limitation		1.03	%(5)(7)		1.03	%(5)		1.04	%(5)		1.04	%(5)		1.04	%(5)		1.02	%(5)(7)
Ratio of Net Investment Income (Loss)		1.32	%(5)(7)		0.19	%(5)		0.05	%(5)		(0.18	)%(5)		(0.26	)%(5)		(0.69	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.01	%		0.01	%		0.01	%		0.03	%(7)
Portfolio Turnover Rate		36	%(6)		27	%		63	%		50	%		44	%		0	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Asia Opportunity Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant

exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers;

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

(4) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at

least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	21,296	$	12,986	$	—	$	34,282
Beverages		—		26,140		—		26,140
Biotechnology		—		2,427		—		2,427
Diversified Consumer Services		19,800		4,904		—		24,704
Entertainment		7,536		—		—		7,536
Food Products		—		17,987		—		17,987
Health Care Providers & Services		777		—		—		777
Hotels, Restaurants & Leisure		1,980		3,991		—		5,971
Household Durables		—		4,166		—		4,166
Insurance		—		10,903		—		10,903
Interactive Media & Services		—		27,441		—		27,441
Internet & Direct Marketing Retail		25,808		15,676		—		41,484
Life Sciences Tools & Services		—		6,221		—		6,221
Semiconductors & Semiconductor Equipment		—		18,276		—		18,276
Textiles, Apparel & Luxury Goods		—		7,242		—		7,242
Total Common Stocks		77,197		158,360		—		235,557
Call Options Purchased		—		2		—		2
Short-Term Investment
Investment Company		23,645		—		—		23,645
Total Assets	$	100,842	$	158,362	$	—	$	259,204

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment

objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	2	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(99	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	77	(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	2	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract

counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities(a) (000)		Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	2	$	—	$	—	$	2

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	24,955,000

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

5.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	11,074	(e)	$	—	$	(11,074	)(f)(g)	$	0

(e) Represents market value of loaned securities at period end.

(f) The Fund received non-cash collateral of approximately $11,631,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(g) The actual collateral received is greater than the amount shown here due to overcollateralization.

6.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets.

7.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

9.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $750 million			Next $750 million			Over $1.5 billion
	0.80	%		0.75	%		0.70	%

For the six months ended June 30, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.78% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.10% for Class I shares, 1.45% for Class A shares, 2.20% for Class C shares and 1.05% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $1,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $146,215,000 and $60,557,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020,

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

advisory fees paid were reduced by approximately $17,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	14,961	$	120,119	$	111,435	$	58

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	23,645

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency

and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:		2018 Distributions Paid From:
Ordinary Income (000)		Ordinary Income (000)
$	37	$	256

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	190	$	(190	)

At December 31, 2019, the Fund had no distributable earnings on a tax basis.

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $2,541,000 that do not have an expiration date.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2019, the Fund intends to defer to January 1, 2020 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	7	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 58.0%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one- and three-year periods and for the period since the end of December 2015, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's contractual management fee and total expense ratio were lower than its peer group averages and the actual management fee was higher than its peer group average. After discussion, the Board concluded that the Fund's (i) performance and total expense ratio were competitive with its peer group average and (ii) management fee was acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

25

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

26

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

28

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIASOPPSAN
3179806 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

China Equity Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	6
Statements of Changes in Net Assets	7
Financial Highlights	8
Notes to Financial Statements	12
Investment Advisory Agreement Approval	18
Liquidity Risk Management Program	20
Privacy Notice	21
Director and Officer Information	23

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in China Equity Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

China Equity Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
China Equity Portfolio Class I	$	1,000.00	$	1,077.20	$	1,019.10	$	5.99	$	5.82		1.16	%
China Equity Portfolio Class A		1,000.00		1,075.40		1,017.21		7.95		7.72		1.54
China Equity Portfolio Class C		1,000.00		1,070.90		1,013.48		11.79		11.46		2.29
China Equity Portfolio Class IS		1,000.00		1,077.20		1,019.19		5.89		5.72		1.14

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

China Equity Portfolio

	Shares		Value (000)
Common Stocks (97.7%)
Banks (6.8%)
Bank of China Ltd. H Shares (a)		309,000	$	114
China Construction Bank Corp. H Shares (a)		503,000		409
China Merchants Bank Co., Ltd. H Shares (a)		31,500		146
Industrial & Commercial Bank of China Ltd. H Shares (a)		211,000		128
				797
Beverages (12.9%)
China Resources Beer Holdings Co., Ltd. (a)		92,000		513
Kweichow Moutai Co., Ltd., Class A		4,800		997
				1,510
Capital Markets (2.5%)
China International Capital Corp., Ltd. H Shares (a)(b)		80,400		159
Hong Kong Exchanges & Clearing Ltd.		3,200		136
				295
Construction Materials (2.4%)
Anhui Conch Cement Co., Ltd., Class A		37,900		285
Diversified Consumer Services (6.4%)
New Oriental Education & Technology Group, Inc. ADR (b)		3,300		430
TAL Education Group ADR (b)		4,700		321
				751
Electronic Equipment, Instruments & Components (1.4%)
Universal Scientific Industrial Shanghai Co., Ltd., Class A		50,700		158
Food Products (6.0%)
China Mengniu Dairy Co., Ltd. (a)(b)		135,000		518
Yihai International Holding Ltd. (a)(b)		18,000		185
				703
Health Care Equipment & Supplies (1.8%)
Shandong Weigao Group Medical Polymer Co., Ltd. H Shares (a)		96,000		214
Insurance (2.6%)
Ping An Insurance Group Co. of China Ltd. H Shares (a)		30,500		304
Interactive Media & Services (20.4%)
Tencent Holdings Ltd. (a)		37,200		2,384
Internet & Direct Marketing Retail (16.2%)
Alibaba Group Holding Ltd. (a)(b)		3,300		89
Alibaba Group Holding Ltd. ADR (b)		8,400		1,812
				1,901
Pharmaceuticals (8.8%)
CSPC Pharmaceutical Group Ltd. (a)		165,600		314
Jiangsu Hengrui Medicine Co., Ltd., Class A		15,718		205
Joincare Pharmaceutical Group Industry Co. Ltd.		57,500		132
Sino Biopharmaceutical Ltd. (a)		203,000		383
				1,034

	Shares		Value (000)
Real Estate Management & Development (2.2%)
China Overseas Land & Investment Ltd. (a)		30,000	$	92
China Resources Land Ltd. (a)		22,000		84
Shenzhen Investment Ltd. (a)		252,000		80
				256
Semiconductors & Semiconductor Equipment (2.8%)
Hua Hong Semiconductor Ltd. (a)(b)		94,000		330
Textiles, Apparel & Luxury Goods (2.9%)
Shenzhou International Group Holdings Ltd. (a)		27,800		338
Wireless Telecommunication Services (1.6%)
China Mobile Ltd. (a)		27,500		186
Total Common Stocks (Cost $9,601)				11,446
Short-Term Investment (3.1%)
Investment Company (3.1%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $367)		366,858		367
Total Investments (100.8%) (Cost $9,968) (c)(d)				11,813
Liabilities in Excess of Other Assets (–0.8%)				(92	)
Net Assets (100.0%)			$	11,721

(a)  Security trades on the Hong Kong exchange.

(b)  Non-income producing security.

(c)  The approximate fair value and percentage of net assets, $8,883,000 and 75.8%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $2,098,000 and the aggregate gross unrealized depreciation is approximately $253,000, resulting in net unrealized appreciation of approximately $1,845,000.

ADR  American Depositary Receipt.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		23.1	%
Interactive Media & Services		20.2
Internet & Direct Marketing Retail		16.1
Beverages		12.8
Pharmaceuticals		8.8
Banks		6.7
Diversified Consumer Services		6.4
Food Products		5.9
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

China Equity Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $9,601)	$	11,446
Investment in Security of Affiliated Issuer, at Value (Cost $367)		367
Total Investments in Securities, at Value (Cost $9,968)		11,813
Prepaid Offering Costs		52
Due from Adviser		37
Dividends Receivable		22
Receivable for Investments Sold		11
Receivable from Affiliate		—	@
Other Assets		21
Total Assets		11,956
Liabilities:
Payable for Offering Costs		154
Payable for Professional Fees		38
Payable for Investments Purchased		36
Payable for Custodian Fees		2
Payable for Administration Fees		1
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		4
Total Liabilities		235
Net Assets	$	11,721
Net Assets Consist of:
Paid-in-Capital	$	10,000
Total Distributable Earnings		1,721
Net Assets	$	11,721
CLASS I:
Net Assets	$	11,685
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		997,000
Net Asset Value, Offering and Redemption Price Per Share	$	11.72
CLASS A:
Net Assets	$	12
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Redemption Price Per Share	$	11.69
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.65
Maximum Offering Price Per Share	$	12.34
CLASS C:
Net Assets	$	12
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	11.63
CLASS IS:
Net Assets	$	12
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	11.72

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

China Equity Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $5 of Foreign Taxes Withheld)	$	68
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		69
Expenses:
Offering Costs		77
Professional Fees		67
Advisory Fees (Note B)		42
Shareholder Reporting Fees		9
Administration Fees (Note C)		4
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Custodian Fees (Note F)		3
Registration Fees		3
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Directors' Fees and Expenses		—	@
Pricing Fees		—	@
Other Expenses		3
Total Expenses		212
Expenses Reimbursed by Adviser (Note B)		(106	)
Waiver of Advisory Fees (Note B)		(42	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		61
Net Investment Income		8
Realized Loss:
Investments Sold		(121	)
Foreign Currency Translation		(—	@)
Net Realized Loss		(121	)
Change in Unrealized Appreciation (Depreciation):
Investments		955
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		955
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		834
Net Increase in Net Assets Resulting from Operations	$	842

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

China Equity Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Period from October 31, 2019^ to December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	8		$	(16	)
Net Realized Gain (Loss)		(121	)		5
Net Change in Unrealized Appreciation (Depreciation)		955			890
Net Increase in Net Assets Resulting from Operations		842			879
Capital Share Transactions:(1)
Class I:
Subscribed		—			9,970
Class A:
Subscribed		—			10
Class C:
Subscribed		—			10
Class IS:
Subscribed		—			10
Net Increase in Net Assets Resulting from Capital Share Transactions		—			10,000
Total Increase in Net Assets		842			10,879
Net Assets:
Beginning of Period		10,879			—
End of Period	$	11,721		$	10,879
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		—			997
Class A:
Shares Subscribed		—			1
Class C:
Shares Subscribed		—			1
Class IS:
Shares Subscribed		—			1

^  Commencement of Operations.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

China Equity Portfolio

	Class I
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Period from October 31, 2019(1) to December 31, 2019
Net Asset Value, Beginning of Period	$	10.88		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.01			(0.02	)
Net Realized and Unrealized Gain		0.83			0.90
Total from Investment Operations		0.84			0.88
Net Asset Value, End of Period	$	11.72		$	10.88
Total Return(3)		7.72	%(5)		8.80	%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11,685		$	10,846
Ratio of Expenses Before Expense Limitation		3.98	%(6)		5.72	%(6)
Ratio of Expenses After Expense Limitation		1.16	%(4)(6)		1.15	%(4)(6)
Ratio of Net Investment Income (Loss)		0.15	%(4)(6)		(0.98	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		13	%(5)		0	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Not annualized.

(6)  Annualized.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

China Equity Portfolio

	Class A
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Period from October 31, 2019(1) to December 31, 2019
Net Asset Value, Beginning of Period	$	10.87		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.01	)		(0.02	)
Net Realized and Unrealized Gain		0.83			0.89
Total from Investment Operations		0.82			0.87
Net Asset Value, End of Period	$	11.69		$	10.87
Total Return(3)		7.54	%(5)		8.70	%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	12		$	11
Ratio of Expenses Before Expense Limitation		21.83	%(6)		19.30	%(6)
Ratio of Expenses After Expense Limitation		1.54	%(4)(6)		1.54	%(4)(6)
Ratio of Net Investment Loss		(0.24	)%(4)(6)		(1.37	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		13	%(5)		0	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Not annualized.

(6)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

China Equity Portfolio

	Class C
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Period from October 31, 2019(1) to December 31, 2019
Net Asset Value, Beginning of Period	$	10.86		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.05	)		(0.04	)
Net Realized and Unrealized Gain		0.82			0.90
Total from Investment Operations		0.77			0.86
Net Asset Value, End of Period	$	11.63		$	10.86
Total Return(3)		7.09	%(5)		8.60	%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	12		$	11
Ratio of Expenses Before Expense Limitation		22.64	%(6)		20.07	%(6)
Ratio of Expenses After Expense Limitation		2.29	%(4)(6)		2.29	%(4)(6)
Ratio of Net Investment Loss		(0.99	)%(4)(6)		(2.12	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		13	%(5)		0	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Not annualized.

(6)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

China Equity Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Period from October 31, 2019(1) to December 31, 2019
Net Asset Value, Beginning of Period	$	10.88		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.01			(0.02	)
Net Realized and Unrealized Gain		0.83			0.90
Total from Investment Operations		0.84			0.88
Net Asset Value, End of Period	$	11.72		$	10.88
Total Return(3)		7.72	%(5)		8.80	%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	12		$	11
Ratio of Expenses Before Expense Limitation		21.46	%(6)		19.05	%(6)
Ratio of Expenses After Expense Limitation		1.14	%(4)(6)		1.14	%(4)(6)
Ratio of Net Investment Income (Loss)		0.16	%(4)(6)		(0.97	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		13	%(5)		0	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Not annualized.

(6)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the China Equity Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded

on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price

12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer

a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	—	$	797	$	—	$	797
Beverages		—		1,510		—		1,510
Capital Markets		—		295		—		295
Construction Materials		—		285		—		285
Diversified Consumer Services		751		—		—		751
Electronic Equipment, Instruments & Components		—		158		—		158
Food Products		—		703		—		703
Health Care Equipment & Supplies		—		214		—		214
Insurance		—		304		—		304
Interactive Media & Services		—		2,384		—		2,384
Internet & Direct Marketing Retail		1,812		89		—		1,901
Pharmaceuticals		—		1,034		—		1,034
Real Estate Management & Development		—		256		—		256
Semiconductors & Semiconductor Equipment		—		330		—		330
Textiles, Apparel & Luxury Goods		—		338		—		338
Wireless Telecommunication Services		—		186		—		186
Total Common Stocks		2,563		8,883		—		11,446
Short-Term Investment Investment Company		367		—		—		367
Total Assets	$	2,930	$	8,883	$	—	$	11,813

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of

the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result,

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets.

5.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are

allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 0.80% of the daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.20% for Class I shares, 1.55% for Class A shares, 2.30% for Class C shares and 1.15% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $42,000 of advisory fees were waived and approximately $109,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $1,561,000 and $1,294,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	550	$	608	$	791	$	1

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	367

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for financial statement recognition of the

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. The tax year ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. There were no distributions paid during fiscal year 2019.

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2019.

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	4	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund did not have record owners of 10% or greater.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

The Board considered the following factors at the time of approval of the contracts which occurred prior to commencement of operations.

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services to be provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services to be provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers.

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who will provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services to be provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board considered that the Adviser plans to arrange for a public offering of shares of the Fund to raise assets for investment and that the offering had not yet begun and concluded that, since the Fund currently had no assets to invest (other than seed capital required under the Investment Company Act) and had no track record of performance, this was not a factor it needed to address at the present time.

The Board reviewed the advisory and administrative fee rates (the "management fee rates") proposed to be paid by the Fund under the Management Agreement relative to comparable funds advised by the Adviser, when applicable, and compared to their peers as determined by the Adviser, and reviewed the anticipated total expense ratio of the Fund. The Board considered that the Fund requires the Adviser to develop processes, invest in additional resources and incur additional risks to successfully manage the Fund and concluded that the proposed management fee rate and anticipated total expense ratio would be competitive with its peer group averages.

Economies of Scale

The Board considered the growth prospects of the Fund and the structure of the proposed management fee schedule, which does not include breakpoints. The Board considered that the Fund's potential growth was uncertain and concluded that it would be premature to consider economies of scale as a factor in approving the Management Agreement at the present time.

Profitability of the Adviser and Affiliates

Since the Fund had not begun operations and had not paid any fees to the Adviser, the Board concluded that this was not a factor that needed to be considered at the present time.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates to be derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. Since the Fund had not begun operations and had not paid any fees to the Adviser, the Board concluded that these benefits were not a factor that needed to be considered at the present time.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to enter into this relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its future shareholders to approve the Management Agreement, which will remain in effect for two years and thereafter must be approved annually by the Board of the Fund if it is to continue in effect. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

20

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

21

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

23

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distributed, Inc.

IFICEQSAN
3183727 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Counterpoint Global Portfolio

(formerly Global Counterpoint Portfolio)

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	8
Statement of Operations	10
Statements of Changes in Net Assets	11
Financial Highlights	12
Notes to Financial Statements	16
Investment Advisory Agreement Approval	25
Liquidity Risk Management Program	27
Privacy Notice	28
Director and Officer Information	30

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Counterpoint Global Portfolio (the "Fund") (formerly Global Counterpoint Portfolio) performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Counterpoint Global Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Counterpoint Global Portfolio Class I	$	1,000.00	$	1,234.10	$	1,019.74	$	5.72	$	5.17		1.03	%
Counterpoint Global Portfolio Class A		1,000.00		1,232.30		1,017.95		7.71		6.97		1.39
Counterpoint Global Portfolio Class C		1,000.00		1,227.70		1,014.22		11.85		10.72		2.14
Counterpoint Global Portfolio Class IS		1,000.00		1,235.00		1,019.94		5.50		4.97		0.99

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Counterpoint Global Portfolio

	Shares		Value (000)
Common Stocks (95.8%)
Argentina (0.1%)
Globant SA (a)		105	$	16
Australia (0.3%)
Brookfield Infrastructure Partners LP		1,100		45
Brazil (0.1%)
B3 SA — Brasil Bolsa Balcao		326		3
Magazine Luiza SA		525		7
				10
Canada (6.6%)
Brookfield Asset Management, Inc., Class A		396		13
Brookfield Asset Management, Inc., Class A		2,141		71
Brookfield Infrastructure Partners LP		100		5
Canada Goose Holdings, Inc. (a)		2,333		54
Canadian National Railway Co.		327		29
Colliers International Group, Inc.		592		34
Constellation Software, Inc.		104		117
FirstService Corp.		1,682		169
Shopify, Inc., Class A (a)		612		581
				1,073
China (4.1%)
Alibaba Group Holding Ltd. ADR (a)		519		112
China East Education Holdings Ltd. (b)		3,000		5
China Resources Beer Holdings Co., Ltd. (b)		2,000		11
Foshan Haitian Flavouring & Food Co., Ltd., Class A		4,860		86
Haidilao International Holding Ltd. (b)		1,000		4
Hangzhou Tigermed Consulting Co., Ltd., Class A		298		4
Huazhu Group Ltd. ADR		77		3
HUYA, Inc. ADR (a)		454		9
Inner Mongolia Yili Industrial Group Co., Ltd., Class A		700		3
Meituan Dianping, Class B (a)(b)		5,200		116
New Frontier Health Corp. (a)		1,068		9
Shenzhou International Group Holdings Ltd. (b)		800		10
TAL Education Group ADR (a)		3,483		238
Tencent Holdings Ltd. (b)		200		13
Trip.com Group Ltd. ADR (a)		1,897		49
				672
Denmark (2.5%)
Chr Hansen Holding A/S		1,512		156
DSV A/S		2,093		257
				413
Finland (0.1%)
Revenio Group Oyj		380		12
France (4.0%)
Christian Dior SE		344		146
Dassault Systemes SE		199		35
EssilorLuxottica SA (a)		237		30
Hermes International		408		343
L'Oreal SA (BSRM) (a)		109		35
Pernod Ricard SA		155		24
Remy Cointreau SA		262		36
				649

	Shares		Value (000)
Germany (0.7%)
Adidas AG (a)		137	$	36
CompuGroup Medical SE & Co. KgaA		346		27
HelloFresh SE (a)		509		27
Puma SE (a)		165		13
zooplus AG (a)		82		14
				117
Hong Kong (0.3%)
AIA Group Ltd.		5,200		49
Alphamab Oncology (a)		1,000		2
				51
India (1.9%)
HDFC Bank Ltd. ADR		6,683		304
ICICI Bank Ltd. ADR		1,173		11
				315
Italy (1.2%)
Brunello Cucinelli SpA (a)		381		11
Davide Campari-Milano SpA		4,097		35
Moncler SpA (a)		3,896		150
				196
Japan (1.1%)
Keyence Corp.		300		126
Pigeon Corp.		1,600		62
				188
Korea, Republic of (0.2%)
NAVER Corp.		187		42
Mexico (0.0%)
Grupo Aeroportuario del Sureste SAB de CV, Class B		95		1
Netherlands (3.2%)
Adyen N.V. (a)		213		310
ASML Holding N.V.		264		97
JDE Peet's BV (a)		2,584		105
Just Eat Takeaway.com N.V (a)		168		17
				529
New Zealand (0.8%)
Ryman Healthcare Ltd.		4,347		37
Xero Ltd. (a)		1,428		89
				126
Poland (0.1%)
Dino Polska SA (a)		218		11
Singapore (1.2%)
Sea Ltd. ADR (a)		1,770		190
Sweden (0.6%)
AddLife AB (a)		3,124		33
Cellavision AB (a)		415		13
Evolution Gaming Group AB		242		14
Vitrolife AB (a)		1,939		43
				103

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Counterpoint Global Portfolio

	Shares		Value (000)
Switzerland (0.5%)
Kuehne & Nagel International AG (Registered) (a)		206	$	34
Straumann Holding AG (Registered)		50		43
				77
Taiwan (0.3%)
Taiwan Semiconductor Manufacturing Co., Ltd.		1,000		11
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		721		41
				52
United Kingdom (4.3%)
Abcam PLC		2,314		38
Atlassian Corp., PLC, Class A (a)		689		124
Blue Prism Group PLC (a)		1,081		15
boohoo Group PLC (a)		2,608		14
Diageo PLC		815		27
Fevertree Drinks PLC		1,467		37
Intertek Group PLC		460		31
Rentokil Initial PLC		4,702		30
Rightmove PLC		8,460		57
Royalty Pharma PLC, Class A (a)		6,368		309
Victoria PLC (a)		6,338		22
				704
United States (61.6%)
10X Genomics, Inc., Class A (a)		1,226		109
Activision Blizzard, Inc.		524		40
Adaptive Biotechnologies Corp. (a)		108		5
Adobe, Inc. (a)		239		104
Alnylam Pharmaceuticals, Inc. (a)		124		18
Alphabet, Inc., Class C (a)		87		123
Alteryx, Inc., Class A (a)		651		107
Amazon.com, Inc. (a)		207		571
American Tower Corp. REIT		21		5
ANSYS, Inc. (a)		19		6
Anterix, Inc.		746		34
Appfolio, Inc., Class A (a)		499		81
Appian Corp. (a)		1,861		95
Apple, Inc.		41		15
ASML Holding NV		358		132
At Home Group, Inc. (a)		2,901		19
Autodesk, Inc. (a)		409		98
AutoZone, Inc. (a)		5		6
Avalara, Inc. (a)		206		27
Ball Corp.		53		4
Berkshire Hathaway, Inc., Class B (a)		32		6
Bill.Com Holdings, Inc. (a)		213		19
Brown & Brown, Inc.		138		6
Cadence Design Systems, Inc. (a)		57		5
Cardlytics, Inc. (a)		1,414		99
Carvana Co. (a)		1,626		195
Chewy, Inc., Class A (a)		1,879		84
Cintas Corp.		23		6
Cognex Corp.		176		11
Collier Creek Holdings, Class A (a)		4,147		57

	Shares		Value (000)
Copart, Inc. (a)		62	$	5
CoStar Group, Inc. (a)		8		6
Costco Wholesale Corp.		234		71
Coupa Software, Inc. (a)		1,098		304
Covetrus, Inc. (a)		16,634		298
Danaher Corp.		23		4
Datadog, Inc., Class A (a)		391		34
DexCom, Inc. (a)		263		107
DocuSign, Inc. (a)		103		18
Ecolab, Inc.		848		169
Editas Medicine, Inc. (a)		156		5
Elastic N.V. (a)		146		13
EPAM Systems, Inc. (a)		639		161
Equinix, Inc. REIT		8		6
EVI Industries, Inc. (a)		331		7
Exact Sciences Corp. (a)		88		8
Facebook, Inc., Class A (a)		688		156
Farfetch Ltd., Class A (a)		8,537		147
Fastenal Co.		134		6
Fastly, Inc., Class A (a)		2,797		238
Floor & Decor Holdings, Inc. (a)		515		30
Gartner, Inc. (a)		43		5
Guardant Health, Inc. (a)		545		44
Guidewire Software, Inc. (a)		54		6
Healthcare Merger Corp. (a)		209		2
HealthEquity, Inc. (a)		212		12
HEICO Corp., Class A		1,835		149
IDEXX Laboratories, Inc. (a)		18		6
IHS Markit Ltd.		424		32
Illumina, Inc. (a)		120		44
Inspire Medical Systems, Inc. (a)		346		30
Intellia Therapeutics, Inc. (a)		192		4
Intercontinental Exchange, Inc.		912		84
Intuitive Surgical, Inc. (a)		622		354
Linde PLC		149		32
Madison Square Garden Co. (The), Class A (a)		33		5
Martin Marietta Materials, Inc.		88		18
Mastercard, Inc., Class A		527		156
Match Group, Inc. (a)		69		7
MercadoLibre, Inc. (a)		110		108
Microsoft Corp.		269		55
Moderna, Inc. (a)		394		25
MongoDB, Inc. (a)		658		149
NanoString Technologies, Inc. (a)		2,531		74
Netflix, Inc. (a)		14		6
NIKE, Inc., Class B		545		53
NVIDIA Corp.		18		7
Okta, Inc. (a)		1,292		259
Overstock.com, Inc. (a)		2,428		69
Party City Holdco, Inc. (a)		14,463		22
Passage Bio, Inc. (a)		351		10
Peloton Interactive, Inc., Class A (a)		481		28

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Counterpoint Global Portfolio

	Shares		Value (000)
United States (cont'd)
Penumbra, Inc. (a)		121	$	22
Phreesia, Inc. (a)		282		8
Pinterest, Inc., Class A (a)		648		14
Pool Corp.		21		6
Quotient Ltd. (a)		2,914		22
RealReal, Inc. (The) (a)		275		4
Redfin Corp. (a)		1,217		51
Roku, Inc. (a)		82		10
Rollins, Inc.		130		6
Roper Technologies, Inc.		50		19
Royal Gold, Inc.		292		36
S&P Global, Inc.		289		95
salesforce.com, Inc. (a)		393		74
Service Corp. International		137		5
ServiceNow, Inc. (a)		605		245
Shake Shack, Inc., Class A (a)		231		12
Sherwin-Williams Co. (The)		97		56
Shockwave Medical, Inc. (a)		287		14
Slack Technologies, Inc., Class A (a)		7,083		220
Smartsheet, Inc., Class A (a)		1,331		68
Snap, Inc., Class A (a)		2,574		60
Spotify Technology SA (a)		1,968		508
Square, Inc., Class A (a)		3,388		356
Starbucks Corp.		655		48
Stitch Fix, Inc., Class A (a)		3,931		98
Synopsys, Inc. (a)		28		5
Take-Two Interactive Software, Inc. (a)		26		4
Teradyne, Inc.		125		11
Texas Pacific Land Trust		111		66
Trade Desk, Inc. (The), Class A (a)		284		115
TransDigm Group, Inc.		38		17
Twilio, Inc., Class A (a)		1,202		264
Twitter, Inc. (a)		4,790		143
Tyler Technologies, Inc. (a)		16		6
Uber Technologies, Inc. (a)		6,197		193
Union Pacific Corp.		32		5
UnitedHealth Group, Inc.		101		30
Vail Resorts, Inc.		29		5
Veeva Systems, Inc., Class A (a)		2,075		486
Verisk Analytics, Inc.		32		5
Visa, Inc., Class A		463		89
Vroom, Inc. (a)		656		34
Walt Disney Co. (The)		434		48
Waste Connections, Inc.		326		31
Wayfair, Inc., Class A (a)		731		144
Workday, Inc., Class A (a)		260		49
XPO Logistics, Inc. (a)		697		54
Zillow Group, Inc., Class A (a)		336		19
Zillow Group, Inc., Class C (a)		1,001		58
Zoetis, Inc.		139		19

	Shares		Value (000)
Zoom Video Communications, Inc., Class A (a)		1,454	$	369
Zynga, Inc., Class A (a)		1,383		13
				10,074
Total Common Stocks (Cost $10,825)				15,666
Preferred Stocks (0.0%)
United States (0.0%)
Overstock.com, Inc. Series A-1 (c) (Cost $1)		176		4
Short-Term Investment (3.0%)
Investment Company (3.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $492)		491,995		492
Total Investments Excluding Purchased Options (98.8%) (Cost $11,318)				16,162
Total Purchased Options Outstanding (0.1%) (Cost $23)				8
Total Investments (98.9%) (Cost $11,341) (d)(e)				16,170
Other Assets in Excess of Liabilities (1.1%)				176
Net Assets (100.0%)			$	16,346

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  Perpetual — One or more securities do not have a predetermined maturity date. Rates for these securities are fixed for a period of time, after which they revert to a floating rate. Interest rates in effect are as of June 30, 2020.

(d)  The approximate fair value and percentage of net assets, $2,916,000 and 17.8%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $4,922,000 and the aggregate gross unrealized depreciation is approximately $93,000, resulting in net unrealized appreciation of approximately $4,829,000.

ADR  American Depositary Receipt.

REIT  Real Estate Investment Trust.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Counterpoint Global Portfolio

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
JP Morgan Chase Bank NA	USD/CNH	CNH	7.74	Jan-21		1,617,368		1,617	$	4		$	6	$	(2	)
JP Morgan Chase Bank NA	USD/CNH	CNH	8.09	Sep-20		1,626,361		1,626		—	@		7		(7	)
JP Morgan Chase Bank NA	USD/CNH	CNH	8.49	May-21		1,600,649		1,601		4			10		(6	)
									$	8		$	23	$	(15	)

@  —  Value is less than $500.

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Other*		48.4	%
Information Technology Services		15.9
Software		15.7
Internet & Direct Marketing Retail		9.7
Textiles, Apparel & Luxury Goods		5.2
Entertainment		5.1
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Counterpoint Global Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $10,849)	$	15,678
Investment in Security of Affiliated Issuer, at Value (Cost $492)		492
Total Investments in Securities, at Value (Cost $11,341)		16,170
Foreign Currency, at Value (Cost $12)		12
Cash		1
Receivable for Investments Sold		135
Due from Adviser		76
Receivable for Fund Shares Sold		45
Dividends Receivable		2
Tax Reclaim Receivable		2
Receivable from Affiliate		—	@
Other Assets		87
Total Assets		16,530
Liabilities:
Payable for Fund Shares Redeemed		73
Payable for Investments Purchased		68
Payable for Professional Fees		32
Payable for Administration Fees		1
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		10
Total Liabilities		184
Net Assets	$	16,346
Net Assets Consist of:
Paid-in-Capital	$	12,313
Total Distributable Earnings		4,033
Net Assets	$	16,346

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Counterpoint Global Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	16,240
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,162,345
Net Asset Value, Offering and Redemption Price Per Share	$	13.97
CLASS A:
Net Assets	$	78
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		5,594
Net Asset Value, Redemption Price Per Share	$	13.90
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.77
Maximum Offering Price Per Share	$	14.67
CLASS C:
Net Assets	$	14
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	13.75
CLASS IS:
Net Assets	$	14
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	13.98

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Counterpoint Global Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $2 of Foreign Taxes Withheld)	$	18
Dividends from Security of Affiliated Issuer (Note G)		4
Total Investment Income		22
Expenses:
Professional Fees		59
Custodian Fees (Note F)		58
Advisory Fees (Note B)		52
Registration Fees		24
Shareholder Reporting Fees		7
Pricing Fees		7
Administration Fees (Note C)		5
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		2
Sub Transfer Agency Fees — Class I		1
Sub Transfer Agency Fees — Class A		—	@
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		11
Total Expenses		231
Expenses Reimbursed by Adviser (Note B)		(108	)
Waiver of Advisory Fees (Note B)		(52	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		67
Net Investment Loss		(45	)
Realized Gain (Loss):
Investments Sold		(540	)
Foreign Currency Translation		1
Net Realized Loss		(539	)
Change in Unrealized Appreciation (Depreciation):
Investments		3,633
Foreign Currency Translation		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		3,633
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		3,094
Net Increase in Net Assets Resulting from Operations	$	3,049

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Counterpoint Global Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(45	)	$	(18	)
Net Realized Gain (Loss)		(539	)		230
Net Change in Unrealized Appreciation (Depreciation)		3,633			1,737
Net Increase in Net Assets Resulting from Operations		3,049			1,949
Capital Share Transactions: (1)
Class I:
Subscribed		7,090			2,424
Redeemed		(3,974	)		—
Class A:
Subscribed		48			4
Redeemed		(1	)		(—	@)
Net Increase in Net Assets Resulting from Capital Share Transactions		3,163			2,428
Total Increase in Net Assets		6,212			4,377
Net Assets:
Beginning of Period		10,134			5,757
End of Period	$	16,346		$	10,134
(1) Capital Share Transactions:
Class I:
Shares Subscribed		634			215
Shares Redeemed		(364	)		—
Net Increase in Class I Shares Outstanding		270			215
Class A:
Shares Subscribed		4			—	@@
Shares Redeemed		(—	@@)		(—	@@)
Net Increase in Class A Shares Outstanding		4			—	@@

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Counterpoint Global Portfolio

	Class I
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 29, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	11.32		$	8.46		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.04	)		(0.03	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		2.69			2.89			(1.41	)
Total from Investment Operations		2.65			2.86			(1.44	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.03	)
Paid-in-Capital		—			—			(0.07	)
Total Distributions		—			—			(0.10	)
Net Asset Value, End of Period	$	13.97		$	11.32		$	8.46
Total Return(3)		23.41	%(5)		33.81	%		(14.36	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	16,240		$	10,097		$	5,733
Ratio of Expenses Before Expense Limitation		3.51	%(6)		5.22	%		6.83	%(6)
Ratio of Expenses After Expense Limitation		1.03	%(4)(6)		1.03	%(4)		1.03	%(4)(6)
Ratio of Net Investment Loss		(0.69	)%(4)(6)		(0.25	)%(4)		(0.54	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(6)		0.01	%		0.01	%(6)
Portfolio Turnover Rate		66	%(5)		67	%		54	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Not annualized.

(6)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Counterpoint Global Portfolio

	Class A
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 29, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	11.28		$	8.47		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.06	)		(0.06	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		2.68			2.87			(1.40	)
Total from Investment Operations		2.62			2.81			(1.44	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.03	)
Paid-in-Capital		—			—			(0.06	)
Total Distributions		—			—			(0.09	)
Net Asset Value, End of Period	$	13.90		$	11.28		$	8.47
Total Return(3)		23.23	%(5)		33.18	%		(14.44	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	78		$	15		$	8
Ratio of Expenses Before Expense Limitation		9.12	%(6)		23.73	%		26.82	%(6)
Ratio of Expenses After Expense Limitation		1.39	%(4)(6)		1.39	%(4)		1.39	%(4)(6)
Ratio of Net Investment Loss		(1.05	)%(4)(6)		(0.62	)%(4)		(0.91	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%		0.01	%(6)
Portfolio Turnover Rate		66	%(5)		67	%		54	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Not annualized.

(6)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Counterpoint Global Portfolio

	Class C
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 29, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	11.20		$	8.47		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.10	)		(0.14	)		(0.08	)
Net Realized and Unrealized Gain (Loss)		2.65			2.87			(1.40	)
Total from Investment Operations		2.55			2.73			(1.48	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.02	)
Paid-in-Capital		—			—			(0.03	)
Total Distributions		—			—			(0.05	)
Net Asset Value, End of Period	$	13.75		$	11.20		$	8.47
Total Return(3)		22.77	%(5)		32.23	%		(14.80	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	14		$	11		$	8
Ratio of Expenses Before Expense Limitation		22.96	%(6)		24.53	%		27.44	%(6)
Ratio of Expenses After Expense Limitation		2.14	%(4)(6)		2.14	%(4)		2.14	%(4)(6)
Ratio of Net Investment Loss		(1.79	)%(4)(6)		(1.37	)%(4)		(1.66	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%		0.01	%(6)
Portfolio Turnover Rate		66	%(5)		67	%		54	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Not annualized.

(6)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Counterpoint Global Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 29, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	11.32		$	8.46		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.04	)		(0.02	)		(0.02	)
Net Realized and Unrealized Gain (Loss)		2.70			2.88			(1.41	)
Total from Investment Operations		2.66			2.86			(1.43	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.03	)
Paid-in-Capital		—			—			(0.08	)
Total Distributions		—			—			(0.11	)
Net Asset Value, End of Period	$	13.98		$	11.32		$	8.46
Total Return(3)		23.50	%(5)		33.81	%		(14.34	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	14		$	11		$	8
Ratio of Expenses Before Expense Limitation		21.30	%(6)		23.44	%		26.39	%(6)
Ratio of Expenses After Expense Limitation		0.99	%(4)(6)		0.99	%(4)		0.99	%(4)(6)
Ratio of Net Investment Loss		(0.64	)%(4)(6)		(0.22	)%(4)		(0.51	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%		0.01	%(6)
Portfolio Turnover Rate		66	%(5)		67	%		54	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Not annualized.

(6)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Counterpoint Global Portfolio (name changed on January 2, 2020, formerly Global Counterpoint Portfolio). The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices

if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant

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Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's

valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

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Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	166	$	—	$	—	$	166
Air Freight & Logistics		54		257		—		311
Banks		315		—		—		315
Beverages		—		170		—		170
Biotechnology		70		83		—		153
Capital Markets		266		—		—		266
Chemicals		257		156		—		413
Commercial Services & Supplies		48		30		—		78
Construction Materials		18		—		—		18
Containers & Packaging		4		—		—		4
Distributors		6		—		—		6
Diversified Consumer Services		243		5		—		248
Diversified Financial Services		6		—		—		6
Diversified Holding Companies		2		—		—		2
Diversified Telecommunication Services		34		—		—		34
Electronic Equipment, Instruments & Components		11		126		—		137
Entertainment		820		—		—		820
Equity Real Estate Investment Trusts (REITs)		11		—		—		11
Food & Staples Retailing		71		11		—		82
Food Products		105		89		—		194
Gas Utilities		5		—		—		5
Health Care Equipment & Supplies		529		68		—		597
Health Care Providers & Services		393		37		—		430
Health Care Technology		551		—		—		551
Hotels, Restaurants & Leisure		68		18		—		86
Household Durables		—		22		—		22
Household Products		—		62		—		62
Industrial Conglomerates		19		—		—		19
Information Technology Services		2,258		310		—		2,568
Insurance		6		49		—		55
Interactive Media & Services		580		112		—		692
Internet & Direct Marketing Retail		1,386		187		—		1,573
Investment Companies		57		—		—		57

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Leisure Products	$	28	$	—	$	—	$	28
Life Sciences Tools & Services		232		37		—		269
Marine		—		34		—		34
Media		99		—		—		99
Metals & Mining		36		—		—		36
Multi-Line Retail		7		—		—		7
Multi-Utilities		45		—		—		45
Oil, Gas & Consumable Fuels		66		—		—		66
Personal Products		—		35		—		35
Pharmaceuticals		328		—		—		328
Professional Services		43		31		—		74
Real Estate Management & Development		254		—		—		254
Road & Rail		227		—		—		227
Semiconductors & Semiconductor Equipment		191		108		—		299
Software		2,393		140		—		2,533
Specialty Retail		306		—		—		306
Tech Hardware, Storage & Peripherals		15		—		—		15
Textiles, Apparel & Luxury Goods		107		739		—		846
Trading Companies & Distributors		13		—		—		13
Transportation Infrastructure		1		—		—		1
Total Common Stocks		12,750		2,916		—		15,666
Preferred Stock
Internet & Direct Marketing Retail		4		—		—		4
Call Options Purchased		—		8		—		8
Short-Term Investment
Investment Company		492		—		—		492
Total Assets	$	13,246	$	2,924	$	—	$	16,170

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–   investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–   investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of

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Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result,

an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting

about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure		Value (000)
Purchased Options	Investments, at Value (Purchased Options)		Currency Risk	$	8	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(12	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	2	(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	8	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
JP Morgan Chase Bank NA	$	8	(a)	$	—	$	—	$	8

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	5,056,000

5.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.80	%		0.75	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses,

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.05% for Class I shares, 1.40% for Class A shares, 2.15% for Class C shares and 1.00% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $52,000 of advisory fees were waived and approximately $111,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for

providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $12,095,000 and $7,897,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	2,154	$	5,901	$	7,563	$	4

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	492

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the two-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Paid-in- Capital (000)
$	—	$	—	$	21	$	50

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	27	$	(27	)

At December 31, 2019, the Fund had no distributable earnings on a tax basis.

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $88,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 40.1%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-year period and the period since the end of June 2018, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's contractual management fee and total expense ratio were higher than but close to its peer group averages and actual management fee was lower than its peer group average. After discussion, the Board concluded that the Fund's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

27

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

28

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

29

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

30

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGCPTSAN
3185003 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Developing Opportunity Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	6
Statement of Changes in Net Assets	7
Financial Highlights	8
Notes to Financial Statements	12
Investment Advisory Agreement Approval	18
Liquidity Risk Management Program	20
Privacy Notice	21
Director and Officer Information	23

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Developing Opportunity Portfolio (the "Fund") performed during the period beginning February 14, 2020 (when the Fund commenced operations) and ended June 30, 2020.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Developing Opportunity Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period 2/14/20 - 6/30/20.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 2/14/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Developing Opportunity Portfolio Class I^	$	1,000.00	$	1,061.00	$	1,014.64	$	4.20	$	4.11		1.09	%
Developing Opportunity Portfolio Class A^		1,000.00		1,059.00		1,013.18		5.70		5.58		1.48
Developing Opportunity Portfolio Class C^		1,000.00		1,056.00		1,010.37		8.58		8.39		2.23
Developing Opportunity Portfolio Class IS^		1,000.00		1,062.00		1,014.67		4.17		4.07		1.08

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 137/366 (to reflect the actual days in the period).

**  Annualized.

^  The Fund commenced operations on February 14, 2020.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Developing Opportunity Portfolio

	Shares		Value (000)
Common Stocks (86.3%)
Argentina (2.1%)
Globant SA (a)		6,420	$	962
Brazil (6.1%)
B3 SA — Brasil Bolsa Balcao		87,260		884
Magazine Luiza SA		140,483		1,851
				2,735
China (46.3%)
Alibaba Group Holding Ltd. ADR (a)		11,366		2,452
China East Education Holdings Ltd. (b)		356,500		648
China Resources Beer Holdings Co., Ltd. (b)		170,000		949
Foshan Haitian Flavouring & Food Co., Ltd., Class A		107,170		1,888
Haidilao International Holding Ltd. (b)		120,000		510
Huazhu Group Ltd. ADR		11,119		390
HUYA, Inc. ADR (a)		54,519		1,018
Kweichow Moutai Co., Ltd., Class A		5,700		1,184
Meituan Dianping, Class B (a)(b)		154,000		3,441
Shenzhou International Group Holdings Ltd. (b)		73,800		897
TAL Education Group ADR (a)		51,483		3,520
Tencent Holdings Ltd. (b)		29,500		1,890
Trip.com Group Ltd. ADR (a)		57,927		1,501
Tsingtao Brewery Co., Ltd. H Shares (b)		94,000		702
				20,990
Hong Kong (0.2%)
Alphamab Oncology (a)		35,000		81
India (10.6%)
HDFC Bank Ltd.		68,238		959
HDFC Bank Ltd. ADR		23,657		1,075
ICICI Bank Ltd. ADR		143,112		1,330
IndusInd Bank Ltd.		66,988		422
Kotak Mahindra Bank Ltd.		56,683		1,023
				4,809
Korea, Republic of (4.6%)
NAVER Corp.		9,305		2,093
Mexico (0.6%)
Grupo Aeroportuario del Sureste SAB de CV, Class B		25,220		283
Taiwan (6.3%)
Nien Made Enterprise Co., Ltd.		37,000		363
Silergy Corp.		13,000		852
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		29,087		1,651
				2,866
United States (9.5%)
EPAM Systems, Inc. (a)		8,325		2,098
MercadoLibre, Inc. (a)		2,171		2,140
New Frontier Health Corp. (a)		7,725		64
				4,302
Total Common Stocks (Cost $35,166)				39,121

	Shares		Value (000)
Short-Term Investment (17.0%)
Investment Company (17.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $7,720)		7,719,754	$	7,720
Total Investments (103.3%) (Cost $42,886) (c)(d)				46,841
Liabilities in Excess of Other Assets (–3.3%)				(1,504	)
Net Assets (100.0%)			$	45,337

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  The approximate fair value and percentage of net assets, $17,902,000 and 39.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $4,253,000 and the aggregate gross unrealized depreciation is approximately $298,000, resulting in net unrealized appreciation of approximately $3,955,000.

ADR  American Depositary Receipt.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		24.1	%
Internet & Direct Marketing Retail		20.4
Short-Term Investments		16.5
Banks		10.3
Diversified Consumer Services		8.9
Interactive Media & Services		8.5
Beverages		6.0
Semiconductors & Semiconductor Equipment		5.3
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Developing Opportunity Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $35,166)	$	39,121
Investment in Security of Affiliated Issuer, at Value (Cost $7,720)		7,720
Total Investments in Securities, at Value (Cost $42,886)		46,841
Foreign Currency, at Value (Cost $181)		181
Receivable for Fund Shares Sold		2,441
Prepaid Offering Costs		80
Dividends Receivable		12
Due from Adviser		12
Receivable for Investments Sold		2
Receivable from Affiliate		—	@
Other Assets		22
Total Assets		49,591
Liabilities:
Payable for Investments Purchased		3,992
Payable for Offering Costs		118
Payable for Fund Shares Redeemed		93
Deferred Capital Gain Country Tax		25
Payable for Professional Fees		18
Payable for Custodian Fees		2
Payable for Administration Fees		2
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		4
Total Liabilities		4,254
Net Assets	$	45,337
Net Assets Consist of:
Paid-in-Capital	$	41,836
Total Distributable Earnings		3,501
Net Assets	$	45,337
CLASS I:
Net Assets	$	43,013
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,053,105
Net Asset Value, Offering and Redemption Price Per Share	$	10.61
CLASS A:
Net Assets	$	1,463
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		138,058
Net Asset Value, Redemption Price Per Share	$	10.60
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.59
Maximum Offering Price Per Share	$	11.19
CLASS C:
Net Assets	$	850
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		80,502
Net Asset Value, Offering and Redemption Price Per Share	$	10.56
CLASS IS:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	10.62

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Developing Opportunity Portfolio

Statement of Operations	Period from February 14, 2020^ to June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $5 of Foreign Taxes Withheld)	$	55
Dividends from Security of Affiliated Issuer (Note G)		2
Total Investment Income		57
Expenses:
Advisory Fees (Note B)		60
Offering Costs		48
Professional Fees		36
Shareholder Reporting Fees		7
Administration Fees (Note C)		5
Custodian Fees (Note F)		3
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Pricing Fees		1
Registration Fees		1
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		1
Sub Transfer Agency Fees — Class I		—	@
Directors' Fees and Expenses		—	@
Other Expenses		1
Total Expenses		167
Waiver of Advisory Fees (Note B)		(60	)
Expenses Reimbursed by Adviser (Note B)		(28	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		77
Net Investment Loss		(20	)
Realized Gain (Loss):
Investments Sold		(411	)
Foreign Currency Translation		—	@
Net Realized Loss		(411	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $25)		3,930
Foreign Currency Translation		2
Net Change in Unrealized Appreciation (Depreciation)		3,932
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		3,521
Net Increase in Net Assets Resulting from Operations	$	3,501

^  Commencement of Operations.

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Developing Opportunity Portfolio

Statement of Changes in Net Assets	Period from February 14, 2020^ to June 30, 2020 (unaudited) (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(20	)
Net Realized Loss		(411	)
Net Change in Unrealized Appreciation (Depreciation)		3,932
Net Increase in Net Assets Resulting from Operations		3,501
Capital Share Transactions:(1)
Class I:
Subscribed		41,024
Redeemed		(1,363	)
Class A:
Subscribed		1,468
Redeemed		(104	)
Class C:
Subscribed		888
Redeemed		(88	)
Class IS:
Subscribed		10
Net Increase in Net Assets Resulting from Capital Share Transactions		41,835
Redemption Fees		1
Total Increase in Net Assets		45,337
Net Assets:
Beginning of Period		—
End of Period	$	45,337
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		4,189
Shares Redeemed		(136	)
Net Increase in Class I Shares Outstanding		4,053
Class A:
Shares Subscribed		148
Shares Redeemed		(10	)
Net Increase in Class A Shares Outstanding		138
Class C:
Shares Subscribed		90
Shares Redeemed		(9	)
Net Increase in Class C Shares Outstanding		81
Class IS:
Shares Subscribed		1

^  Commencement of Operations.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Developing Opportunity Portfolio

	Class I
Selected Per Share Data and Ratios	Period from February 14, 2020(1) to June 30, 2020 (unaudited)
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.01	)
Net Realized and Unrealized Gain		0.62
Total from Investment Operations		0.61
Redemption Fees		0.00	(3)
Net Asset Value, End of Period	$	10.61
Total Return(4)		6.10	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	43,013
Ratio of Expenses Before Expense Limitation		2.43	%(7)
Ratio of Expenses After Expense Limitation		1.09	%(5)(7)
Ratio of Net Investment Loss		(0.25	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)
Portfolio Turnover Rate		12	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Developing Opportunity Portfolio

	Class A
Selected Per Share Data and Ratios	Period from February 14, 2020(1) to June 30, 2020 (unaudited)
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.01	)
Net Realized and Unrealized Gain		0.61
Total from Investment Operations		0.60
Redemption Fees		0.00	(3)
Net Asset Value, End of Period	$	10.60
Total Return(4)		5.90	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,463
Ratio of Expenses Before Expense Limitation		3.25	%(7)
Ratio of Expenses After Expense Limitation		1.48	%(5)(7)
Ratio of Net Investment Loss		(0.26	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)
Portfolio Turnover Rate		12	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Developing Opportunity Portfolio

	Class C
Selected Per Share Data and Ratios	Period from February 14, 2020(1) to June 30, 2020 (unaudited)
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.04	)
Net Realized and Unrealized Gain		0.60
Total from Investment Operations		0.56
Redemption Fees		0.00	(3)
Net Asset Value, End of Period	$	10.56
Total Return(4)		5.60	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	850
Ratio of Expenses Before Expense Limitation		4.49	%(7)
Ratio of Expenses After Expense Limitation		2.23	%(5)(7)
Ratio of Net Investment Loss		(1.02	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)
Portfolio Turnover Rate		12	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Developing Opportunity Portfolio

	Class IS
Selected Per Share Data and Ratios	Period from February 14, 2020(1) to June 30, 2020 (unaudited)
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.01	)
Net Realized and Unrealized Gain		0.63
Total from Investment Operations		0.62
Redemption Fees		0.00	(3)
Net Asset Value, End of Period	$	10.62
Total Return(4)		6.20	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11
Ratio of Expenses Before Expense Limitation		19.16	%(7)
Ratio of Expenses After Expense Limitation		1.08	%(5)(7)
Ratio of Net Investment Loss		(0.36	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)
Portfolio Turnover Rate		12	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Developing Opportunity Portfolio. The Fund seeks long-term capital appreciation.

The Fund commenced operations on February 14, 2020 and offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the

mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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

12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing

an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	2,405	$	2,404	$	—	$	4,809
Beverages		—		2,835		—		2,835
Biotechnology		—		81		—		81
Capital Markets		884		—		—		884
Diversified Consumer Services		3,520		648		—		4,168
Entertainment		1,018		—		—		1,018
Food Products		—		1,888		—		1,888
Health Care Providers & Services		64		—		—		64
Hotels, Restaurants & Leisure		390		510		—		900
Household Durables		—		363		—		363
Information Technology Services		2,098		—		—		2,098
Interactive Media & Services		—		3,983		—		3,983
Internet & Direct Marketing Retail		6,093		3,441		—		9,534
Multi-Line Retail		1,851		—		—		1,851
Semiconductors & Semiconductor Equipment		1,651		852		—		2,503
Software		962		—		—		962
Textiles, Apparel & Luxury Goods		—		897		—		897
Transportation Infrastructure		283		—		—		283
Total Common Stocks		21,219		17,902		—		39,121
Short-Term Investment
Investment Company		7,720		—		—		7,720
Total Assets	$	28,939	$	17,902	$	—	$	46,841

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of

the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result,

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statement of Changes in Net Assets.

5.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer

agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.90	%		0.85	%

For the period ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.15% for Class I shares, 1.50% for Class A shares, 2.25% for Class C shares and 1.10% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the period ended June 30, 2020, approximately $60,000 of advisory fees were waived and approximately $29,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the period ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $37,876,000 and $2,296,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the period ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its

pro-rata share of the advisory and administration fees paid by the Liquidity Funds. For the period ended June 30, 2020, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the period ended June 30, 2020 is as follows:

Affiliated Investment Company	Value February 14, 2020 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	—	$	26,552	$	18,832	$	2

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	7,720

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the period ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the period ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 57.3%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

The Board considered the following factors at the time of approval of the contracts which occurred prior to commencement of operations.

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services to be provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services to be provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers.

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who will provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services to be provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board considered that the Adviser plans to arrange for a public offering of shares of the Fund to raise assets for investment and that the offering had not yet begun and concluded that, since the Fund currently had no assets to invest (other than seed capital required under the Investment Company Act) and had no track record of performance, this was not a factor it needed to address at the present time.

The Board reviewed the advisory and administrative fee rates (the "management fee rates") proposed to be paid by the Fund under the Management Agreement relative to comparable funds advised by the Adviser, when applicable, and compared to their peers as determined by the Adviser, and reviewed the anticipated total expense ratio of the Fund. The Board considered that the Fund requires the Adviser to develop processes, invest in additional resources and incur additional risks to successfully manage the Fund and concluded that the proposed management fee rate and anticipated total expense ratio would be competitive with its peer group averages.

Economies of Scale

The Board considered the growth prospects of the Fund and the structure of the proposed management fee schedule, which does include breakpoints. The Board considered that the Fund's potential growth was uncertain and concluded that it would be premature to consider economies of scale as a factor in approving the Management Agreement at the present time.

Profitability of the Adviser and Affiliates

Since the Fund had not begun operations and had not paid any fees to the Adviser, the Board concluded that this was not a factor that needed to be considered at the present time.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates to be derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. Since the Fund had not begun operations and had not paid any fees to the Adviser, the Board concluded that these benefits were not a factor that needed to be considered at the present time.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to enter into this relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its future shareholders to approve the Management Agreement, which will remain in effect for two years and thereafter must be approved annually by the Board of the Fund if it is to continue in effect. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

20

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

21

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

23

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIDOSAN
3178666 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets Breakout Nations Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	7
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	10
Notes to Financial Statements	14
Investment Advisory Agreement Approval	23
Liquidity Risk Management Program	25
Privacy Notice	26
Director and Officer Information	28

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Emerging Markets Breakout Nations Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Emerging Markets Breakout Nations Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Breakout Nations Portfolio Class I	$	1,000.00	$	793.10	$	1,019.29	$	4.99	$	5.62		1.12	%
Emerging Markets Breakout Nations Portfolio Class A		1,000.00		792.00		1,017.30		6.77		7.62		1.52
Emerging Markets Breakout Nations Portfolio Class C		1,000.00		789.00		1,013.53		10.14		11.41		2.28
Emerging Markets Breakout Nations Portfolio Class IS		1,000.00		793.10		1,019.49		4.81		5.42		1.08

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Emerging Markets Breakout Nations Portfolio

	Shares		Value (000)
Common Stocks (96.6%)
Argentina (1.3%)
Globant SA (a)		372	$	56
Brazil (10.3%)
Atacadao SA		11,251		41
Hapvida Participacoes e Investimentos SA		4,522		52
Itau Unibanco Holding SA (Preference)		8,358		39
Localiza Rent a Car SA		6,524		49
Lojas Renner SA		7,198		55
Pagseguro Digital Ltd., Class A (a)		1,653		59
Petroleo Brasileiro SA		10,420		43
Petroleo Brasileiro SA (Preference)		13,674		54
Rumo SA (a)		12,399		51
				443
China (18.9%)
Alibaba Group Holding Ltd. ADR (a)		796		172
China Mengniu Dairy Co., Ltd. (a)(b)		10,000		38
China Resources Beer Holdings Co., Ltd. (b)		4,000		22
CSPC Pharmaceutical Group Ltd. (b)		19,200		36
Hua Hong Semiconductor Ltd. (a)(b)		12,000		42
Jiangsu Hengrui Medicine Co., Ltd., Class A		1,080		14
Kweichow Moutai Co., Ltd., Class A		400		83
New Oriental Education & Technology Group, Inc. ADR (a)		354		46
TAL Education Group ADR (a)		887		61
Tencent Holdings Ltd. (b)		4,300		276
Universal Scientific Industrial Shanghai Co., Ltd., Class A		7,900		25
				815
Egypt (2.8%)
Commercial International Bank Egypt SAE		5,226		21
Commercial International Bank Egypt SAE GDR		26,345		102
				123
India (18.9%)
Apollo Hospitals Enterprise Ltd.		3,666		65
Bharti Airtel Ltd. (a)		20,449		152
Eicher Motors Ltd.		194		47
HDFC Bank Ltd. ADR		558		25
ICICI Bank Ltd. ADR		11,691		109
Infosys Ltd.		4,628		45
Larsen & Toubro Ltd. GDR		3,450		43
Maruti Suzuki India Ltd.		1,459		113
Reliance Industries Ltd.		9,484		216
				815
Indonesia (7.0%)
Astra International Tbk PT		127,900		43
Bank Central Asia Tbk PT		75,000		150
Bank Mandiri Persero Tbk PT		52,600		18
Bank Rakyat Indonesia Persero Tbk PT		243,000		52
Telekomunikasi Indonesia Persero Tbk PT		172,200		37
				300

	Shares		Value (000)
Korea, Republic of (2.4%)
Kakao Corp.		126	$	28
Samsung Electronics Co., Ltd.		1,671		74
				102
Malaysia (1.3%)
Malayan Banking Bhd		17,440		31
Public Bank Bhd		6,900		26
				57
Mexico (3.8%)
Grupo Aeroportuario del Centro Norte SAB de CV (a)		3,690		17
Grupo Financiero Banorte SAB de CV Series O		16,526		57
Wal-Mart de Mexico SAB de CV		38,389		92
				166
Pakistan (1.9%)
MCB Bank Ltd.		83,112		80
Peru (3.7%)
Cia de Minas Buenaventura SAA ADR		5,030		46
Credicorp Ltd.		840		112
				158
Philippines (0.8%)
Jollibee Foods Corp.		12,390		35
Poland (3.0%)
Jeronimo Martins SGPS SA		2,673		47
LPP SA (a)		31		47
Santander Bank Polska SA (a)		841		38
				132
Russia (5.3%)
LUKOIL PJSC ADR		616		46
Novatek PJSC (Registered GDR)		378		54
Novolipetsk Steel PJSC GDR		1,304		26
Sberbank of Russia PJSC ADR		2,658		30
X5 Retail Group N.V. GDR		888		31
Yandex N.V., Class A (a)		813		41
				228
Singapore (1.3%)
Sea Ltd. ADR (a)		534		57
South Africa (2.4%)
Bidvest Group Ltd. (The)		3,433		28
Capitec Bank Holdings Ltd.		641		32
Clicks Group Ltd.		2,720		33
Nedbank Group Ltd.		2,099		12
				105
Taiwan (2.3%)
Delta Electronics, Inc.		4,000		23
Taiwan Semiconductor Manufacturing Co., Ltd.		7,000		75
				98
Turkey (2.1%)
Akbank T.A.S. (a)		51,276		46
Turkiye Garanti Bankasi AS (a)		38,072		47
				93

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Breakout Nations Portfolio

	Shares		Value (000)
United Kingdom (0.8%)
Avast PLC		5,178	$	34
United States (2.9%)
EPAM Systems, Inc. (a)		136		34
MercadoLibre, Inc. (a)		58		57
Micron Technology, Inc. (a)		655		34
				125
Vietnam (3.4%)
Bank for Foreign Trade of Vietnam JSC		5,670		20
Masan Group Corp. (a)		7,380		17
Sai Gon Cargo Service Corp.		2,060		10
Saigon Beer Alcohol Beverage Corp.		2,530		17
Vietjet Aviation JSC (a)		3,858		18
Vincom Retail JSC		26,503		29
Vinhomes JSC		10,380		34
				145
Total Common Stocks (Cost $4,210)				4,167
Investment Company (0.9%)
Pakistan (0.9%)
Global X MSCI Pakistan ETF (Cost $53)		1,675		38
Short-Term Investment (1.3%)
Investment Company (1.3%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $55)		55,158		55
Total Investments (98.8%) (Cost $4,318) (c)(d)(e)				4,260
Other Assets in Excess of Liabilities (1.2%)				50
Net Assets (100.0%)			$	4,310

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  The approximate fair value and percentage of net assets, $2,708,000 and 62.8%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d)  Securities are available for collateral in connection with open foreign currency forward exchange contracts.

(e)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $476,000 and the aggregate gross unrealized depreciation is approximately $533,000, resulting in net unrealized depreciation of approximately $57,000.

ADR  American Depositary Receipt.

ETF  Exchange Traded Fund.

GDR  Global Depositary Receipt.

PJSC  Public Joint Stock Company.

Foreign Currency Forward Exchange Contracts:

The Fund had the following foreign currency forward exchange contracts open at June 30, 2020:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
JPMorgan Chase Bank NA	INR	4,325	$	57	7/16/20	$	(1	)
JPMorgan Chase Bank NA	$	55	INR	4,325	7/16/20		2
						$	1

INR  —  Indian Rupee

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Breakout Nations Portfolio

Portfolio Composition

Classification	Percentage of Total Investments
Other*		46.5	%
Banks		24.6
Oil, Gas & Consumable Fuels		9.7
Interactive Media & Services		8.1
Food & Staples Retailing		5.7
Internet & Direct Marketing Retail		5.4
Total Investments		100.0	%**

*  Industries and/or investment types representing less than 5% of total investments.

**  Does not include open foreign currency forward exchange contracts with net unrealized appreciation of approximately $1,000.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Breakout Nations Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $4,263)	$	4,205
Investment in Security of Affiliated Issuer, at Value (Cost $55)		55
Total Investments in Securities, at Value (Cost $4,318)		4,260
Foreign Currency, at Value (Cost $7)		7
Due from Adviser		54
Receivable for Investments Sold		11
Dividends Receivable		9
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		2
Tax Reclaim Receivable		—	@
Receivable from Affiliate		—	@
Other Assets		45
Total Assets		4,388
Liabilities:
Payable for Professional Fees		50
Payable for Investments Purchased		9
Deferred Capital Gain Country Tax		6
Payable for Custodian Fees		5
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		1
Payable for Shareholder Service Fees — Class A		—	@
Payable for Distribution and Shareholder Service Fees — Class C		—	@
Payable for Administration Fees		—	@
Other Liabilities		7
Total Liabilities		78
Net Assets	$	4,310
Net Assets Consist of:
Paid-in-Capital	$	5,037
Total Accumulated Loss		(727	)
Net Assets	$	4,310
CLASS I:
Net Assets	$	4,284
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		501,148
Net Asset Value, Offering and Redemption Price Per Share	$	8.55
CLASS A:
Net Assets	$	9
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,004
Net Asset Value, Redemption Price Per Share	$	8.49
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.47
Maximum Offering Price Per Share	$	8.96
CLASS C:
Net Assets	$	8
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	8.30
CLASS IS:
Net Assets	$	9
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,009
Net Asset Value, Offering and Redemption Price Per Share	$	8.55

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Breakout Nations Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $6 of Foreign Taxes Withheld)	$	41
Dividends from Security of Affiliated Issuer (Note G)		2
Total Investment Income		43
Expenses:
Professional Fees		56
Registration Fees		24
Advisory Fees (Note B)		20
Custodian Fees (Note F)		19
Shareholder Reporting Fees		7
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Pricing Fees		3
Administration Fees (Note C)		2
Directors' Fees and Expenses		2
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		10
Total Expenses		147
Expenses Reimbursed by Adviser (Note B)		(98	)
Waiver of Advisory Fees (Note B)		(20	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		26
Net Investment Income		17
Realized Loss:
Investments Sold		(481	)
Foreign Currency Forward Exchange Contracts		(3	)
Foreign Currency Translation		(—	@)
Futures Contracts		(162	)
Net Realized Loss		(646	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $5)		(495	)
Foreign Currency Forward Exchange Contracts		1
Foreign Currency Translation		(—	@)
Futures Contracts		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		(494	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(1,140	)
Net Decrease in Net Assets Resulting from Operations	$	(1,123	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Emerging Markets Breakout Nations Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	17		$	48
Net Realized Gain (Loss)		(646	)		18
Net Change in Unrealized Appreciation (Depreciation)		(494	)		506
Net Increase (Decrease) in Net Assets Resulting from Operations		(1,123	)		572
Dividends and Distributions to Shareholders:
Class I		—			(44	)
Class A		—			(—	@)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(44	)
Capital Share Transactions:(1)
Class I:
Distributions Reinvested		—			44
Class A:
Distributions Reinvested		—			—	@
Class IS:
Distributions Reinvested		—			—	@
Net Increase in Net Assets Resulting from Capital Share Transactions		—			44
Total Increase (Decrease) in Net Assets		(1,123	)		572
Net Assets:
Beginning of Period		5,433			4,861
End of Period	$	4,310		$	5,433
(1) Capital Share Transactions:
Class I:
Shares Issued on Distributions Reinvested		—			4
Class A:
Shares Issued on Distributions Reinvested		—			—	@@
Class IS:
Shares Issued on Distributions Reinvested		—			—	@@

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Breakout Nations Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from December 15, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.78		$	9.72		$	11.91		$	10.15		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.04			0.10			0.06			0.08			0.00	(3)
Net Realized and Unrealized Gain (Loss)		(2.27	)		1.05			(2.09	)		2.19			0.15
Total from Investment Operations		(2.23	)		1.15			(2.03	)		2.27			0.15
Distributions from and/or in Excess of:
Net Investment Income		—			(0.09	)		(0.03	)		(0.05	)		—
Net Realized Gain		—			—			(0.13	)		(0.46	)		—
Total Distributions		—			(0.09	)		(0.16	)		(0.51	)		—
Net Asset Value, End of Period	$	8.55		$	10.78		$	9.72		$	11.91		$	10.15
Total Return(4)		(20.69	)%(6)		11.72	%		(17.10	)%		22.44	%		1.50	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,284		$	5,400		$	4,831		$	5,917		$	5,043
Ratio of Expenses Before Expense Limitation		6.47	%(7)		6.24	%		6.28	%		9.42	%		22.93	%(7)
Ratio of Expenses After Expense Limitation		1.12	%(5)(7)		1.12	%(5)		1.12	%(5)		1.11	%(5)		1.09	%(5)(7)
Ratio of Net Investment Income		0.86	%(5)(7)		0.92	%(5)		0.54	%(5)		0.66	%(5)		0.67	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.02	%		0.02	%		0.04	%(7)
Portfolio Turnover Rate		26	%(6)		26	%		36	%		79	%		16	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Breakout Nations Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from December 15, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.72		$	9.67		$	11.90		$	10.14		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.02			0.05			0.01			0.03			0.00	(3)
Net Realized and Unrealized Gain (Loss)		(2.25	)		1.05			(2.08	)		2.20			0.14
Total from Investment Operations		(2.23	)		1.10			(2.07	)		2.23			0.14
Distributions from and/or in Excess of:
Net Investment Income		—			(0.05	)		(0.03	)		(0.01	)		—
Net Realized Gain		—			—			(0.13	)		(0.46	)		—
Total Distributions		—			(0.05	)		(0.16	)		(0.47	)		—
Net Asset Value, End of Period	$	8.49		$	10.72		$	9.67		$	11.90		$	10.14
Total Return(4)		(20.80	)%(6)		11.23	%		(17.45	)%		22.01	%		1.40	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9		$	11		$	10		$	12		$	10
Ratio of Expenses Before Expense Limitation		27.72	%(7)		24.83	%		23.28	%		27.13	%		37.02	%(7)
Ratio of Expenses After Expense Limitation		1.52	%(5)(7)		1.53	%(5)		1.53	%(5)		1.53	%(5)		1.51	%(5)(7)
Ratio of Net Investment Income		0.46	%(5)(7)		0.50	%(5)		0.12	%(5)		0.25	%(5)		0.24	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.02	%		0.02	%		0.04	%(7)
Portfolio Turnover Rate		26	%(6)		26	%		36	%		79	%		16	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Breakout Nations Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from December 15, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.52		$	9.53		$	11.80		$	10.14		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.01	)		(0.02	)		(0.07	)		(0.06	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		(2.21	)		1.01			(2.04	)		2.18			0.14
Total from Investment Operations		(2.22	)		0.99			(2.11	)		2.12			0.14
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.03	)		0.00	(3)		—
Net Realized Gain		—			—			(0.13	)		(0.46	)		—
Total Distributions		—			—			(0.16	)		(0.46	)		—
Net Asset Value, End of Period	$	8.30		$	10.52		$	9.53		$	11.80		$	10.14
Total Return(4)		(21.10	)%(6)		10.39	%		(18.09	)%		21.09	%		1.40	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8		$	11		$	10		$	12		$	10
Ratio of Expenses Before Expense Limitation		28.97	%(7)		25.82	%		24.22	%		26.78	%		37.76	%(7)
Ratio of Expenses After Expense Limitation		2.28	%(5)(7)		2.28	%(5)		2.28	%(5)		2.28	%(5)		2.26	%(5)(7)
Ratio of Net Investment Loss		(0.30	)%(5)(7)		(0.24	)%(5)		(0.62	)%(5)		(0.50	)%(5)		(0.50	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.02	%		0.02	%		0.04	%(7)
Portfolio Turnover Rate		26	%(6)		26	%		36	%		79	%		16	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Breakout Nations Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from December 15, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.78		$	9.73		$	11.91		$	10.15		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.04			0.10			0.06			0.08			0.00	(3)
Net Realized and Unrealized Gain (Loss)		(2.27	)		1.04			(2.08	)		2.19			0.15
Total from Investment Operations		(2.23	)		1.14			(2.02	)		2.27			0.15
Distributions from and/or in Excess of:
Net Investment Income		—			(0.09	)		(0.03	)		(0.05	)		—
Net Realized Gain		—			—			(0.13	)		(0.46	)		—
Total Distributions		—			(0.09	)		(0.16	)		(0.51	)		—
Net Asset Value, End of Period	$	8.55		$	10.78		$	9.73		$	11.91		$	10.15
Total Return(4)		(20.69	)%(6)		11.76	%		(17.10	)%		22.47	%		1.50	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9		$	11		$	10		$	12		$	10
Ratio of Expenses Before Expense Limitation		27.22	%(7)		24.32	%		20.74	%		25.68	%		36.76	%(7)
Ratio of Expenses After Expense Limitation		1.08	%(5)(7)		1.08	%(5)		1.08	%(5)		1.08	%(5)		1.06	%(5)(7)
Ratio of Net Investment Income		0.90	%(5)(7)		0.96	%(5)		0.58	%(5)		0.69	%(5)		0.70	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.02	%		0.02	%		0.04	%(7)
Portfolio Turnover Rate		26	%(6)		26	%		36	%		79	%		16	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Emerging Markets Breakout Nations Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant

exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) futures are valued at the

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value

Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

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Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	10	$	—	$	10
Airlines		—		18		—		18
Automobiles		—		203		—		203
Banks		342		705		—		1,047
Beverages		—		122		—		122
Construction & Engineering		—		43		—		43
Diversified Consumer Services		107		—		—		107
Diversified Telecommunication Services		—		37		—		37
Electronic Equipment, Instruments & Components		—		48		—		48
Entertainment		57		—		—		57
Food & Staples Retailing		133		111		—		244
Food Products		—		55		—		55
Health Care Providers & Services		52		65		—		117
Hotels, Restaurants & Leisure		—		35		—		35
Industrial Conglomerates		—		28		—		28
Information Technology Services		93		45		—		138
Interactive Media & Services		41		304		—		345
Internet & Direct Marketing Retail		229		—		—		229
Metals & Mining		46		26		—		72
Multi-Line Retail		55		—		—		55
Oil, Gas & Consumable Fuels		97		316		—		413
Pharmaceuticals		—		50		—		50
Real Estate Management & Development		—		63		—		63
Road & Rail		100		—		—		100
Semiconductors & Semiconductor Equipment		34		117		—		151
Software		56		34		—		90
Tech Hardware, Storage & Peripherals		—		74		—		74
Textiles, Apparel & Luxury Goods		—		47		—		47
Transportation Infrastructure		17		—		—		17
Wireless Telecommunication Services		—		152		—		152
Total Common Stocks		1,459		2,708		—		4,167

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Investment Company	$	38	$	—		$	—	$	38
Short-Term Investment
Investment Company		55		—			—		55
Foreign Currency Forward Exchange Contract		—		2			—		2
Total Assets		1,552		2,710			—		4,262
Liability:
Foreign Currency Forward Exchange Contract		—		(1	)		—		(1	)
Total	$	1,552	$	2,709		$	—	$	4,261

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

A significant portion of the Fund's net assets consist of securities of issuers located in emerging markets, which are denominated in foreign currencies. Such securities may be concentrated in a limited number of countries and regions and may vary throughout the year. Changes in currency exchange rates will affect the value of securities and investment income from foreign currency denominated securities. Emerging market securities are often subject to greater price volatility, limited capitalization and liquidity, and higher rates of inflation than securities of companies based in the U.S. In addition, emerging market issuers may be subject to substantial governmental involvement in the economy and greater social, economic and political uncertainty.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing

interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

Futures: A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes

in the value of the contract (the variation margin). A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return and the potential loss from futures contracts can exceed the Fund's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

As of June 30, 2020, the Fund did not have any open futures contracts.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contract	Unrealized Appreciation on Foreign Currency Forward Exchange Contract	Currency Risk	$	2
	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contract	Unrealized Depreciation on Foreign Currency Forward Exchange Contract	Currency Risk	$	(1	)

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative

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Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(3	)
Equity Risk	Futures Contracts		(162	)
Total		$	(165	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	1
Equity Risk	Futures Contracts		(—	@)
Total		$	1

@  Amount is less than $500.

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives(a)	Assets(b) (000)		Liabilities(b) (000)
Foreign Currency Forward Exchange Contracts	$	2	$	(1	)

(a)  Excludes exchange-traded derivatives.

(b) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions

under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Received (000)		Net Amount (not less than $0) (000)
JPMorgan Chase Bank NA	$	2	$	(1	)	$	—	$	1
Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Pledged (000)		Net Amount (not less than $0) (000)
JPMorgan Chase Bank NA	$	1	$	(1	)	$	—	$	0

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	67,000
Futures Contracts:
Average monthly notional value	$	1,033,000

5.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets.

6.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's

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Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.90	%		0.85	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will

not exceed 1.20% for Class I shares, 1.55% for Class A shares, 2.30% for Class C shares and 1.10% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $20,000 of advisory fees were waived and approximately $101,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

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Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $1,617,000 and $1,016,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	777	$	683	$	1,405	$	2

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	55

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as

other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	44	$	—	$	35	$	35

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2019.

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	4	$	—

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $28,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

During the year ended December 31, 2019, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $36,000.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused

portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund did not have record owners of 10% or greater.

K. Subsequent Events: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

The Directors of the Company approved a Plan of Liquidation with respect to the Fund. Pursuant to the Plan of Liquidation, substantially all of the assets of the Fund will be liquidated, known liabilities of the Fund will be satisfied, the remaining proceeds will be distributed to the Fund's stockholders, and all of the issued and outstanding shares of the Fund will be redeemed (the "Liquidation"). The Liquidation is expected to occur on or about September 11, 2020. The Fund will suspend the offering of its shares to all investors at the close of business on August 12, 2020.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one- and three-year period and for the period since the middle of December 2016, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's contractual management fee was higher than but close to its peer group average and the actual management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

25

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

26

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

28

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIEMBONSAN
3178603 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets Fixed Income Opportunities Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	10
Statement of Operations	12
Statements of Changes in Net Assets	13
Financial Highlights	15
Notes to Financial Statements	20
Investment Advisory Agreement Approval	29
Liquidity Risk Management Program	31
Privacy Notice	32
Director and Officer Information	34

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Emerging Markets Fixed Income Opportunities Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Emerging Markets Fixed Income Opportunities Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Fixed Income Opportunities Portfolio Class I	$	1,000.00	$	945.70	$	1,020.69	$	4.06	$	4.22		0.84	%
Emerging Markets Fixed Income Opportunities Portfolio Class A		1,000.00		943.60		1,018.95		5.75		5.97		1.19
Emerging Markets Fixed Income Opportunities Portfolio Class L		1,000.00		942.80		1,017.70		6.96		7.22		1.44
Emerging Markets Fixed Income Opportunities Portfolio Class C		1,000.00		939.90		1,015.22		9.36		9.72		1.94
Emerging Markets Fixed Income Opportunities Portfolio Class IS		1,000.00		946.90		1,020.84		3.92		4.07		0.81

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Emerging Markets Fixed Income Opportunities Portfolio

	Face Amount (000)		Value (000)
Fixed Income Securities (93.0%)
Angola (0.6%)
Sovereign (0.6%)
Angolan Government International Bond, 8.00%, 11/26/29 (a)	$	330	$	273
Argentina (2.0%)
Corporate Bonds (1.7%)
Pampa Energia SA,
9.13%, 4/15/29 (a)		300		244
Province of Santa Fe,
6.90%, 11/1/27 (a)		400		242
Provincia de Cordoba,
7.45%, 9/1/24 (a)		330		196
Provincia de Entre Rios Argentina,
8.75%, 2/8/25 (a)		230		103
Telecom Argentina SA,
8.00%, 7/18/26 (a)		50		45
				830
Sovereign (0.3%)
Argentine Republic Government International Bond,
7.50%, 4/22/26 (b)(c)		370		150
				980
Armenia (0.5%)
Corporate Bond (0.5%)
Ardshinbank CJSC Via Dilijan Finance BV,
6.50%, 1/28/25 (a)		270		256
Azerbaijan (0.7%)
Sovereign (0.7%)
Republic of Azerbaijan International Bond,
3.50%, 9/1/32		360		353
Bahrain (0.7%)
Sovereign (0.7%)
Bahrain Government International Bond,
7.50%, 9/20/47		300		336
Belarus (0.8%)
Sovereign (0.8%)
Republic of Belarus International Bond,
6.20%, 2/28/30 (a)		200		192
Republic of Belarus Ministry of Finance,
6.38%, 2/24/31 (a)		200		193
				385
Brazil (6.5%)
Corporate Bonds (2.7%)
CSN Islands XI Corp.,
6.75%, 1/28/28 (a)		360		310
CSN Resources SA,
7.63%, 4/17/26 (a)		260		227
Minerva Luxembourg SA,
5.88%, 1/19/28 (a)		200		196
6.50%, 9/20/26		200		202

	Face Amount (000)		Value (000)
Petrobras Global Finance BV,
6.75%, 6/3/50	$	140	$	144
Rumo Luxembourg Sarl,
5.25%, 1/10/28		200		200
				1,279
Sovereign (3.8%)
Brazil Notas do Tesouro Nacional, Series F,
10.00%, 1/1/23 - 1/1/25	BRL	6,685		1,430
Brazilian Government International Bond,
3.88%, 6/12/30	$	200		193
4.50%, 5/30/29		200		205
				1,828
				3,107
Chile (2.7%)
Corporate Bonds (1.3%)
Colbun SA,
3.15%, 3/6/30 (a)		200		202
Geopark Ltd.,
6.50%, 9/21/24 (a)		200		185
VTR Finance,
6.38%, 7/15/28 (a)(d)		225		232
				619
Sovereign (1.4%)
Bonos de la Tesoreria de la Republica en pesos,
4.50%, 3/1/26	CLP	285,000		402
Chile Government International Bond,
3.50%, 1/25/50	$	230		260
				662
				1,281
China (4.5%)
Corporate Bonds (2.4%)
China SCE Group Holdings Ltd.,
7.38%, 4/9/24		250		246
Country Garden Holdings Co., Ltd.,
7.25%, 4/8/26		260		284
Scenery Journey Ltd.,
13.00%, 11/6/22		300		293
Yuzhou Properties Co. Ltd.,
8.38%, 10/30/24		300		304
				1,127
Sovereign (2.1%)
China Government Bond,
3.13%, 11/21/29	CNY	4,010		579
Sinopec Group Overseas Development 2018 Ltd.,
2.95%, 11/12/29 (a)	$	400		421
				1,000
				2,127

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Fixed Income Opportunities Portfolio

	Face Amount (000)		Value (000)
Colombia (4.2%)
Corporate Bonds (2.4%)
Banco de Bogota SA,
4.38%, 8/3/27	$	300	$	305
Canacol Energy Ltd.,
7.25%, 5/3/25 (a)		200		203
Grupo Aval Ltd.,
4.38%, 2/4/30 (a)		200		191
Termocandelaria Power Ltd.,
7.88%, 1/30/29 (a)		400		421
				1,120
Sovereign (1.8%)
Colombian TES,
Series B
6.00%, 4/28/28	COP	951,400		258
7.00%, 6/30/32		253,800		69
7.50%, 8/26/26		1,315,100		399
10.00%, 7/24/24		454,100		149
				875
				1,995
Costa Rica (0.4%)
Sovereign (0.4%)
Costa Rica Government International Bond,
6.13%, 2/19/31 (a)	$	200		173
Dominican Republic (1.5%)
Corporate Bond (0.9%)
AES Andres BV/Dominican Power Partners/ Empresa Generadora de Electricidad It,
(Units)
7.95%, 5/11/26 (a)(e)		400		406
Sovereign (0.6%)
Dominican Republic International Bond,
5.88%, 1/30/60 (a)	DOP	150		129
9.75%, 6/5/26 (a)		10,550		163
				292
				698
Ecuador (0.8%)
Sovereign (0.8%)
Ecuador Government International Bond,
7.78%, 1/23/28 (b)(c)	$	240		100
8.88%, 10/23/27 (b)(c)		290		123
10.65%, 1/31/29 (b)(c)		400		166
				389
Egypt (2.7%)
Corporate Bond (0.8%)
African Export-Import Bank (The),
3.99%, 9/21/29 (a)		390		386
Sovereign (1.9%)
Egypt Government International Bond,
4.75%, 4/16/26	EUR	100		107
6.38%, 4/11/31 (a)		330		345

	Face Amount (000)		Value (000)
8.15%, 11/20/59 (a)	EUR	260	$	243
8.88%, 5/29/50 (a)		200		198
				893
				1,279
El Salvador (0.4%)
Sovereign (0.4%)
El Salvador Government International Bond,
7.12%, 1/20/50 (a)	$	150		123
8.63%, 2/28/29 (a)		80		77
				200
Gabon (0.4%)
Sovereign (0.4%)
Gabon Government International Bond,
6.63%, 2/6/31 (a)		200		179
Ghana (1.3%)
Corporate Bond (0.4%)
Kosmos Energy Ltd.,
7.13%, 4/4/26 (a)		200		176
Sovereign (0.9%)
Ghana Government International Bond,
8.63%, 6/16/49 (a)		260		236
8.95%, 3/26/51 (a)		200		184
				420
				596
Guatemala (0.7%)
Sovereign (0.7%)
Guatemala Government Bond,
4.88%, 2/13/28		300		321
Hungary (0.7%)
Sovereign (0.7%)
Hungary Government Bond,
3.00%, 8/21/30	HUF	92,000		315
India (0.5%)
Corporate Bond (0.5%)
Greenko Investment Co.,
4.88%, 8/16/23 (a)	$	240		235
Indonesia (6.8%)
Corporate Bonds (1.7%)
Indo Energy Finance II BV,
6.38%, 1/24/23		342		322
Jababeka International BV,
6.50%, 10/5/23 (a)		460		378
Soechi Capital Pte Ltd.,
8.38%, 1/31/23 (a)		200		134
				834
Sovereign (5.1%)
Indonesia Government International Bond,
4.45%, 4/15/70		230		266
Indonesia Treasury Bond,
7.00%, 9/15/30	IDR	4,600,000		318
7.50%, 8/15/32		4,290,000		297

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Fixed Income Opportunities Portfolio

	Face Amount (000)		Value (000)
Sovereign (cont'd)
8.13%, 5/15/24	IDR	8,817,000	$	653
8.38%, 3/15/34 - 4/15/39		5,600,000		413
8.75%, 5/15/31		1,310,000		100
9.00%, 3/15/29		1,395,000		108
Pertamina Persero PT,
6.50%, 11/7/48 (a)	$	200		263
				2,418
				3,252
Iraq (0.4%)
Sovereign (0.4%)
Iraq International Bond,
6.75%, 3/9/23 (a)		200		185
Israel (0.7%)
Corporate Bond (0.7%)
Teva Pharmaceutical Finance Netherlands III BV,
7.13%, 1/31/25		300		320
Jamaica (0.6%)
Sovereign (0.6%)
Jamaica Government International Bond,
8.00%, 3/15/39		250		309
Jordan (0.4%)
Sovereign (0.4%)
Jordan Government International Bond,
7.38%, 10/10/47 (a)		200		206
Lebanon (0.1%)
Sovereign (0.1%)
Lebanon Government International Bond,
6.85%, 3/23/27 (b)(c)		266		48
Luxembourg (0.5%)
Corporate Bond (0.5%)
Cosan Luxembourg SA,
7.00%, 1/20/27		220		231
Malaysia (2.3%)
Sovereign (2.3%)
Malaysia Government Bond,
3.66%, 10/15/20	MYR	137		32
3.96%, 9/15/25		2,383		596
4.16%, 7/15/21		195		46
4.18%, 7/15/24		762		190
4.23%, 6/30/31		246		63
4.50%, 4/15/30		559		146
				1,073
Mexico (10.8%)
Corporate Bonds (2.7%)
Alfa SAB de CV,
6.88%, 3/25/44	$	400		468
Alpha Holding SA de CV,
10.00%, 12/19/22 (a)		200		187

	Face Amount (000)		Value (000)
Financiera Independencia SAB de CV SOFOM ENR,
8.00%, 7/19/24 (a)	$	250	$	185
Operadora de Servicios Mega SA de CV Sofom ER,
8.25%, 2/11/25 (a)		200		186
Trust Fibra Uno,
6.39%, 1/15/50 (a)		240		254
				1,280
Sovereign (8.1%)
Mexican Bonos,
Series M
6.50%, 6/10/21	MXN	9,837		435
7.50%, 6/3/27		13,502		655
7.75%, 5/29/31		5,070		250
8.00%, 12/7/23		2,072		99
10.00%, 12/5/24		15,250		799
Mexico Government International Bond,
4.50%, 4/22/29	$	200		218
Petroleos Mexicanos,
6.35%, 2/12/48		234		174
6.50%, 3/13/27 - 1/23/29		626		557
6.75%, 9/21/47		200		154
6.95%, 1/28/60 (a)		365		281
7.69%, 1/23/50		300		251
				3,873
				5,153
Moldova (1.0%)
Corporate Bond (1.0%)
Aragvi Finance International DAC,
12.00%, 4/9/24 (a)		460		481
Nigeria (3.0%)
Corporate Bonds (2.2%)
Fidelity Bank PLC,
10.50%, 10/16/22 (a)		220		227
IHS Netherlands Holdco BV,
8.00%, 9/18/27 (a)		270		275
United Bank for Africa PLC,
7.75%, 6/8/22 (a)		540		541
				1,043
Sovereign (0.8%)
Nigeria Government International Bond,
7.14%, 2/23/30 (a)		200		188
9.25%, 1/21/49 (a)		200		203
				391
				1,434
Panama (0.5%)
Sovereign (0.5%)
Aeropuerto Internacional de Tocumen SA,
5.63%, 5/18/36 (a)		200		216

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Fixed Income Opportunities Portfolio

	Face Amount (000)		Value (000)
Paraguay (1.9%)
Sovereign (1.9%)
Paraguay Government International Bond,
4.70%, 3/27/27 (a)	$	200	$	219
4.95%, 4/28/31 (a)		200		224
5.40%, 3/30/50 (a)		400		465
				908
Peru (1.5%)
Corporate Bond (0.4%)
Lima Metro Line 2 Finance Ltd.,
4.35%, 4/5/36 (a)		200		214
Sovereign (1.1%)
Peru Government Bond,
5.40%, 8/12/34 (a)	PEN	259		77
5.94%, 2/12/29 (a)		1,382		451
6.15%, 8/12/32 (a)		1		—	@
				528
				742
Poland (4.5%)
Sovereign (4.5%)
Republic of Poland Government Bond,
3.25%, 7/25/25	PLN	2,044		582
4.00%, 10/25/23		1,455		412
5.75%, 10/25/21 - 9/23/22		2,680		758
Republic of Poland Government International Bond,
5.00%, 3/23/22	$	370		398
				2,150
Qatar (2.2%)
Sovereign (2.2%)
Qatar Government International Bond,
3.75%, 4/16/30 (a)		200		228
4.82%, 3/14/49 (a)		630		831
				1,059
Romania (0.9%)
Sovereign (0.9%)
Romania Government Bond,
4.75%, 2/24/25	RON	1,745		425
Russia (4.8%)
Corporate Bond (0.6%)
Alfa Bank AO Via Alfa Bond Issuance PLC,
5.95%, 4/15/30	$	300		299
Sovereign (4.2%)
Russian Federal Bond — OFZ,
6.90%, 5/23/29	RUB	47,895		729
7.70%, 3/23/33		46,360		746
Russian Foreign Bond — Eurobond,
5.63%, 4/4/42	$	400		544
				2,318

	Face Amount (000)		Value (000)
Saudi Arabia (1.5%)
Sovereign (1.5%)
Saudi Government International Bond,
5.25%, 1/16/50 (a)	$	540	$	696
Senegal (1.3%)
Sovereign (1.3%)
Senegal Government International Bond,
6.25%, 5/23/33 (a)		600		613
Serbia (0.3%)
Sovereign (0.3%)
Serbia International Bond,
3.13%, 5/15/27 (a)	EUR	140		165
South Africa (4.3%)
Sovereign (4.3%)
Eskom Holdings SOC Ltd.,
7.13%, 2/11/25	$	200		186
8.45%, 8/10/28 (a)		400		375
Republic of South Africa Government Bond,
8.00%, 1/31/30		19,061		1,016
8.25%, 3/31/32	ZAR	6,937		349
8.75%, 1/31/44		820		37
9.00%, 1/31/40		1,500		72
				2,035
Sri Lanka (0.5%)
Sovereign (0.5%)
Sri Lanka Government International Bond,
7.85%, 3/14/29	$	360		238
Supernational (0.8%)
Sovereign (0.8%)
Banque Ouest Africaine de Developpement,
4.70%, 10/22/31 (a)		370		374
Tanzania, United Republic of (0.4%)
Corporate Bond (0.4%)
HTA Group Ltd.,
7.00%, 12/18/25 (a)		200		203
Thailand (2.2%)
Sovereign (2.2%)
Thailand Government Bond,
3.63%, 6/16/23	THB	9,000		317
4.88%, 6/22/29		17,434		735
				1,052
Turkey (2.5%)
Sovereign (2.5%)
Turkey Government Bond,
8.00%, 3/12/25	TRY	1,773		237
10.50%, 8/11/27		1,055		147
11.00%, 2/24/27		586		84
Turkey Government International Bond,
6.35%, 8/10/24	$	530		537
7.25%, 12/23/23		200		209
				1,214

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Fixed Income Opportunities Portfolio

	Face Amount (000)		Value (000)
Ukraine (1.6%)
Corporate Bond (0.5%)
NAK Naftogaz Ukraine via Kondor Finance PLC,
7.13%, 7/19/24	EUR	200	$	220
Sovereign (1.1%)
Ukraine Government International Bond,
6.75%, 6/20/26 (a)	$	100		115
7.75%, 9/1/26		380		397
				512
				732
United Arab Emirates (1.5%)
Corporate Bonds (1.5%)
DP World Crescent Ltd.,
4.85%, 9/26/28		220		233
DP World PLC,
5.63%, 9/25/48 (a)		200		219
MAF Global Securities Ltd.,
6.38%, 3/20/26 (f)		250		243
				695
Venezuela (0.1%)
Sovereign (0.1%)
Petroleos de Venezuela SA,
6.00%, 11/15/26 (b)(c)		1,582		46
Virgin Islands, British (0.5%)
Corporate Bond (0.5%)
Scenery Journey Ltd.,
11.50%, 10/24/22		250		238
Total Fixed Income Securities (Cost $46,708)				44,289
	No. of Warrants
Warrant (0.0%)
Venezuela (0.0%)
Venezuela Government International Bond, Oil-Linked Payment Obligation, 0.00% expires 4/15/20 (i) (Cost $—)		495		1
	Shares
Short-Term Investments (5.1%)
United States (5.0%)
Investment Company (5.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $2,396)		2,395,661		2,396

	Face Amount (000)		Value (000)
United States (0.1%)
U.S. Treasury Security (0.1%)
U.S. Treasury Bill,
0.16%, 1/28/21 (g)(Cost $30)	$	30	$	30
Total Short-Term Investments (Cost $2,426)				2,426
Total Investments (98.1%) (Cost $49,134) (h)(j)				46,716
Other Assets in Excess of Liabilities (1.9%)				903
Net Assets (100.0%)			$	47,619

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(b)  Non-income producing security; bond in default.

(c)  Issuer in bankruptcy.

(d)  When-issued security.

(e)  Consists of one or more classes of securities traded together as a unit.

(f)  Perpetual — One or more securities do not have a predetermined maturity date. Rates for these securities are fixed for a period of time, after which they revert to a floating rate. Interest rates in effect are as of June 30, 2020.

(g)  Rate shown is the yield to maturity at June 30, 2020.

(h)  Securities are available for collateral in connection with purchase of when-issued security and open foreign currency forward exchange contracts.

(i)  Perpetual maturity date. Date disclosed is the last expiration date.

(j)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $1,488,000 and the aggregate gross unrealized depreciation is approximately $3,818,000, resulting in net unrealized depreciation of approximately $2,330,000.

@  Value is less than $500.

OFZ  Obilgatsyi Federal'novo Zaima (Russian Federal Loan Obligation).

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Fixed Income Opportunities Portfolio

Foreign Currency Forward Exchange Contracts:

The Fund had the following foreign currency forward exchange contracts open at June 30, 2020:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
BNP Paribas SA	BRL	1,200	$	219	7/2/20	$	(2	)
BNP Paribas SA	BRL	2,023	$	394	7/2/20		22
BNP Paribas SA	$	369	BRL	2,023	7/2/20		3
BNP Paribas SA	$	211	BRL	1,200	7/2/20		10
BNP Paribas SA	IDR	1,700,000	$	119	9/10/20		1
BNP Paribas SA	RUB	13,000	$	187	9/10/20		6
BNP Paribas SA	$	745	CZK	17,600	9/10/20		(3	)
BNP Paribas SA	$	466	HUF	142,000	9/10/20		(16	)
Citibank NA	HUF	62,000	$	202	9/10/20		6
Citibank NA	PLN	1,680	$	427	9/10/20		3
JPMorgan Chase Bank NA	BRL	2,133	$	390	7/2/20		(3	)
JPMorgan Chase Bank NA	$	382	BRL	2,133	7/2/20		10
JPMorgan Chase Bank NA	EUR	855	$	963	9/10/20		1
JPMorgan Chase Bank NA	$	242	ZAR	4,100	9/10/20		(8	)
State Street Bank and Trust Co.	BRL	670	$	125	7/2/20		2
State Street Bank and Trust Co.	BRL	640	$	122	7/2/20		4
State Street Bank and Trust Co.	$	117	BRL	640	7/2/20		1
State Street Bank and Trust Co.	$	122	BRL	670	7/2/20		1
UBS AG	MXN	17,280	$	780	9/10/20		36
UBS AG	ZAR	10,500	$	615	9/10/20		14
						$	88

BRL  —  Brazilian Real

CLP  —  Chilean Peso

CNY  —  Chinese Yuan Renminbi

COP  —  Colombian Peso

CZK  —  Czech Koruna

DOP  —  Dominican Peso

EUR  —  Euro

HUF  —  Hungarian Forint

IDR  —  Indonesian Rupiah

MXN  —  Mexican Peso

MYR —  Malaysian Ringgit

PEN  —  Peruvian Nuevo Sol

PLN  —  Polish Zloty

RON  —  Romanian New Leu

RUB  —  Russian Ruble

THB  —  Thai Baht

TRY  —  Turkish Lira

ZAR  —  South African Rand

Portfolio Composition

Classification	Percentage of Total Investments
Sovereign		68.1	%
Corporate Bonds		26.7
Short-Term Investments		5.2
Other*		0.0	**
Total Investments		100.0	%***

*  Industries and/or investment types representing less than 5% of total investments.

**  Amount is less than 0.05%.

***  Does not include open foreign currency forward exchange contracts with net unrealized appreciation of approximately $88,000.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Fixed Income Opportunities Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $46,738)	$	44,320
Investment in Security of Affiliated Issuer, at Value (Cost $2,396)		2,396
Total Investments in Securities, at Value (Cost $49,134)		46,716
Foreign Currency, at Value (Cost $415)		406
Interest Receivable		836
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		120
Tax Reclaim Receivable		17
Due from Adviser		1
Receivable from Affiliate		—	@
Other Assets		75
Total Assets		48,171
Liabilities:
Payable for Investments Purchased		425
Payable for Professional Fees		34
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		32
Deferred Capital Gain Country Tax		32
Payable for Custodian Fees		7
Payable for Sub Transfer Agency Fees — Class I		3
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		3
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		15
Total Liabilities		552
Net Assets	$	47,619
Net Assets Consist of:
Paid-in-Capital	$	56,961
Total Accumulated Loss		(9,342	)
Net Assets	$	47,619

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Fixed Income Opportunities Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	43,428
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		5,042,819
Net Asset Value, Offering and Redemption Price Per Share	$	8.61
CLASS A:
Net Assets	$	3,063
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		356,357
Net Asset Value, Redemption Price Per Share	$	8.59
Maximum Sales Load		3.25	%
Maximum Sales Charge	$	0.29
Maximum Offering Price Per Share	$	8.88
CLASS L:
Net Assets	$	718
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		83,716
Net Asset Value, Offering and Redemption Price Per Share	$	8.58
CLASS C:
Net Assets	$	392
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		45,820
Net Asset Value, Offering and Redemption Price Per Share	$	8.55
CLASS IS:
Net Assets	$	18
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,046
Net Asset Value, Offering and Redemption Price Per Share	$	8.62

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Fixed Income Opportunities Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers (Net of $26 of Foreign Taxes Withheld)	$	1,585
Dividends from Security of Affiliated Issuer (Note G)		14
Total Investment Income		1,599
Expenses:
Advisory Fees (Note B)		197
Professional Fees		68
Registration Fees		27
Administration Fees (Note C)		21
Custodian Fees (Note F)		15
Sub Transfer Agency Fees — Class I		12
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		—	@
Shareholder Reporting Fees		11
Pricing Fees		8
Shareholder Services Fees — Class A (Note D)		4
Distribution and Shareholder Services Fees — Class L (Note D)		2
Distribution and Shareholder Services Fees — Class C (Note D)		2
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		3
Other Expenses		10
Total Expenses		387
Waiver of Advisory Fees (Note B)		(144	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(6	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(3	)
Net Expenses		231
Net Investment Income		1,368
Realized Gain (Loss):
Investments Sold (Net of $4 of Capital Gain Country Tax)		(1,918	)
Foreign Currency Forward Exchange Contracts		88
Foreign Currency Translation		(58	)
Net Realized Loss		(1,888	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of $23)		(4,459	)
Foreign Currency Forward Exchange Contracts		134
Foreign Currency Translation		(19	)
Net Change in Unrealized Appreciation (Depreciation)		(4,344	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(6,232	)
Net Decrease in Net Assets Resulting from Operations	$	(4,864	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Emerging Markets Fixed Income Opportunities Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,368		$	2,801
Net Realized Loss		(1,888	)		(980	)
Net Change in Unrealized Appreciation (Depreciation)		(4,344	)		4,411
Net Increase (Decrease) in Net Assets Resulting from Operations		(4,864	)		6,232
Dividends and Distributions to Shareholders:
Class I		(664	)		(2,260	)
Class A		(42	)		(82	)
Class L		(9	)		(30	)
Class C		(5	)		(18	)
Class IS		(—	@)		(18	)
Paid-in-Capital:
Class I		—			(275	)
Class A		—			(10	)
Class L		—			(4	)
Class C		—			(2	)
Class IS		—			(2	)
Total Dividends and Distributions to Shareholders		(720	)		(2,701	)
Capital Share Transactions:(1)
Class I:
Subscribed		1,411			22,927
Distributions Reinvested		662			2,529
Redeemed		(11,747	)		(3,153	)
Class A:
Subscribed		2,364			1,620
Distributions Reinvested		42			92
Redeemed		(1,046	)		(1,006	)
Class L:
Distributions Reinvested		9			34
Redeemed		(1	)		(58	)
Class C:
Subscribed		77			453
Distributions Reinvested		5			20
Redeemed		(173	)		(13	)
Class IS:
Subscribed		—			725
Distributions Reinvested		—	@		1
Redeemed		—			(1,430	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(8,397	)		22,741
Redemption Fees		—	@		—	@
Total Increase (Decrease) in Net Assets		(13,981	)		26,272
Net Assets:
Beginning of Period		61,600			35,328
End of Period	$	47,619		$	61,600

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Emerging Markets Fixed Income Opportunities Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		162			2,527
Shares Issued on Distributions Reinvested		88			278
Shares Redeemed		(1,489	)		(349	)
Net Increase (Decrease) in Class I Shares Outstanding		(1,239	)		2,456
Class A:
Shares Subscribed		254			178
Shares Issued on Distributions Reinvested		6			10
Shares Redeemed		(135	)		(110	)
Net Increase in Class A Shares Outstanding		125			78
Class L:
Shares Issued on Distributions Reinvested		1			4
Shares Redeemed		(—	@@)		(7	)
Net Increase (Decrease) in Class L Shares Outstanding		1			(3	)
Class C:
Shares Subscribed		8			50
Shares Issued on Distributions Reinvested		1			2
Shares Redeemed		(20	)		(1	)
Net Increase (Decrease) in Class C Shares Outstanding		(11	)		51
Class IS:
Shares Subscribed		—			81
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		—			(158	)
Net Increase (Decrease) in Class IS Shares Outstanding		—	@@		(77	)

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Fixed Income Opportunities Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	9.25		$	8.52		$	9.68		$	9.07		$	8.53		$	9.22
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.22			0.51			0.57			0.65			0.67			0.52
Net Realized and Unrealized Gain (Loss)		(0.74	)		0.70			(1.24	)		0.52			0.42			(0.68	)
Total from Investment Operations		(0.52	)		1.21			(0.67	)		1.17			1.09			(0.16	)
Distributions from and/or in Excess of:
Net Investment Income		(0.12	)		(0.43	)		(0.49	)		(0.56	)		(0.55	)		(0.53	)
Paid-in-Capital		—			(0.05	)		—			—			—			—
Total Distributions		(0.12	)		(0.48	)		(0.49	)		(0.56	)		(0.55	)		(0.53	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	8.61		$	9.25		$	8.52		$	9.68		$	9.07		$	8.53
Total Return(4)		(5.43	)%(7)		14.41	%		(6.93	)%		12.94	%		12.80	%		(1.83	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	43,428		$	58,152		$	32,575		$	22,219		$	20,332		$	19,219
Ratio of Expenses Before Expense Limitation		1.42	%(8)		1.39	%		1.98	%		2.01	%		2.03	%		1.82	%
Ratio of Expenses After Expense Limitation		0.84	%(5)(8)		0.83	%(5)		0.84	%(5)		0.83	%(5)		0.84	%(5)		0.83	%(5)
Ratio of Net Investment Income		5.23	%(5)(8)		5.65	%(5)		6.24	%(5)		6.73	%(5)		7.32	%(5)		5.74	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.02	%		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		38	%(7)		58	%		47	%		77	%		116	%		111	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Fixed Income Opportunities Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	9.24		$	8.51		$	9.67		$	9.06		$	8.52		$	9.21
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.21			0.48			0.52			0.61			0.64			0.50
Net Realized and Unrealized Gain (Loss)		(0.75	)		0.70			(1.22	)		0.52			0.42			(0.69	)
Total from Investment Operations		(0.54	)		1.18			(0.70	)		1.13			1.06			(0.19	)
Distributions from and/or in Excess of:
Net Investment Income		(0.11	)		(0.40	)		(0.46	)		(0.52	)		(0.52	)		(0.50	)
Paid-in-Capital		—			(0.05	)		—			—			—			—
Total Distributions		(0.11	)		(0.45	)		(0.46	)		(0.52	)		(0.52	)		(0.50	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	8.59		$	9.24		$	8.51		$	9.67		$	9.06		$	8.52
Total Return(4)		(5.64	)%(7)		14.03	%		(7.29	)%		12.54	%		12.53	%		(2.14	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,063		$	2,141		$	1,306		$	1,150		$	972		$	1,103
Ratio of Expenses Before Expense Limitation		1.75	%(8)		1.81	%		2.49	%		2.51	%		2.28	%		2.49	%
Ratio of Expenses After Expense Limitation		1.19	%(5)(8)		1.18	%(5)		1.19	%(5)		1.19	%(5)		1.09	%(5)		1.20	%(5)
Ratio of Net Investment Income		4.90	%(5)(8)		5.31	%(5)		5.74	%(5)		6.37	%(5)		7.03	%(5)		5.61	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.02	%		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		38	%(7)		58	%		47	%		77	%		116	%		111	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Fixed Income Opportunities Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	9.23		$	8.50		$	9.65		$	9.05		$	8.51		$	9.22
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.20			0.46			0.50			0.59			0.62			0.49
Net Realized and Unrealized Gain (Loss)		(0.74	)		0.70			(1.22	)		0.51			0.41			(0.72	)
Total from Investment Operations		(0.54	)		1.16			(0.72	)		1.10			1.03			(0.23	)
Distributions from and/or in Excess of:
Net Investment Income		(0.11	)		(0.38	)		(0.43	)		(0.50	)		(0.49	)		(0.48	)
Paid-in-Capital		—			(0.05	)		—			—			—			—
Total Distributions		(0.11	)		(0.43	)		(0.43	)		(0.50	)		(0.49	)		(0.48	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	8.58		$	9.23		$	8.50		$	9.65		$	9.05		$	8.51
Total Return(4)		(5.72	)%(7)		13.76	%		(7.52	)%		12.28	%		12.15	%		(2.53	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	718		$	764		$	727		$	842		$	777		$	735
Ratio of Expenses Before Expense Limitation		2.19	%(8)		2.16	%		2.78	%		2.77	%		2.78	%		2.94	%
Ratio of Expenses After Expense Limitation		1.44	%(5)(8)		1.43	%(5)		1.44	%(5)		1.44	%(5)		1.45	%(5)		1.45	%(5)
Ratio of Net Investment Income		4.67	%(5)(8)		5.05	%(5)		5.51	%(5)		6.11	%(5)		6.70	%(5)		5.44	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.02	%		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		38	%(7)		58	%		47	%		77	%		116	%		111	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Fixed Income Opportunities Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	9.21		$	8.50		$	9.65		$	9.05		$	8.52		$	9.52
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.18			0.41			0.46			0.50			0.54			0.32
Net Realized and Unrealized Gain (Loss)		(0.75	)		0.70			(1.22	)		0.55			0.43			(0.97	)
Total from Investment Operations		(0.57	)		1.11			(0.76	)		1.05			0.97			(0.65	)
Distributions from and/or in Excess of:
Net Investment Income		(0.09	)		(0.35	)		(0.39	)		(0.45	)		(0.44	)		(0.35	)
Paid-in-Capital		—			(0.05	)		—			—			—			—
Total Distributions		(0.09	)		(0.40	)		(0.39	)		(0.45	)		(0.44	)		(0.35	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	8.55		$	9.21		$	8.50		$	9.65		$	9.05		$	8.52
Total Return(5)		(6.01	)%(8)		13.19	%		(7.98	)%		11.76	%		11.60	%		(6.95	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	392		$	524		$	48		$	284		$	225		$	202
Ratio of Expenses Before Expense Limitation		2.93	%(9)		2.92	%		3.79	%		3.84	%		3.97	%		6.28	%(9)
Ratio of Expenses After Expense Limitation		1.94	%(6)(9)		1.93	%(6)		1.94	%(6)		1.94	%(6)		1.95	%(6)		1.95	%(6)(9)
Ratio of Net Investment Income		4.15	%(6)(9)		4.54	%(6)		5.09	%(6)		5.18	%(6)		5.87	%(6)		5.34	%(6)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.02	%		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		38	%(8)		58	%		47	%		77	%		116	%		111	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Fixed Income Opportunities Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	9.25		$	8.52		$	9.68		$	9.07		$	8.53		$	9.22
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.22			0.52			0.56			0.65			0.67			0.50
Net Realized and Unrealized Gain (Loss)		(0.73	)		0.69			(1.23	)		0.52			0.42			(0.66	)
Total from Investment Operations		(0.51	)		1.21			(0.67	)		1.17			1.09			(0.16	)
Distributions from and/or in Excess of:
Net Investment Income		(0.12	)		(0.43	)		(0.49	)		(0.56	)		(0.55	)		(0.53	)
Paid-in-Capital		—			(0.05	)		—			—			—			—
Total Distributions		(0.12	)		(0.48	)		(0.49	)		(0.56	)		(0.55	)		(0.53	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	8.62		$	9.25		$	8.52		$	9.68		$	9.07		$	8.53
Total Return(4)		(5.31	)%(7)		14.44	%		(6.91	)%		12.95	%		12.81	%		(1.83	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	18		$	19		$	672		$	763		$	716		$	673
Ratio of Expenses Before Expense Limitation		11.81	%(8)		1.73	%		2.22	%		2.25	%		2.25	%		1.86	%
Ratio of Expenses After Expense Limitation		0.81	%(5)(8)		0.80	%(5)		0.81	%(5)		0.81	%(5)		0.82	%(5)		0.82	%(5)
Ratio of Net Investment Income		5.29	%(5)(8)		5.72	%(5)		6.15	%(5)		6.74	%(5)		7.33	%(5)		5.45	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.02	%		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		38	%(7)		58	%		47	%		77	%		116	%		111	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Emerging Markets Fixed Income Opportunities Portfolio. The Fund seeks high total return.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) Certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield

spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (2) an equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services,

quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Fixed Income Securities
Corporate Bonds	$	—	$	12,492		$	—	$	12,492
Sovereign		—		31,797			—		31,797
Total Fixed Income Securities		—		44,289			—		44,289
Warrant		—		1			—		1
Short-Term Investments
Investment Company		2,396		—			—		2,396
U.S. Treasury Security		—		30			—		30
Total Short-Term Investments		2,396		30			—		2,426
Foreign Currency Forward Exchange Contracts		—		120			—		120
Total Assets		2,396		44,440			—		46,836
Liabilities:
Foreign Currency Forward Exchange Contracts		—		(32	)		—		(32	)
Total	$	2,396	$	44,408		$	—	$	46,804

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of

securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

4.  Structured Investments: The Fund invested a portion of its assets in structured investments. A structured investment is a derivative security designed to offer a return linked to a particular underlying security, currency, commodity or market. Structured investments may come in various forms including notes (such as exchange-traded notes), warrants and options to purchase securities. The Fund will typically use structured investments to gain exposure to a permitted underlying security, currency, commodity or market when direct access to a market is limited or inefficient from a tax or cost standpoint. There can be no assurance that structured investments will trade at the same price or have the same value as the underlying security, currency, commodity or market. Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Fund is relying on the creditworthiness of such issuer or counterparty and has no rights with respect to the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Fund's illiquidity to the extent that the Fund, at a particular time, may be unable to find qualified buyers for these securities.

5.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk

analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Appreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	120
	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Depreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	(32	)

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	88
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	134

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(a) (000)		Liabilities(a) (000)
Foreign Currency Forward Exchange Contracts	$	120	$	(32	)

(a) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Received (000)		Net Amount (not less than $0) (000)
BNP Paribas SA	$	42	$	(21	)	$	—	$	21
Citibank NA		9		—			—		9
JPMorgan Chase Bank NA		11		(11	)		—		0
State Street Bank and Trust Co.		8		—			—		8
UBS AG		50		—			—		50
Total	$	120	$	(32	)	$	—	$	88
Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Pledged (000)		Net Amount (not less than $0) (000)
BNP Paribas SA	$	21	$	(21	)	$	—	$	0
JPMorgan Chase Bank NA		11		(11	)		—		0
Total	$	32	$	(32	)	$	—	$	0

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	5,226,000

6.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets.

7.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment

income, if any, are declared and paid quarterly. Net realized capital gains, if any, are distributed at least annually.

9.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.19% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.85% for Class I shares, 1.20% for Class A shares, 1.45% for Class L shares, 1.95% for Class C shares and 0.82% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $144,000 of advisory fees were waived and approximately $9,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The Adviser has entered into Sub-Advisory Agreements with the Sub-Advisers, each a wholly-owned subsidiary of Morgan Stanley. The Sub-Advisers provide the Fund with advisory services subject to the overall supervision of the Adviser and the Company's Officers and Directors. The Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.25% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a

distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $18,407,000 and $22,773,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $3,000 relating to the Fund's investment in the Liquidity Funds.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	4,403	$	16,153	$	18,160	$	14

Affiliated Investment Company (cont'd)	Realized Gain Loss (Loss)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	2,396

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Paid-in- Capital (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	2,408	$	293	$	1,530	$	—

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Accumulated Loss (000)			Paid-in- Capital (000)
$	—	@	$	(—	@)

@ Amount is less than $500.

At December 31, 2019, the Fund had no distributable earnings on a tax basis.

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $1,135,000 and $4,171,000, respectively, that do not have an expiration date. These amounts

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

include capital losses acquired from MSIF Emerging Markets Domestic Debt that may be subject to limitation under IRC Section 382 in future years.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 46.4%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Advisers, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's contractual management fee and total expense ratio were higher than but close to its peer group averages and the actual management fee was higher than its peer group average. After discussion, the Board concluded that the Fund's (i) performance and total expense ratio were competitive with its peer group averages and (ii) management fee was acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

29

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

30

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

31

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

32

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

33

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

34

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIEMEDSAN
3178342 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets Leaders Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	10
Notes to Financial Statements	14
Investment Advisory Agreement Approval	20
Liquidity Risk Management Program	22
Privacy Notice	23
Director and Officer Information	25

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Emerging Markets Leaders Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Emerging Markets Leaders Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Leaders Portfolio Class I	$	1,000.00	$	1,064.60	$	1,019.10	$	5.95	$	5.82		1.16	%
Emerging Markets Leaders Portfolio Class A		1,000.00		1,062.30		1,017.21		7.90		7.72		1.54
Emerging Markets Leaders Portfolio Class C		1,000.00		1,058.30		1,013.48		11.72		11.46		2.29
Emerging Markets Leaders Portfolio Class IS		1,000.00		1,064.50		1,019.44		5.60		5.47		1.09

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Emerging Markets Leaders Portfolio

	Shares		Value (000)
Common Stocks (97.0%)
Brazil (5.8%)
Pagseguro Digital Ltd., Class A (a)		45,931	$	1,623
StoneCo Ltd., Class A (a)		40,824		1,583
				3,206
China (30.7%)
Alibaba Group Holding Ltd. (a)(b)		179,844		4,853
Kingdee International Software Group Co., Ltd. (a)(b)		135,000		316
Li Ning Co., Ltd. (b)		488,500		1,564
Meituan Dianping, Class B (a)(b)		186,800		4,174
Ping An Healthcare and Technology Co., Ltd. (a)(b)		4,500		69
Tencent Holdings Ltd. (b)		73,800		4,729
Wuliangye Yibin Co., Ltd., Class A		46,800		1,137
				16,842
Germany (1.7%)
Adidas AG (a)		3,423		902
Hong Kong (7.4%)
AIA Group Ltd.		232,000		2,171
Budweiser Brewing Co., APAC Ltd.		643,100		1,883
				4,054
India (21.8%)
Aarti Industries Ltd.		130,234		1,609
Aarti Surfactants Ltd. (a)		4,458		13
Apollo Hospitals Enterprise Ltd.		162,964		2,916
AU Small Finance Bank Ltd.		171,876		1,231
Bajaj Finance Ltd.		61,839		2,328
HDFC Life Insurance Co., Ltd. (a)		149,014		1,088
Kotak Mahindra Bank Ltd.		124,050		2,239
SRF Ltd.		11,984		573
				11,997
Singapore (2.0%)
Sea Ltd. ADR (a)		10,200		1,094
Taiwan (12.0%)
Silergy Corp.		30,000		1,965
Taiwan Semiconductor Manufacturing Co., Ltd.		268,000		2,862
Voltronic Power Technology Corp. (a)		61,937		1,785
				6,612
Thailand (1.7%)
Muangthai Capital PCL (Foreign Shares) (a)		541,800		920
United States (13.9%)
MercadoLibre, Inc. (a)		3,255		3,209
NIKE, Inc., Class B		19,200		1,883
NVIDIA Corp.		3,865		1,468
Visa, Inc., Class A		5,669		1,095
				7,655
Total Common Stocks (Cost $37,194)				53,282

	Shares		Value (000)
Short-Term Investment (3.0%)
Investment Company (3.0%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $1,659)		1,658,571	$	1,659
Total Investments (100.0%) (Cost $38,853) (c)(d)				54,941
Liabilities in Excess of Other Assets (0.0%) (e)				(12	)
Net Assets (100.0%)			$	54,929

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  The approximate fair value and percentage of net assets, $40,394,000 and 73.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $17,208,000 and the aggregate gross unrealized depreciation is approximately $1,120,000, resulting in net unrealized appreciation of approximately $16,088,000.

(e)  Amount is less than 0.05%.

ADR  American Depositary Receipt.

Portfolio Composition

Classification	Percentage of Total Investments
Internet & Direct Marketing Retail		22.3	%
Other*		13.0
Semiconductors & Semiconductor Equipment		11.5
Interactive Media & Services		8.6
Textiles, Apparel & Luxury Goods		7.9
Information Technology Services		7.8
Banks		6.3
Insurance		5.9
Consumer Finance		5.9
Beverages		5.5
Health Care Providers & Services		5.3
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Leaders Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $37,194)	$	53,282
Investment in Security of Affiliated Issuer, at Value (Cost $1,659)		1,659
Total Investments in Securities, at Value (Cost $38,853)		54,941
Foreign Currency, at Value (Cost $79)		79
Tax Reclaim Receivable		34
Dividends Receivable		23
Receivable for Investments Sold		8
Receivable for Fund Shares Sold		1
Receivable from Affiliate		—	@
Other Assets		48
Total Assets		55,134
Liabilities:
Payable for Investments Purchased		57
Payable for Advisory Fees		57
Payable for Professional Fees		44
Deferred Capital Gain Country Tax		14
Payable for Custodian Fees		13
Payable for Sub Transfer Agency Fees — Class I		4
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		3
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		1
Payable to the Advisor		2
Other Liabilities		9
Total Liabilities		205
Net Assets	$	54,929
Net Assets Consist of:
Paid-in-Capital	$	38,229
Total Distributable Earnings		16,700
Net Assets	$	54,929

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Leaders Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	31,053
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,297,180
Net Asset Value, Offering and Redemption Price Per Share	$	13.52
CLASS A:
Net Assets	$	1,597
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		119,957
Net Asset Value, Redemption Price Per Share	$	13.31
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.74
Maximum Offering Price Per Share	$	14.05
CLASS C:
Net Assets	$	1,160
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		90,034
Net Asset Value, Offering and Redemption Price Per Share	$	12.88
CLASS IS:
Net Assets	$	21,119
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,560,941
Net Asset Value, Offering and Redemption Price Per Share	$	13.53

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Leaders Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $12 of Foreign Taxes Withheld)	$	149
Dividends from Security of Affiliated Issuer (Note G)		6
Total Investment Income		155
Expenses:
Advisory Fees (Note B)		221
Professional Fees		61
Registration Fees		24
Custodian Fees (Note F)		22
Administration Fees (Note C)		20
Sub Transfer Agency Fees — Class I		8
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class C		—	@
Shareholder Reporting Fees		7
Shareholder Services Fees — Class A (Note D)		2
Distribution and Shareholder Services Fees — Class C (Note D)		5
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		3
Pricing Fees		1
Other Expenses		7
Total Expenses		385
Waiver of Advisory Fees (Note B)		(95	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		288
Net Investment Loss		(133	)
Realized Gain (Loss):
Investments Sold		913
Foreign Currency Translation		(7	)
Net Realized Gain		906
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of $175)		2,823
Foreign Currency Translation		(2	)
Net Change in Unrealized Appreciation (Depreciation)		2,821
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		3,727
Net Increase in Net Assets Resulting from Operations	$	3,594

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Emerging Markets Leaders Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(133	)	$	(59	)
Net Realized Gain		906			2,214
Net Change in Unrealized Appreciation (Depreciation)		2,821			9,889
Net Increase in Net Assets Resulting from Operations		3,594			12,044
Dividends and Distributions to Shareholders:
Class I		—			(1,093	)
Class A		—			(40	)
Class C		—			(33	)
Class IS		—			(539	)
Total Dividends and Distributions to Shareholders		—			(1,705	)
Capital Share Transactions:(1)
Class I:
Subscribed		4,113			9,014
Distributions Reinvested		—			1,089
Redeemed		(7,921	)		(23,753	)
Class A:
Subscribed		619			76
Distributions Reinvested		—			40
Redeemed		(263	)		(155	)
Class C:
Subscribed		201			150
Distributions Reinvested		—			33
Redeemed		(101	)		(123	)
Class IS:
Subscribed		—			3,649
Distributions Reinvested		—			539
Net Decrease in Net Assets Resulting from Capital Share Transactions		(3,352	)		(9,441	)
Redemption Fees		—	@		—	@
Total Increase in Net Assets		242			898
Net Assets:
Beginning of Period		54,687			53,789
End of Period	$	54,929		$	54,687

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Emerging Markets Leaders Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		356			806
Shares Issued on Distributions Reinvested		—			87
Shares Redeemed		(629	)		(2,098	)
Net Decrease in Class I Shares Outstanding		(273	)		(1,205	)
Class A:
Shares Subscribed		50			7
Shares Issued on Distributions Reinvested		—			3
Shares Redeemed		(25	)		(14	)
Net Increase (Decrease) in Class A Shares Outstanding		25			(4	)
Class C:
Shares Subscribed		17			14
Shares Issued on Distributions Reinvested		—			3
Shares Redeemed		(10	)		(12	)
Net Increase in Class C Shares Outstanding		7			5
Class IS:
Shares Subscribed		—			287
Shares Issued on Distributions Reinvested		—			43
Net Increase in Class IS Shares Outstanding		—			330

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Leaders Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from January 5, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	12.70		$	10.38		$	12.14		$	9.73		$	9.45		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		(0.03	)		(0.02	)		0.03			0.08			0.04			0.06
Net Realized and Unrealized Gain (Loss)		0.85			2.78			(1.74	)		2.45			0.25			(0.49	)
Total from Investment Operations		0.82			2.76			(1.71	)		2.53			0.29			(0.43	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.01	)		(0.08	)		(0.01	)		(0.12	)
Net Realized Gain		—			(0.44	)		(0.04	)		(0.04	)		—			—
Paid-in-Capital		—			—			—			—			(0.00	)(4)		—
Total Distributions		—			(0.44	)		(0.05	)		(0.12	)		(0.01	)		(0.12	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		—
Net Asset Value, End of Period	$	13.52		$	12.70		$	10.38		$	12.14		$	9.73		$	9.45
Total Return(5)		6.46	%(7)		26.63	%		(14.12	)%		26.01	%		3.08	%		(4.26	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	31,053		$	32,651		$	39,206		$	73,273		$	25,374		$	13,379
Ratio of Expenses Before Expense Limitation		1.55	%(8)		1.57	%		1.48	%		1.43	%		1.32	%		2.80	%(8)
Ratio of Expenses After Expense Limitation		1.16	%(6)(8)		1.17	%(6)		1.17	%(6)		1.11	%(6)		1.10	%(6)		1.14	%(6)(8)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.16	%(6)		1.16	%(6)		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.53	)%(6)(8)		(0.14	)%(6)		0.29	%(6)		0.67	%(6)		0.37	%(6)		0.65	%(6)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.02	%		0.01	%(8)
Portfolio Turnover Rate		22	%(7)		58	%		47	%		79	%		45	%		36	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Date of Reorganization (close of business).

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Leaders Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from January 5, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	12.53		$	10.29		$	12.06		$	9.67		$	9.43		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		(0.05	)		(0.05	)		(0.00	)(4)		0.02			(0.03	)		0.02
Net Realized and Unrealized Gain (Loss)		0.83			2.73			(1.73	)		2.44			0.28			(0.48	)
Total from Investment Operations		0.78			2.68			(1.73	)		2.46			0.25			(0.46	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.03	)		(0.01	)		(0.11	)
Net Realized Gain		—			(0.44	)		(0.04	)		(0.04	)		—			—
Paid-in-Capital		—			—			—			—			(0.00	)(4)		—
Total Distributions		—			(0.44	)		(0.04	)		(0.07	)		(0.01	)		(0.11	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		—
Net Asset Value, End of Period	$	13.31		$	12.53		$	10.29		$	12.06		$	9.67		$	9.43
Total Return(5)		6.23	%(7)		26.08	%		(14.41	)%		25.46	%		2.63	%		(4.61	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,597		$	1,191		$	1,024		$	1,102		$	821		$	182
Ratio of Expenses Before Expense Limitation		1.99	%(8)		2.04	%		1.93	%		2.01	%		1.96	%		5.89	%(8)
Ratio of Expenses After Expense Limitation		1.54	%(6)(8)		1.55	%(6)		1.55	%(6)		1.54	%(6)		1.53	%(6)		1.54	%(6)(8)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.54	%(6)		1.54	%(6)		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.87	)%(6)(8)		(0.45	)%(6)		(0.04	)%(6)		0.18	%(6)		(0.33	)%(6)		0.21	%(6)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.02	%		0.01	%(8)
Portfolio Turnover Rate		22	%(7)		58	%		47	%		79	%		45	%		36	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Date of Reorganization (close of business).

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Leaders Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	12.17		$	10.08		$	11.90		$	9.59		$	9.42		$	10.61
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.10	)		(0.13	)		(0.09	)		(0.06	)		(0.10	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		0.81			2.66			(1.69	)		2.41			0.28			(1.07	)
Total from Investment Operations		0.71			2.53			(1.78	)		2.35			0.18			(1.13	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.01	)		(0.06	)
Net Realized Gain		—			(0.44	)		(0.04	)		(0.04	)		—			—
Paid-in-Capital		—			—			—			—			(0.00	)(4)		—
Total Distributions		—			(0.44	)		(0.04	)		(0.04	)		(0.01	)		(0.06	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		—
Net Asset Value, End of Period	$	12.88		$	12.17		$	10.08		$	11.90		$	9.59		$	9.42
Total Return(5)		5.83	%(8)		25.14	%		(15.02	)%		24.53	%		1.89	%		(10.61	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,160		$	1,007		$	780		$	926		$	587		$	100
Ratio of Expenses Before Expense Limitation		2.77	%(9)		2.82	%		2.75	%		2.80	%		3.08	%		5.73	%(9)
Ratio of Expenses After Expense Limitation		2.29	%(6)(9)		2.30	%(6)		2.30	%(6)		2.29	%(6)		2.28	%(6)		2.30	%(6)(9)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			2.29	%(6)		2.29	%(6)		N/A			N/A			N/A
Ratio of Net Investment Loss		(1.64	)%(6)(9)		(1.18	)%(6)		(0.83	)%(6)		(0.49	)%(6)		(0.99	)%(6)		(0.85	)%(6)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.02	%		0.00	%(7)(9)
Portfolio Turnover Rate		22	%(8)		58	%		47	%		79	%		45	%		36	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Leaders Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from January 5, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	12.71		$	10.38		$	12.14		$	9.73		$	9.45		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		(0.03	)		0.00	(4)		0.04			0.08			(0.00	)(4)		0.07
Net Realized and Unrealized Gain (Loss)		0.85			2.77			(1.74	)		2.45			0.29			(0.50	)
Total from Investment Operations		0.82			2.77			(1.70	)		2.53			0.29			(0.43	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.02	)		(0.08	)		(0.01	)		(0.12	)
Net Realized Gain		—			(0.44	)		(0.04	)		(0.04	)		—			—
Paid-in-Capital		—			—			—			—			(0.00	)(4)		—
Total Distributions		—			(0.44	)		(0.06	)		(0.12	)		(0.01	)		(0.12	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		—
Net Asset Value, End of Period	$	13.53		$	12.71		$	10.38		$	12.14		$	9.73		$	9.45
Total Return(5)		6.45	%(9)		26.73	%		(14.03	)%		26.02	%		3.09	%		(4.25	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	21,119		$	19,838		$	12,779		$	14,868		$	88,880		$	15,925
Ratio of Expenses Before Expense Limitation		1.50	%(10)		1.53	%		1.44	%		1.42	%		1.31	%		2.65	%(10)
Ratio of Expenses After Expense Limitation		1.09	%(6)(10)		1.10	%(6)		1.10	%(6)		1.09	%(6)		1.08	%(6)		1.12	%(6)(7)(10)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.09	%(6)		1.09	%(6)		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.45	)%(6)(10)		0.00	%(6)(8)		0.38	%(6)		0.72	%(6)		(0.00	)%(6)(8)		0.75	%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(10)		0.01	%		0.01	%		0.01	%		0.02	%		0.01	%(10)
Portfolio Turnover Rate		22	%(9)		58	%		47	%		79	%		45	%		36	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Date of Reorganization (close of business).

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.10% for Class IS shares. Prior to September 30, 2015, the maximum ratio was 1.15% for Class IS shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Emerging Markets Leaders Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant

exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Company ("MSIM Company") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the

Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	—	$	3,470	$	—	$	3,470
Beverages		—		3,020		—		3,020
Chemicals		—		2,195		—		2,195
Consumer Finance		—		3,248		—		3,248
Electrical Equipment		—		1,785		—		1,785
Entertainment		1,094		—		—		1,094
Health Care Providers & Services		—		2,916		—		2,916
Health Care Technology		—		69		—		69
Information Technology Services		4,301		—		—		4,301
Insurance		—		3,259		—		3,259
Interactive Media & Services		—		4,729		—		4,729
Internet & Direct Marketing Retail		3,209		9,027		—		12,236
Semiconductors & Semiconductor Equipment		1,468		4,827		—		6,295
Software		—		316		—		316
Textiles, Apparel & Luxury Goods		1,883		2,466		—		4,349
Total Common Stocks		11,955		41,327		—		53,282
Short-Term Investment
Investment Company		1,659		—		—		1,659
Total Assets	$	13,614	$	41,327	$	—	$	54,941

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at

period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets.

5.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.90	%		0.85	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.51% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.20% for Class I shares, 1.55% for Class A shares, 2.30% for Class C shares and 1.10% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $95,000 of advisory fees were waived and approximately $1,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley. The Sub-Adviser provides the Fund with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $10,422,000 and $12,842,000, respectively. There were no purchases and sales of long-term

U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	2,729	$	11,457	$	12,527	$	6

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	1,659

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	—	$	1,705	$	61	$	207

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(151	)	$	151

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	7	$	565

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 75.2%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one- three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were higher than but close to its peer group averages. After discussion, the Board concluded that the Fund's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

22

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

23

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Adviser

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

25

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIEMLSAN
3178614 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	17
Investment Advisory Agreement Approval	27
Liquidity Risk Management Program	29
Privacy Notice	30
Director and Officer Information	32

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Emerging Markets Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Emerging Markets Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Portfolio Class I	$	1,000.00	$	878.00	$	1,019.59	$	4.95	$	5.32		1.06	%
Emerging Markets Portfolio Class A		1,000.00		876.80		1,017.85		6.58		7.07		1.41
Emerging Markets Portfolio Class L		1,000.00		874.70		1,015.37		8.90		9.57		1.91
Emerging Markets Portfolio Class C		1,000.00		873.50		1,014.12		10.06		10.82		2.16
Emerging Markets Portfolio Class IS		1,000.00		878.80		1,020.09		4.48		4.82		0.96
Emerging Markets Portfolio Class IR		1,000.00		878.80		1,020.09		4.48		4.82		0.96

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Emerging Markets Portfolio

	Shares		Value (000)
Common Stocks (97.9%)
Argentina (0.9%)
Globant SA (a)		40,728	$	6,103
Brazil (7.3%)
Atacadao SA		1,521,043		5,524
Hapvida Participacoes e Investim entos SA		519,684		5,941
Localiza Rent a Car SA (a)		835,970		6,289
Lojas Renner SA		807,383		6,206
Pagseguro Digital Ltd., Class A (a)		196,214		6,934
Petroleo Brasileiro SA		1,146,902		4,712
Petroleo Brasileiro SA (Preference)		1,357,848		5,381
Rumo SA (a)		1,487,503		6,152
				47,139
China (36.6%)
Alibaba Group Holding Ltd. (a)(b)		365,400		9,860
Alibaba Group Holding Ltd. ADR (a)		160,216		34,559
Anhui Conch Cement Co., Ltd., Class A		930,667		7,000
Bank of China Ltd. H Shares (b)		21,294,000		7,888
China Construction Bank Corp. H Shares (b)		14,760,120		12,006
China International Capital Corp., Ltd. H Shares (a)(b)(c)		1,700,000		3,364
China Mengniu Dairy Co., Ltd. (a)(b)		2,641,000		10,127
China Mobile Ltd. (b)		552,280		3,729
China Overseas Land & Investment Ltd. (b)		1,416,000		4,324
China Resources Beer Holdings Co., Ltd. (b)		1,560,000		8,708
China Resources Land Ltd. (b)		786,000		3,004
CSPC Pharmaceutical Group Ltd. (b)		3,679,200		6,968
Hua Hong Semiconductor Ltd. (a)(b)(c)		1,878,000		6,584
Jiangsu Hengrui Medicine Co., Ltd., Class A		277,316		3,624
Joincare Pharmaceutical Group Industry Co. Ltd.		1,168,300		2,687
Kweichow Moutai Co., Ltd., Class A		66,949		13,903
New Oriental Education & Technology Group, Inc. ADR (a)		63,838		8,314
Ping An Insurance Group Co. of China Ltd., Class A		434,774		4,400
Ping An Insurance Group Co. of China Ltd. H Shares (b)		329,000		3,280
Shandong Weigao Group Medical Polymer Co., Ltd. H Shares (b)		1,312,000		2,929
Shenzhou International Group Holdings Ltd. (b)		645,400		7,846
Sino Biopharmaceutical Ltd. (b)		3,323,000		6,263
TAL Education Group ADR (a)		88,701		6,065
Tencent Holdings Ltd. (b)		768,600		49,250
Universal Scientific Industrial Shanghai Co., Ltd., Class A		1,373,753		4,271
Yihai International Holding Ltd. (a)(b)		355,000		3,658
				234,611
Hong Kong (0.4%)
Budweiser Brewing Co. APAC Ltd.		932,100		2,729
Hungary (1.1%)
Richter Gedeon Nyrt		339,391		7,042

	Shares		Value (000)
India (6.2%)
Bharti Airtel Ltd. (a)		787,881	$	5,851
Eicher Motors Ltd.		11,415		2,772
HDFC Bank Ltd. ADR		99,150		4,507
ICICI Bank Ltd.		989,820		4,615
ICICI Prudential Life Insurance Co., Ltd.		548,313		3,100
Infosys Ltd.		544,328		5,291
Infosys Ltd. ADR		173,669		1,678
Larsen & Toubro Ltd.		189,849		2,382
Marico Ltd.		80,365		375
Reliance Industries Partly Paid (a)		72,137		762
Reliance Industries Ltd.		221,846		5,046
Shree Cement Ltd.		10,109		3,091
				39,470
Indonesia (2.4%)
Astra International Tbk PT		7,905,000		2,674
Bank Central Asia Tbk PT		5,329,500		10,663
Bank Rakyat Indonesia Persero Tbk PT		8,263,350		1,764
				15,101
Korea, Republic of (7.8%)
Hotel Shilla Co., Ltd.		33,283		1,980
Kakao Corp.		19,093		4,285
NCSoft Corp.		10,417		7,749
Samsung Biologics Co., Ltd. (a)		6,012		3,900
Samsung Electronics Co., Ltd.		664,265		29,405
SK Hynix, Inc.		39,771		2,840
				50,159
Mexico (2.4%)
Grupo Aeroportuario del Centro Norte SAB de CV (a)		586,819		2,727
Grupo Financiero Banorte SAB de CV Series O		1,552,813		5,373
Wal-Mart de Mexico SAB de CV		3,126,697		7,478
				15,578
Peru (1.2%)
Cia de Minas Buenaventura SAA ADR		377,755		3,452
Credicorp Ltd.		31,598		4,224
				7,676
Philippines (0.4%)
Jollibee Foods Corp.		840,010		2,372
Poland (2.8%)
Jeronimo Martins SGPS SA		291,279		5,097
LPP SA (a)		3,237		4,940
PLAY Communications SA		609,283		4,705
Santander Bank Polska SA (a)		80,289		3,585
				18,327
Russia (6.7%)
LUKOIL PJSC ADR		108,693		8,079
Novatek PJSC (Registered GDR)		55,161		7,819
Novolipetsk Steel PJSC GDR		194,425		3,870
TCS Group Holding PLC GDR		240,664		4,886
X5 Retail Group N.V. GDR		240,051		8,514

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Portfolio

	Shares		Value (000)
Russia (cont'd)
Yandex N.V., Class A (a)		187,753	$	9,391
				42,559
South Africa (2.4%)
Bidvest Group Ltd. (The)		587,638		4,821
Capitec Bank Holdings Ltd.		119,349		5,932
Clicks Group Ltd.		368,152		4,470
				15,223
Taiwan (11.9%)
ASE Technology Holding Co., Ltd.		1,817,626		4,186
CTBC Financial Holding Co., Ltd.		5,163,000		3,578
Delta Electronics, Inc.		406,000		2,317
Eclat Textile Co., Ltd.		168,000		1,957
Largan Precision Co., Ltd.		12,000		1,669
MediaTek, Inc.		456,000		9,015
Mega Financial Holding Co., Ltd.		4,182,000		4,396
Nanya Technology Corp.		1,066,000		2,224
President Chain Store Corp.		238,000		2,394
Taiwan Semiconductor Manufacturing Co., Ltd.		3,850,205		41,118
Vanguard International Semiconductor Corp.		1,414,000		3,760
				76,614
Thailand (1.0%)
Central Retail Corp. PCL (a)		98,800		106
CP ALL PCL (Foreign Shares) (a)		1,710,600		3,770
Muangthai Capital PCL (Foreign Shares) (a)		1,405,400		2,387
				6,263
Turkey (1.4%)
Akbank T.A.S. (a)		7,918,043		7,041
Migros Ticaret AS (a)		386,210		2,173
				9,214
United Kingdom (1.7%)
Avast PLC		606,501		3,964
Mondi PLC		367,987		6,906
				10,870
United States (3.3%)
ASML Holding NV		11,057		4,069
EPAM Systems, Inc. (a)		13,433		3,385
MercadoLibre, Inc. (a)		6,928		6,829
NIKE, Inc., Class B		71,489		7,010
				21,293
Total Common Stocks (Cost $497,305)				628,343
Short-Term Investments (2.4%)
Securities held as Collateral on Loaned Securities (0.8%)
Investment Company (0.8%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $4,948)		4,947,752		4,948

	Shares		Value (000)
Investment Company (1.6%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $10,243)		10,243,103	$	10,243
Total Short-Term Investments (Cost $15,191)				15,191
Total Investments (100.3%) (Cost $512,496) Including $9,106 of Securities Loaned (d)(e)				643,534
Liabilities in Excess of Other Assets (–0.3%)				(1,936	)
Net Assets (100.0%)			$	641,598

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  All or a portion of this security was on loan at June 30, 2020.

(d)  The approximate fair value and percentage of net assets, $459,015,000 and 71.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $166,138,000 and the aggregate gross unrealized depreciation is approximately $35,100,000, resulting in net unrealized appreciation of approximately $131,038,000.

ADR  American Depositary Receipt.

GDR  Global Depositary Receipt.

PJSC  Public Joint Stock Company.

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		47.6	%
Banks		11.8
Semiconductors & Semiconductor Equipment		11.6
Interactive Media & Services		9.8
Internet & Direct Marketing Retail		8.0
Food & Staples Retailing		6.2
Oil, Gas & Consumable Fuels		5.0
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2020.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $497,305)	$	628,343
Investment in Security of Affiliated Issuer, at Value (Cost $15,191)		15,191
Total Investments in Securities, at Value (Cost $512,496)		643,534
Foreign Currency, at Value (Cost $2,511)		2,513
Receivable for Investments Sold		4,464
Dividends Receivable		2,185
Receivable for Fund Shares Sold		167
Tax Reclaim Receivable		152
Receivable from Securities Lending Income		11
Receivable from Affiliate		—	@
Other Assets		169
Total Assets		653,195
Liabilities:
Collateral on Securities Loaned, at Value		4,948
Payable for Investments Purchased		4,423
Payable for Advisory Fees		1,185
Deferred Capital Gain Country Tax		419
Payable for Reorganization Expense		190
Payable for Custodian Fees		112
Payable for Fund Shares Redeemed		93
Payable for Sub Transfer Agency Fees — Class I		70
Payable for Sub Transfer Agency Fees — Class A		3
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		30
Payable for Professional Fees		—	@
Payable for Transfer Agency Fees — Class I		8
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Shareholder Services Fees — Class A		2
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		113
Total Liabilities		11,597
Net Assets	$	641,598
Net Assets Consist of:
Paid-in-Capital	$	548,139
Total Distributable Earnings		93,459
Net Assets	$	641,598

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	259,276
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		12,463,858
Net Asset Value, Offering and Redemption Price Per Share	$	20.80
CLASS A:
Net Assets	$	7,843
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		388,145
Net Asset Value, Redemption Price Per Share	$	20.21
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.12
Maximum Offering Price Per Share	$	21.33
CLASS L:
Net Assets	$	121
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		6,144
Net Asset Value, Offering and Redemption Price Per Share	$	19.75
CLASS C:
Net Assets	$	410
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		20,883
Net Asset Value, Offering and Redemption Price Per Share	$	19.61
CLASS IS:
Net Assets	$	373,939
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		17,973,370
Net Asset Value, Offering and Redemption Price Per Share	$	20.81
CLASS IR:
Net Assets	$	9
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		434
Net Asset Value, Offering and Redemption Price Per Share	$	20.81
(1) Including: Securities on Loan, at Value:	$	9,106

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $653 of Foreign Taxes Withheld)	$	5,400
Income from Securities Loaned — Net		31
Dividends from Security of Affiliated Issuer (Note G)		24
Total Investment Income		5,455
Expenses:
Advisory Fees (Note B)		2,609
Administration Fees (Note C)		252
Custodian Fees (Note F)		214
Sub Transfer Agency Fees — Class I		129
Sub Transfer Agency Fees — Class A		7
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		—	@
Professional Fees		75
Registration Fees		37
Transfer Agency Fees — Class I (Note E)		23
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Transfer Agency Fees — Class IR (Note E)		1
Shareholder Reporting Fees		26
Shareholder Services Fees — Class A (Note D)		11
Distribution and Shareholder Services Fees — Class L (Note D)		1
Distribution and Shareholder Services Fees — Class C (Note D)		2
Pricing Fees		4
Other Expenses		31
Expenses Before Non-Operating Expenses		3,427
Bank Overdraft Expense		23
Total Expenses		3,450
Waiver of Advisory Fees (Note B)		(258	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(30	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(7	)
Net Expenses		3,151
Net Investment Income		2,304
Realized Loss:
Investments Sold		(30,434	)
Foreign Currency Forward Exchange Contracts		(1,280	)
Foreign Currency Translation		(681	)
Net Realized Loss		(32,395	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of $373)		(53,794	)
Foreign Currency Forward Exchange Contracts		510
Foreign Currency Translation		(93	)
Net Change in Unrealized Appreciation (Depreciation)		(53,377	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(85,772	)
Net Decrease in Net Assets Resulting from Operations	$	(83,468	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Emerging Markets Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	2,304		$	13,422
Net Realized Gain (Loss)		(32,395	)		107,229
Net Change in Unrealized Appreciation (Depreciation)		(53,377	)		37,183
Net Increase (Decrease) in Net Assets Resulting from Operations		(83,468	)		157,834
Dividends and Distributions to Shareholders:
Class I		—			(33,365	)
Class A		—			(1,495	)
Class L		—			(29	)
Class C		—			(55	)
Class IS		—			(62,373	)
Class IR		—			(1	)
Total Dividends and Distributions to Shareholders		—			(97,318	)
Capital Share Transactions:(1)
Class I:
Subscribed		43,668			28,345
Issued due to a tax-free reorganization		—			438,765
Distributions Reinvested		—			31,579
Redeemed		(32,088	)		(457,409	)
Class A:
Subscribed		666			3,722
Distributions Reinvested		—			1,482
Redeemed		(2,641	)		(8,421	)
Class L:
Distributions Reinvested		—			29
Redeemed		(54	)		(127	)
Class C:
Subscribed		19			108
Distributions Reinvested		—			55
Redeemed		(6	)		(28	)
Class IS:
Subscribed		18,779			100,062
Distributions Reinvested		—			52,608
Redeemed		(116,688	)		(478,275	)
Class IR:
Distributions Reinvested		—			1
Net Decrease in Net Assets Resulting from Capital Share Transactions		(88,345	)		(287,504	)
Redemption Fees		12			11
Total Decrease in Net Assets		(171,801	)		(226,977	)
Net Assets:
Beginning of Period		813,399			1,040,376
End of Period	$	641,598		$	813,399

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Emerging Markets Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		2,376			1,180
Shares Issued due to a tax-free reorganization		—			17,868
Shares Issued on Distributions Reinvested		—			1,359
Shares Redeemed		(1,610	)		(18,880	)
Net Increase in Class I Shares Outstanding		766			1,527
Class A:
Shares Subscribed		34			157
Shares Issued on Distributions Reinvested		—			66
Shares Redeemed		(131	)		(356	)
Net Decrease in Class A Shares Outstanding		(97	)		(133	)
Class L:
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(3	)		(5	)
Net Decrease in Class L Shares Outstanding		(3	)		(4	)
Class C:
Shares Subscribed		1			5
Shares Issued on Distributions Reinvested		—			2
Shares Redeemed		—	@@		(1	)
Net Increase in Class C Shares Outstanding		1			6
Class IS:
Shares Subscribed		906			4,177
Shares Issued on Distributions Reinvested		—			2,266
Shares Redeemed		(5,078	)		(19,685	)
Net Decrease in Class IS Shares Outstanding		(4,172	)		(13,242	)
Class IR:
Shares Subscribed		—			—
Shares Issued on Distributions Reinvested		—			—	@@
Net Increase in Class IR Shares Outstanding		—			—	@@

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	23.69		$	22.53		$	27.95		$	20.83		$	19.68		$	22.13
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.07			0.41			0.28			0.19			0.17			0.15
Net Realized and Unrealized Gain (Loss)		(2.96	)		3.92			(5.15	)		7.10			1.15			(2.43	)
Total from Investment Operations		(2.89	)		4.33			(4.87	)		7.29			1.32			(2.28	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.18	)		(0.35	)		(0.17	)		(0.17	)		(0.17	)
Net Realized Gain		—			(2.99	)		(0.20	)		—			—			—
Total Distributions		—			(3.17	)		(0.55	)		(0.17	)		(0.17	)		(0.17	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	20.80		$	23.69		$	22.53		$	27.95		$	20.83		$	19.68
Total Return(4)		(12.20	)%(9)		19.44	%		(17.32	)%		34.97	%		6.73	%		(10.33	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	259,276		$	277,114		$	229,132		$	342,400		$	282,674		$	531,194
Ratio of Expenses Before Expense Limitation		1.16	%(10)		1.16	%		N/A			1.07	%		1.16	%		1.45	%
Ratio of Expenses After Expense Limitation		1.06	%(5)(10)(11)		1.05	%(5)		1.03	%(5)		1.04	%(5)		1.11	%(5)(7)		1.24	%(5)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.05	%(5)(10)		1.05	%(5)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.71	%(5)(10)		1.69	%(5)		1.08	%(5)		0.75	%(5)		0.83	%(5)		0.68	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(8)(10)		0.00	%(8)		0.01	%		0.00	%(8)		0.00	%(8)		0.00	%(8)
Portfolio Turnover Rate		33	%(9)		58	%		56	%		35	%		33	%		40	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.20% for Class I shares. Prior to September 30, 2015, the maximum ratio was 1.25% for Class I shares.

(7)  Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.05% for Class I shares. Prior to September 30, 2016, the maximum ratio was 1.20% for Class I shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

(11)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	23.05		$	21.99		$	27.24		$	20.31		$	19.19		$	21.57
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.03			0.30			0.20			0.10			0.11			0.07
Net Realized and Unrealized Gain (Loss)		(2.87	)		3.85			(5.01	)		6.92			1.11			(2.36	)
Total from Investment Operations		(2.84	)		4.15			(4.81	)		7.02			1.22			(2.29	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.10	)		(0.24	)		(0.09	)		(0.10	)		(0.09	)
Net Realized Gain		—			(2.99	)		(0.20	)		—			—			—
Total Distributions		—			(3.09	)		(0.44	)		(0.09	)		(0.10	)		(0.09	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	20.21		$	23.05		$	21.99		$	27.24		$	20.31		$	19.19
Total Return(4)		(12.32	)%(9)		19.08	%		(17.58	)%		34.54	%		6.37	%		(10.63	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	7,843		$	11,195		$	13,605		$	23,952		$	18,824		$	19,065
Ratio of Expenses Before Expense Limitation		1.50	%(10)		1.43	%		N/A			1.40	%		1.48	%		1.76	%
Ratio of Expenses After Expense Limitation		1.41	%(5)10)(11)		1.34	%(5)		1.34	%(5)		1.36	%(5)		1.45	%(5)(7)		1.56	%(5)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.40	%(5)(10)		1.34	%(5)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.26	%(5)(10)		1.26	%(5)		0.78	%(5)		0.42	%(5)		0.55	%(5)		0.34	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(8)(10)		0.00	%(8)		0.01	%		0.00	%(8)		0.00	%(8)		0.00	%(8)
Portfolio Turnover Rate		33	%(9)		58	%		56	%		35	%		33	%		40	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.55% for Class A shares. Prior to September 30, 2015, the maximum ratio was 1.60% for Class A shares.

(7)  Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.40% for Class A shares. Prior to September 30, 2016, the maximum ratio was 1.55% for Class A shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

(11)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	22.59		$	21.64		$	26.85		$	20.08		$	18.98		$	21.39
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.01	)		0.17			0.05			(0.01	)		0.00	(3)		(0.04	)
Net Realized and Unrealized Gain (Loss)		(2.83	)		3.77			(4.91	)		6.80			1.10			(2.33	)
Total from Investment Operations		(2.84	)		3.94			(4.86	)		6.79			1.10			(2.37	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.15	)		(0.02	)		—			(0.04	)
Net Realized Gain		—			(2.99	)		(0.20	)		—			—			—
Total Distributions		—			(2.99	)		(0.35	)		(0.02	)		—			(0.04	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	19.75		$	22.59		$	21.64		$	26.85		$	20.08		$	18.98
Total Return(4)		(12.53	)%(9)		18.37	%		(18.03	)%		33.80	%		5.80	%		(11.11	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	121		$	210		$	292		$	253		$	239		$	226
Ratio of Expenses Before Expense Limitation		3.08	%(10)		2.47	%		2.55	%		2.54	%		2.69	%		2.78	%
Ratio of Expenses After Expense Limitation		1.91	%(5)(10)(11)		1.90	%(5)		1.89	%(5)		1.90	%(5)		2.01	%(5)(7)		2.09	%(5)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.90	%(5)(10)		1.90	%(5)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.09	)%(5)(10)		0.73	%(5)		0.20	%(5)		(0.03	)%(5)		0.00	%(5)(8)		(0.19	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(8)(10)		0.00	%(8)		0.01	%		0.00	%(8)		0.00	%(8)		0.00	%(8)
Portfolio Turnover Rate		33	%(9)		58	%		56	%		35	%		33	%		40	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.05% for Class L shares. Prior to September 30, 2015, the maximum ratio was 2.10% for Class L shares.

(7)  Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.90% for Class L shares. Prior to September 30, 2016, the maximum ratio was 2.05% for Class L shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

(11)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	22.45		$	21.57		$	26.66		$	19.99		$	18.95		$	23.16
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		(0.03	)		0.11			0.04			(0.09	)		(0.04	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		(2.81	)		3.76			(4.93	)		6.78			1.09			(4.14	)
Total from Investment Operations		(2.84	)		3.87			(4.89	)		6.69			1.05			(4.17	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.00	)(4)		(0.02	)		(0.01	)		(0.04	)
Net Realized Gain		—			(2.99	)		(0.20	)		—			—			—
Total Distributions		—			(2.99	)		(0.20	)		(0.02	)		(0.01	)		(0.04	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	19.61		$	22.45		$	21.57		$	26.66		$	19.99		$	18.95
Total Return(5)		(12.65	)%(10)		18.16	%		(18.26	)%		33.45	%		5.56	%		(18.03	)%(10)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	410		$	454		$	309		$	817		$	608		$	10
Ratio of Expenses Before Expense Limitation		2.65	%(11)		2.58	%		2.37	%		2.30	%		2.58	%		22.89	%(11)
Ratio of Expenses After Expense Limitation		2.16	%(6)(11)(12)		2.15	%(6)		2.14	%(6)		2.15	%(6)		2.24	%(6)(8)		2.33	%(6)(7)(11)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		2.15	%(6)(11)		2.15	%(6)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.33	)%(6)(11)		0.47	%(6)		0.17	%(6)		(0.36	)%(6)		(0.19	)%(6)		(0.23	)%(6)(11)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(9)(11)		0.00	%(9)		0.01	%		0.00	%(9)		0.00	%(9)		0.00	%(9)(11)
Portfolio Turnover Rate		33	%(10)		58	%		56	%		35	%		33	%		40	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.30% for Class C shares. Prior to September 30, 2015, the maximum ratio was 2.35% for Class C shares.

(8)  Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.15% for Class C shares. Prior to September 30, 2016, the maximum ratio was 2.30% for Class C shares.

(9)  Amount is less than 0.005%.

(10)  Not annualized.

(11)  Annualized.

(12)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	23.68		$	22.52		$	27.96		$	20.83		$	19.68		$	22.14
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.08			0.36			0.31			0.21			0.21			0.17
Net Realized and Unrealized Gain (Loss)		(2.95	)		4.00			(5.17	)		7.11			1.12			(2.44	)
Total from Investment Operations		(2.87	)		4.36			(4.86	)		7.32			1.33			(2.27	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.21	)		(0.38	)		(0.19	)		(0.18	)		(0.19	)
Net Realized Gain		—			(2.99	)		(0.20	)		—			—			—
Total Distributions		—			(3.20	)		(0.58	)		(0.19	)		(0.18	)		(0.19	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	20.81		$	23.68		$	22.52		$	27.96		$	20.83		$	19.68
Total Return(4)		(12.12	)%(9)		19.58	%		(17.25	)%		35.09	%		6.79	%		(10.29	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	373,939		$	524,416		$	797,029		$	1,034,348		$	657,106		$	297,469
Ratio of Expenses Before Expense Limitation		1.03	%(10)		1.04	%		N/A			0.98	%		1.07	%		1.35	%
Ratio of Expenses After Expense Limitation		0.96	%(5)(10)(11)		0.95	%(5)		0.92	%(5)		0.95	%(5)		1.04	%(5)(7)		1.16	%(5)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		0.95	%(5)(10)		0.95	%(5)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.75	%(5)(10)		1.47	%(5)		1.21	%(5)		0.82	%(5)		0.99	%(5)		0.75	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(8)(10)		0.00	%(8)		0.01	%		0.00	%(8)		0.00	%(8)		0.00	%(8)
Portfolio Turnover Rate		33	%(9)		58	%		56	%		35	%		33	%		40	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.10% for Class IS shares. Prior to September 30, 2015, the maximum ratio was 1.18% for Class IS shares.

(7)  Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.95% for Class IS shares. Prior to September 30, 2016, the maximum ratio was 1.10% for Class IS shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

(11)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	23.68		$	22.54		$	26.23
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.10			0.40			0.20
Net Realized and Unrealized Gain (Loss)		(2.97	)		3.94			(3.31	)
Total from Investment Operations		(2.87	)		4.34			(3.11	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.21	)		(0.38	)
Net Realized Gain		—			(2.99	)		(0.20	)
Total Distributions		—			(3.20	)		(0.58	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	20.81		$	23.68		$	22.54
Total Return(4)		(12.12	)%(7)		19.53	%		(11.82	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	9		$	10		$	9
Ratio of Expenses Before Expense Limitation		21.32	%(8)		21.52	%		19.46	%(8)
Ratio of Expenses After Expense Limitation		0.96	%(5)(8)(9)		0.95	%(5)		0.93	%(5)(8)
Ratios of Expenses After Expense Limitation Excluding Non-Operating Expenses		0.95	%(5)(8)		0.95	%(5)		N/A
Ratio of Net Investment Income		0.77	%(5)(8)		1.62	%(5)		1.56	%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.01	%(8)
Portfolio Turnover Rate		33	%(7)		58	%		56	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

(9)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Emerging Markets Portfolio. The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of issuers in emerging market countries.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

On February 22, 2019, the Fund acquired the net assets of Morgan Stanley Emerging Markets Fund, Inc. ("Emerging Markets Fund"), a closed-end management investment company, based on the respective valuations as of the close of business on February 22, 2019, pursuant to a Plan of Reorganization approved by the shareholders of Emerging Markets Fund on January 7, 2019 ("Reorganization A"). The purpose of the transaction was to combine two portfolios managed by Morgan Stanley Investment Management Inc., (the "Adviser") with comparable investment objectives and strategies. The acquisition was accomplished by a tax-free exchange of 9,264,009 Class I shares of the Fund at a net asset value ("NAV") of $24.31 for 13,428,781 shares of Emerging Markets Fund. The net assets of Emerging Markets Fund before Reorganization A were approximately $225,208,000, including unrealized appreciation (depreciation) of approximately $24,269,000 at February 22, 2019. The investment portfolio of Emerging Markets Fund, with a fair value of approximately $220,642,000 and identified cost of approximately $196,373,000, on February 22, 2019, was the principal asset acquired by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from Emerging Markets Fund was carried forward to align ongoing reporting of the Fund's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. Immediately prior to Reorganization A, the net assets of the Fund were approximately $1,130,576,000. Immediately after Reorganization A, the net assets of the Fund were approximately $1,355,784,000.

Upon closing of Reorganization A, shareholders of Emerging Markets Fund received shares of the Fund as follows:

Emerging Markets Fund	Emerging Markets Portfolio
Common Shares	Class I

Assuming the acquisition had been completed on January 1, 2019, the beginning of the annual reporting period of the Fund, the Fund's pro-forma results of operations for the year ended December 31, 2019, are approximately as follows:

Net investment income(1)	$	14,773,000
Net realized gain and unrealized gain(2)	$	189,147,000
Net increase in net assets resulting from operations	$	203,920,000

(1) Approximately $13,422,000 as reported, plus approximately $361,000 Emerging Markets Fund prior to Reorganization A, plus approximately $990,000 of estimated pro-forma eliminated expenses.

(2) Approximately $144,412,000 as reported, plus approximately $44,735,000 Emerging Markets Fund prior to Reorganization A.

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of Emerging Markets Fund that have been included in the Fund's Statement of Operations since February 22, 2019.

On April 5, 2019, the Fund acquired the net assets of Morgan Stanley Asia-Pacific Fund, Inc. ("Asia-Pacific Fund"), a closed-end management investment company, based on the respective valuations as of the close of business on April 5, 2019, pursuant to a Plan of Reorganization approved by the shareholders of Asia-Pacific Fund on March 8, 2019 ("Reorganization B"). The purpose of the transaction was to combine two portfolios managed by the Adviser with comparable investment objectives and strategies. The acquisition was accomplished by a tax-free exchange of 8,604,225 Class I shares of the Fund at a NAV of $24.82 for 12,679,878 shares of Asia-Pacific Fund. The net assets of Asia-Pacific Fund before Reorganization B were approximately $213,557,000, including unrealized appreciation (depreciation) of approximately $20,463,000 at April 5, 2019. The investment portfolio of Asia-Pacific Fund, with a fair value of approximately $209,696,000 and identified cost of approximately $189,233,000, on April 5, 2019, was the principal asset acquired by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from Asia-Pacific Fund was carried forward to align ongoing reporting of the Fund's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Immediately prior to Reorganization B, the net assets of the Fund were approximately $840,351,000. Immediately after Reorganization B, the net assets of the Fund were approximately $1,053,908,000.

Upon closing of Reorganization B, shareholders of Asia-Pacific Fund received shares of the Fund as follows:

Asia-Pacific Fund	Emerging Markets Portfolio
Common Shares	Class I

Assuming the acquisition had been completed on January 1, 2019, the beginning of the annual reporting period of the Fund, the Fund's pro-forma results of operations for the year ended December 31, 2019, are approximately as follows:

Net investment income(1)	$	15,510,000
Net realized gain and unrealized gain(2)	$	190,531,000
Net increase in net assets resulting from operations	$	206,041,000

(1) Approximately $13,422,000 as reported, plus approximately $994,000 Asia-Pacific Fund prior to Reorganization B, plus approximately $1,094,000 of estimated pro-forma eliminated expenses.

(2) Approximately $144,412,000 as reported, plus approximately $46,119,000 Asia-Pacific Fund prior to Reorganization B.

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of Asia-Pacific Fund that have been included in the Fund's Statement of Operations since April 5, 2019.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily

those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If the Adviser or Morgan Stanley Investment Management Company ("MSIM Company") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the NAV as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are

approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Automobiles	$	—	$	5,446	$	—	$	5,446
Banks		14,104		61,468		—		75,572
Beverages		—		25,340		—		25,340
Capital Markets		—		3,364		—		3,364
Commercial Banks		—		4,886		—		4,886
Construction & Engineering		—		2,382		—		2,382
Construction Materials		—		10,091		—		10,091
Consumer Finance		—		2,387		—		2,387
Diversified Consumer Services		14,379		—		—		14,379
Electronic Equipment, Instruments & Components		—		8,257		—		8,257
Entertainment		—		7,749		—		7,749
Food & Staples Retailing		13,002		26,418		—		39,420
Food Products		—		13,785		—		13,785
Health Care Equipment & Supplies		—		2,929		—		2,929
Health Care Providers & Services		5,941		—		—		5,941
Hotels, Restaurants & Leisure		—		2,372		—		2,372
Industrial Conglomerates		—		4,821		—		4,821
Information Technology Services		11,997		5,291		—		17,288
Insurance		—		10,780		—		10,780
Interactive Media & Services		9,391		53,535		—		62,926
Internet & Direct Marketing Retail		41,388		9,860		—		51,248
Life Sciences Tools & Services		—		3,900		—		3,900
Metals & Mining		3,452		3,870		—		7,322
Multi-Line Retail		6,206		106		—		6,312
Oil, Gas & Consumable Fuels		10,855		20,944		—		31,799
Paper & Forest Products		—		6,906		—		6,906
Personal Products		—		375		—		375
Pharmaceuticals		—		26,584		—		26,584
Real Estate Management & Development		—		7,328		—		7,328
Road & Rail		12,441		—		—		12,441
Semiconductors & Semiconductor Equipment		4,069		69,727		—		73,796
Software		6,103		3,964		—		10,067
Specialty Retail		—		1,980		—		1,980
Tech Hardware, Storage & Peripherals		—		29,405		—		29,405

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Textiles, Apparel & Luxury Goods	$	7,010	$	14,743	$	—	$	21,753
Transportation Infrastructure		2,727		—		—		2,727
Wireless Telecommunication Services		—		14,285		—		14,285
Total Common Stocks		163,065		465,278		—		628,343
Short-Term Investments
Investment Company		15,191		—		—		15,191
Total Assets	$	178,256	$	465,278	$	—	$	643,534

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transac-

tions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser and/or Sub-Adviser seek to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

As of June 30, 2020, the Fund did not have any open foreign currency forward exchange contracts.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(1,280	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	510

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	90,991,000

5.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	9,106	(a)	$	—	$	(9,106	)(b)(c)	$	0

(a) Represents market value of loaned securities at period end.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

(b) The Fund received cash collateral of approximately $4,948,000, which was subsequently invested in Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $4,493,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(c) The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2020:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	4,948	$	—	$	—	$	—	$	4,948
Total Borrowings	$	4,948	$	—	$	—	$	—	$	4,948
Gross amount of recognized liabilities for securities lending transactions									$	4,948

6.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares, Class IS shares and Class IR shares which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets.

7.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment

income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

9.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million			Next $500 million			Next $1.5 billion			Over $2.5 billion
	0.85	%		0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.74% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.05% for Class I shares, 1.40% for Class A shares, 1.90% for Class L shares, 2.15% for Class C shares, 0.95% for Class IS shares and 0.95% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020,

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

approximately $258,000 of advisory fees were waived and approximately $34,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley. The Sub-Adviser provides the Fund with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a

distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $206,242,000 and $302,875,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $7,000 relating to the Fund's investment in the Liquidity Funds.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	9,572	$	100,992	$	95,373	$	24

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	15,191

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	6,000	$	91,318	$	17,069	$	9,096

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to equalization debits and tax adjustments related to the Reorganization A and B, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(26,073	)	$	26,073

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	2,837	$	4,178

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 50.8%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

29

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

30

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

31

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Adviser

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

32

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIEMSAN
3178993 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets Small Cap Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	10
Notes to Financial Statements	14
Investment Advisory Agreement Approval	23
Liquidity Risk Management Program	25
Privacy Notice	26
Director and Officer Information	28

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Emerging Markets Small Cap Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Emerging Markets Small Cap Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Small Cap Portfolio Class I	$	1,000.00	$	872.60	$	1,018.40	$	6.05	$	6.52		1.30	%
Emerging Markets Small Cap Portfolio Class A		1,000.00		871.50		1,016.66		7.68		8.27		1.65
Emerging Markets Small Cap Portfolio Class C		1,000.00		868.50		1,012.93		11.15		12.01		2.40
Emerging Markets Small Cap Portfolio Class IS		1,000.00		873.40		1,018.65		5.82		6.27		1.25

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Emerging Markets Small Cap Portfolio

	Shares		Value (000)
Common Stocks (98.4%)
Brazil (8.3%)
Afya Ltd., Class A (a)		40,600	$	952
Fleury SA		196,527		888
Grupo SBF SA (a)		87,295		525
Randon SA Implementos e Participacoes (Preference) (a)		324,100		573
TOTVS SA		116,708		497
YDUQS Part		96,775		599
				4,034
China (17.5%)
Baozun, Inc. ADR (a)(b)		29,417		1,131
Beijing Thunisoft Corp., Ltd., Class A		126,454		507
Chengdu Jiafaantai Education Technology Co., Ltd.		253,950		764
China Education Group Holdings Ltd. (c)		298,000		481
China New Higher Education Group Ltd. (c)		1,148,000		765
DouYu International Holdings Ltd. ADR (a)(b)		61,858		714
Focused Photonics Hangzhou, Inc., Class A (a)		276,200		654
Grandblue Environment Co., Ltd.		157,800		490
GreenTree Hospitality Group Ltd. ADR		33,775		455
Hua Hong Semiconductor Ltd. (a)(b)(c)		315,000		1,104
Laobaixing Pharmacy Chain JSC, Class A		37,300		528
LexinFintech Holdings Ltd. ADR (a)		87,174		927
				8,520
Egypt (2.5%)
Cairo Investment & Real Estate Development Co. SAE		898,862		723
Cleopatra Hospital (a)		1,546,529		505
				1,228
Hong Kong (1.1%)
Yeahka Ltd. (a)		238,800		530
India (18.5%)
Aarti Industries Ltd.		49,695		614
Amber Enterprises India Ltd.		24,980		476
Apollo Hospitals Enterprise Ltd.		26,535		475
Blue Star Ltd.		82,002		545
Cholamandalam Investment and Finance Co., Ltd.		279,506		701
CreditAccess Grameen Ltd. (a)		109,939		757
Dr Lal PathLabs Ltd.		22,900		474
Gujarat Gas Ltd.		126,679		535
Gulf Oil Lubricants India Ltd.		82,179		621
Info Edge India Ltd.		19,421		709
Phoenix Mills Ltd.		93,757		728
Spandana Sphoorty Financial Ltd. (a)		67,859		489
TCI Express Ltd.		86,597		769
Varun Beverages Ltd.		65,471		591
Westlife Development Ltd. (a)		124,982		511
				8,995
Indonesia (4.8%)
Bank Tabungan Pensiunan Nasional Syariah Tbk PT		3,196,400		716
Map Aktif Adiperkasa PT (a)		2,570,200		458

	Shares		Value (000)
Mitra Keluarga Karyasehat Tbk PT		4,244,000	$	675
Nippon Indosari Corpindo Tbk PT		5,658,700		472
				2,321
Kazakhstan (1.0%)
NAC Kazatomprom JSC GDR		35,716		496
Korea, Republic of (14.2%)
AfreecaTV Co., Ltd.		20,810		1,104
Cowintech Co. Ltd.		23,263		480
Douzone Bizon Co., Ltd.		5,226		446
Innocean Worldwide, Inc.		8,592		320
JYP Entertainment Corp.		41,834		743
KINX, Inc.		14,166		701
MegaStudyEdu Co., Ltd.		21,427		639
Nasmedia Co., Ltd.		19,945		469
SaraminHR Co., Ltd.		36,105		697
Settle Bank, Inc./Korea		30,178		677
Studio Dragon Corp. (a)		8,484		609
				6,885
Malaysia (1.0%)
Carlsberg Brewery Malaysia Bhd, Class B		85,600		498
Mexico (1.6%)
Gentera SAB de CV		1,640,553		797
Pakistan (1.0%)
MCB Bank Ltd.		506,405		489
Philippines (2.9%)
Puregold Price Club, Inc.		538,600		503
Shakey's Pizza Asia Ventures, Inc.		3,757,400		447
Wilcon Depot, Inc.		1,509,300		469
				1,419
Poland (1.5%)
11 bit studios SA (a)		5,675		700
South Africa (1.3%)
Transaction Capital Ltd.		592,525		637
Taiwan (16.2%)
Acer Cyber Security, Inc.		142,900		856
ASPEED Technology, Inc.		10,000		423
Bizlink Holding, Inc.		134,560		965
Chief Telecom, Inc. (a)		73,000		929
Innodisk Corp.		92,000		555
Merida Industry Co., Ltd.		111,000		759
Power Wind Health Industry, Inc.		74,000		466
Poya International Co., Ltd.		36,492		721
Sunny Friend Environmental Technology Co., Ltd.		81,000		709
Taiwan Hon Chuan Enterprise Co., Ltd.		273,000		510
Taiwan Paiho Ltd.		219,000		482
Voltronic Power Technology Corp. (a)		17,000		490
				7,865
United Arab Emirates (1.5%)
Network International Holdings PLC (a)		129,405		709

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Small Cap Portfolio

	Shares		Value (000)
United Kingdom (2.0%)
Avast PLC		77,525	$	507
DP Eurasia N.V. (a)(b)		962,584		451
				958
United States (1.5%)
Arco Platform Ltd., Class A (a)		16,746		728
Total Common Stocks (Cost $44,576)				47,809
Short-Term Investment (1.9%)
Securities held as Collateral on Loaned Securities (1.9%)
Investment Company (1.9%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $920)		920,333		920
Total Investments (100.3%) (Cost $45,496) Including $2,473 of Securities Loaned (d)(e)(f)				48,729
Liabilities in Excess of Other Assets (–0.3%)				(146	)
Net Assets (100.0%)			$	48,583

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2020.

(c)  Security trades on the Hong Kong exchange.

(d)  The approximate fair value and percentage of net assets, $38,493,000 and 79.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  Securities are available for collateral in connection with open foreign currency forward exchange contracts.

(f)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $6,492,000 and the aggregate gross unrealized depreciation is approximately $3,261,000, resulting in net unrealized appreciation of approximately $3,231,000.

ADR  American Depositary Receipt.

GDR  Global Depositary Receipt.

Foreign Currency Forward Exchange Contracts:

The Fund had the following foreign currency forward exchange contracts open at June 30, 2020:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation Depreciation (000)
UBS AG	HKD	16,358	$	2,108	7/16/20	$	(3	)
UBS AG	$	2,110	HKD	16,358	7/16/20		1
						$	(2	)

HKD  —  Hong Kong Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		62.9	%
Diversified Consumer Services		10.2
Consumer Finance		9.0
Health Care Providers & Services		6.3
Information Technology Services		5.8
Entertainment		5.8
Total Investments		100.0	%***

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2020.

**  Industries and/or investment types representing less than 5% of total investments.

***  Does not include open foreign currency forward exchange contracts with unrealized depreciation of approximately $2,000.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Small Cap Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $44,576)	$	47,809
Investment in Security of Affiliated Issuer, at Value (Cost $920)		920
Total Investments in Securities, at Value (Cost $45,496)		48,729
Foreign Currency, at Value (Cost $318)		318
Receivable for Investments Sold		807
Dividends Receivable		63
Receivable for Fund Shares Sold		15
Receivable from Securities Lending Income		2
Unrealized Appreciation on Foreign Currency Forward Exchange Contract		1
Tax Reclaim Receivable		—	@
Receivable from Affiliate		—	@
Other Assets		48
Total Assets		49,983
Liabilities:
Collateral on Securities Loaned, at Value		920
Bank Overdraft		315
Payable for Investments Purchased		45
Payable for Advisory Fees		42
Payable for Professional Fees		41
Payable for Sub Transfer Agency Fees — Class I		15
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Custodian Fees		5
Unrealized Depreciation on Foreign Currency Forward Exchange Contract		3
Payable for Administration Fees		3
Deferred Capital Gain Country Tax		2
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		9
Total Liabilities		1,400
Net Assets	$	48,583
Net Assets Consist of:
Paid-in-Capital	$	56,130
Total Accumulated Loss		(7,547	)
Net Assets	$	48,583

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Small Cap Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	48,359
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,643,789
Net Asset Value, Offering and Redemption Price Per Share	$	10.41
CLASS A:
Net Assets	$	182
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		17,673
Net Asset Value, Redemption Price Per Share	$	10.31
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.57
Maximum Offering Price Per Share	$	10.88
CLASS C:
Net Assets	$	32
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,137
Net Asset Value, Offering and Redemption Price Per Share	$	10.04
CLASS IS:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,005
Net Asset Value, Offering and Redemption Price Per Share	$	10.42
(1) Including: Securities on Loan, at Value:	$	2,473

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Emerging Markets Small Cap Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $68 of Foreign Taxes Withheld)	$	328
Income from Securities Loaned — Net		15
Dividends from Security of Affiliated Issuer (Note G)		7
Total Investment Income		350
Expenses:
Advisory Fees (Note B)		357
Professional Fees		64
Custodian Fees (Note F)		54
Registration Fees		24
Administration Fees (Note C)		23
Sub Transfer Agency Fees — Class I		20
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class C		—	@
Shareholder Reporting Fees		8
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		3
Pricing Fees		3
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		6
Expenses Before Non-Operating Expenses		566
Bank Overdraft Expense		1
Total Expenses		567
Waiver of Advisory Fees (Note B)		(185	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(8	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		370
Net Investment Loss		(20	)
Realized Loss:
Investments Sold		(8,792	)
Foreign Currency Forward Exchange Contracts		(38	)
Foreign Currency Translation		(112	)
Net Realized Loss		(8,942	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of $20)		(2,243	)
Foreign Currency Forward Exchange Contracts		20
Foreign Currency Translation		6
Net Change in Unrealized Appreciation (Depreciation)		(2,217	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(11,159	)
Net Decrease in Net Assets Resulting from Operations	$	(11,179	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Emerging Markets Small Cap Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(20	)	$	475
Net Realized Loss		(8,942	)		(363	)
Net Change in Unrealized Appreciation (Depreciation)		(2,217	)		7,401
Net Increase (Decrease) in Net Assets Resulting from Operations		(11,179	)		7,513
Dividends and Distributions to Shareholders:
Class I		—			(276	)
Class A		—			(—	@)
Class IS		—			(42	)
Total Dividends and Distributions to Shareholders		—			(318	)
Capital Share Transactions:(1)
Class I:
Subscribed		5,950			7,917
Distributions Reinvested		—			192
Redeemed		(6,952	)		(3,998	)
Class A:
Subscribed		18			85
Distributions Reinvested		—			—	@
Redeemed		(39	)		(59	)
Class C:
Redeemed		(1	)		—
Class IS:
Distributions Reinvested		—			42
Redeemed		(7,045	)		—
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(8,069	)		4,179
Redemption Fees		1			—	@
Total Increase (Decrease) in Net Assets		(19,247	)		11,374
Net Assets:
Beginning of Period		67,830			56,456
End of Period	$	48,583		$	67,830
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		513			693
Shares Issued on Distributions Reinvested		—			16
Shares Redeemed		(844	)		(349	)
Net Increase (Decrease) in Class I Shares Outstanding		(331	)		360
Class A:
Shares Subscribed		2			8
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(4	)		(5	)
Net Increase (Decrease) in Class A Shares Outstanding		(2	)		3
Class C:
Shares Redeemed		(—	@@)		—
Class IS:
Shares Issued on Distributions Reinvested		—			4
Shares Redeemed		(688	)		—
Net Increase (Decrease) in Class IS Shares Outstanding		(688	)		4

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Small Cap Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from December 15, 2015(1) to December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016			2015
Net Asset Value, Beginning of Period	$	11.93		$	10.61		$	12.77		$	9.85		$	10.28		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.00	)(3)		0.09			0.02			(0.01	)		0.02			0.01
Net Realized and Unrealized Gain (Loss)		(1.52	)		1.29			(2.01	)		3.38			(0.35	)		0.27
Total from Investment Operations		(1.52	)		1.38			(1.99	)		3.37			(0.33	)		0.28
Distributions from and/or in Excess of:
Net Investment Income		—			(0.06	)		—			—			(0.10	)		—
Net Realized Gain		—			—			(0.17	)		(0.45	)		—			—
Total Distributions		—			(0.06	)		(0.17	)		(0.45	)		(0.10	)		—
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		—			—			—
Net Asset Value, End of Period	$	10.41		$	11.93		$	10.61		$	12.77		$	9.85		$	10.28
Total Return(4)		(12.74	)%(8)		12.98	%		(15.73	)%		34.29	%		(3.19	)%		2.80	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	48,359		$	59,335		$	48,965		$	25,762		$	19,673		$	20,536
Ratio of Expenses Before Expense Limitation		1.98	%(9)		1.83	%		2.18	%		2.58	%		2.63	%		7.62	%(9)
Ratio of Expenses After Expense Limitation		1.30	%(5)(9)		1.30	%(5)		1.41	%(5)(6)		1.57	%(5)		1.61	%(5)		1.58	%(5)(9)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.30	%(5)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.09	)%(5)(9)		0.74	%(5)		0.14	%(5)		(0.09	)%(5)		0.16	%(5)		1.01	%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.01	%		0.04	%		0.00	%(7)		0.03	%(9)
Portfolio Turnover Rate		74	%(8)		69	%		70	%		71	%		69	%		5	%(8)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 13, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.30% for Class I shares. Prior to July 13, 2018, the maximum ratio was 1.65% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Small Cap Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from December 15, 2015(1) to December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016			2015
Net Asset Value, Beginning of Period	$	11.83		$	10.53		$	12.72		$	9.85		$	10.28		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.02	)		0.05			(0.01	)		(0.06	)		(0.02	)		0.00	(3)
Net Realized and Unrealized Gain (Loss)		(1.50	)		1.27			(2.01	)		3.38			(0.35	)		0.28
Total from Investment Operations		(1.52	)		1.32			(2.02	)		3.32			(0.37	)		0.28
Distributions from and/or in Excess of:
Net Investment Income		—			(0.02	)		—			—			(0.06	)		—
Net Realized Gain		—			—			(0.17	)		(0.45	)		—			—
Total Distributions		—			(0.02	)		(0.17	)		(0.45	)		(0.06	)		—
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		—			—			—
Net Asset Value, End of Period	$	10.31		$	11.83		$	10.53		$	12.72		$	9.85		$	10.28
Total Return(4)		(12.85	)%(8)		12.51	%		(16.03	)%		33.79	%		(3.58	)%		2.80	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	182		$	233		$	179		$	188		$	10		$	10
Ratio of Expenses Before Expense Limitation		3.26	%(9)		2.88	%		3.49	%		12.38	%		22.65	%		21.45	%(9)
Ratio of Expenses After Expense Limitation		1.65	%(5)(9)		1.65	%(5)		1.83	%(5)(6)		1.96	%(5)		2.00	%(5)		1.97	%(5)(9)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.65	%(5)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.42	)%(5)(9)		0.42	%(5)		(0.11	)%(5)		(0.50	)%(5)		(0.22	)%(5)		0.62	%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.01	%		0.04	%		0.00	%(7)		0.03	%(9)
Portfolio Turnover Rate		74	%(8)		69	%		70	%		71	%		69	%		5	%(8)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 13, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.65% for Class A shares. Prior to July 13, 2018, the maximum ratio was 2.00% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Small Cap Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from December 15, 2015(1) to December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016			2015
Net Asset Value, Beginning of Period	$	11.56		$	10.35		$	12.60		$	9.84		$	10.28		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.06	)		(0.04	)		(0.10	)		(0.15	)		(0.10	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		(1.46	)		1.25			(1.98	)		3.36			(0.34	)		0.28
Total from Investment Operations		(1.52	)		1.21			(2.08	)		3.21			(0.44	)		0.28
Distributions from and/or in Excess of:
Net Realized Gain		—			—			(0.17	)		(0.45	)		—			—
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		—			—			—
Net Asset Value, End of Period	$	10.04		$	11.56		$	10.35		$	12.60		$	9.84		$	10.28
Total Return(4)		(13.15	)%(8)		11.69	%		(16.66	)%		32.70	%		(4.28	)%		2.80	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	32		$	37		$	33		$	24		$	10		$	10
Ratio of Expenses Before Expense Limitation		9.34	%(9)		8.37	%		9.02	%		20.48	%		23.48	%		22.20	%(9)
Ratio of Expenses After Expense Limitation		2.40	%(5)(9)		2.40	%(5)		2.58	%(5)(6)		2.71	%(5)		2.75	%(5)		2.73	%(5)(9)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		2.40	%(5)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.20	)%(5)(9)		(0.36	)%(5)		(0.84	)%(5)		(1.27	)%(5)		(0.99	)%(5)		(0.14	)%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.01	%		0.04	%		0.00	%(7)		0.02	%(9)
Portfolio Turnover Rate		74	%(8)		69	%		70	%		71	%		69	%		5	%(8)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 13, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.40% for Class C shares. Prior to July 13, 2018, the maximum ratio was 2.75% for Class C shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Emerging Markets Small Cap Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from December 15, 2015(1) to December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016			2015
Net Asset Value, Beginning of Period	$	11.93		$	10.62		$	12.77		$	9.85		$	10.28		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.00	(3)		0.09			0.00	(3)		(0.01	)		0.02			0.01
Net Realized and Unrealized Gain (Loss)		(1.51	)		1.28			(1.98	)		3.38			(0.35	)		0.27
Total from Investment Operations		(1.51	)		1.37			(1.98	)		3.37			(0.33	)		0.28
Distributions from and/or in Excess of:
Net Investment Income		—			(0.06	)		—			—			(0.10	)		—
Net Realized Gain		—			—			(0.17	)		(0.45	)		—			—
Total Distributions		—			(0.06	)		(0.17	)		(0.45	)		(0.10	)		—
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		—			—			—
Net Asset Value, End of Period	$	10.42		$	11.93		$	10.62		$	12.77		$	9.85		$	10.28
Total Return(4)		(12.66	)%(8)		12.93	%		(15.65	)%		34.29	%		(3.18	)%		2.80	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10		$	8,225		$	7,279		$	13		$	10		$	10
Ratio of Expenses Before Expense Limitation		1.93	%(9)		1.78	%		2.10	%		19.47	%		21.37	%		21.20	%(9)
Ratio of Expenses After Expense Limitation		1.25	%(5)(9)		1.25	%(5)		1.26	%(5)(6)		1.55	%(5)		1.60	%(5)		1.58	%(5)(9)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.25	%(5)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		0.05	%(5)(9)		0.79	%(5)		0.03	%(5)		(0.08	)%(5)		0.16	%(5)		1.01	%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.01	%		0.05	%		0.00	%(7)		0.02	%(9)
Portfolio Turnover Rate		74	%(8)		69	%		70	%		71	%		69	%		5	%(8)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 13, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class IS shares. Prior to July 13, 2018, the maximum ratio was 1.60% for Class IS shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Emerging Markets Small Cap Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant

exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the

Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	769	$	—	$	769
Banks		—		1,205		—		1,205
Beverages		—		1,089		—		1,089
Building Products		—		545		—		545
Chemicals		—		1,235		—		1,235
Commercial Services & Supplies		—		1,363		—		1,363
Communications Equipment		—		764		—		764
Computers & Peripherals		—		555		—		555
Consumer Finance		1,724		2,584		—		4,308
Containers & Packaging		—		510		—		510
Diversified Consumer Services		2,279		2,608		—		4,887
Diversified Telecommunication Services		—		1,630		—		1,630
Electrical Equipment		—		1,455		—		1,455
Entertainment		714		2,052		—		2,766
Food & Staples Retailing		—		1,031		—		1,031
Food Products		—		472		—		472
Gas Utilities		—		535		—		535
Health Care Providers & Services		888		2,129		—		3,017
Hotels, Restaurants & Leisure		455		1,875		—		2,330
Household Durables		—		476		—		476
Information Technology Services		530		2,242		—		2,772
Interactive Media & Services		—		1,813		—		1,813
Internet & Direct Marketing Retail		1,131		—		—		1,131
Leisure Products		—		759		—		759
Machinery		573		480		—		1,053
Media		—		789		—		789
Multi-Line Retail		—		721		—		721
Oil, Gas & Consumable Fuels		—		496		—		496
Professional Services		—		697		—		697
Real Estate Management & Development		—		728		—		728
Semiconductors & Semiconductor Equipment		—		1,527		—		1,527
Software		497		1,460		—		1,957
Specialty Retail		525		927		—		1,452
Textiles, Apparel & Luxury Goods		—		482		—		482
Water Utilities		—		490		—		490
Total Common Stocks		9,316		38,493		—		47,809

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Short-Term Investment
Investment Company	$	920	$	—		$	—	$	920
Foreign Currency Forward Exchange Contract		—		1			—		1
Total Assets		10,236		38,494			—		48,730
Liability:
Foreign Currency Forward Exchange Contract		—		(3	)		—		(3	)
Total	$	10,236	$	38,491		$	—	$	48,727

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

A significant portion of the Fund's net assets consist of securities of issuers located in emerging markets, which are denominated in foreign currencies. Such securities may be concentrated in a limited number of countries and regions and may vary throughout the year. Changes in currency exchange rates will affect the value of securities and investment income from foreign currency denominated securities. Emerging market securities are often subject to greater price volatility, limited capitalization and liquidity, and higher rates of inflation than securities of companies based in the U.S. In addition, emerging market issuers may be subject to substantial governmental involvement in the economy and greater social, economic and political uncertainty.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative

instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seek to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contract	Unrealized Appreciation on Foreign Currency Forward Exchange Contract	Currency Risk	$	1

	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contract	Unrealized Depreciation on Foreign Currency Forward Exchange Contract	Currency Risk	$	(3	)

The following tables set forth by primary risk exposure the Fund's change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(38	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	20

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(a) (000)		Liabilities(a) (000)
Foreign Currency Forward Exchange Contracts	$	1	$	(3	)

(a) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Received (000)		Net Amount (not less than $0) (000)
UBS AG	$	1	$	(1	)	$	—	$	0
Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Received (000)		Net Amount (not less than $0) (000)
UBS AG	$	3	$	(1	)	$	—	$	2

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	3,160,000

5.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to

ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	2,473	(b)	$	—	$	(2,473	)(c)(d)	$	0

(b) Represents market value of loaned securities at period end.

(c) The Fund received cash collateral of approximately $920,000, which was subsequently invested in Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $1,636,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(d) The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2020:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	920	$	—	$	—	$	—	$	920
Total Borrowings	$	920	$	—	$	—	$	—	$	920
Gross amount of recognized liabilities for securities lending transactions									$	920

6.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets.

7.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

9.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where

collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 1.25% of the average daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.30% for Class I shares, 1.65% for Class A shares, 2.40% for Class C shares and 1.25% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $185,000 of advisory fees were waived and approximately $11,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $41,378,000 and $49,131,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a

portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	1,586	$	20,183	$	20,849	$	7

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	920

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	318	$	—	$	—	$	892

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2019.

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	12	$	—

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $1,650,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 52.6%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one- and three-year period and the period since the end of December 2015, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's contractual management fee was higher than but close to its peer group average, actual management fee was higher than its peer group average and total expense ratio was lower than its peer group average. After discussion, the Board concluded that the Fund's (i) performance and management fee were acceptable and (ii) total expense ratio was competitive with its peer group average.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which does not include breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

25

Privacy Notice (unaudited) (cont'd)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

26

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

28

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIEMSCSAN
3180195 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Frontier Markets Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	10
Notes to Financial Statements	15
Investment Advisory Agreement Approval	22
Liquidity Risk Management Program	24
Privacy Notice	25
Director and Officer Information	27

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Frontier Markets Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Frontier Markets Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Frontier Markets Portfolio Class I	$	1,000.00	$	913.50	$	1,015.42	$	9.04	$	9.52		1.90	%
Frontier Markets Portfolio Class A		1,000.00		911.40		1,013.63		10.74		11.31		2.26
Frontier Markets Portfolio Class L		1,000.00		908.90		1,011.14		13.10		13.80		2.76
Frontier Markets Portfolio Class C		1,000.00		908.00		1,009.90		14.28		15.04		3.01
Frontier Markets Portfolio Class IS		1,000.00		913.50		1,015.61		8.85		9.32		1.86

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Frontier Markets Portfolio

	Shares		Value (000)
Common Stocks (99.8%)
Argentina (3.9%)
Globant SA (a)		16,083	$	2,410
Bangladesh (1.3%)
Brac Bank Ltd.		2,115,113		793
Egypt (6.4%)
Cairo Investment & Real Estate Development Co. SAE		1,161,175		934
Cleopatra Hospital (a)		1,940,263		633
Commercial International Bank Egypt SAE		585,319		2,355
				3,922
Kazakhstan (3.7%)
Halyk Savings Bank of Kazakhstan JSC GDR (a)		64,814		808
NAC Kazatomprom JSC GDR		108,118		1,501
				2,309
Kenya (6.1%)
Safaricom PLC		13,809,428		3,737
Kuwait (10.2%)
Boubyan Bank KSCP		768,697		1,339
National Bank of Kuwait		1,845,286		4,940
				6,279
Morocco (8.1%)
Label Vie		6,835		2,231
Maroc Telecom		150,487		2,148
Societe d'Exploitation des Ports		32,421		641
				5,020
Nigeria (2.0%)
Nestle Nigeria PLC		405,894		1,261
Pakistan (2.1%)
MCB Bank Ltd.		1,328,544		1,282
Philippines (1.0%)
Wilcon Depot, Inc.		2,052,300		638
Poland (6.1%)
11 bit studios SA (a)		9,688		1,196
CD Projekt SA		25,181		2,537
				3,733
Romania (6.4%)
Banca Transilvania SA		4,469,398		2,218
BRD-Groupe Societe Generale SA (a)		288,074		775
Societatea Nationala de Gaze Naturale Romgaz SA		128,553		954
				3,947
Russia (1.0%)
TCS Group Holding PLC GDR		31,756		645
Singapore (7.7%)
Sea Ltd. ADR (a)		44,255		4,746

	Shares		Value (000)
Slovenia (2.3%)
Krka dd Novo mesto		14,997	$	1,398
United Arab Emirates (2.0%)
Network International Holdings PLC (a)		223,212		1,222
United Kingdom (3.9%)
Avast PLC		369,815		2,417
United States (6.5%)
MercadoLibre, Inc. (a)		4,061		4,003
Vietnam (19.1%)
Bank for Foreign Trade of Vietnam JSC		777,710		2,721
FPT Corp.		528,436		1,155
Mobile World Investment Corp.		619,463		2,522
Sai Gon Cargo Service Corp.		287,020		1,432
Saigon Beer Alcohol Beverage Corp.		169,320		1,148
Vietnam Dairy Products JSC		570,200		2,787
				11,765
Total Investments (99.8%) (Cost $47,260) (b)(c)				61,527
Other Assets in Excess of Liabilities (0.2%)				124
Net Assets (100.0%)			$	61,651

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  The approximate fair value and percentage of net assets, $45,191,000 and 73.3%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $16,818,000 and the aggregate gross unrealized depreciation is approximately $2,551,000, resulting in net unrealized appreciation of approximately $14,267,000.

ADR  American Depositary Receipt.

GDR  Global Depositary Receipt.

Portfolio Composition

Classification	Percentage of Total Investments
Banks		28.0	%
Other*		26.1
Entertainment		13.8
Software		7.8
Food Products		6.6
Internet & Direct Marketing Retail		6.5
Wireless Telecommunication Services		6.1
Specialty Retail		5.1
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Frontier Markets Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $47,260)	$	61,527
Foreign Currency, at Value (Cost $1,039)		1,039
Dividends Receivable		134
Receivable for Fund Shares Sold		—	@
Other Assets		76
Total Assets		62,776
Liabilities:
Bank Overdraft		594
Payable for Custodian Fees		213
Payable for Fund Shares Redeemed		82
Payable for Professional Fees		78
Payable for Advisory Fees		50
Payable for Investments Purchased		32
Payable for Sub Transfer Agency Fees — Class I		21
Payable for Sub Transfer Agency Fees — Class A		3
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		4
Payable for Transfer Agency Fees — Class I		4
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		2
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		1
Other Liabilities		40
Total Liabilities		1,125
Net Assets	$	61,651
Net Assets Consist of:
Paid-in-Capital	$	140,293
Total Accumulated Loss		(78,642	)
Net Assets	$	61,651

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Frontier Markets Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	51,560
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,301,442
Net Asset Value, Offering and Redemption Price Per Share	$	15.62
CLASS A:
Net Assets	$	7,653
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		489,565
Net Asset Value, Redemption Price Per Share	$	15.63
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.87
Maximum Offering Price Per Share	$	16.50
CLASS L:
Net Assets	$	360
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		23,143
Net Asset Value, Offering and Redemption Price Per Share	$	15.56
CLASS C:
Net Assets	$	689
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		44,999
Net Asset Value, Offering and Redemption Price Per Share	$	15.30
CLASS IS:
Net Assets	$	1,389
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		88,964
Net Asset Value, Offering and Redemption Price Per Share	$	15.62

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Frontier Markets Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $39 of Foreign Taxes Withheld)	$	753
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		753
Expenses:
Advisory Fees (Note B)		553
Custodian Fees (Note F)		275
Sub Transfer Agency Fees — Class I		47
Sub Transfer Agency Fees — Class A		7
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		—	@
Professional Fees		87
Administration Fees (Note C)		35
Registration Fees		28
Shareholder Services Fees — Class A (Note D)		11
Distribution and Shareholder Services Fees — Class L (Note D)		1
Distribution and Shareholder Services Fees — Class C (Note D)		3
Shareholder Reporting Fees		17
Transfer Agency Fees — Class I (Note E)		6
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Pricing Fees		2
Other Expenses		6
Expenses Before Non-Operating Expenses		1,083
Bank Overdraft Expense		23
Total Expenses		1,106
Waiver of Advisory Fees (Note B)		(206	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(34	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(3	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		860
Net Investment Loss		(107	)
Realized Loss:
Investments Sold		(8,509	)
Foreign Currency Translation		(331	)
Net Realized Loss		(8,840	)
Change in Unrealized Appreciation (Depreciation):
Investments		(11,861	)
Foreign Currency Translation		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		(11,861	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(20,701	)
Net Decrease in Net Assets Resulting from Operations	$	(20,808	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Frontier Markets Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(107	)	$	4,621
Net Realized Loss		(8,840	)		(477	)
Net Change in Unrealized Appreciation (Depreciation)		(11,861	)		23,772
Net Increase (Decrease) in Net Assets Resulting from Operations		(20,808	)		27,916
Dividends and Distributions to Shareholders:
Class I		—			(3,717	)
Class A		—			(261	)
Class L		—			(10	)
Class C		—			(21	)
Class IS		—			(46	)
Total Dividends and Distributions to Shareholders		—			(4,055	)
Capital Share Transactions:(1)
Class I:
Subscribed		6,393			18,572
Distributions Reinvested		—			3,144
Redeemed		(61,287	)		(145,539	)
Class A:
Subscribed		416			5,119
Distributions Reinvested		—			261
Redeemed		(3,604	)		(31,321	)
Class L:
Distributions Reinvested		—			10
Redeemed		(167	)		(780	)
Class C:
Subscribed		15			29
Distributions Reinvested		—			21
Redeemed		(117	)		(977	)
Class IS:
Subscribed		163			307
Distributions Reinvested		—			46
Redeemed		(205	)		(3,781	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(58,393	)		(154,889	)
Redemption Fees		1			6
Total Decrease in Net Assets		(79,200	)		(131,022	)
Net Assets:
Beginning of Period		140,851			271,873
End of Period	$	61,651		$	140,851

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Frontier Markets Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		414			1,103
Shares Issued on Distributions Reinvested		—			184
Shares Redeemed		(4,468	)		(8,625	)
Net Decrease in Class I Shares Outstanding		(4,054	)		(7,338	)
Class A:
Shares Subscribed		27			299
Shares Issued on Distributions Reinvested		—			15
Shares Redeemed		(240	)		(1,832	)
Net Decrease in Class A Shares Outstanding		(213	)		(1,518	)
Class L:
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(10	)		(47	)
Net Decrease in Class L Shares Outstanding		(10	)		(46	)
Class C:
Shares Subscribed		1			2
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(8	)		(59	)
Net Decrease in Class C Shares Outstanding		(7	)		(56	)
Class IS:
Shares Subscribed		11			18
Shares Issued on Distributions Reinvested		—			3
Shares Redeemed		(14	)		(225	)
Net Decrease in Class IS Shares Outstanding		(3	)		(204	)

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Frontier Markets Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	17.10		$	15.63		$	21.02		$	17.39		$	16.98		$	19.15
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.02	)		0.39			0.33			0.16			0.31			0.19
Net Realized and Unrealized Gain (Loss)		(1.46	)		1.58			(5.07	)		3.47			0.33			(2.21	)
Total from Investment Operations		(1.48	)		1.97			(4.74	)		3.63			0.64			(2.02	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.50	)		(0.65	)		—			(0.23	)		(0.14	)
Paid-in-Capital		—			—			—			—			(0.00	)(3)		(0.01	)
Total Distributions		—			(0.50	)		(0.65	)		—			(0.23	)		(0.15	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	15.62		$	17.10		$	15.63		$	21.02		$	17.39		$	16.98
Total Return(4)		(8.65	)%(8)		12.53	%		(22.60	)%		20.82	%		3.83	%		(10.58	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	51,560		$	125,780		$	229,688		$	632,435		$	525,664		$	531,927
Ratio of Expenses Before Expense Limitation		2.40	%(9)		1.92	%		N/A			N/A			1.69	%		N/A
Ratio of Expenses After Expense Limitation		1.90	%(5)(6)(9)		1.90	%(5)(6)		1.77	%(5)		1.73	%(5)		1.67	%(5)		1.72	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.85	%(5)(9)		1.85	%(5)		1.76	%(5)		1.73	%(5)		N/A			N/A
Ratio of Net Investment Income (Loss)		(0.28	)%(5)(9)		2.33	%(5)		1.68	%(5)		0.82	%(5)		1.82	%(5)		1.02	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		39	%(8)		68	%		61	%		52	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Frontier Markets Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	17.15		$	15.61		$	20.86		$	17.31		$	16.90		$	19.06
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.03	)		0.42			0.34			0.11			0.24			0.11
Net Realized and Unrealized Gain (Loss)		(1.49	)		1.48			(5.10	)		3.44			0.35			(2.18	)
Total from Investment Operations		(1.52	)		1.90			(4.76	)		3.55			0.59			(2.07	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.36	)		(0.49	)		—			(0.18	)		(0.08	)
Paid-in-Capital		—			—			—			—			(0.00	)(3)		(0.01	)
Total Distributions		—			(0.36	)		(0.49	)		—			(0.18	)		(0.09	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	15.63		$	17.15		$	15.61		$	20.86		$	17.31		$	16.90
Total Return(4)		(8.86	)%(8)		12.13	%		(22.80	)%		20.39	%		3.49	%		(10.90	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	7,653		$	12,044		$	34,654		$	86,324		$	90,817		$	82,480
Ratio of Expenses Before Expense Limitation		2.73	%(9)		2.23	%		N/A			N/A			2.03	%		N/A
Ratio of Expenses After Expense Limitation		2.26	%(5)(6)(9)		2.25	%(5)(6)		2.07	%(5)		2.05	%(5)		2.01	%(5)		2.07	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		2.20	%(5)(9)		2.20	%(5)		2.06	%(5)		2.05	%(5)		N/A			N/A
Ratio of Net Investment Income (Loss)		(0.43	)%(5)(9)		2.48	%(5)		1.71	%(5)		0.59	%(5)		1.40	%(5)		0.60	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		39	%(8)		68	%		61	%		52	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Frontier Markets Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	17.11		$	15.59		$	20.65		$	17.25		$	16.79		$	18.96
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.07	)		0.25			0.17			(0.02	)		0.15			0.05
Net Realized and Unrealized Gain (Loss)		(1.48	)		1.56			(4.98	)		3.42			0.32			(2.22	)
Total from Investment Operations		(1.55	)		1.81			(4.81	)		3.40			0.47			(2.17	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.29	)		(0.25	)		—			(0.01	)		—
Paid-in-Capital		—			—			—			—			(0.00	)(3)		—
Total Distributions		—			(0.29	)		(0.25	)		—			(0.01	)		—
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	15.56		$	17.11		$	15.59		$	20.65		$	17.25		$	16.79
Total Return(4)		(9.11	)%(8)		11.58	%		(23.19	)%		19.59	%		2.77	%		(11.49	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	360		$	570		$	1,241		$	2,570		$	2,630		$	4,490
Ratio of Expenses Before Expense Limitation		3.68	%(9)		2.90	%		N/A			2.76	%		2.80	%		2.73	%
Ratio of Expenses After Expense Limitation		2.76	%(5)(6)(9)		2.75	%(5)(6)		2.57	%(5)		2.70	%(5)		2.70	%(5)		2.70	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		2.70	%(5)(9)		2.70	%(5)		2.56	%(5)		2.70	%(5)		N/A			N/A
Ratio of Net Investment Income (Loss)		(0.94	)%(5)(9)		1.47	%(5)		0.88	%(5)		(0.13	)%(5)		0.88	%(5)		0.26	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		39	%(8)		68	%		61	%		52	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Frontier Markets Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	16.85		$	15.38		$	20.41		$	17.07		$	16.69		$	19.53
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		(0.08	)		0.20			0.11			(0.05	)		0.10			(0.16	)
Net Realized and Unrealized Gain (Loss)		(1.47	)		1.56			(4.90	)		3.39			0.34			(2.60	)
Total from Investment Operations		(1.55	)		1.76			(4.79	)		3.34			0.44			(2.76	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.29	)		(0.24	)		—			(0.06	)		(0.07	)
Paid-in-Capital		—			—			—			—			(0.00	)(4)		(0.01	)
Total Distributions		—			(0.29	)		(0.24	)		—			(0.06	)		(0.08	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	15.30		$	16.85		$	15.38		$	20.41		$	17.07		$	16.69
Total Return(5)		(9.20	)%(9)		11.34	%		(23.42	)%		19.51	%		2.63	%		(14.10	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	689		$	877		$	1,657		$	2,857		$	1,925		$	1,400
Ratio of Expenses Before Expense Limitation		3.70	%(10)		3.07	%		N/A			N/A			2.89	%		3.17	%(10)
Ratio of Expenses After Expense Limitation		3.01	%(6)(7)(10)		2.99	%(6)(7)		2.83	%(6)		2.81	%(6)		2.88	%(6)		2.95	%(6)(10)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		2.95	%(6)(10)		2.95	%(6)		2.82	%(6)		2.81	%(6)		N/A			N/A
Ratio of Net Investment Income (Loss)		(1.16	)%(6)(10)		1.17	%(6)		0.56	%(6)		(0.26	)%(6)		0.57	%(6)		(1.38	)%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(8)(10)		0.00	%(8)		0.00	%(8)		0.00	%(8)		0.00	%(8)		0.00	%(8)(10)
Portfolio Turnover Rate		39	%(9)		68	%		61	%		52	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Frontier Markets Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from February 27, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	17.09		$	15.63		$	21.02		$	17.39		$	16.97		$	19.28
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.01			0.33			0.58			0.13			0.30			0.26
Net Realized and Unrealized Gain (Loss)		(1.48	)		1.64			(5.33	)		3.50			0.36			(2.41	)
Total from Investment Operations		(1.47	)		1.97			(4.75	)		3.63			0.66			(2.15	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.51	)		(0.64	)		—			(0.24	)		(0.15	)
Paid-in-Capital		—			—			—			—			(0.00	)(4)		(0.01	)
Total Distributions		—			(0.51	)		(0.64	)		—			(0.24	)		(0.16	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	15.62		$	17.09		$	15.63		$	21.02		$	17.39		$	16.97
Total Return(5)		(8.65	)%(9)		12.60	%		(22.61	)%		20.83	%		3.88	%		(11.14	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,389		$	1,580		$	4,633		$	16,344		$	12,055		$	7,732
Ratio of Expenses Before Expense Limitation		2.46	%(10)		1.91	%		N/A			N/A			1.64	%		1.68	%(10)
Ratio of Expenses After Expense Limitation		1.86	%(6)(7)(10)		1.85	%(6)(7)		1.74	%(6)		1.69	%(6)		1.62	%(6)		1.68	%(6)(10)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.80	%(6)(10)		1.80	%(6)		1.73	%(6)		1.69	%(6)		N/A			N/A
Ratio of Net Investment Income		0.02	%(6)(10)		1.95	%(6)		2.85	%(6)		0.65	%(6)		1.75	%(6)		1.67	%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(8)(10)		0.00	%(8)		0.00	%(8)		0.00	%(8)		0.00	%(8)		0.00	%(8)(10)
Portfolio Turnover Rate		39	%(9)		68	%		61	%		52	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Frontier Markets Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if

there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.   Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	1,432	$	—	$	1,432
Banks		—		17,231		—		17,231
Beverages		—		1,148		—		1,148
Commercial Banks		—		645		—		645
Diversified Consumer Services		—		934		—		934
Diversified Telecommunication Services		—		2,148		—		2,148
Electronic Equipment, Instruments & Components		—		1,155		—		1,155
Entertainment		4,746		3,733		—		8,479
Food & Staples Retailing		—		2,231		—		2,231
Food Products		—		4,048		—		4,048
Health Care Providers & Services		—		633		—		633
Information Technology Services		—		1,222		—		1,222
Internet & Direct Marketing Retail		4,003		—		—		4,003
Oil, Gas & Consumable Fuels		—		2,455		—		2,455
Pharmaceuticals		—		1,398		—		1,398
Software		2,410		2,417		—		4,827
Specialty Retail		—		3,160		—		3,160
Transportation Infrastructure		—		641		—		641
Wireless Telecommunication Services		—		3,737		—		3,737
Total Assets	$	11,159	$	50,368	$	—	$	61,527

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of

the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

A significant portion of the Fund's net assets consist of securities of issuers located in emerging markets, which are denominated in foreign currencies. Such securities may be concentrated in a limited number of countries and regions and may vary throughout the year. Changes in currency exchange rates will affect the value of securities and investment income from foreign currency denominated securities. Emerging market securities are often subject to greater price volatility, limited capitalization and liquidity, and higher rates of inflation than securities of companies based in the U.S. In addition, emerging market issuers may be subject to substantial governmental involvement in the economy and greater social, economic and political uncertainty.

Governmental approval for foreign investments may be required in advance of making an investment under cer-

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

tain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets.

5.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premi-

ums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 1.25% of the daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.85% for Class I shares, 2.20% for Class A shares, 2.70% for Class L shares, 2.95% for Class C shares and 1.80% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $206,000 of advisory fees were waived and approximately $40,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $34,540,000 and $93,338,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	—	$	3,868	$	3,868	$	—	@

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	—

@ Amount is less than $500.

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From: Ordinary Income (000)		2018 Distributions Paid From: Ordinary Income (000)
$	4,055	$	14,633

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations

which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2019.

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	24	$	—

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $82,830,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 50.1%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the three- and five-year periods but better than its peer group average for the one-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's contractual management fee was lower than its peer group averages, actual management fee was higher than but close to its peer group average and total expense ratio was higher than its peer group average. After discussion, the Board concluded that the Fund's (i) performance and total expense ratio were acceptable and (ii) management fee was competitive with its peer group average.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which does not include breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

24

Privacy Notice (unaudited)   April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

25

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

27

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIFEMSAN
3183612 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Advantage Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	10
Notes to Financial Statements	14
Investment Advisory Agreement Approval	24
Liquidity Risk Management Program	26
Privacy Notice	27
Director and Officer Information	29

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Advantage Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Global Advantage Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Advantage Portfolio Class I	$	1,000.00	$	1,378.60	$	1,019.44	$	6.45	$	5.47		1.09	%
Global Advantage Portfolio Class A		1,000.00		1,376.80		1,017.85		8.33		7.07		1.41
Global Advantage Portfolio Class L		1,000.00		1,373.40		1,015.22		11.45		9.72		1.94
Global Advantage Portfolio Class C		1,000.00		1,371.20		1,014.02		12.85		10.92		2.18

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Global Advantage Portfolio

	Shares		Value (000)
Common Stocks (93.5%)
Canada (9.2%)
FirstService Corp.		34,903	$	3,516
Shopify, Inc., Class A (a)		18,062		17,144
				20,660
Denmark (1.4%)
Chr Hansen Holding A/S		30,381		3,134
France (4.1%)
Christian Dior SE		10,940		4,655
Hermes International		5,575		4,681
				9,336
India (1.4%)
HDFC Bank Ltd. ADR		70,575		3,208
Netherlands (6.5%)
Adyen N.V. (a)		8,051		11,730
JDE Peet's N.V. (a)		70,974		2,877
				14,607
New Zealand (3.2%)
Xero Ltd. (a)		115,684		7,267
Singapore (6.2%)
Sea Ltd. ADR (a)		128,961		13,830
United Kingdom (9.0%)
Atlassian Corp., PLC, Class A (a)		54,944		9,905
Royalty Pharma PLC, Class A (a)		211,705		10,278
				20,183
United States (52.5%)
Activision Blizzard, Inc.		37,427		2,841
Amazon.com, Inc. (a)		1,978		5,457
Coupa Software, Inc. (a)		29,783		8,251
Ecolab, Inc.		23,005		4,577
Farfetch Ltd., Class A (a)		255,487		4,412
HEICO Corp., Class A		37,129		3,016
Intercontinental Exchange, Inc.		18,289		1,675
Intuitive Surgical, Inc. (a)		16,927		9,646
MercadoLibre, Inc. (a)		8,041		7,927
Okta, Inc. (a)		37,723		7,553
Royal Gold, Inc.		3,317		412
S&P Global, Inc.		5,669		1,868
ServiceNow, Inc. (a)		17,801		7,211
Slack Technologies, Inc., Class A (a)		183,669		5,710
Spotify Technology SA (a)		49,077		12,671
Square, Inc., Class A (a)		77,667		8,150
Texas Pacific Land Trust		876		521
Twilio, Inc., Class A (a)		35,051		7,691
Twitter, Inc. (a)		138,753		4,133
Veeva Systems, Inc., Class A (a)		43,663		10,236
Zoom Video Communications, Inc., Class A (a)		15,135		3,837
				117,795
Total Common Stocks (Cost $142,032)				210,020

	Shares		Value (000)
Preferred Stocks (0.1%)
United States (0.1%)
Airbnb, Inc. Series D (a)(b)(c) (acquisition cost — $77; acquired 4/16/14)		1,917	$	154
Lookout, Inc. Series F (a)(b)(c) (acquisition cost — $73; acquired 6/17/14)		6,374		16
Palantir Technologies, Inc. Series G (a)(b)(c) (acquisition cost — $9; acquired 7/19/12)		2,935		20
Palantir Technologies, Inc. Series H (a)(b)(c) (acquisition cost — $6; acquired 10/25/13)		1,572		11
Palantir Technologies, Inc. Series H1 (a)(b)(c) (acquisition cost — $6; acquired 10/25/13)		1,572		11
Total Preferred Stocks (Cost $171)				212
Short-Term Investment (6.9%)
Investment Company (6.9%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $15,575)		15,574,586		15,575
Total Investments Excluding Purchased Options (100.5%) (Cost $157,778)				225,807
Total Purchased Options Outstanding (0.1%) (Cost $452)				151
Total Investments (100.6%) (Cost $158,230) (d)(e)				225,958
Liabilities in Excess of Other Assets (-0.6%)				(1,459	)
Net Assets (100.0%)			$	224,499

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Fund has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at June 30, 2020 amounts to approximately $212,000 and represents 0.1% of net assets.

(c)  At June 30, 2020, the Fund held fair valued securities valued at approximately $212,000, representing 0.1% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(d)  The approximate fair value and percentage of net assets, $31,467,000 and 14.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $69,733,000 and the aggregate gross unrealized depreciation is approximately $2,005,000, resulting in net unrealized appreciation of approximately $67,728,000.

ADR  American Depositary Receipt.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Global Advantage Portfolio

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
JP Morgan Chase Bank NA	USD/CNH	CNH	8.49	May-21		29,023,770		29,024	$	63	$	169	$	(106	)
Royal Bank of Scotland	USD/CNH	CNH	7.75	Jan-21		32,872,723		32,873		84		144		(60	)
Royal Bank of Scotland	USD/CNH	CNH	8.09	Sep-20		25,839,776		25,840		4		139		(135	)
									$	151	$	452	$	(301	)

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Other*		30.3	%
Information Technology Services		23.1
Software		18.7
Entertainment		13.0
Internet & Direct Marketing Retail		8.0
Short-Term Investment		6.9
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Advantage Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $142,655)	$	210,383
Investment in Security of Affiliated Issuer, at Value (Cost $15,575)		15,575
Total Investments in Securities, at Value (Cost $158,230)		225,958
Foreign Currency, at Value (Cost $6)		6
Receivable for Fund Shares Sold		3,144
Tax Reclaim Receivable		47
Dividends Receivable		18
Receivable from Affiliate		1
Receivable for Investments Sold		—	@
Receivable from Securities Lending Income		—	@
Other Assets		58
Total Assets		229,232
Liabilities:
Payable for Investments Purchased		4,120
Payable for Advisory Fees		309
Due to Broker		120
Payable for Fund Shares Redeemed		59
Payable for Professional Fees		39
Payable for Sub Transfer Agency Fees — Class I		13
Payable for Sub Transfer Agency Fees — Class A		7
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		1
Payable for Shareholder Services Fees — Class A		10
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		10
Payable for Administration Fees		13
Payable for Transfer Agency Fees — Class I		5
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		2
Payable for Custodian Fees		4
Other Liabilities		20
Total Liabilities		4,733
Net Assets	$	224,499
Net Assets Consist of:
Paid-in-Capital	$	147,493
Total Distributable Earnings		77,006
Net Assets	$	224,499

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Advantage Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	158,312
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		6,391,576
Net Asset Value, Offering and Redemption Price Per Share	$	24.77
CLASS A:
Net Assets	$	52,277
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,160,483
Net Asset Value, Redemption Price Per Share	$	24.20
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.34
Maximum Offering Price Per Share	$	25.54
CLASS L:
Net Assets	$	668
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		28,925
Net Asset Value, Offering and Redemption Price Per Share	$	23.10
CLASS C:
Net Assets	$	13,242
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		583,619
Net Asset Value, Offering and Redemption Price Per Share	$	22.69

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Advantage Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $6 of Foreign Taxes Withheld)	$	102
Dividends from Security of Affiliated Issuer (Note G)		14
Income from Securities Loaned — Net		—	@
Total Investment Income		116
Expenses:
Advisory Fees (Note B)		607
Shareholder Services Fees — Class A (Note D)		54
Distribution and Shareholder Services Fees — Class L (Note D)		2
Distribution and Shareholder Services Fees — Class C (Note D)		54
Sub Transfer Agency Fees — Class I		39
Sub Transfer Agency Fees — Class A		24
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		3
Administration Fees (Note C)		61
Professional Fees		59
Registration Fees		26
Transfer Agency Fees — Class I (Note E)		16
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		5
Shareholder Reporting Fees		16
Custodian Fees (Note F)		13
Pricing Fees		2
Directors' Fees and Expenses		1
Other Expenses		10
Total Expenses		995
Reimbursement of Class Specific Expenses — Class I (Note B)		(28	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(4	)
Net Expenses		962
Net Investment Loss		(846	)
Realized Gain (Loss):
Investments Sold		9,232
Foreign Currency Translation		(18	)
Net Realized Gain		9,214
Change in Unrealized Appreciation (Depreciation):
Investments		45,253
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		45,253
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		54,467
Net Increase in Net Assets Resulting from Operations	$	53,621

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Advantage Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(846	)	$	(400	)
Net Realized Gain		9,214			8,401
Net Change in Unrealized Appreciation (Depreciation)		45,253			24,236
Net Increase in Net Assets Resulting from Operations		53,621			32,237
Dividends and Distributions to Shareholders:
Class I		—			(1,881	)
Class A		—			(956	)
Class L		—			(13	)
Class C		—			(250	)
Total Dividends and Distributions to Shareholders		—			(3,100	)
Capital Share Transactions:(1)
Class I:
Subscribed		58,868			29,609
Distributions Reinvested		—			1,880
Redeemed		(23,902	)		(21,827	)
Class A:
Subscribed		7,263			10,308
Distributions Reinvested		—			955
Redeemed		(12,754	)		(9,908	)
Class L:
Exchanged		6			—
Distributions Reinvested		—			13
Redeemed		(95	)		(28	)
Class C:
Subscribed		1,022			1,557
Distributions Reinvested		—			250
Redeemed		(2,258	)		(2,463	)
Net Increase in Net Assets Resulting from Capital Share Transactions		28,150			10,346
Total Increase in Net Assets		81,771			39,483
Net Assets:
Beginning of Period		142,728			103,245
End of Period	$	224,499		$	142,728
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		2,821			1,751
Shares Issued on Distributions Reinvested		—			106
Shares Redeemed		(1,307	)		(1,296	)
Net Increase in Class I Shares Outstanding		1,514			561
Class A:
Shares Subscribed		352			615
Shares Issued on Distributions Reinvested		—			55
Shares Redeemed		(673	)		(614	)
Net Increase (Decrease) in Class A Shares Outstanding		(319	)		56
Class L:
Shares Exchanged		—-	@@		—
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(5	)		(2	)
Net Decrease in Class L Shares Outstanding		(5	)		(1	)
Class C:
Shares Subscribed		55			97
Shares Issued on Distributions Reinvested		—			15
Shares Redeemed		(135	)		(160	)
Net Decrease in Class C Shares Outstanding		(80	)		(48	)

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Advantage Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	17.96		$	13.96		$	15.43		$	12.12		$	12.36		$	12.74
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.09	)		(0.02	)		(0.03	)		(0.03	)		0.00	(3)		0.05
Net Realized and Unrealized Gain (Loss)		6.90			4.41			(0.80	)		5.07			0.02			0.46
Total from Investment Operations		6.81			4.39			(0.83	)		5.04			0.02			0.51
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.03	)
Net Realized Gain		—			(0.39	)		(0.64	)		(1.73	)		(0.26	)		(0.86	)
Total Distributions		—			(0.39	)		(0.64	)		(1.73	)		(0.26	)		(0.89	)
Net Asset Value, End of Period	$	24.77		$	17.96		$	13.96		$	15.43		$	12.12		$	12.36
Total Return(4)		37.86	%(8)		31.49	%		(5.75	)%		41.56	%		0.21	%		3.85	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	158,312		$	87,595		$	60,271		$	7,005		$	3,229		$	1,785
Ratio of Expenses Before Expense Limitation		1.16	%(9)		1.21	%		1.82	%		3.67	%		3.82	%		5.38	%
Ratio of Expenses After Expense Limitation		1.09	%(5)(9)		1.09	%(5)		1.09	%(5)		1.09	%(5)		1.09	%(5)		1.11	%(5)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.09	%(5)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.94	)%(5)(9)		(0.11	)%(5)		(0.19	)%(5)		(0.19	)%(5)		0.04	%(5)		0.37	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%(7)
Portfolio Turnover Rate		45	%(8)		95	%		130	%		103	%		90	%		90	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.10% for Class I shares. Prior to January 23, 2015, the maximum ratio was 1.30% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Advantage Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	17.57		$	13.71		$	15.21		$	12.01		$	12.29		$	12.70
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.12	)		(0.07	)		(0.08	)		(0.08	)		(0.05	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		6.75			4.32			(0.78	)		5.01			0.03			0.49
Total from Investment Operations		6.63			4.25			(0.86	)		4.93			(0.02	)		0.45
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.39	)		(0.64	)		(1.73	)		(0.26	)		(0.86	)
Net Asset Value, End of Period	$	24.20		$	17.57		$	13.71		$	15.21		$	12.01		$	12.29
Total Return(3)		37.68	%(7)		31.04	%		(6.03	)%		41.02	%		(0.11	)%		3.40	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	52,277		$	43,576		$	33,240		$	4,577		$	2,640		$	3,414
Ratio of Expenses Before Expense Limitation		N/A			1.48	%		1.95	%		3.88	%		4.09	%		5.92	%
Ratio of Expenses After Expense Limitation		1.41	%(4)(8)		1.41	%(4)		1.41	%(4)(6)		1.41	%(4)		1.44	%(4)		1.45	%(4)(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.41	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.26	)%(4)(8)		(0.43	)%(4)		(0.54	)%(4)		(0.52	)%(4)		(0.38	)%(4)		(0.34	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		45	%(7)		95	%		130	%		103	%		90	%		90	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.45% for Class A shares. Prior to January 23, 2015, the maximum ratio was 1.65% for Class A shares.

(6)  Effective November 19, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.42% for Class A shares. Prior to November 19, 2018, the maximum ratio was 1.45% for Class A shares.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Advantage Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	16.82		$	13.21		$	14.75		$	11.74		$	12.09		$	12.56
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.16	)		(0.16	)		(0.16	)		(0.15	)		(0.10	)		(0.08	)
Net Realized and Unrealized Gain (Loss)		6.44			4.16			(0.74	)		4.89			0.01			0.47
Total from Investment Operations		6.28			4.00			(0.90	)		4.74			(0.09	)		0.39
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.39	)		(0.64	)		(1.73	)		(0.26	)		(0.86	)
Net Asset Value, End of Period	$	23.10		$	16.82		$	13.21		$	14.75		$	11.74		$	12.09
Total Return(3)		37.34	%(7)		30.32	%		(6.50	)%		40.34	%		(0.70	)%		2.96	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	668		$	573		$	462		$	327		$	217		$	382
Ratio of Expenses Before Expense Limitation		2.22	%(8)		2.16	%		3.29	%		5.07	%		5.12	%		6.58	%
Ratio of Expenses After Expense Limitation		1.94	%(4)(8)		1.94	%(4)		1.94	%(4)		1.94	%(4)		1.94	%(4)		1.96	%(4)(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.94	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.78	)%(4)(8)		(0.96	)%(4)		(1.03	)%(4)		(1.05	)%(4)		(0.86	)%(4)		(0.60	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%(6)
Portfolio Turnover Rate		45	%(7)		95	%		130	%		103	%		90	%		90	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.95% for Class L shares. Prior to January 23, 2015, the maximum ratio was 2.15% for Class L shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Advantage Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	16.54		$	13.03		$	14.60		$	11.66		$	12.04		$	13.30
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.18	)		(0.19	)		(0.18	)		(0.19	)		(0.13	)		(0.11	)
Net Realized and Unrealized Gain (Loss)		6.33			4.09			(0.75	)		4.86			0.01			(0.26	)
Total from Investment Operations		6.15			3.90			(0.93	)		4.67			(0.12	)		(0.37	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.03	)
Net Realized Gain		—			(0.39	)		(0.64	)		(1.73	)		(0.26	)		(0.86	)
Total Distributions		—			(0.39	)		(0.64	)		(1.73	)		(0.26	)		(0.89	)
Net Asset Value, End of Period	$	22.69		$	16.54		$	13.03		$	14.60		$	11.66		$	12.04
Total Return(4)		37.12	%(7)		29.97	%		(6.77	)%		40.02	%		(0.95	)%		(2.94	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	13,242		$	10,984		$	9,272		$	549		$	180		$	59
Ratio of Expenses Before Expense Limitation		N/A			2.24	%		2.70	%		5.22	%		6.12	%		12.84	%(8)
Ratio of Expenses After Expense Limitation		2.18	%(5)(8)		2.19	%(5)		2.19	%(5)		2.19	%(5)		2.19	%(5)		2.20	%(5)(8)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			2.19	%(5)		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(2.03	)%(5)(8)		(1.21	)%(5)		(1.29	)%(5)		(1.30	)%(5)		(1.12	)%(5)		(1.33	)%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%(6)(8)
Portfolio Turnover Rate		45	%(7)		95	%		130	%		103	%		90	%		90	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Advantage Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class L and Class C. On April 30, 2015, the Fund suspended offering Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued

at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee

provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	3,016	$	—	$	—	$	3,016
Banks		3,208		—		—		3,208
Capital Markets		3,543		—		—		3,543
Chemicals		4,577		3,134		—		7,711
Entertainment		29,342		—		—		29,342
Food Products		2,877		—		—		2,877
Health Care Equipment & Supplies		9,646		—		—		9,646
Health Care Technology		10,236		—		—		10,236
Information Technology Services		40,538		11,730		—		52,268
Interactive Media & Services		4,133		—		—		4,133
Internet & Direct Marketing Retail		17,796		—		—		17,796
Metals & Mining		412		—		—		412
Oil, Gas & Consumable Fuels		521		—		—		521
Pharmaceuticals		10,278		—		—		10,278
Real Estate Management & Development		3,516		—		—		3,516
Software		34,914		7,267		—		42,181
Textiles, Apparel & Luxury Goods		—		9,336		—		9,336
Total Common Stocks		178,553		31,467		—		210,020
Preferred Stocks
Internet & Direct Marketing Retail		—		—		154		154
Software		—		—		58		58
Total Preferred Stocks		—		—		212		212
Call Options Purchased		—		151		—		151
Short-Term Investment
Investment Company		15,575		—		—		15,575
Total Assets	$	194,128	$	31,618	$	212	$	225,958

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Preferred Stocks (000)
Beginning Balance	$	306
Purchases
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		(94	)
Realized gains (losses)		—
Ending Balance	$	212
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2020	$	(94	)

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2020. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance. The Fund calculated the weighted averages of the unobservable inputs relative to each investment's fair value as of June 30, 2020.

	Fair Value at June 30, 2020 (000)		Valuation Technique	Unobservable Input	Amount or Range/ Weighted Average*		Impact to Valuation from an Increase in Input**
Preferred Stocks	$	212	Market Transaction Method	Precedent Transaction	$	8.41	Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		13.5%–19.0%/15.1%	Decrease
				Perpetual Growth Rate		3.0%–4.0%/3.5%	Increase
			Market Comparable Companies	Enterprise Value/Revenue		1.5x–30.3x/7.7x	Increase
				Discount for Lack of Marketability		14.0%–17.0%/16.0%	Decrease
			Comparable Transactions	Enterprise Value/Revenue		2.3x–16.0x/11.8x	Increase

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are

treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment

objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure		Value (000)
Purchased Options	Investments, at Value (Purchased Options)		Currency Risk	$	151	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(242	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	35	(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	151	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract

counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities(a) (000)		Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
JP Morgan Chase Bank NA	$	63	$	—	$	—		$	63
Royal Bank of Scotland		88		—		(88	)		0
Total	$	151	$	—	$	(88	)	$	63

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) In some instances, the actual collateral received or pledged may be more than the amount shown here due to overcollateralization.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	89,875,000

5.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund.

The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

At June 30, 2020, the Fund did not have any outstanding securities on loan.

6.  Restricted Securities: The Fund invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing of such

assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

7.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

9.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.80	%		0.75	%

For the six months ended June 30, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.79% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.10% for Class I shares, 1.42% for Class A shares, 1.95% for Class L shares and 2.20% for Class C shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $29,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $84,050,000 and $69,117,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $4,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	2,991	$	69,503	$	56,919	$	14

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	15,575

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)		Paid-in- Capital (000)
$	—	$	3,100	$	126	$	974	$	2

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	699	$	(699	)

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	—	$	1,767

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2019, the Fund intends to defer to January 1, 2020 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	66	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 18.4%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's contractual management fee and total expense ratio were higher than but close to its peer group averages and the actual management fee was higher than its peer group average. After discussion, the Board concluded that the Fund's (i) performance and total expense ratio were competitive with its peer group averages and (ii) management fee was acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

26

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

27

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

29

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGASAN
3178370 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Concentrated Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	6
Statements of Changes in Net Assets	7
Financial Highlights	8
Notes to Financial Statements	12
Investment Advisory Agreement Approval	18
Liquidity Risk Management Program	20
Privacy Notice	21
Director and Officer Information	23

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Concentrated Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Global Concentrated Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Concentrated Portfolio Class I	$	1,000.00	$	950.90	$	1,019.89	$	4.85	$	5.02		1.00	%
Global Concentrated Portfolio Class A		1,000.00		949.30		1,018.40		6.30		6.52		1.30
Global Concentrated Portfolio Class C		1,000.00		945.70		1,014.47		10.11		10.47		2.09
Global Concentrated Portfolio Class IS		1,000.00		950.90		1,020.14		4.61		4.77		0.95

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Global Concentrated Portfolio

	Shares		Value (000)
Common Stocks (99.0%)
China (15.7%)
Alibaba Group Holding Ltd. ADR (a)		8,440	$	1,821
Tencent Holdings Ltd. ADR		25,444		1,628
				3,449
France (7.2%)
LVMH Moet Hennessy Louis Vuitton SE ADR		17,852		1,579
India (6.6%)
HDFC Bank Ltd. ADR		31,995		1,454
Taiwan (6.1%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		23,847		1,354
United Kingdom (6.2%)
Diageo PLC ADR		10,183		1,369
United States (57.2%)
Danaher Corp.		2,574		455
Domino's Pizza, Inc.		1,667		616
Essex Property Trust, Inc. REIT		3,026		693
Estee Lauder Cos., Inc. (The), Class A		5,012		946
JPMorgan Chase & Co.		10,233		963
Lennar Corp., Class A		11,452		706
Lululemon Athletica, Inc. (a)		3,182		993
Mastercard, Inc., Class A		5,464		1,616
Microsoft Corp.		11,142		2,267
NextEra Energy, Inc.		3,346		804
STORE Capital Corp. REIT		23,624		562
SVB Financial Group (a)		4,832		1,041
United Rentals, Inc. (a)		2,100		313
Waste Management, Inc.		5,877		622
				12,597
Total Common Stocks (Cost $19,103)				21,802
Short-Term Investment (0.7%)
Investment Company (0.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $156)		156,242		156
Total Investments (99.7%) (Cost $19,259) (b)				21,958
Other Assets in Excess of Liabilities (0.3%)				57
Net Assets (100.0%)			$	22,015

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $3,483,000 and the aggregate gross unrealized depreciation is approximately $784,000, resulting in net unrealized appreciation of approximately $2,699,000.

ADR  American Depositary Receipt.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		21.0	%
Banks		15.8
Textiles, Apparel & Luxury Goods		11.7
Software		10.3
Internet & Direct Marketing Retail		8.3
Interactive Media & Services		7.4
Information Technology Services		7.4
Beverages		6.2
Semiconductors & Semiconductor Equipment		6.2
Equity Real Estate Investment Trusts (REITs)		5.7
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Concentrated Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $19,103)	$	21,802
Investment in Security of Affiliated Issuer, at Value (Cost $156)		156
Total Investments in Securities, at Value (Cost $19,259)		21,958
Receivable for Fund Shares Sold		70
Dividends Receivable		23
Due from Adviser		23
Tax Reclaim Receivable		1
Receivable from Affiliate		—	@
Other Assets		70
Total Assets		22,145
Liabilities:
Payable for Fund Shares Redeemed		93
Payable for Professional Fees		28
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class C		2
Payable for Sub Transfer Agency Fees — Class I		1
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Custodian Fees		1
Payable for Administration Fees		1
Other Liabilities		3
Total Liabilities		130
Net Assets	$	22,015
Net Assets Consist of:
Paid-in-Capital	$	19,998
Total Distributable Earnings		2,017
Net Assets	$	22,015
CLASS I:
Net Assets	$	15,400
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,168,748
Net Asset Value, Offering and Redemption Price Per Share	$	13.18
CLASS A:
Net Assets	$	4,188
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		319,659
Net Asset Value, Redemption Price Per Share	$	13.10
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.73
Maximum Offering Price Per Share	$	13.83
CLASS C:
Net Assets	$	2,394
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		185,723
Net Asset Value, Offering and Redemption Price Per Share	$	12.89
CLASS IS:
Net Assets	$	33
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,488
Net Asset Value, Offering and Redemption Price Per Share	$	13.18

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Concentrated Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $4 of Foreign Taxes Withheld)	$	125
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		126
Expenses:
Advisory Fees (Note B)		77
Professional Fees		64
Registration Fees		20
Shareholder Services Fees — Class A (Note D)		5
Distribution and Shareholder Services Fees — Class C (Note D)		13
Shareholder Reporting Fees		13
Administration Fees (Note C)		8
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Sub Transfer Agency Fees — Class I		3
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class C		1
Custodian Fees (Note F)		3
Directors' Fees and Expenses		3
Pricing Fees		1
Other Expenses		4
Total Expenses		220
Waiver of Advisory Fees (Note B)		(77	)
Expenses Reimbursed by Adviser (Note B)		(19	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		123
Net Investment Income		3
Realized Loss:
Investments Sold		(472	)
Change in Unrealized Appreciation (Depreciation):
Investments		(909	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(1,381	)
Net Decrease in Net Assets Resulting from Operations	$	(1,378	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Concentrated Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	3		$	82
Net Realized Gain (Loss)		(472	)		559
Net Change in Unrealized Appreciation (Depreciation)		(909	)		4,466
Net Increase (Decrease) in Net Assets Resulting from Operations		(1,378	)		5,107
Dividends and Distributions to Shareholders:
Class I		—			(164	)
Class A		—			(24	)
Class C		—			(2	)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(190	)
Capital Share Transactions: (1)
Class I:
Subscribed		2,668			1,770
Distributions Reinvested		—			164
Redeemed		(1,246	)		(2,155	)
Class A:
Subscribed		1,314			2,061
Distributions Reinvested		—			24
Redeemed		(935	)		(1,014	)
Class C:
Subscribed		1,129			590
Distributions Reinvested		—			2
Redeemed		(1,167	)		(788	)
Class IS:
Subscribed		18			—
Distributions Reinvested		—			—	@
Net Increase in Net Assets Resulting from Capital Share Transactions		1,781			654
Total Increase in Net Assets		403			5,571
Net Assets:
Beginning of Period		21,612			16,041
End of Period	$	22,015		$	21,612
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		204			142
Shares Issued on Distributions Reinvested		—			12
Shares Redeemed		(109	)		(177	)
Net Increase (Decrease) in Class I Shares Outstanding		95			(23	)
Class A:
Shares Subscribed		102			161
Shares Issued on Distributions Reinvested		—			2
Shares Redeemed		(73	)		(84	)
Net Increase in Class A Shares Outstanding		29			79
Class C:
Shares Subscribed		89			46
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(102	)		(66	)
Net Decrease in Class C Shares Outstanding		(13	)		(20	)
Class IS:
Shares Subscribed		1			—
Shares Issued on Distributions Reinvested		—			—	@@
Net Increase in Class IS Shares Outstanding		1			—	@@

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Concentrated Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.86		$	10.53		$	12.42		$	10.16		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.01			0.08			0.14			0.02			0.03
Net Realized and Unrealized Gain (Loss)		(0.69	)		3.40			(1.95	)		2.28			0.19
Total from Investment Operations		(0.68	)		3.48			(1.81	)		2.30			0.22
Distributions from and/or in Excess of:
Net Investment Income		—			(0.15	)		(0.08	)		(0.03	)		(0.06	)
Paid-in-Capital		—			—			—			(0.01	)		—
Total Distributions		—			(0.15	)		(0.08	)		(0.04	)		(0.06	)
Net Asset Value, End of Period	$	13.18		$	13.86		$	10.53		$	12.42		$	10.16
Total Return(3)		(4.91	)%(6)		33.10	%		(14.61	)%		22.64	%		2.24	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	15,400		$	14,885		$	11,554		$	11,814		$	6,922
Ratio of Expenses Before Expense Limitation		1.94	%(7)		1.96	%		1.90	%		3.13	%		3.57	%(7)
Ratio of Expenses After Expense Limitation		1.00	%(4)(7)		1.00	%(4)		1.00	%(4)		0.98	%(4)		0.97	%(4)(7)
Ratio of Net Investment Income		0.23	%(4)(7)		0.64	%(4)		1.13	%(4)		0.15	%(4)		0.48	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		29	%(6)		123	%		94	%		68	%		44	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Concentrated Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.80		$	10.49		$	12.37		$	10.15		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.01	)		0.04			0.11			(0.03	)		0.01
Net Realized and Unrealized Gain (Loss)		(0.69	)		3.38			(1.95	)		2.28			0.19
Total from Investment Operations		(0.70	)		3.42			(1.84	)		2.25			0.20
Distributions from and/or in Excess of:
Net Investment Income		—			(0.11	)		(0.04	)		(0.03	)		(0.05	)
Net Asset Value, End of Period	$	13.10		$	13.80		$	10.49		$	12.37		$	10.15
Total Return(3)		(5.07	)%(6)		32.64	%		(14.91	)%		22.17	%		2.02	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,188		$	4,009		$	2,213		$	1,666		$	782
Ratio of Expenses Before Expense Limitation		2.24	%(7)		2.29	%		2.24	%		3.61	%		4.23	%(7)
Ratio of Expenses After Expense Limitation		1.30	%(4)(7)		1.34	%(4)		1.35	%(4)		1.35	%(4)		1.35	%(4)(7)
Ratio of Net Investment Income (Loss)		(0.09	)%(4)(7)		0.32	%(4)		0.91	%(4)		(0.25	)%(4)		0.16	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		29	%(6)		123	%		94	%		68	%		44	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Concentrated Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.63		$	10.36		$	12.27		$	10.15		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.05	)		(0.06	)		0.02			(0.11	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		(0.69	)		3.34			(1.93	)		2.26			0.21
Total from Investment Operations		(0.74	)		3.28			(1.91	)		2.15			0.17
Distributions from and/or in Excess of:
Net Investment Income		—			(0.01	)		—			(0.03	)		(0.02	)
Net Asset Value, End of Period	$	12.89		$	13.63		$	10.36		$	12.27		$	10.15
Total Return(3)		(5.43	)%(6)		31.69	%		(15.57	)%		21.18	%		1.69	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,394		$	2,704		$	2,263		$	1,728		$	877
Ratio of Expenses Before Expense Limitation		3.03	%(7)		3.06	%		2.98	%		4.36	%		4.81	%(7)
Ratio of Expenses After Expense Limitation		2.09	%(4)(7)		2.10	%(4)		2.09	%(4)		2.10	%(4)		2.10	%(4)(7)
Ratio of Net Investment Income (Loss)		(0.86	)%(4)(7)		(0.46	)%(4)		0.18	%(4)		(0.95	)%(4)		(0.69	)%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		29	%(6)		123	%		94	%		68	%		44	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Concentrated Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.86		$	10.53		$	12.42		$	10.16		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.02			0.09			0.16			0.02			0.03
Net Realized and Unrealized Gain (Loss)		(0.70	)		3.40			(1.97	)		2.28			0.20
Total from Investment Operations		(0.68	)		3.49			(1.81	)		2.30			0.23
Distributions from and/or in Excess of:
Net Investment Income		—			(0.16	)		(0.08	)		(0.03	)		(0.07	)
Paid-in-Capital		—			—			—			(0.01	)		—
Total Distributions		—			(0.16	)		(0.08	)		(0.04	)		(0.07	)
Net Asset Value, End of Period	$	13.18		$	13.86		$	10.53		$	12.42		$	10.16
Total Return(3)		(4.91	)%(6)		33.16	%		(14.55	)%		22.67	%		2.25	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	33		$	14		$	11		$	12		$	10
Ratio of Expenses Before Expense Limitation		12.76	%(7)		17.68	%		17.97	%		18.61	%		19.43	%(7)
Ratio of Expenses After Expense Limitation		0.95	%(4)(7)		0.95	%(4)		0.95	%(4)		0.95	%(4)		0.95	%(4)(7)
Ratio of Net Investment Income		0.35	%(4)(7)		0.68	%(4)		1.27	%(4)		0.22	%(4)		0.56	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		29	%(6)		123	%		94	%		68	%		44	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Concentrated Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued

at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable

12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; and (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the

Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	3,458	$	—	$	—	$	3,458
Beverages		1,369		—		—		1,369
Commercial Services & Supplies		622		—		—		622
Electric Utilities		804		—		—		804
Equity Real Estate Investment Trusts (REITs)		1,255		—		—		1,255
Health Care Equipment & Supplies		455		—		—		455
Hotels, Restaurants & Leisure		616		—		—		616
Household Durables		706		—		—		706
Information Technology Services		1,616		—		—		1,616
Interactive Media & Services		1,628		—		—		1,628
Internet & Direct Marketing Retail		1,821		—		—		1,821
Personal Products		946		—		—		946
Semiconductors & Semiconductor Equipment		1,354		—		—		1,354
Software		2,267		—		—		2,267
Textiles, Apparel & Luxury Goods		2,572		—		—		2,572
Trading Companies & Distributors		313		—		—		313
Total Common Stocks		21,802		—		—		21,802
Short-Term Investment
Investment Company		156		—		—		156
Total Assets	$	21,958	$	—	$	—	$	21,958

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

4.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

5.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $750 million			Next $750 million			Over $1.5 billion
	0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $77,000 of advisory fees were waived and approximately $20,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act.

Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $7,980,000 and $6,037,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	359	$	3,426	$	3,629	$	1

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	156

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:		2018 Distributions Paid From:
Ordinary Income (000)		Ordinary Income (000)
$	190	$	92

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	4	$	(4	)

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	5	$	—

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $111,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders. During the year ended December 31, 2019, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $484,000.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 67.4%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-year period but below its peer group average for the three-year period and for the period since the end of May 2016, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

20

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

21

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

23

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGCNPSAN
3183642 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Concentrated Real Estate Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	9
Notes to Financial Statements	13
Investment Advisory Agreement Approval	19
Liquidity Risk Management Program	21
Privacy Notice	22
Director and Officer Information	24

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Concentrated Real Estate Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Global Concentrated Real Estate Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Concentrated Real Estate Portfolio Class I	$	1,000.00	$	673.00	$	1,020.19	$	3.91	$	4.72		0.94	%
Global Concentrated Real Estate Portfolio Class A		1,000.00		671.90		1,018.45		5.36		6.47		1.29
Global Concentrated Real Estate Portfolio Class C		1,000.00		669.80		1,014.67		8.51		10.27		2.05
Global Concentrated Real Estate Portfolio Class IS		1,000.00		673.00		1,020.39		3.74		4.52		0.90

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Global Concentrated Real Estate Portfolio

	Shares		Value (000)
Common Stocks (97.0%)
Australia (1.6%)
Dexus REIT		2,163	$	14
GPT Group (The) REIT		5,159		15
Scentre Group REIT		14,673		22
				51
Canada (0.3%)
RioCan Real Estate Investment Trust REIT		838		9
China (0.5%)
China Overseas Land & Investment Ltd. (a)		1,444		4
China Resources Land Ltd. (a)		3,282		13
				17
Finland (0.3%)
Citycon Oyj		1,361		10
France (5.9%)
Gecina SA REIT		581		72
ICADE REIT		33		2
Klepierre SA REIT		5,252		105
Unibail-Rodamco-Westfield REIT		299		17
				196
Germany (2.5%)
ADO Properties SA (b)		185		5
Deutsche Wohnen SE		1,733		78
				83
Hong Kong (18.2%)
CK Asset Holdings Ltd.		1,935		12
Hongkong Land Holdings Ltd.		32,340		134
Hysan Development Co., Ltd.		10,547		34
Link REIT		4,982		41
Mandarin Oriental International Ltd.		58,076		88
New World Development Co. Ltd.		2,511		12
Sino Land Co., Ltd.		10,338		13
Sun Hung Kai Properties Ltd.		10,824		138
Swire Properties Ltd.		31,656		81
Wharf Real Estate Investment Co., Ltd.		9,733		47
				600
Ireland (0.5%)
Hibernia REIT PLC		13,592		17
Japan (8.3%)
GLP J-REIT		1		1
Japan Hotel REIT Investment Corp.		81		34
Mitsubishi Estate Co., Ltd.		6,432		96
Mitsui Fudosan Co., Ltd.		4,413		78
Nippon Building Fund, Inc. REIT		8		46
Sumitomo Realty & Development Co., Ltd.		702		19
				274
Netherlands (1.0%)
Eurocommercial Properties N.V. CVA REIT		2,567		33
Norway (0.3%)
Entra ASA		746		10

	Shares		Value (000)
Singapore (0.3%)
CapitaLand Ltd. (b)		3,097	$	6
UOL Group Ltd.		937		5
				11
Spain (1.5%)
Inmobiliaria Colonial Socimi SA REIT		1,071		10
Merlin Properties Socimi SA REIT		4,576		38
				48
Sweden (0.4%)
Hufvudstaden AB, Class A		1,162		14
United Kingdom (8.4%)
British Land Co., PLC (The) REIT		14,209		68
Derwent London PLC REIT		1,201		41
Great Portland Estates PLC REIT		7,069		55
Hammerson PLC REIT		24,700		25
Land Securities Group PLC REIT		11,944		82
St. Modwen Properties PLC		1,003		4
Urban & Civic PLC		1,129		3
				278
United States (47.0%)
American Campus Communities, Inc. REIT		465		16
AvalonBay Communities, Inc. REIT		601		93
Boston Properties, Inc. REIT		1,494		135
Camden Property Trust REIT		303		28
CubeSmart REIT		32		1
DiamondRock Hospitality Co. REIT		156		1
Equity Residential REIT		1,400		82
Essex Property Trust, Inc. REIT		93		21
Federal Realty Investment Trust REIT		188		16
Healthcare Realty Trust, Inc. REIT		552		16
Healthpeak Properties, Inc. REIT		64		2
Host Hotels & Resorts, Inc. REIT		8,894		96
Hudson Pacific Properties, Inc. REIT		2,132		54
Invitation Homes, Inc. REIT		421		12
JBG SMITH Properties REIT		783		23
Life Storage, Inc. REIT		242		23
Mack-Cali Realty Corp. REIT		2,613		40
Mid-America Apartment Communities, Inc. REIT		117		13
Paramount Group, Inc. REIT		3,340		26
ProLogis, Inc. REIT		342		32
Public Storage REIT		157		30
QTS Realty Trust, Inc., Class A REIT		64		4
Regency Centers Corp. REIT		1,239		57
RLJ Lodging Trust REIT		2,560		24
Simon Property Group, Inc. REIT		2,900		198
SITE Centers Corp. REIT		459		4
SL Green Realty Corp. REIT		4,367		215
Sunstone Hotel Investors, Inc. REIT		5,183		42
Taubman Centers, Inc. REIT		424		16
Ventas, Inc. REIT		1,820		67
Vornado Realty Trust REIT		3,165		121
Weingarten Realty Investors REIT		2,116		40
				1,548
Total Common Stocks (Cost $4,608)				3,199

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Global Concentrated Real Estate Portfolio

	Shares		Value (000)
Short-Term Investment (0.5%)
Investment Company (0.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $17)		17,088	$	17
Total Investments (97.5%) (Cost $4,625) (c)(d)				3,216
Other Assets in Excess of Liabilities (2.5%)				81
Net Assets (100.0%)			$	3,297

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Security trades on the Hong Kong exchange.

(b)  Non-income producing security.

(c)  The approximate fair value and percentage of net assets, $1,630,000 and 49.4%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $66,000 and the aggregate gross unrealized depreciation is approximately $1,475,000, resulting in net unrealized depreciation of approximately $1,409,000.

CVA  Certificaten Van Aandelen.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Diversified		31.4	%
Office		24.1
Retail		18.4
Residential		11.3
Lodging/Resorts		8.9
Other*		5.9
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Concentrated Real Estate Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $4,608)	$	3,199
Investment in Security of Affiliated Issuer, at Value (Cost $17)		17
Total Investments in Securities, at Value (Cost $4,625)		3,216
Foreign Currency, at Value (Cost $7)		6
Due from Adviser		50
Dividends Receivable		10
Tax Reclaim Receivable		4
Receivable from Affiliate		—	@
Other Assets		62
Total Assets		3,348
Liabilities:
Payable for Professional Fees		32
Payable for Investments Purchased		6
Payable for Custodian Fees		3
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Administration Fees		—	@
Other Liabilities		10
Total Liabilities		51
Net Assets	$	3,297
Net Assets Consist of:
Paid-in-Capital	$	5,066
Total Accumulated Loss		(1,769	)
Net Assets	$	3,297
CLASS I:
Net Assets	$	3,277
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		513,587
Net Asset Value, Offering and Redemption Price Per Share	$	6.38
CLASS A:
Net Assets	$	7
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,052
Net Asset Value, Redemption Price Per Share	$	6.37
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.35
Maximum Offering Price Per Share	$	6.72
CLASS C:
Net Assets	$	6
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,022
Net Asset Value, Offering and Redemption Price Per Share	$	6.35
CLASS IS:
Net Assets	$	7
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,034
Net Asset Value, Offering and Redemption Price Per Share	$	6.38

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Concentrated Real Estate Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $1 of Foreign Taxes Withheld)	$	77
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		78
Expenses:
Professional Fees		58
Registration Fees		16
Advisory Fees (Note B)		14
Custodian Fees (Note F)		10
Shareholder Reporting Fees		6
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Pricing Fees		3
Administration Fees (Note C)		2
Directors' Fees and Expenses		2
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		9
Total Expenses		124
Expenses Reimbursed by Adviser (Note B)		(88	)
Waiver of Advisory Fees (Note B)		(14	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		19
Net Investment Income		59
Realized Loss:
Investments Sold		(364	)
Foreign Currency Translation		(—	@)
Net Realized Loss		(364	)
Change in Unrealized Appreciation (Depreciation):
Investments		(1,294	)
Foreign Currency Translation		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		(1,294	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(1,658	)
Net Decrease in Net Assets Resulting from Operations	$	(1,599	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Concentrated Real Estate Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	59		$	77
Net Realized Gain (Loss)		(364	)		53
Net Change in Unrealized Appreciation (Depreciation)		(1,294	)		443
Net Increase (Decrease) in Net Assets Resulting from Operations		(1,599	)		573
Dividends and Distributions to Shareholders:
Class I		—			(154	)
Class A		—			(—	@)
Class C		—			(—	@)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(154	)
Capital Share Transactions:(1)
Class I:
Distributions Reinvested		—			154
Class A:
Subscribed		—	@		1
Distributions Reinvested		—			—	@
Redeemed		—			(—	@)
Class C:
Distributions Reinvested		—			—	@
Class IS:
Distributions Reinvested		—			—	@
Net Increase in Net Assets Resulting from Capital Share Transactions		—	@		155
Total Increase (Decrease) in Net Assets		(1,599	)		574
Net Assets:
Beginning of Period		4,896			4,322
End of Period	$	3,297		$	4,896
(1) Capital Share Transactions:
Class I:
Shares Issued on Distributions Reinvested		—			17
Class A:
Shares Subscribed		—	@@		—	@@
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		—			(—	@@)
Net Increase in Class A Shares Outstanding		—	@@		—	@@
Class C:
Shares Issued on Distributions Reinvested		—			—	@@
Class IS:
Shares Issued on Distributions Reinvested		—			—	@@

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Concentrated Real Estate Portfolio

	Class I
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	9.48		$	8.64		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.11			0.16			0.23
Net Realized and Unrealized Gain (Loss)		(3.21	)		0.99			(1.16	)
Total from Investment Operations		(3.10	)		1.15			(0.93	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.31	)		(0.29	)
Paid-in-Capital		—			—			(0.14	)
Total Distributions		—			(0.31	)		(0.43	)
Net Asset Value, End of Period	$	6.38		$	9.48		$	8.64
Total Return(3)		(32.70	)%(6)		13.38	%		(9.49	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,277		$	4,866		$	4,295
Ratio of Expenses Before Expense Limitation		6.35	%(7)		6.15	%		8.58	%(7)
Ratio of Expenses After Expense Limitation		0.94	%(4)(7)		0.94	%(4)		0.94	%(4)(7)
Ratio of Net Investment Income		3.13	%(4)(7)		1.67	%(4)		4.42	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		13	%(6)		21	%		19	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Concentrated Real Estate Portfolio

	Class A
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	9.48		$	8.65		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.10			0.12			0.21
Net Realized and Unrealized Gain (Loss)		(3.21	)		0.99			(1.15	)
Total from Investment Operations		(3.11	)		1.11			(0.94	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.28	)		(0.27	)
Paid-in-Capital		—			—			(0.14	)
Total Distributions		—			(0.28	)		(0.41	)
Net Asset Value, End of Period	$	6.37		$	9.48		$	8.65
Total Return(3)		(32.81	)%(6)		12.85	%		(9.57	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	7		$	10		$	9
Ratio of Expenses Before Expense Limitation		30.10	%(7)		26.09	%		26.73	%(7)
Ratio of Expenses After Expense Limitation		1.29	%(4)(7)		1.30	%(4)		1.30	%(4)(7)
Ratio of Net Investment Income		2.80	%(4)(7)		1.31	%(4)		4.06	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		13	%(6)		21	%		19	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Concentrated Real Estate Portfolio

	Class C
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	9.48		$	8.65		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.07			0.05			0.17
Net Realized and Unrealized Gain (Loss)		(3.20	)		0.98			(1.15	)
Total from Investment Operations		(3.13	)		1.03			(0.98	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.20	)		(0.23	)
Paid-in-Capital		—			—			(0.14	)
Total Distributions		—			(0.20	)		(0.37	)
Net Asset Value, End of Period	$	6.35		$	9.48		$	8.65
Total Return(3)		(33.02	)%(6)		12.01	%		(9.94	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	6		$	10		$	9
Ratio of Expenses Before Expense Limitation		31.76	%(7)		26.91	%		27.50	%(7)
Ratio of Expenses After Expense Limitation		2.05	%(4)(7)		2.05	%(4)		2.05	%(4)(7)
Ratio of Net Investment Income		2.02	%(4)(7)		0.55	%(4)		3.30	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		13	%(6)		21	%		19	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Concentrated Real Estate Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	9.48		$	8.64		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.12			0.16			0.23
Net Realized and Unrealized Gain (Loss)		(3.22	)		0.99			(1.16	)
Total from Investment Operations		(3.10	)		1.15			(0.93	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.31	)		(0.29	)
Paid-in-Capital		—			—			(0.14	)
Total Distributions		—			(0.31	)		(0.43	)
Net Asset Value, End of Period	$	6.38		$	9.48		$	8.64
Total Return(3)		(32.70	)%(6)		13.43	%		(9.47	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	7		$	10		$	9
Ratio of Expenses Before Expense Limitation		29.87	%(7)		25.85	%		26.46	%(7)
Ratio of Expenses After Expense Limitation		0.90	%(4)(7)		0.90	%(4)		0.90	%(4)(7)
Ratio of Net Investment Income		3.17	%(4)(7)		1.71	%(4)		4.45	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		13	%(6)		21	%		19	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Concentrated Real Estate Portfolio. The Fund seeks to provide current income and long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant

exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Fund invests a significant portion of its assets in securities of real estate investment trusts ("REITs"). The market's perception of prospective declines in private real estate values and other financial assets may result in

increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Fund.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 ^— unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Diversified	$	200	$	810	$	—	$	1,010
Health Care		85		—		—		85
Industrial		32		1		—		33
Lodging/Resorts		163		122		—		285
Office		430		344		—		774
Residential		265		100		—		365
Retail		340		253		—		593
Self Storage		54		—		—		54
Total Common Stocks		1,569		1,630		—		3,199
Short-Term Investment
Investment Company		17		—		—		17
Total Assets	$	1,586	$	1,630	$	—	$	3,216

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment

transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

or losses pursuant to these contracts and expects the risk of loss to be remote.

5.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

6.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $2 billion			Over $2 billion
	0.75	%		0.70	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.95% for Class I shares, 1.30% for Class A shares, 2.05% for Class C shares and 0.90% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time that the Directors act to discontinue all or a portion of such waivers or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $14,000 of advisory fees were waived and approximately $91,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $675,000 and $470,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	231	$	296	$	510	$	1

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	17

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the two-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Paid-in- Capital (000)
$	149	$	5	$	141	$	71

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to an adjustment to prior period distributions, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Accumulated Loss (000)		Paid-in- Capital (000)
$	18	$	(18	)

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	—	$	4

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2019, the Fund intends to defer to

January 1, 2020 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	7	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund did not have record owners of 10% or greater.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one-year period and the period since the middle of June 2018, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's contractual management fee was higher than its peer group average and its actual management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

21

Privacy Notice (unaudited) (cont'd)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

22

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

24

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGCRESAN
3183730 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Core Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	6
Statements of Changes in Net Assets	7
Financial Highlights	8
Notes to Financial Statements	12
Investment Advisory Agreement Approval	18
Liquidity Risk Management Program	20
Privacy Notice	21
Director and Officer Information	23

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Core Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Global Core Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Core Portfolio Class I	$	1,000.00	$	948.40	$	1,019.94	$	4.80	$	4.97		0.99	%
Global Core Portfolio Class A		1,000.00		946.80		1,018.15		6.53		6.77		1.35
Global Core Portfolio Class C		1,000.00		942.90		1,014.42		10.14		10.52		2.10
Global Core Portfolio Class IS		1,000.00		949.20		1,020.14		4.60		4.77		0.95

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Global Core Portfolio

	Shares		Value (000)
Common Stocks (99.1%)
Canada (0.4%)
Franco-Nevada Corp.		250	$	35
China (15.2%)
Alibaba Group Holding Ltd. ADR (a)		2,902		626
NetEase, Inc. ADR		460		198
Tencent Holdings Ltd. ADR		11,086		709
				1,533
France (4.2%)
Airbus SE ADR (a)		1,648		29
LVMH Moet Hennessy Louis Vuitton SE		890		393
				422
India (2.7%)
HDFC Bank Ltd. ADR		6,054		275
Ireland (1.3%)
CRH PLC ADR		3,652		125
Japan (1.8%)
Nippon Telegraph & Telephone Corp. ADR		7,687		179
Panama (0.8%)
Copa Holdings SA, Class A		1,593		81
Taiwan (3.3%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		5,924		336
United Kingdom (8.6%)
Diageo PLC ADR		3,194		429
Experian PLC ADR		5,117		180
London Stock Exchange Group PLC		1,572		164
Ryanair Holdings PLC ADR (a)		1,429		95
				868
United States (60.8%)
Adobe, Inc. (a)		219		95
Ameriprise Financial, Inc.		1,484		223
Apple, Inc.		1,822		665
Charles Schwab Corp. (The)		1,943		65
Chevron Corp.		845		75
Cigna Corp. (a)		617		116
Comcast Corp., Class A		3,993		156
Danaher Corp.		1,733		306
Essex Property Trust, Inc. REIT		867		199
Estee Lauder Cos., Inc. (The), Class A		1,214		229
Ferrari N.V.		2,139		366
First Republic Bank		846		90
Fortune Brands Home & Security, Inc.		1,963		125
JPMorgan Chase & Co.		3,676		346
Lennar Corp., Class A		3,515		216
Lululemon Athletica, Inc. (a)		1,183		369
Mastercard, Inc., Class A		2,388		706
McDonald's Corp.		1,156		213
Microsoft Corp.		2,308		470
NextEra Energy, Inc.		1,098		264
S&P Global, Inc.		285		94
Starbucks Corp.		689		51
STORE Capital Corp. REIT		7,671		183

	Shares		Value (000)
SVB Financial Group (a)		732	$	158
Target Corp.		695		83
Veeva Systems, Inc., Class A (a)		533		125
Welltower, Inc. REIT		2,702		140
				6,128
Total Common Stocks (Cost $7,478)				9,982
Short-Term Investment (0.2%)
Investment Company (0.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $22)		22,252		22
Total Investments (99.3%) (Cost $7,500) (b)(c)				10,004
Other Assets in Excess of Liabilities (0.7%)				74
Net Assets (100.0%)			$	10,078

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  The approximate fair value and percentage of net assets, $557,000 and 5.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $2,934,000 and the aggregate gross unrealized depreciation is approximately $430,000, resulting in net unrealized appreciation of approximately $2,504,000.

ADR  American Depositary Receipt.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		40.3	%
Banks		8.7
Textiles, Apparel & Luxury Goods		7.6
Interactive Media & Services		7.1
Information Technology Services		7.1
Tech Hardware, Storage & Peripherals		6.6
Internet & Direct Marketing Retail		6.3
Software		5.6
Capital Markets		5.5
Equity Real Estate Investment Trusts (REITs)		5.2
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Core Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $7,478)	$	9,982
Investment in Security of Affiliated Issuer, at Value (Cost $22)		22
Total Investments in Securities, at Value (Cost $7,500)		10,004
Due from Adviser		37
Receivable for Investments Sold		16
Receivable for Fund Shares Sold		14
Dividends Receivable		9
Tax Reclaim Receivable		2
Receivable from Affiliate		—	@
Other Assets		64
Total Assets		10,146
Liabilities:
Payable for Investments Purchased		34
Payable for Professional Fees		30
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		1
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Custodian Fees		1
Payable for Administration Fees		1
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Other Liabilities		1
Total Liabilities		68
Net Assets	$	10,078
Net Assets Consist of:
Paid-in-Capital	$	7,947
Total Distributable Earnings		2,131
Net Assets	$	10,078
CLASS I:
Net Assets	$	7,024
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		561,426
Net Asset Value, Offering and Redemption Price Per Share	$	12.51
CLASS A:
Net Assets	$	1,715
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		137,533
Net Asset Value, Redemption Price Per Share	$	12.47
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.69
Maximum Offering Price Per Share	$	13.16
CLASS C:
Net Assets	$	1,326
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		108,424
Net Asset Value, Offering and Redemption Price Per Share	$	12.23
CLASS IS:
Net Assets	$	13
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,008
Net Asset Value, Offering and Redemption Price Per Share	$	12.51

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Core Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $2 of Foreign Taxes Withheld)	$	69
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		69
Expenses:
Professional Fees		58
Advisory Fees (Note B)		38
Registration Fees		20
Shareholder Reporting Fees		11
Shareholder Services Fees — Class A (Note D)		2
Distribution and Shareholder Services Fees — Class C (Note D)		6
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Administration Fees (Note C)		4
Custodian Fees (Note F)		3
Directors' Fees and Expenses		2
Pricing Fees		2
Sub Transfer Agency Fees — Class I		—	@
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class C		—	@
Other Expenses		6
Total Expenses		157
Expenses Reimbursed by Adviser (Note B)		(56	)
Waiver of Advisory Fees (Note B)		(38	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		61
Net Investment Income		8
Realized Gain (Loss):
Investments Sold		(80	)
Foreign Currency Translation		—	@
Net Realized Loss		(80	)
Change in Unrealized Appreciation (Depreciation):
Investments		(603	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(683	)
Net Decrease in Net Assets Resulting from Operations	$	(675	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Core Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	8		$	42
Net Realized Gain (Loss)		(80	)		54
Net Change in Unrealized Appreciation (Depreciation)		(603	)		2,613
Net Increase (Decrease) in Net Assets Resulting from Operations		(675	)		2,709
Dividends and Distributions to Shareholders:
Class I		—			(57	)
Class A		—			(9	)
Class IS		—			(—	@)
Paid-in-Capital:
Class I		—			(3	)
Class A		—			(1	)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(70	)
Capital Share Transactions:(1)
Class I:
Subscribed		123			342
Distributions Reinvested		—			60
Redeemed		(772	)		(821	)
Class A:
Subscribed		74			1,100
Distributions Reinvested		—			10
Redeemed		(436	)		(688	)
Class C:
Subscribed		55			135
Redeemed		(95	)		(352	)
Class IS:
Distributions Reinvested		—			—	@
Net Decrease in Net Assets Resulting from Capital Share Transactions		(1,051	)		(214	)
Total Increase (Decrease) in Net Assets		(1,726	)		2,425
Net Assets:
Beginning of Period		11,804			9,379
End of Period	$	10,078		$	11,804
(1) Capital Share Transactions:
Class I:
Shares Subscribed		10			27
Shares Issued on Distributions Reinvested		—			5
Shares Redeemed		(67	)		(77	)
Net Decrease in Class I Shares Outstanding		(57	)		(45	)
Class A:
Shares Subscribed		7			95
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(35	)		(60	)
Net Increase (Decrease) in Class A Shares Outstanding		(28	)		36
Class C:
Shares Subscribed		5			12
Shares Redeemed		(8	)		(31	)
Net Decrease in Class C Shares Outstanding		(3	)		(19	)
Class IS:
Shares Issued on Distributions Reinvested		—			—	@@

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Core Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.19		$	10.15		$	12.20		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.02			0.07			0.12			0.07			0.05
Net Realized and Unrealized Gain (Loss)		(0.70	)		3.07			(2.09	)		2.16			0.06
Total from Investment Operations		(0.68	)		3.14			(1.97	)		2.23			0.11
Distributions from and/or in Excess of:
Net Investment Income		—			(0.09	)		(0.08	)		(0.06	)		(0.08	)
Paid-in-Capital		—			(0.01	)		—			(0.00	)(3)		—
Total Distributions		—			(0.10	)		(0.08	)		(0.06	)		(0.08	)
Net Asset Value, End of Period	$	12.51		$	13.19		$	10.15		$	12.20		$	10.03
Total Return(4)		(5.16	)%(7)		30.96	%		(16.15	)%		22.27	%		1.08	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	7,024		$	8,157		$	6,738		$	10,398		$	6,517
Ratio of Expenses Before Expense Limitation		2.83	%(8)		2.73	%		2.53	%		2.89	%		3.73	%(8)
Ratio of Expenses After Expense Limitation		0.99	%(5)(8)		0.98	%(5)		1.00	%(5)		0.97	%(5)		0.98	%(5)(8)
Ratio of Net Investment Income		0.36	%(5)(8)		0.61	%(5)		0.97	%(5)		0.64	%(5)		0.82	%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.01	%(8)
Portfolio Turnover Rate		9	%(7)		61	%		50	%		41	%		22	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Core Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.17		$	10.15		$	12.18		$	10.02		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.00	)(3)		0.03			0.07			0.03			0.02
Net Realized and Unrealized Gain (Loss)		(0.70	)		3.05			(2.07	)		2.15			0.06
Total from Investment Operations		(0.70	)		3.08			(2.00	)		2.18			0.08
Distributions from and/or in Excess of:
Net Investment Income		—			(0.05	)		(0.03	)		(0.02	)		(0.06	)
Paid-in-Capital		—			(0.01	)		—			(0.00	)(3)		—
Total Distributions		—			(0.06	)		(0.03	)		(0.02	)		(0.06	)
Net Asset Value, End of Period	$	12.47		$	13.17		$	10.15		$	12.18		$	10.02
Total Return(4)		(5.32	)%(7)		30.36	%		(16.41	)%		21.82	%		0.83	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,715		$	2,186		$	1,320		$	1,962		$	1,263
Ratio of Expenses Before Expense Limitation		3.22	%(8)		3.12	%		2.89	%		3.36	%		4.16	%(8)
Ratio of Expenses After Expense Limitation		1.35	%(5)(8)		1.35	%(5)		1.35	%(5)		1.35	%(5)		1.35	%(5)(8)
Ratio of Net Investment Income (Loss)		(0.02	)%(5)(8)		0.26	%(5)		0.62	%(5)		0.25	%(5)		0.39	%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)(8)
Portfolio Turnover Rate		9	%(7)		61	%		50	%		41	%		22	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Core Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	12.97		$	10.02		$	12.08		$	10.00		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.04	)		(0.05	)		(0.01	)		(0.06	)		(0.02	)
Net Realized and Unrealized Gain (Loss)		(0.70	)		3.00			(2.05	)		2.15			0.06
Total from Investment Operations		(0.74	)		2.95			(2.06	)		2.09			0.04
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.01	)		(0.04	)
Net Asset Value, End of Period	$	12.23		$	12.97		$	10.02		$	12.08		$	10.00
Total Return(3)		(5.71	)%(6)		29.44	%		(17.05	)%		20.92	%		0.41	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,326		$	1,448		$	1,311		$	1,246		$	901
Ratio of Expenses Before Expense Limitation		4.02	%(7)		3.92	%		3.66	%		4.19	%		5.02	%(7)
Ratio of Expenses After Expense Limitation		2.10	%(4)(7)		2.10	%(4)		2.10	%(4)		2.10	%(4)		2.10	%(4)(7)
Ratio of Net Investment Loss		(0.75	)%(4)(7)		(0.45	)%(4)		(0.05	)%(4)		(0.50	)%(4)		(0.36	)%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		9	%(6)		61	%		50	%		41	%		22	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Core Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	13.18		$	10.15		$	12.20		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.02			0.07			0.13			0.07			0.05
Net Realized and Unrealized Gain (Loss)		(0.69	)		3.06			(2.09	)		2.17			0.06
Total from Investment Operations		(0.67	)		3.13			(1.96	)		2.24			0.11
Distributions from and/or in Excess of:
Net Investment Income		—			(0.09	)		(0.09	)		(0.07	)		(0.08	)
Paid-in-Capital		—			(0.01	)		—			(0.00	)(3)		—
Total Distributions		—			(0.10	)		(0.09	)		(0.07	)		(0.08	)
Net Asset Value, End of Period	$	12.51		$	13.18		$	10.15		$	12.20		$	10.03
Total Return(4)		(5.08	)%(7)		30.90	%		(16.10	)%		22.29	%		1.10	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	13		$	13		$	10		$	12		$	10
Ratio of Expenses Before Expense Limitation		18.46	%(8)		18.98	%		19.09	%		18.67	%		19.70	%(8)
Ratio of Expenses After Expense Limitation		0.95	%(5)(8)		0.95	%(5)		0.95	%(5)		0.95	%(5)		0.95	%(5)(8)
Ratio of Net Investment Income		0.40	%(5)(8)		0.63	%(5)		1.06	%(5)		0.66	%(5)		0.84	%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)(8)
Portfolio Turnover Rate		9	%(7)		61	%		50	%		41	%		22	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Core Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant

exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers

12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	29	$	—	$	—	$	29
Airlines		176		—		—		176
Automobiles		366		—		—		366
Banks		869		—		—		869
Beverages		429		—		—		429
Building Products		125		—		—		125
Capital Markets		382		164		—		546
Construction Materials		125		—		—		125
Diversified Telecommunication Services		179		—		—		179
Electric Utilities		264		—		—		264
Entertainment		198		—		—		198
Equity Real Estate Investment Trusts (REITs)		522		—		—		522
Health Care Equipment & Supplies		306		—		—		306
Health Care Providers & Services		116		—		—		116
Health Care Technology		125		—		—		125
Hotels, Restaurants & Leisure		264		—		—		264
Household Durables		216		—		—		216
Information Technology Services		706		—		—		706
Interactive Media & Services		709		—		—		709
Internet & Direct Marketing Retail		626		—		—		626
Media		156		—		—		156
Metals & Mining		35		—		—		35
Multi-Line Retail		83		—		—		83
Oil, Gas & Consumable Fuels		75		—		—		75
Personal Products		229		—		—		229
Professional Services		180		—		—		180
Semiconductors & Semiconductor Equipment		336		—		—		336
Software		565		—		—		565
Tech Hardware, Storage & Peripherals		665		—		—		665
Textiles, Apparel & Luxury Goods		369		393		—		762
Total Common Stocks		9,425		557		—		9,982
Short-Term Investment
Investment Company		22		—		—		22
Total Assets	$	9,447	$	557	$	—	$	10,004

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

lower levels of governmental supervision and regulation of foreign security markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

5.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

6.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution

and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $750 million			Next $750 million			Over $1.5 billion
	0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $38,000 of advisory fees were waived and approximately $58,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement.

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $892,000 and $1,930,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-

rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	80	$	529	$	587	$	—	@

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	22

@ Amount is less than $500.

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Paid-in- Capital (000)		Ordinary Income (000)
$	66	$	4	$	58

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	1	$	(1	)

At December 31, 2019, the Fund had no distributable earnings on a tax basis.

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $258,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders. During the year ended December 31, 2019, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $41,000.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 28.0%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-year period but below its peer group average for the three-year period and for the period since the end of May 2016, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

20

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

21

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

23

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGCPSAN
3183743 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Endurance Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	9
Notes to Financial Statements	13
Investment Advisory Agreement Approval	20
Liquidity Risk Management Program	22
Privacy Notice	23
Director and Officer Information	25

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholder,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Endurance Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Global Endurance Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Endurance Portfolio Class I	$	1,000.00	$	1,279.40	$	1,019.89	$	5.67	$	5.02		1.00	%
Global Endurance Portfolio Class A		1,000.00		1,277.10		1,018.20		7.59		6.72		1.34
Global Endurance Portfolio Class C		1,000.00		1,272.30		1,014.42		11.86		10.52		2.10
Global Endurance Portfolio Class IS		1,000.00		1,279.90		1,020.14		5.39		4.77		0.95

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Global Endurance Portfolio

	Shares		Value (000)
Common Stocks (97.8%)
Canada (11.0%)
Brookfield Asset Management, Inc., Class A		1,957	$	64
Colliers International Group, Inc.		2,828		162
Constellation Software, Inc.		159		180
				406
Finland (1.2%)
Revenio Group Oyj		1,365		43
Germany (2.6%)
CompuGroup Medical SE		1,236		97
New Zealand (3.7%)
Ryman Healthcare Ltd.		16,332		139
Poland (1.0%)
Dino Polska SA (a)		700		36
Sweden (4.5%)
AddLife AB (a)		11,692		124
Cellavision AB (a)		1,492		45
				169
United Kingdom (8.0%)
Blue Prism Group PLC (a)		3,882		55
Royalty Pharma PLC, Class A (a)		3,365		163
Victoria PLC (a)		22,763		78
				296
United States (65.8%)
Alteryx, Inc., Class A (a)		399		65
Appfolio, Inc., Class A (a)		626		102
Appian Corp. (a)(b)		3,076		158
At Home Group, Inc. (a)		10,419		68
Cardlytics, Inc. (a)		2,816		197
Carvana Co. (a)		2,522		303
Collier Creek Holdings, Class A (a)		3,267		45
Fastly, Inc., Class A (a)		6,091		518
Floor & Decor Holdings, Inc. (a)		1,050		60
Party City Holdco, Inc. (a)(b)		28,630		43
Slack Technologies, Inc., Class A (a)		1,341		42
Smartsheet, Inc., Class A (a)		2,866		146
Stitch Fix, Inc., Class A (a)(b)		3,521		88
TransDigm Group, Inc.		119		53
UnitedHealth Group, Inc.		366		108
Wayfair, Inc., Class A (a)		924		182
XPO Logistics, Inc. (a)		2,419		187
Zoom Video Communications, Inc., Class A (a)		269		68
				2,433
Total Common Stocks (Cost $2,348)				3,619
Short-Term Investments (4.0%)
Securities held as Collateral on Loaned Securities (3.8%)
Investment Company (3.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		110,033		110

	Face Amount (000)		Value (000)
Repurchase Agreements (0.8%)
HSBC Securities USA, Inc. (0.07%, dated 6/30/20, due 7/1/20; proceeds $11; fully collateralized by a U.S. Government obligation; 0.5% due 3/15/23; valued at $11)	$	10,823	$	11
Merrill Lynch & Co., Inc. (0.07%, dated 6/30/20, due 7/1/20; proceeds $19; fully collateralized by U.S. Government obligations; 1.38% – 3.88% due 9/30/20 – 8/15/40; valued at $19)		19,032		19
				30
Total Securities held as Collateral on Loaned Securities (Cost $140)				140
	Shares
Investment Company (0.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $6)		6,135		6
Total Short-Term Investments (Cost $146)				146
Total Investments (101.8%) (Cost $2,494) Including $281 of Securities Loaned (c)(d)				3,765
Liabilities in Excess of Other Assets (–1.8%)				(67	)
Net Assets (100.0%)			$	3,698

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2020.

(c)  The approximate fair value and percentage of net assets, $520,000 and 14.1%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $1,353,000 and the aggregate gross unrealized depreciation is approximately $82,000, resulting in net unrealized appreciation of approximately $1,271,000.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Global Endurance Portfolio

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		25.3	%
Software		22.5
Information Technology Services		14.3
Specialty Retail		13.1
Internet & Direct Marketing Retail		7.4
Health Care Providers & Services		6.8
Media		5.4
Air Freight & Logistics		5.2
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2020.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Endurance Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $2,378)	$	3,649
Investment in Security of Affiliated Issuer, at Value (Cost $116)		116
Total Investments in Securities, at Value (Cost $2,494)		3,765
Cash		—	@
Receivable for Investments Sold		76
Due from Adviser		48
Dividends Receivable		1
Receivable from Securities Lending Income		1
Receivable from Affiliate		—	@
Other Assets		39
Total Assets		3,930
Liabilities:
Collateral on Securities Loaned, at Value		140
Payable for Investments Purchased		49
Payable for Professional Fees		28
Payable for Offering Costs		5
Payable for Custodian Fees		2
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Administration Fees		—	@
Other Liabilities		8
Total Liabilities		232
Net Assets	$	3,698
Net Assets Consist of:
Paid-in-Capital	$	2,256
Total Distributable Earnings		1,442
Net Assets	$	3,698
CLASS I:
Net Assets	$	3,603
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		216,280
Net Asset Value, Offering and Redemption Price Per Share	$	16.66
CLASS A:
Net Assets	$	17
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,016
Net Asset Value, Redemption Price Per Share	$	16.57
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.92
Maximum Offering Price Per Share	$	17.49
CLASS C:
Net Assets	$	61
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,704
Net Asset Value, Offering and Redemption Price Per Share	$	16.39
CLASS IS:
Net Assets	$	17
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	16.67
(1) Including: Securities on Loan, at Value:	$	281

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Endurance Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $1 of Foreign Taxes Withheld)	$	4
Income from Securities Loaned — Net		4
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		8
Expenses:
Professional Fees		58
Registration Fees		22
Advisory Fees (Note B)		11
Shareholder Reporting Fees		6
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Custodian Fees (Note F)		3
Administration Fees (Note C)		1
Directors' Fees and Expenses		1
Pricing Fees		1
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Sub Transfer Agency Fees — Class I		—	@
Other Expenses		6
Total Expenses		113
Expenses Reimbursed by Adviser (Note B)		(85	)
Waiver of Advisory Fees (Note B)		(11	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		14
Net Investment Loss		(6	)
Realized Gain (Loss):
Investments Sold		191
Foreign Currency Translation		(—	@)
Net Realized Gain		191
Change in Unrealized Appreciation (Depreciation):
Investments		616
Foreign Currency Translation		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		616
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		807
Net Increase in Net Assets Resulting from Operations	$	801

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Endurance Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(6	)	$	(11	)
Net Realized Gain (Loss)		191			(3	)
Net Change in Unrealized Appreciation (Depreciation)		616			658
Net Increase in Net Assets Resulting from Operations		801			644
Capital Share Transactions:(1)
Class I:
Subscribed		59			105
Class A:
Subscribed		—	@		—
Class C:
Subscribed		43			—
Redeemed		(1	)		—
Net Increase in Net Assets Resulting from Capital Share Transactions		101			105
Total Increase in Net Assets		902			749
Net Assets:
Beginning of Period		2,796			2,047
End of Period	$	3,698		$	2,796
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		5			9
Class A:
Shares Subscribed		—	@@		—
Class C:
Shares Subscribed		3			—
Shares Redeemed		(—	@@)		—
Net Increase in Class C Shares Outstanding		3			—

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Endurance Portfolio

	Class I
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period Ended December 31, 2018(1)
Net Asset Value, Beginning of Period	$	13.03		$	9.98		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.03	)		(0.05	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		3.66			3.10			(0.02	)
Total from Investment Operations		3.63			3.05			(0.02	)
Net Asset Value, End of Period	$	16.66		$	13.03		$	9.98
Total Return(4)		27.94	%(7)		30.30	%		0.00	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,603		$	2,757		$	2,017
Ratio of Expenses Before Expense Limitation		7.88	%(8)		14.17	%		913.94	%(8)
Ratio of Expenses After Expense Limitation		1.00	%(5)(8)		1.00	%(5)		1.00	%(8)
Ratio of Net Investment Loss		(0.45	)%(5)(8)		(0.42	)%(5)		(1.00	)%(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		N/A
Portfolio Turnover Rate		30	%(7)		74	%		0	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Endurance Portfolio

	Class A
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period Ended December 31, 2018(1)
Net Asset Value, Beginning of Period	$	12.99		$	9.98		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.05	)		(0.09	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		3.63			3.10			(0.02	)
Total from Investment Operations		3.58			3.01			(0.02	)
Net Asset Value, End of Period	$	16.57		$	12.99		$	9.98
Total Return(4)		27.71	%(7)		29.90	%		0.00	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	17		$	13		$	10
Ratio of Expenses Before Expense Limitation		22.57	%(8)		29.52	%		927.90	%(8)
Ratio of Expenses After Expense Limitation		1.34	%(5)(8)		1.35	%(5)		1.35	%(8)
Ratio of Net Investment Loss		(0.77	)%(5)(8)		(0.77	)%(5)		(1.35	)%(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.00	%(6)		N/A
Portfolio Turnover Rate		30	%(7)		74	%		0	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Endurance Portfolio

	Class C
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period Ended December 31, 2018(1)
Net Asset Value, Beginning of Period	$	12.89		$	9.98		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.09	)		(0.18	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		3.59			3.09			(0.02	)
Total from Investment Operations		3.50			2.91			(0.02	)
Net Asset Value, End of Period	$	16.39		$	12.89		$	9.98
Total Return(4)		27.23	%(7)		28.90	%		0.00	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	61		$	13		$	10
Ratio of Expenses Before Expense Limitation		19.18	%(8)		30.23	%		928.63	%(8)
Ratio of Expenses After Expense Limitation		2.10	%(5(8)		2.10	%(5)		2.10	%(8)
Ratio of Net Investment Loss		(1.32	)%(5)(8)		(1.52	)%(5)		(2.10	)%(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		N/A
Portfolio Turnover Rate		30	%(7)		74	%(7)		0	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Endurance Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period Ended December 31, 2018(1)
Net Asset Value, Beginning of Period	$	13.04		$	9.98		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.03	)		(0.04	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		3.66			3.10			(0.02	)
Total from Investment Operations		3.63			3.06			(0.02	)
Net Asset Value, End of Period	$	16.67		$	13.04		$	9.98
Total Return(4)		27.99	%(7)		30.40	%		0.00	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	17		$	13		$	10
Ratio of Expenses Before Expense Limitation		21.86	%(8)		29.13	%		927.65	%(8)
Ratio of Expenses After Expense Limitation		0.95	%(5)(8)		0.95	%(5)		0.95	%(8)
Ratio of Net Investment Loss		(0.40	)%(5)(8)		(0.37	)%(5)		(0.95	)%(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		N/A
Portfolio Turnover Rate		30	%(7)		74	%		0	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Endurance Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices

if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.   Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	53	$	—	$	—	$	53
Air Freight & Logistics		187		—		—		187
Capital Markets		64		—		—		64
Food & Staples Retailing		—		36		—		36
Health Care Equipment & Supplies		—		88		—		88
Health Care Providers & Services		108		139		—		247
Health Care Technology		97		—		—		97
Household Durables		—		78		—		78
Information Technology Services		518		—		—		518
Internet & Direct Marketing Retail		270		—		—		270
Investment Companies		45		—		—		45
Life Sciences Tools & Services		—		124		—		124
Media		197		—		—		197
Pharmaceuticals		163		—		—		163
Real Estate Management & Development		162		—		—		162
Software		761		55		—		816
Specialty Retail		474		—		—		474
Total Common Stocks		3,099		520		—		3,619
Short-Term Investments
Investment Company		116		—		—		116
Repurchase Agreements		—		30		—		30
Total Short-Term Investments		116		30		—		146
Total Assets	$	3,215	$	550	$	—	$	3,765

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus

accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign
Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

5.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	281	(a)	$	—	$	(281	)(b)(c)	$	0

(a) Represents market value of loaned securities at period end.

(b) The Fund received cash collateral of approximately $140,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $150,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(c) The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2020:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	140	$	—	$	—	$	—	$	140
Total Borrowings	$	140	$	—	$	—	$	—	$	140
Gross amount of recognized liabilities for securities lending transactions									$	140

6.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or

losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.80	%		0.75	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $11,000 of advisory fees were waived and approximately $88,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $848,000 and $864,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an

amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	62	$	770	$	716	$	—	@

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	116

@ Amount is less than $500.

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the two-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. There were no distributions paid during fiscal years 2019 and 2018.

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2019.

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	9	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or

funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 45.0%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-year period and for the period since the end of December 2018, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

22

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

23

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

25

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGENDSAN
3185001 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Franchise Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	10
Notes to Financial Statements	15
Investment Advisory Agreement Approval	21
Liquidity Risk Management Program	23
Privacy Notice	24
Director and Officer Information	26

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Franchise Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Global Franchise Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Franchise Portfolio Class I	$	1,000.00	$	1,006.30	$	1,020.39	$	4.49	$	4.52		0.90	%
Global Franchise Portfolio Class A		1,000.00		1,004.70		1,019.10		5.78		5.82		1.16
Global Franchise Portfolio Class L		1,000.00		1,002.50		1,016.61		8.26		8.32		1.66
Global Franchise Portfolio Class C		1,000.00		1,001.10		1,015.42		9.45		9.52		1.90
Global Franchise Portfolio Class IS		1,000.00		1,006.70		1,020.74		4.14		4.17		0.83

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Global Franchise Portfolio

	Shares		Value (000)
Common Stocks (97.9%)
France (5.5%)
L'Oreal SA (a)		232,291	$	74,971
LVMH Moet Hennessy Louis Vuitton SE		60,973		26,919
Pernod Ricard SA		226,609		35,683
				137,573
Germany (4.8%)
SAP SE		860,048		120,225
Italy (0.4%)
Davide Campari-Milano SpA		1,237,067		10,462
Netherlands (2.2%)
Heineken N.V.		596,997		55,048
United Kingdom (17.9%)
British American Tobacco PLC		1,788,283		68,586
Experian PLC		819,124		28,750
Reckitt Benckiser Group PLC		2,473,024		227,514
RELX PLC (Euronext N.V)		945,180		21,898
RELX PLC (LSE)		2,444,052		56,570
Unilever PLC		816,979		44,069
				447,387
United States (67.1%)
Abbott Laboratories		993,553		90,841
Accenture PLC, Class A		633,595		136,045
Automatic Data Processing, Inc.		602,412		89,693
Baxter International, Inc.		1,179,455		101,551
Becton Dickinson & Co.		413,989		99,055
Coca-Cola Co. (The)		1,002,993		44,814
Danaher Corp.		530,692		93,842
Factset Research Systems, Inc.		96,514		31,702
Fidelity National Information Services, Inc.		477,367		64,010
Fox Corp., Class A		798,272		21,410
Fox Corp., Class B (a)		436,540		11,717
Microsoft Corp.		1,177,382		239,609
Moody's Corp.		103,564		28,452
NIKE, Inc., Class B		334,905		32,837
Philip Morris International, Inc.		2,679,665		187,737
Procter & Gamble Co. (The)		940,804		112,492
Roper Technologies, Inc.		61,334		23,814
Thermo Fisher Scientific, Inc.		216,652		78,502
Visa, Inc., Class A		712,041		137,545
Zoetis, Inc.		357,274		48,961
				1,674,629
Total Common Stocks (Cost $1,949,888)				2,445,324
Short-Term Investment (2.0%)
Investment Company (2.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $48,805)		48,805,169		48,805
Total Investments (99.9%) (Cost $1,998,693) (b)(c)				2,494,129
Other Assets in Excess of Liabilities (0.1%)				2,145
Net Assets (100.0%)			$	2,496,274

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  The approximate fair value and percentage of net assets, $770,695,000 and 30.9%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $553,084,000 and the aggregate gross unrealized depreciation is approximately $57,648,000, resulting in net unrealized appreciation of approximately $495,436,000.

Euronext N.V.  Euronext Amsterdam Stock Market.

LSE    London Stock Exchange.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		23.2	%
Information Technology Services		17.1
Health Care Equipment & Supplies		15.5
Software		14.4
Household Products		13.6
Tobacco		10.3
Beverages		5.9
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Franchise Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $1,949,888)	$	2,445,324
Investment in Security of Affiliated Issuer, at Value (Cost $48,805)		48,805
Total Investments in Securities, at Value (Cost $1,998,693)		2,494,129
Dividends Receivable		4,670
Receivable for Fund Shares Sold		3,292
Tax Reclaim Receivable		760
Receivable from Affiliate		3	��
Other Assets		240
Total Assets		2,503,094
Liabilities:
Payable for Advisory Fees		4,222
Payable for Fund Shares Redeemed		2,031
Payable for Sub Transfer Agency Fees — Class I		82
Payable for Sub Transfer Agency Fees — Class A		27
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Sub Transfer Agency Fees — Class C		7
Payable for Shareholder Services Fees — Class A		55
Payable for Distribution and Shareholder Services Fees — Class L		5
Payable for Distribution and Shareholder Services Fees — Class C		89
Payable for Administration Fees		161
Payable for Professional Fees		40
Payable for Custodian Fees		19
Payable for Transfer Agency Fees — Class I		2
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		—	@
Other Liabilities		77
Total Liabilities		6,820
Net Assets	$	2,496,274
Net Assets Consist of:
Paid-in-Capital	$	1,964,786
Total Distributable Earnings		531,488
Net Assets	$	2,496,274

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Franchise Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	1,944,466
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		67,736,878
Net Asset Value, Offering and Redemption Price Per Share	$	28.71
CLASS A:
Net Assets	$	272,034
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		9,718,042
Net Asset Value, Redemption Price Per Share	$	27.99
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.55
Maximum Offering Price Per Share	$	29.54
CLASS L:
Net Assets	$	7,669
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		274,817
Net Asset Value, Offering and Redemption Price Per Share	$	27.91
CLASS C:
Net Assets	$	109,049
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,990,147
Net Asset Value, Offering and Redemption Price Per Share	$	27.33
CLASS IS:
Net Assets	$	163,056
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		5,677,105
Net Asset Value, Offering and Redemption Price Per Share	$	28.72

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Franchise Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $383 of Foreign Taxes Withheld)	$	22,481
Dividends from Security of Affiliated Issuer (Note G)		198
Total Investment Income		22,679
Expenses:
Advisory Fees (Note B)		8,274
Administration Fees (Note C)		903
Shareholder Services Fees — Class A (Note D)		348
Distribution and Shareholder Services Fees — Class L (Note D)		29
Distribution and Shareholder Services Fees — Class C (Note D)		509
Sub Transfer Agency Fees — Class I		567
Sub Transfer Agency Fees — Class A		110
Sub Transfer Agency Fees — Class L		2
Sub Transfer Agency Fees — Class C		35
Registration Fees		72
Professional Fees		50
Custodian Fees (Note F)		41
Shareholder Reporting Fees		37
Transfer Agency Fees — Class I (Note E)		10
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		4
Transfer Agency Fees — Class IS (Note E)		2
Pricing Fees		1
Other Expenses		13
Total Expenses		11,010
Rebate from Morgan Stanley Affiliate (Note G)		(55	)
Net Expenses		10,955
Net Investment Income		11,724
Realized Gain (Loss):
Investments Sold		32,881
Foreign Currency Translation		(249	)
Net Realized Gain		32,632
Change in Unrealized Appreciation (Depreciation):
Investments		(15,377	)
Foreign Currency Translation		(11	)
Net Change in Unrealized Appreciation (Depreciation)		(15,388	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		17,244
Net Increase in Net Assets Resulting from Operations	$	28,968

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Franchise Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	11,724		$	18,037
Net Realized Gain		32,632			75,417
Net Change in Unrealized Appreciation (Depreciation)		(15,388	)		342,113
Net Increase in Net Assets Resulting from Operations		28,968			435,567
Dividends and Distributions to Shareholders:
Class I		—			(69,422	)
Class A		—			(12,386	)
Class L		—			(324	)
Class C		—			(3,695	)
Class IS		—			(6,101	)
Total Dividends and Distributions to Shareholders		—			(91,928	)
Capital Share Transactions:(1)
Class I:
Subscribed		583,656			610,415
Distributions Reinvested		—			66,894
Redeemed		(263,505	)		(243,674	)
Class A:
Subscribed		48,515			129,760
Distributions Reinvested		—			11,893
Redeemed		(69,242	)		(42,410	)
Class L:
Exchanged		20			153
Distributions Reinvested		—			324
Redeemed		(679	)		(971	)
Class C:
Subscribed		22,963			39,565
Distributions Reinvested		—			3,620
Redeemed		(13,001	)		(13,421	)
Class IS:
Subscribed		128,453			27,633
Distributions Reinvested		—			6,101
Redeemed		(100,269	)		(145,085	)
Net Increase in Net Assets Resulting from Capital Share Transactions		336,911			450,797
Total Increase in Net Assets		365,879			794,436
Net Assets:
Beginning of Period		2,130,395			1,335,959
End of Period	$	2,496,274		$	2,130,395

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Franchise Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		21,955			22,755
Shares Issued on Distributions Reinvested		—			2,357
Shares Redeemed		(10,058	)		(9,143	)
Net Increase in Class I Shares Outstanding		11,897			15,969
Class A:
Shares Subscribed		1,844			4,988
Shares Issued on Distributions Reinvested		—			429
Shares Redeemed		(2,626	)		(1,617	)
Net Increase (Decrease) in Class A Shares Outstanding		(782	)		3,800
Class L:
Shares Exchanged		1			5
Shares Issued on Distributions Reinvested		—			12
Shares Redeemed		(28	)		(41	)
Net Decrease in Class L Shares Outstanding		(27	)		(24	)
Class C:
Shares Subscribed		867			1,520
Shares Issued on Distributions Reinvested		—			133
Shares Redeemed		(509	)		(519	)
Net Increase in Class C Shares Outstanding		358			1,134
Class IS:
Shares Subscribed		4,575			988
Shares Issued on Distributions Reinvested		—			215
Shares Redeemed		(3,709	)		(5,250	)
Net Increase (Decrease) in Class IS Shares Outstanding		866			(4,047	)

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Franchise Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	28.53		$	23.03		$	24.72		$	20.56		$	20.33		$	20.27
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.15			0.30			0.29			0.27			0.30			0.31
Net Realized and Unrealized Gain (Loss)		0.03			6.51			(0.63	)		5.05			0.84			1.02
Total from Investment Operations		0.18			6.81			(0.34	)		5.32			1.14			1.33
Distributions from and/or in Excess of:
Net Investment Income		—			(0.27	)		(0.27	)		(0.24	)		(0.28	)		(0.35	)
Net Realized Gain		—			(1.04	)		(1.08	)		(0.92	)		(0.63	)		(0.92	)
Total Distributions		—			(1.31	)		(1.35	)		(1.16	)		(0.91	)		(1.27	)
Net Asset Value, End of Period	$	28.71		$	28.53		$	23.03		$	24.72		$	20.56		$	20.33
Total Return(3)		0.63	%(6)		29.60	%		(1.50	)%		25.85	%		5.64	%		6.50	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,944,466		$	1,593,092		$	918,409		$	753,107		$	601,340		$	505,321
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			N/A			0.98	%		0.99	%
Ratio of Expenses After Expense Limitation		0.90	%(4)(7)		0.93	%(4)		0.94	%(4)		0.98	%(4)		0.97	%(4)		0.98	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.93	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		1.11	%(4)(7)		1.09	%(4)		1.14	%(4)		1.17	%(4)		1.40	%(4)		1.46	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)
Portfolio Turnover Rate		16	%(6)		16	%		27	%		28	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Franchise Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	27.86		$	22.53		$	24.21		$	20.16		$	19.96		$	19.92
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.11			0.23			0.21			0.22			0.23			0.24
Net Realized and Unrealized Gain (Loss)		0.02			6.35			(0.61	)		4.94			0.83			1.02
Total from Investment Operations		0.13			6.58			(0.40	)		5.16			1.06			1.26
Distributions from and/or in Excess of:
Net Investment Income		—			(0.21	)		(0.20	)		(0.19	)		(0.23	)		(0.30	)
Net Realized Gain		—			(1.04	)		(1.08	)		(0.92	)		(0.63	)		(0.92	)
Total Distributions		—			(1.25	)		(1.28	)		(1.11	)		(0.86	)		(1.22	)
Net Asset Value, End of Period	$	27.99		$	27.86		$	22.53		$	24.21		$	20.16		$	19.96
Total Return(3)		0.47	%(6)		29.24	%		(1.77	)%		25.58	%		5.36	%		6.25	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	272,034		$	292,491		$	150,936		$	146,722		$	104,306		$	75,297
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			N/A			1.23	%		1.25	%
Ratio of Expenses After Expense Limitation		1.16	%(4)(7)		1.19	%(4)		1.23	%(4)		1.21	%(4)		1.22	%(4)		1.25	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.19	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.80	%(4)(7)		0.83	%(4)		0.84	%(4)		0.94	%(4)		1.13	%(4)		1.15	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)
Portfolio Turnover Rate		16	%(6)		16	%		27	%		28	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Franchise Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	27.84		$	22.51		$	24.18		$	20.13		$	19.91		$	19.87
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.04			0.09			0.09			0.10			0.13			0.15
Net Realized and Unrealized Gain (Loss)		0.03			6.35			(0.62	)		4.93			0.82			1.00
Total from Investment Operations		0.07			6.44			(0.53	)		5.03			0.95			1.15
Distributions from and/or in Excess of:
Net Investment Income		—			(0.07	)		(0.06	)		(0.06	)		(0.10	)		(0.19	)
Net Realized Gain		—			(1.04	)		(1.08	)		(0.92	)		(0.63	)		(0.92	)
Total Distributions		—			(1.11	)		(1.14	)		(0.98	)		(0.73	)		(1.11	)
Net Asset Value, End of Period	$	27.91		$	27.84		$	22.51		$	24.18		$	20.13		$	19.91
Total Return(3)		0.25	%(6)		28.62	%		(2.29	)%		24.98	%		4.82	%		5.72	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	7,669		$	8,388		$	7,312		$	7,993		$	7,449		$	8,898
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			N/A			1.72	%		1.73	%
Ratio of Expenses After Expense Limitation		1.66	%(4)(7)		1.69	%(4)		1.73	%(4)		1.70	%(4)		1.71	%(4)		1.72	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.69	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.29	%(4)(7)		0.31	%(4)		0.36	%(4)		0.44	%(4)		0.65	%(4)		0.72	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)
Portfolio Turnover Rate		16	%(6)		16	%		27	%		28	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Franchise Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from September 30, 2015(2) to December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	27.30		$	22.13		$	23.82		$	19.88		$	19.75		$	19.79
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.01			0.02			0.03			0.04			0.06			0.01
Net Realized and Unrealized Gain (Loss)		0.02			6.23			(0.60	)		4.86			0.84			1.02
Total from Investment Operations		0.03			6.25			(0.57	)		4.90			0.90			1.03
Distributions from and/or in Excess of:
Net Investment Income		—			(0.04	)		(0.04	)		(0.04	)		(0.14	)		(0.28	)
Net Realized Gain		—			(1.04	)		(1.08	)		(0.92	)		(0.63	)		(0.79	)
Total Distributions		—			(1.08	)		(1.12	)		(0.96	)		(0.77	)		(1.07	)
Net Asset Value, End of Period	$	27.33		$	27.30		$	22.13		$	23.82		$	19.88		$	19.75
Total Return(4)		0.11	%(7)		28.27	%		(2.51	)%		24.63	%		4.58	%		5.11	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	109,049		$	99,141		$	55,271		$	47,726		$	29,650		$	5,765
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			N/A			2.00	%		N/A
Ratio of Expenses After Expense Limitation		1.90	%(5)(8)		1.95	%(5)		1.96	%(5)		1.98	%(5)		1.99	%(5)		2.03	%(5)(8)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.95	%(5)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.08	%(5)(8)		0.07	%(5)		0.12	%(5)		0.16	%(5)		0.29	%(5)		0.11	%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)(8)
Portfolio Turnover Rate		16	%(7)		16	%		27	%		28	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Franchise Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from December 15, 2015(2) to December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	28.53		$	23.03		$	24.72		$	20.55		$	20.33		$	21.49
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.17			0.32			0.32			0.29			0.21			0.12
Net Realized and Unrealized Gain (Loss)		0.02			6.51			(0.65	)		5.05			0.93			0.00	(4)
Total from Investment Operations		0.19			6.83			(0.33	)		5.34			1.14			0.12
Distributions from and/or in Excess of:
Net Investment Income		—			(0.29	)		(0.28	)		(0.25	)		(0.29	)		(0.36	)
Net Realized Gain		—			(1.04	)		(1.08	)		(0.92	)		(0.63	)		(0.92	)
Total Distributions		—			(1.33	)		(1.36	)		(1.17	)		(0.92	)		(1.28	)
Net Asset Value, End of Period	$	28.72		$	28.53		$	23.03		$	24.72		$	20.55		$	20.33
Total Return(5)		0.67	%(8)		29.67	%		(1.45	)%		26.00	%		5.70	%		0.45	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	163,056		$	137,283		$	204,031		$	90,488		$	19,334		$	9
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			N/A			0.94	%		16.54	%(9)
Ratio of Expenses After Expense Limitation		0.83	%(6)(9)		0.86	%(6)		0.88	%(6)		0.91	%(6)		0.92	%(6)		0.94	%(6)(9)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.86	%(6)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		1.27	%(6)(9)		1.21	%(6)		1.30	%(6)		1.23	%(6)		0.99	%(6)		0.95	%(6)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		16	%(8)		16	%		27	%		28	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Franchise Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official

exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services,

quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Beverages	$	44,814	$	101,193	$	—	$	146,007
Capital Markets		60,154		—		—		60,154
Health Care Equipment & Supplies		385,289		—		—		385,289
Household Products		112,492		227,514		—		340,006
Industrial Conglomerates		23,814		—		—		23,814
Information Technology Services		427,293		—		—		427,293
Life Sciences Tools & Services		78,502		—		—		78,502
Media		33,127		—		—		33,127
Personal Products		—		119,040		—		119,040
Pharmaceuticals		48,961		—		—		48,961
Professional Services		—		107,218		—		107,218
Software		239,609		120,225		—		359,834
Textiles, Apparel & Luxury Goods		32,837		26,919		—		59,756
Tobacco		187,737		68,586		—		256,323
Total Common Stocks		1,674,629		770,695		—		2,445,324
Short-Term Investment
Investment Company		48,805		—		—		48,805
Total Assets	$	1,723,434	$	770,695	$	—	$	2,494,129

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at

period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

5.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

6.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.80	%		0.75	%		0.70	%

For the six months ended June 30, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.73% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. This arrangement had no effect for the six months ended June 30, 2020.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley. The Sub-Adviser provides the Fund with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $701,639,000 and $346,464,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $55,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	52,999	$	454,205	$	458,399	$	198

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	48,805

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly,

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	22,253	$	69,675	$	12,935	$	55,773

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(8,583	)	$	8,583

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	575	$	1,469

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 35.3%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one-year period but better than its peer group average for the three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee was higher than but close to its peer group average and the total expense ratio was lower than its peer group average. After discussion, the Board concluded that the Fund's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

23

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

24

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Adviser

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

26

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGFSAN
3178594 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Infrastructure Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	17
Investment Advisory Agreement Approval	24
Liquidity Risk Management Program	26
Privacy Notice	27
Director and Officer Information	29

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Infrastructure Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Global Infrastructure Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Infrastructure Portfolio Class I	$	1,000.00	$	895.90	$	1,020.04	$	4.57	$	4.87		0.97	%
Global Infrastructure Portfolio Class A		1,000.00		895.00		1,018.85		5.70		6.07		1.21
Global Infrastructure Portfolio Class L		1,000.00		892.10		1,016.01		8.37		8.92		1.78
Global Infrastructure Portfolio Class C		1,000.00		891.20		1,014.57		9.73		10.37		2.07
Global Infrastructure Portfolio Class IS		1,000.00		896.70		1,020.19		4.43		4.72		0.94
Global Infrastructure Portfolio Class IR		1,000.00		895.80		1,020.19		4.43		4.72		0.94

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Global Infrastructure Portfolio

	Shares		Value (000)
Common Stocks (99.0%)
Australia (6.1%)
APA Group (Units) (a)		301,951	$	2,335
Atlas Arteria Ltd. (Units) (a)		670,672		3,097
Spark Infrastructure Group		1,846,939		2,758
Sydney Airport (Units) (a)		387,634		1,530
Transurban Group (Units) (a)		691,052		6,777
				16,497
Brazil (0.3%)
Energisa SA (Units) (a)		102,700		925
Canada (10.8%)
Canadian Pacific Railway Ltd.		1,100		280
Enbridge, Inc.		233,395		7,097
Gibson Energy, Inc.		531,710		8,276
Pembina Pipeline Corp.		125,038		3,126
TC Energy Corp. (b)		244,892		10,462
				29,241
China (5.5%)
China Everbright International Ltd. (c)		8,665,000		4,597
China Gas Holdings Ltd. (c)		2,028,600		6,284
China Tower Corp. Ltd. H Shares (c)		8,210,000		1,459
ENN Energy Holdings Ltd. (c)		126,700		1,432
Jiangsu Expressway Co., Ltd. H Shares (c)		848,000		997
				14,769
France (5.2%)
Aeroports de Paris		8,610		889
Getlink SE (d)		176,170		2,548
Vinci SA		113,590		10,532
				13,969
India (2.8%)
Azure Power Global Ltd. (d)		468,016		7,470
Italy (3.9%)
Atlantia SpA (d)		146,342		2,367
Infrastrutture Wireless Italiane SpA		276,000		2,771
Snam SpA		293,940		1,433
Terna Rete Elettrica Nazionale SpA		592,390		4,086
				10,657
Japan (1.4%)
Tokyo Gas Co., Ltd.		155,300		3,719
Mexico (2.8%)
Promotora y Operadora de Infraestructura SAB de CV (d)		1,030,606		7,443
New Zealand (0.8%)
Auckland International Airport Ltd.		512,584		2,180
Spain (5.5%)
Aena SME SA (d)		18,220		2,437
Atlantica Yield PLC		152,512		4,438
Cellnex Telecom SA		52,181		3,187
Ferrovial SA		142,683		3,814
Red Electrica Corp., SA (b)		54,270		1,015
				14,891

	Shares		Value (000)
Switzerland (0.5%)
Flughafen Zurich AG (Registered) (d)		9,260	$	1,209
United Kingdom (6.9%)
National Grid PLC		898,218		10,959
Pennon Group PLC		284,513		3,940
Severn Trent PLC		77,746		2,379
United Utilities Group PLC		130,318		1,464
				18,742
United States (46.5%)
Ameren Corp.		20,990		1,477
American Electric Power Co., Inc.		17,700		1,410
American Tower Corp. REIT		105,770		27,346
American Water Works Co., Inc.		52,660		6,775
Atmos Energy Corp.		77,336		7,701
Cheniere Energy, Inc. (d)		81,763		3,951
CMS Energy Corp.		37,770		2,206
Crown Castle International Corp. REIT		91,262		15,273
Edison International		93,947		5,102
Essential Utilities, Inc.		108,779		4,595
Evergy, Inc.		42,720		2,533
Eversource Energy		85,961		7,158
Kinder Morgan, Inc.		372,300		5,648
NiSource, Inc.		193,618		4,403
ONEOK, Inc.		81,840		2,719
SBA Communications Corp. REIT		21,530		6,414
Sempra Energy		65,166		7,639
Targa Resources Corp.		58,320		1,170
Union Pacific Corp.		1,620		274
Waste Management, Inc.		51,600		5,465
Williams Cos., Inc. (The)		199,520		3,795
Xcel Energy, Inc.		43,690		2,730
				125,784
Total Common Stocks (Cost $219,257)				267,496
Short-Term Investments (4.7%)
Securities held as Collateral on Loaned Securities (3.9%)
Investment Company (3.1%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class(See Note G)		8,259,588		8,260
	Face Amount (000)
Repurchase Agreements (0.8%)
HSBC Securities USA, Inc., (0.07%, dated 6/30/20, due 7/1/20; proceeds $812; fully collateralized by a U.S. Government obligation; 0.50% due 3/15/23; valued at $829)	$	812		812

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Global Infrastructure Portfolio

	Face Amount (000)		Value (000)
Repurchase Agreements (cont'd)
Merrill Lynch & Co., Inc., (0.07%, dated 6/30/20, due 7/1/20; proceeds $1,429; fully collateralized by U.S. Government obligations; 1.38% – 3.88% due 9/30/20 – 8/15/40; valued at $1,457)	$	1,429	$	1,429
				2,241
Total Securities held as Collateral on Loaned Securities (Cost $10,501)				10,501
	Shares
Investment Company (0.8%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $2,258)		2,258,054		2,258
Total Short-Term Investments (Cost $12,759)				12,759
Total Investments (103.7%) (Cost $232,016) Including $11,099 of Securities Loaned (e)(f)				280,255
Liabilities in Excess of Other Assets (–3.7%)				(9,897	)
Net Assets (100.0%)			$	270,358

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Consists of one or more classes of securities traded together as a unit; stocks with attached warrants.

(b)  All or a portion of this security was on loan at June 30, 2020.

(c)  Security trades on the Hong Kong exchange.

(d)  Non-income producing security.

(e)  The approximate fair value and percentage of net assets, $92,195,000 and 34.1%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(f)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $59,766,000 and the aggregate gross unrealized depreciation is approximately $11,527,000, resulting in net unrealized appreciation of approximately $48,239,000.

REIT  Real Estate Investment Trust.

Portfolio Composition*

Classification	Percentage of Total Investments
Oil & Gas Storage & Transportation		30.1	%
Communications		20.9
Electricity Transmission & Distribution		14.4
Other**		11.9
Water		8.8
Toll Roads		8.6
Diversified		5.3
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2020.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Infrastructure Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $221,498)	$	269,737
Investment in Security of Affiliated Issuer, at Value (Cost $10,518)		10,518
Total Investments in Securities, at Value (Cost $232,016)		280,255
Foreign Currency, at Value (Cost $513)		511
Dividends Receivable		882
Receivable for Investments Sold		408
Tax Reclaim Receivable		18
Receivable for Fund Shares Sold		11
Receivable from Securities Lending Income		2
Receivable from Affiliate		—	@
Other Assets		93
Total Assets		282,180
Liabilities:
Collateral on Securities Loaned, at Value		10,501
Payable for Investments Purchased		481
Payable for Advisory Fees		434
Payable for Fund Shares Redeemed		155
Payable for Sub Transfer Agency Fees — Class I		17
Payable for Sub Transfer Agency Fees — Class A		34
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Shareholder Services Fees — Class A		42
Payable for Distribution and Shareholder Services Fees — Class L		2
Payable for Distribution and Shareholder Services Fees — Class C		2
Payable for Directors' Fees and Expenses		42
Payable for Professional Fees		34
Payable for Administration Fees		18
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		11
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Custodian Fees		13
Other Liabilities		34
Total Liabilities		11,822
Net Assets	$	270,358
Net Assets Consist of:
Paid-in-Capital	$	225,673
Total Distributable Earnings		44,685
Net Assets	$	270,358

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Infrastructure Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	62,010
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,503,334
Net Asset Value, Offering and Redemption Price Per Share	$	13.77
CLASS A:
Net Assets	$	202,809
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		14,781,742
Net Asset Value, Redemption Price Per Share	$	13.72
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.76
Maximum Offering Price Per Share	$	14.48
CLASS L:
Net Assets	$	3,126
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		229,152
Net Asset Value, Offering and Redemption Price Per Share	$	13.64
CLASS C:
Net Assets	$	2,393
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		178,070
Net Asset Value, Offering and Redemption Price Per Share	$	13.44
CLASS IS:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		751
Net Asset Value, Offering and Redemption Price Per Share	$	13.71
CLASS IR:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		732
Net Asset Value, Offering and Redemption Price Per Share	$	13.76
(1) Including: Securities on Loan, at Value:	$	11,099

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Infrastructure Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $186 of Foreign Taxes Withheld)	$	4,019
Dividends from Security of Affiliated Issuer (Note G)		21
Income from Securities Loaned — Net		7
Total Investment Income		4,047
Expenses:
Advisory Fees (Note B)		1,228
Shareholder Services Fees — Class A (Note D)		266
Distribution and Shareholder Services Fees — Class L (Note D)		12
Distribution and Shareholder Services Fees — Class C (Note D)		13
Sub Transfer Agency Fees — Class I		51
Sub Transfer Agency Fees — Class A		77
Sub Transfer Agency Fees — Class L		1
Sub Transfer Agency Fees — Class C		1
Administration Fees (Note C)		116
Professional Fees		52
Registration Fees		30
Custodian Fees (Note F)		29
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		21
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Transfer Agency Fees — Class IR (Note E)		1
Shareholder Reporting Fees		25
Directors' Fees and Expenses		2
Pricing Fees		2
Other Expenses		10
Total Expenses		1,942
Waiver of Advisory Fees (Note B)		(135	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(43	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(77	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(5	)
Net Expenses		1,678
Net Investment Income		2,369
Realized Loss:
Investments Sold		(3,246	)
Foreign Currency Translation		(29	)
Net Realized Loss		(3,275	)
Change in Unrealized Appreciation (Depreciation):
Investments		(32,114	)
Foreign Currency Translation		(11	)
Net Change in Unrealized Appreciation (Depreciation)		(32,125	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(35,400	)
Net Decrease in Net Assets Resulting from Operations	$	(33,031	)

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Infrastructure Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	2,369		$	7,490
Net Realized Gain (Loss)		(3,275	)		8,302
Net Change in Unrealized Appreciation (Depreciation)		(32,125	)		65,191
Net Increase (Decrease) in Net Assets Resulting from Operations		(33,031	)		80,983
Dividends and Distributions to Shareholders:
Class I		—			(2,674	)
Class A		—			(6,686	)
Class L		—			(83	)
Class C		—			(60	)
Class IS		—			(—	@)
Class IR		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(9,503	)
Capital Share Transactions:(1)
Class I:
Subscribed	��	6,756			16,736
Distributions Reinvested		—			2,669
Redeemed		(26,716	)		(11,724	)
Class A:
Subscribed		1,001			4,129
Distributions Reinvested		—			6,562
Redeemed		(13,633	)		(32,462	)
Class L:
Exchanged		16			2
Distributions Reinvested		—			81
Redeemed		(221	)		(985	)
Class C:
Subscribed		36			146
Distributions Reinvested		—			60
Redeemed		(212	)		(465	)
Class IS:
Subscribed		—			3,143
Distributions Reinvested		—			—	@
Redeemed		—			(32,096	)
Class IR:
Subscribed		—			—
Distributions Reinvested		—			—	@
Net Decrease in Net Assets Resulting from Capital Share Transactions		(32,973	)		(44,204	)
Total Increase (Decrease) in Net Assets		(66,004	)		27,276
Net Assets:
Beginning of Period		336,362			309,086
End of Period	$	270,358		$	336,362

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Infrastructure Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		472			1,194
Shares Issued on Distributions Reinvested		—			177
Shares Redeemed		(1,785	)		(826	)
Net Increase (Decrease) in Class I Shares Outstanding		(1,313	)		545
Class A:
Shares Subscribed		73			280
Shares Issued on Distributions Reinvested		—			435
Shares Redeemed		(972	)		(2,261	)
Net Decrease in Class A Shares Outstanding		(899	)		(1,546	)
Class L:
Shares Exchanged		1			—	@@
Shares Issued on Distributions Reinvested		—			5
Shares Redeemed		(15	)		(70	)
Net Decrease in Class L Shares Outstanding		(14	)		(65	)
Class C:
Shares Subscribed		3			10
Shares Issued on Distributions Reinvested		—			4
Shares Redeemed		(17	)		(34	)
Net Decrease in Class C Shares Outstanding		(14	)		(20	)
Class IS:
Shares Subscribed		—			224
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		—			(2,198	)
Net Decrease in Class IS Shares Outstanding		—			(1,974	)
Class IR:
Shares Subscribed		—			—
Shares Issued on Distributions Reinvested		—			—	@@
Net Increase in Class IR Shares Outstanding		—			—	@@

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Infrastructure Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	15.37		$	12.39		$	14.64		$	14.02		$	12.59		$	15.41
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.13			0.35			0.31			0.44			0.40			0.40
Net Realized and Unrealized Gain (Loss)		(1.73	)		3.11			(1.45	)		1.33			1.55			(2.54	)
Total from Investment Operations		(1.60	)		3.46			(1.14	)		1.77			1.95			(2.14	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.36	)		(0.37	)		(0.42	)		(0.37	)		(0.35	)
Net Realized Gain		—			(0.12	)		(0.74	)		(0.73	)		(0.15	)		(0.32	)
Paid-in-Capital		—			—			—			—			—			(0.01	)
Total Distributions		—			(0.48	)		(1.11	)		(1.15	)		(0.52	)		(0.68	)
Net Asset Value, End of Period	$	13.77		$	15.37		$	12.39		$	14.64		$	14.02		$	12.59
Total Return(3)		(10.41	)%(8)		27.94	%		(8.02	)%		12.70	%		15.55	%		(13.90	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	62,010		$	89,371		$	65,311		$	95,219		$	58,794		$	47,878
Ratio of Expenses Before Expense Limitation		1.19	%(9)		1.16	%		1.16	%		1.08	%		1.04	%		1.10	%
Ratio of Expenses After Expense Limitation		0.97	%(4)(9)		0.97	%(4)		0.97	%(4)		0.91	%(4)(5)		0.85	%(4)		0.88	%(4)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.97	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		1.77	%(4)(9)		2.40	%(4)		2.21	%(4)		2.93	%(4)		2.85	%(4)		2.70	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.01	%		0.01	%		0.00	%(7)
Portfolio Turnover Rate		34	%(8)		30	%		43	%		45	%		48	%		48	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.97% for Class I shares. Prior to July 1, 2017, the maximum ratio was 0.87% for Class I shares.

(6)  Effective March 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.87% for Class I shares. Prior to March 30, 2015, the maximum ratio was 1.15% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Infrastructure Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	15.33		$	12.36		$	14.60		$	13.99		$	12.56		$	15.38
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.11			0.31			0.28			0.39			0.36			0.39
Net Realized and Unrealized Gain (Loss)		(1.72	)		3.10			(1.45	)		1.33			1.55			(2.56	)
Total from Investment Operations		(1.61	)		3.41			(1.17	)		1.72			1.91			(2.17	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.32	)		(0.33	)		(0.38	)		(0.33	)		(0.32	)
Net Realized Gain		—			(0.12	)		(0.74	)		(0.73	)		(0.15	)		(0.32	)
Paid-in-Capital		—			—			—			—			—			(0.01	)
Total Distributions		—			(0.44	)		(1.07	)		(1.11	)		(0.48	)		(0.65	)
Net Asset Value, End of Period	$	13.72		$	15.33		$	12.36		$	14.60		$	13.99		$	12.56
Total Return(3)		(10.50	)%(8)		27.62	%		(8.22	)%		12.37	%		15.29	%		(14.08	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	202,809		$	240,350		$	212,919		$	278,780		$	275,481		$	263,702
Ratio of Expenses Before Expense Limitation		1.38	%(9)		1.37	%		1.37	%		1.38	%		1.37	%		1.35	%
Ratio of Expenses After Expense Limitation		1.21	%(4)(9)		1.21	%(4)		1.21	%(4)		1.15	%(4)(5)		1.10	%(4)		1.12	%(4)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.21	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		1.61	%(4)(9)		2.16	%(4)		2.00	%(4)		2.63	%(4)		2.60	%(4)		2.67	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.01	%		0.01	%		0.00	%(7)
Portfolio Turnover Rate		34	%(8)		30	%		43	%		45	%		48	%		48	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.21% for Class A shares. Prior to July 1, 2017, the maximum ratio was 1.11% for Class A shares.

(6)  Effective March 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.11% for Class A shares. Prior to March 30, 2015, the maximum ratio was 1.50% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Infrastructure Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	15.29		$	12.33		$	14.55		$	13.94		$	12.52		$	15.34
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.07			0.23			0.20			0.31			0.28			0.30
Net Realized and Unrealized Gain (Loss)		(1.72	)		3.08			(1.44	)		1.33			1.54			(2.55	)
Total from Investment Operations		(1.65	)		3.31			(1.24	)		1.64			1.82			(2.25	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.23	)		(0.24	)		(0.30	)		(0.25	)		(0.24	)
Net Realized Gain		—			(0.12	)		(0.74	)		(0.73	)		(0.15	)		(0.32	)
Paid-in-Capital		—			—			—			—			—			(0.01	)
Total Distributions		—			(0.35	)		(0.98	)		(1.03	)		(0.40	)		(0.57	)
Net Asset Value, End of Period	$	13.64		$	15.29		$	12.33		$	14.55		$	13.94		$	12.52
Total Return(3)		(10.79	)%(8)		26.87	%		(8.73	)%		11.80	%		14.57	%		(14.64	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,126		$	3,718		$	3,805		$	5,634		$	5,534		$	5,529
Ratio of Expenses Before Expense Limitation		1.92	%(9)		1.93	%		1.87	%		1.95	%		1.95	%		1.95	%
Ratio of Expenses After Expense Limitation		1.78	%(4)(9)		1.78	%(4)		1.78	%(4)		1.72	%(4)(5)		1.67	%(4)		1.69	%(4)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.78	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		1.04	%(4)(9)		1.58	%(4)		1.41	%(4)		2.06	%(4)		2.03	%(4)		2.06	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.01	%		0.01	%		0.00	%(7)
Portfolio Turnover Rate		34	%(8)		30	%		43	%		45	%		48	%		48	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.78% for Class L shares. Prior to July 1, 2017, the maximum ratio was 1.68% for Class L shares.

(6)  Effective March 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.68% for Class L shares. Prior to March 30, 2015, the maximum ratio was 2.00% for Class L shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Infrastructure Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	15.08		$	12.17		$	14.36		$	13.81		$	12.47		$	15.87
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.05			0.18			0.16			0.29			0.26			0.17
Net Realized and Unrealized Gain (Loss)		(1.69	)		3.05			(1.42	)		1.28			1.52			(2.97	)
Total from Investment Operations		(1.64	)		3.23			(1.26	)		1.57			1.78			(2.80	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.20	)		(0.19	)		(0.29	)		(0.29	)		(0.27	)
Net Realized Gain		—			(0.12	)		(0.74	)		(0.73	)		(0.15	)		(0.32	)
Paid-in-Capital		—			—			—			—			—			(0.01	)
Total Distributions		—			(0.32	)		(0.93	)		(1.02	)		(0.44	)		(0.60	)
Net Asset Value, End of Period	$	13.44		$	15.08		$	12.17		$	14.36		$	13.81		$	12.47
Total Return(4)		(10.88	)%(8)		26.55	%		(9.02	)%		11.42	%		14.35	%		(17.62	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,393		$	2,901		$	2,580		$	3,601		$	784		$	516
Ratio of Expenses Before Expense Limitation		2.21	%(9)		2.20	%		2.20	%		2.23	%		2.69	%		2.34	%(9)
Ratio of Expenses After Expense Limitation		2.07	%(5)(9)		2.07	%(5)		2.07	%(5)		2.02	%(5)(6)		1.96	%(5)		1.97	%(5)(9)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			2.07	%(5)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		0.74	%(5)(9)		1.30	%(5)		1.14	%(5)		1.96	%(5)		1.90	%(5)		1.81	%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.01	%		0.01	%		0.00	%(7)(9)
Portfolio Turnover Rate		34	%(8)		30	%		43	%		45	%		48	%		48	%(8)

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.07% for Class C shares. Prior to July 1, 2017, the maximum ratio was 1.97% for Class C shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Infrastructure Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	15.29		$	12.38		$	14.63		$	14.02		$	12.58		$	15.41
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.13			0.38			0.32			0.45			0.43			0.53
Net Realized and Unrealized Gain (Loss)		(1.71	)		3.01			(1.46	)		1.32			1.53			(2.68	)
Total from Investment Operations		(1.58	)		3.39			(1.14	)		1.77			1.96			(2.15	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.36	)		(0.37	)		(0.43	)		(0.37	)		(0.35	)
Net Realized Gain		—			(0.12	)		(0.74	)		(0.73	)		(0.15	)		(0.32	)
Paid-in-Capital		—			—			—			—			—			(0.01	)
Total Distributions		—			(0.48	)		(1.11	)		(1.16	)		(0.52	)		(0.68	)
Net Asset Value, End of Period	$	13.71		$	15.29		$	12.38		$	14.63		$	14.02		$	12.58
Total Return(3)		(10.33	)%(8)		27.31	%		(7.92	)%		12.65	%		15.66	%		(13.96	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10		$	11		$	24,462		$	9,516		$	5,921		$	2,167
Ratio of Expenses Before Expense Limitation		17.60	%(9)		1.05	%		1.05	%		1.06	%		1.08	%		1.41	%
Ratio of Expenses After Expense Limitation		0.94	%(4)(9)		0.94	%(4)		0.94	%(4)		0.89	%(4)(5)		0.83	%(4)		0.84	%(4)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.94	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		1.90	%(4)(9)		2.71	%(4)		2.26	%(4)		2.95	%(4)		3.02	%(4)		3.91	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.01	%		0.01	%		0.00	%(7)
Portfolio Turnover Rate		34	%(8)		30	%		43	%		45	%		48	%		48	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.94% for Class IS shares. Prior to July 1, 2017, the maximum ratio was 0.84% for Class IS shares.

(6)  Effective March 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.84% for Class IS shares. Prior to March 30, 2015, the maximum ratio was 1.08% for Class IS shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Infrastructure Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	15.36		$	12.38		$	14.10
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.13			0.35			0.20
Net Realized and Unrealized Gain on Investments Gain (Loss)		(1.73	)		3.11			(0.81	)
Total from Investment Operations		(1.60	)		3.46			(0.61	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.36	)		(0.37	)
Net Realized Gain		—			(0.12	)		(0.74	)
Total Distributions		—			(0.48	)		(1.11	)
Net Asset Value, End of Period	$	13.76		$	15.36		$	12.38
Total Return(3)		(10.42	)%(6)		27.99	%		(4.54	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	10		$	11		$	9
Ratio of Expenses Before Expense Limitation		18.54	%(7)		19.62	%		18.47	%(7)
Ratio of Expenses After Expense Limitation		0.94	%(4)(7)		0.94	%(4)		0.94	%(4)(7)
Ratios of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.94	%(4)		N/A
Ratio of Net Investment Income		1.90	%(4)(7)		2.65	%(4)		2.67	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		34	%(6)		30	%		43	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Infrastructure Portfolio. The Fund seeks to provide both capital appreciation and income.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official

exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value

Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Airports	$	—	$	8,245	$	—	$	8,245
Commercial Services & Supplies		5,465		—		—		5,465
Communications		49,033		7,417		—		56,450
Diversified		—		14,346		—		14,346
Electricity Transmission & Distribution		19,858		18,818		—		38,676
Oil & Gas Storage & Transportation		65,987		15,203		—		81,190
Railroads		554		—		—		554
Renewables		11,908		—		—		11,908
Toll Roads		7,443		15,786		—		23,229
Utilities		3,683		—		—		3,683
Water		11,370		12,380		—		23,750
Total Common Stocks		175,301		92,195		—		267,496
Short-Term Investments
Investment Company		10,518		—		—		10,518
Repurchase Agreements		—		2,241		—		2,241
Total Short-Term Investments		10,518		2,241		—		12,759
Total Assets	$	185,819	$	94,436	$	—	$	280,255

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the

agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

5.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and

that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	11,099	(a)	$	—	$	(11,099	)(b)(c)	$	0

(a) Represents market value of loaned securities at period end.

(b) The Fund received cash collateral of approximately $10,501,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $955,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(c) The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2020:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	10,501	$	—	$	—	$	—	$	10,501
Total Borrowings	$	10,501	$	—	$	—	$	—	$	10,501
Gross amount of recognized liabilities for securities lending transactions									$	10,501

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

6.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 0.85% of the average daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.97% for Class I shares, 1.21% for Class A shares, 1.78% for Class L shares, 2.07% for Class C shares, 0.94% for Class IS shares and 0.94% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one

year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $135,000 of advisory fees were waived and approximately $124,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $97,657,000 and $125,172,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $5,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	9,217	$	68,814	$	67,513	$	21

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	10,518

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	7,000	$	2,503	$	7,366	$	18,949

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	112	$	(112	)

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	655	$	3,290

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 52.7%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-year period but below its peer group average for the three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee was higher than but close to its peer group average and actual management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which does not include breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

26

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

27

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

29

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFISGISAN
3178622 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Opportunity Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	10
Notes to Financial Statements	16
Investment Advisory Agreement Approval	26
Liquidity Risk Management Program	28
Privacy Notice	29
Director and Officer Information	31

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Opportunity Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Global Opportunity Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Opportunity Portfolio Class I	$	1,000.00	$	1,162.40	$	1,020.34	$	4.89	$	4.57		0.91	%
Global Opportunity Portfolio Class A		1,000.00		1,160.90		1,018.85		6.50		6.07		1.21
Global Opportunity Portfolio Class L		1,000.00		1,160.50		1,018.55		6.82		6.37		1.27
Global Opportunity Portfolio Class C		1,000.00		1,157.20		1,015.37		10.24		9.57		1.91
Global Opportunity Portfolio Class IS		1,000.00		1,163.50		1,020.74		4.46		4.17		0.83
Global Opportunity Portfolio Class IR		1,000.00		1,163.20		1,020.74		4.46		4.17		0.83

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Global Opportunity Portfolio

	Shares		Value (000)
Common Stocks (91.6%)
Argentina (0.4%)
Globant SA (a)		149,725	$	22,436
Canada (2.2%)
Shopify, Inc., Class A (a)		114,252		108,448
China (14.1%)
Alibaba Group Holding Ltd. ADR (a)		529,684		114,253
China Resources Beer Holdings Co., Ltd. (b)		3,549,333		19,813
Foshan Haitian Flavouring & Food Co., Ltd., Class A		2,596,854		45,741
Meituan Dianping, Class B (a)(b)		7,638,200		170,686
TAL Education Group ADR (a)		4,143,846		283,356
Trip.com Group Ltd. ADR (a)		2,773,120		71,879
				705,728
Denmark (3.8%)
DSV A/S		1,530,820		188,038
France (2.8%)
Hermes International		167,152		140,342
India (4.2%)
HDFC Bank Ltd.		14,765,402		207,536
Italy (2.1%)
Moncler SpA (a)		2,783,211		107,024
Japan (2.1%)
Keyence Corp.		250,500		104,975
Korea, Republic of (0.9%)
NAVER Corp.		195,954		44,086
United Kingdom (0.7%)
Fevertree Drinks PLC		1,324,303		33,570
United States (58.3%)
Adobe, Inc. (a)		438,076		190,699
Agilon Health Topco, Inc. (a)(c)(d) (acquisition cost — $11,376; acquired 11/7/18)		30,083		13,765
Alphabet, Inc., Class C (a)		139,211		196,790
Amazon.com, Inc. (a)		133,487		368,267
EPAM Systems, Inc. (a)		561,101		141,403
Facebook, Inc., Class A (a)		793,360		180,148
Farfetch Ltd., Class A (a)		2,431,966		42,000
Intuitive Surgical, Inc. (a)		112,277		63,979
Martin Marietta Materials, Inc.		117,692		24,312
Mastercard, Inc., Class A		991,945		293,318
salesforce.com, Inc. (a)		718,647		134,624
ServiceNow, Inc. (a)		605,160		245,126
Spotify Technology SA (a)		609,003		157,239
Square, Inc., Class A (a)		829,658		87,064
Uber Technologies, Inc. (a)		5,926,457		184,194
Veeva Systems, Inc., Class A (a)		192,868		45,212
Visa, Inc., Class A		869,740		168,008
Walt Disney Co. (The)		671,690		74,900
Workday, Inc., Class A (a)		368,637		69,068

	Shares		Value (000)
Zillow Group, Inc., Class A (a)		615,873	$	35,400
Zoom Video Communications, Inc., Class A (a)		749,627		190,061
				2,905,577
Total Common Stocks (Cost $2,668,130)				4,567,760
Preferred Stocks (0.1%)
United States (0.1%)
Airbnb, Inc. Series D (a)(c)(d) (acquisition cost — $1,594; acquired 4/16/14)		39,153		3,134
Magic Leap Series C (a)(c)(d) (acquisition cost — $3,175; acquired 12/22/15)		137,829		—
Total Preferred Stocks (Cost $4,769)				3,134
Short-Term Investment (8.4%)
Investment Company (8.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $418,922)		418,922,211		418,922
Total Investments Excluding Purchased Options (100.1%) (Cost $3,091,821)				4,989,816
Total Purchased Options Outstanding (0.0%) (Cost $3,320)				97
Total Investments (100.1%) (Cost $3,095,141) (e)(f)				4,989,913
Liabilities in Excess of Other Assets (–0.1%)				(6,695	)
Net Assets (100.0%)			$	4,983,218

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Fund has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at June 30, 2020 amounts to approximately $16,899,000 and represents 0.3% of net assets.

(d)  At June 30, 2020, the Fund held fair valued securities valued at approximately $16,899,000, representing 0.3% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(e)  The approximate fair value and percentage of net assets, $1,061,811,000 and 21.3%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Global Opportunity Portfolio

(f)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $1,945,522,000 and the aggregate gross unrealized depreciation is approximately $50,750,000, resulting in net unrealized appreciation of approximately $1,894,772,000.

ADR  American Depositary Receipt.

Call Option Purchased:

The Fund had the following call option purchased open at June 30, 2020:

Counterparty	Description		Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
Royal Bank of Scotland		USD/CNH	CNH	8.09	Sep-20		615,152,760		615,153	$	97	$	3,320	$	(3,223	)

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Other*		23.3	%
Software		17.1
Information Technology Services		16.0
Internet & Direct Marketing Retail		15.4
Interactive Media & Services		9.1
Short-Term Investments		8.4
Diversified Consumer Services		5.7
Textiles, Apparel & Luxury Goods		5.0
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Opportunity Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $2,676,219)	$	4,570,991
Investment in Security of Affiliated Issuer, at Value (Cost $418,922)		418,922
Total Investments in Securities, at Value (Cost $3,095,141)		4,989,913
Foreign Currency, at Value (Cost $4)		4
Receivable for Fund Shares Sold		6,574
Tax Reclaim Receivable		311
Dividends Receivable		34
Receivable from Affiliate		19
Other Assets		456
Total Assets		4,997,311
Liabilities:
Payable for Advisory Fees		7,472
Payable for Fund Shares Redeemed		3,954
Deferred Capital Gain Country Tax		977
Payable for Shareholder Services Fees — Class A		247
Payable for Distribution and Shareholder Services Fees — Class L		11
Payable for Distribution and Shareholder Services Fees — Class C		248
Due to Broker		320
Payable for Administration Fees		313
Payable for Sub Transfer Agency Fees — Class I		146
Payable for Sub Transfer Agency Fees — Class A		111
Payable for Sub Transfer Agency Fees — Class L		3
Payable for Sub Transfer Agency Fees — Class C		16
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		55
Payable for Transfer Agency Fees — Class L		9
Payable for Transfer Agency Fees — Class C		3
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Professional Fees		59
Payable for Custodian Fees		24
Other Liabilities		125
Total Liabilities		14,093
Net Assets	$	4,983,218
Net Assets Consist of:
Paid-in-Capital	$	3,106,709
Total Distributable Earnings		1,876,509
Net Assets	$	4,983,218

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Opportunity Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	3,072,597
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		90,757,960
Net Asset Value, Offering and Redemption Price Per Share	$	33.85
CLASS A:
Net Assets	$	1,244,426
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		38,148,285
Net Asset Value, Redemption Price Per Share	$	32.62
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.81
Maximum Offering Price Per Share	$	34.43
CLASS L:
Net Assets	$	45,172
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,404,097
Net Asset Value, Offering and Redemption Price Per Share	$	32.17
CLASS C:
Net Assets	$	313,843
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		10,082,473
Net Asset Value, Offering and Redemption Price Per Share	$	31.13
CLASS IS:
Net Assets	$	221,601
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		6,527,651
Net Asset Value, Offering and Redemption Price Per Share	$	33.95
CLASS IR:
Net Assets	$	85,579
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,517,723
Net Asset Value, Offering and Redemption Price Per Share	$	33.99

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Opportunity Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $325 of Foreign Taxes Withheld)	$	3,778
Dividends from Security of Affiliated Issuer (Note G)		949
Total Investment Income		4,727
Expenses:
Advisory Fees (Note B)		14,580
Shareholder Services Fees — Class A (Note D)		1,343
Distribution and Shareholder Services Fees — Class L (Note D)		149
Distribution and Shareholder Services Fees — Class C (Note D)		1,307
Sub Transfer Agency Fees — Class I		997
Sub Transfer Agency Fees — Class A		596
Sub Transfer Agency Fees — Class L		10
Sub Transfer Agency Fees — Class C		97
Administration Fees (Note C)		1,602
Custodian Fees (Note F)		238
Transfer Agency Fees — Class I (Note E)		27
Transfer Agency Fees — Class A (Note E)		104
Transfer Agency Fees — Class L (Note E)		18
Transfer Agency Fees — Class C (Note E)		13
Transfer Agency Fees — Class IS (Note E)		3
Transfer Agency Fees — Class IR (Note E)		1
Shareholder Reporting Fees		124
Registration Fees		95
Professional Fees		65
Directors' Fees and Expenses		38
Pricing Fees		2
Other Expenses		50
Total Expenses		21,459
Rebate from Morgan Stanley Affiliate (Note G)		(276	)
Distribution Fees — Class L Shares Waived (Note D)		(89	)
Net Expenses		21,094
Net Investment Loss		(16,367	)
Realized Gain (Loss):
Investments Sold		65,529
Foreign Currency Translation		(355	)
Net Realized Gain		65,174
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of $1,889)		634,888
Foreign Currency Translation		9
Net Change in Unrealized Appreciation (Depreciation)		634,897
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		700,071
Net Increase in Net Assets Resulting from Operations	$	683,704

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Opportunity Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(16,367	)	$	(19,027	)
Net Realized Gain (Loss)		65,174			(32,839	)
Net Change in Unrealized Appreciation (Depreciation)		634,897			951,506
Net Increase in Net Assets Resulting from Operations		683,704			899,640
Capital Share Transactions: (1)
Class I:
Subscribed		931,846			904,534
Redeemed		(503,756	)		(546,491	)
Class A:
Subscribed		196,932			219,604
Redeemed		(190,166	)		(216,191	)
Class L:
Exchanged		35			46
Redeemed		(1,934	)		(4,481	)
Class C:
Subscribed		49,700			70,635
Redeemed		(28,447	)		(36,622	)
Class IS:
Subscribed		83,686			115,916
Redeemed		(18,463	)		(4,208	)
Net Increase in Net Assets Resulting from Capital Share Transactions		519,433			502,742
Total Increase in Net Assets		1,203,137			1,402,382
Net Assets:
Beginning of Period		3,780,081			2,377,699
End of Period	$	4,983,218		$	3,780,081
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		32,678			34,981
Shares Redeemed		(18,174	)		(20,909	)
Net Increase in Class I Shares Outstanding		14,504			14,072
Class A:
Shares Subscribed		7,085			8,760
Shares Redeemed		(7,025	)		(8,663	)
Net Increase in Class A Shares Outstanding		60			97
Class L:
Shares Exchanged		2			2
Shares Redeemed		(71	)		(180	)
Net Decrease in Class L Shares Outstanding		(69	)		(178	)
Class C:
Shares Subscribed		1,850			2,895
Shares Redeemed		(1,103	)		(1,514	)
Net Increase in Class C Shares Outstanding		747			1,381
Class IS:
Shares Subscribed		2,889			4,310
Shares Redeemed		(616	)		(155	)
Net Increase in Class IS Shares Outstanding		2,273			4,155

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Opportunity Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	29.12		$	21.50		$	22.94		$	15.41		$	16.36		$	13.98
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.10	)		(0.12	)		(0.07	)		(0.06	)		(0.05	)		(0.05	)
Net Realized and Unrealized Gain (Loss)		4.83			7.74			(1.20	)		7.68			0.18			2.64
Total from Investment Operations		4.73			7.62			(1.27	)		7.62			0.13			2.59
Distributions from and/or in Excess of:
Net Realized Gain		—			—			(0.17	)		(0.09	)		(1.08	)		(0.21	)
Net Asset Value, End of Period	$	33.85		$	29.12		$	21.50		$	22.94		$	15.41		$	16.36
Total Return(3)		16.24	%(7)		35.44	%		(5.66	)%		49.44	%		1.05	%		18.50	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,072,597		$	2,220,219		$	1,337,133		$	898,008		$	255,187		$	238,920
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			0.99	%		1.07	%		1.20	%
Ratio of Expenses After Expense Limitation		0.91	%(4)(8)		0.94	%(4)		0.94	%(4)(6)		0.79	%(4)		0.80	%(4)		0.98	%(4)(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.94	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(0.68	)%(4)(8)		(0.44	)%(4)		(0.30	)%(4)		(0.31	)%(4)		(0.34	)%(4)		(0.33	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		17	%(7)		15	%		28	%		30	%		37	%		115	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective December 7, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.81% for Class I shares. Prior to December 7, 2015, the maximum ratio was 1.10% for Class I shares. Prior to January 23, 2015, the maximum ratio was 1.25% for Class I shares.

(6)  Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% for Class I shares. Prior to January 1, 2018, the maximum ratio was 0.81% for Class I shares.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Opportunity Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	28.10		$	20.81		$	22.28		$	15.01		$	16.03		$	13.75
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.14	)		(0.18	)		(0.14	)		(0.12	)		(0.11	)		(0.10	)
Net Realized and Unrealized Gain (Loss)		4.66			7.47			(1.16	)		7.48			0.17			2.59
Total from Investment Operations		4.52			7.29			(1.30	)		7.36			0.06			2.49
Distributions from and/or in Excess of:
Net Realized Gain		—			—			(0.17	)		(0.09	)		(1.08	)		(0.21	)
Net Asset Value, End of Period	$	32.62		$	28.10		$	20.81		$	22.28		$	15.01		$	16.03
Total Return(3)		16.09	%(7)		35.03	%		(5.96	)%		49.03	%		0.62	%		18.16	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,244,426		$	1,070,124		$	790,571		$	780,705		$	340,092		$	347,683
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			1.32	%		1.41	%		1.50	%
Ratio of Expenses After Expense Limitation		1.21	%(4)(8)		1.22	%(4)		1.26	%(4)(6)		1.12	%(4)		1.17	%(4)		1.25	%(4)(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.22	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(0.97	)%(4)(8)		(0.72	)%(4)		(0.59	)%(4)		(0.63	)%(4)		(0.70	)%(4)		(0.64	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		17	%(7)		15	%		28	%		30	%		37	%		115	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective December 7, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.23% for Class A Shares. Prior to December 7, 2015, the maximum ratio was 1.45% for Class A Share. Prior to January 23,2015, the maximum ratio was 1.60% for class A shares.

(6)  Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to January 1, 2018, the maximum ratio was 1.23% for Class A shares.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Opportunity Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	27.72		$	20.54		$	22.01		$	14.84		$	15.87		$	13.62
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.14	)		(0.19	)		(0.15	)		(0.13	)		(0.12	)		(0.11	)
Net Realized and Unrealized Gain (Loss)		4.59			7.37			(1.15	)		7.39			0.17			2.57
Total from Investment Operations		4.45			7.18			(1.30	)		7.26			0.05			2.46
Distributions from and/or in Excess of:
Net Realized Gain		—			—			(0.17	)		(0.09	)		(1.08	)		(0.21	)
Net Asset Value, End of Period	$	32.17		$	27.72		$	20.54		$	22.01		$	14.84		$	15.87
Total Return(3)		16.05	%(7)		34.96	%		(6.04	)%		48.91	%		0.56	%		18.03	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	45,172		$	40,836		$	33,913		$	39,979		$	30,133		$	34,628
Ratio of Expenses Before Expense Limitation		1.73	%(8)		1.74	%		1.78	%		1.86	%		1.93	%		2.03	%
Ratio of Expenses After Expense Limitation		1.27	%(4)(8)		1.28	%(4)		1.32	%(4)(6)		1.20	%(4)		1.25	%(4)		1.30	%(4)(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.28	%(4)		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.03	)%(4)(8)		(0.78	)%(4)		(0.65	)%(4)		(0.67	)%(4)		(0.79	)%(4)		(0.70	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		17	%(7)		15	%		28	%		30	%		37	%		115	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.50% for Class L shares. Prior to January 23, 2015, the maximum ratio was 1.65% for Class L shares.

(6)  Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.40% for Class L shares. Prior to January 1, 2018, the maximum ratio was 1.50% for Class L shares.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Opportunity Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	26.90		$	20.07		$	21.64		$	14.69		$	15.80		$	15.25
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.22	)		(0.35	)		(0.30	)		(0.26	)		(0.21	)		(0.15	)
Net Realized and Unrealized Gain (Loss)		4.45			7.18			(1.10	)		7.30			0.18			0.91
Total from Investment Operations		4.23			6.83			(1.40	)		7.04			(0.03	)		0.76
Distributions from and/or in Excess of:
Net Realized Gain		—			—			(0.17	)		(0.09	)		(1.08	)		(0.21	)
Net Asset Value, End of Period	$	31.13		$	26.90		$	20.07		$	21.64		$	14.69		$	15.80
Total Return(4)		15.72	%(7)		34.03	%		(6.61	)%		47.92	%		0.05	%		4.95	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	313,843		$	251,160		$	159,642		$	104,364		$	33,801		$	20,475
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			2.01	%		2.08	%		2.22	%(8)
Ratio of Expenses After Expense Limitation		1.91	%(5)(8)		1.94	%(5)		1.95	%(5)(6)		1.81	%(5)		1.84	%(5)		2.03	%(5)(8)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.94	%(5)		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.67	)%(5)(8)		(1.45	)%(5)		(1.30	)%(5)		(1.33	)%(5)		(1.38	)%(5)		(1.40	)%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%(8)
Portfolio Turnover Rate		17	%(7)		15	%		28	%		30	%		37	%		115	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.10% for Class C shares. Prior to January 1, 2018, the maximum ratio was 2.20% for Class C shares.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Opportunity Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	29.18		$	21.53		$	23.00		$	15.44		$	16.38		$	13.99
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.09	)		(0.14	)		(0.00	)(3)		(0.05	)		(0.06	)		(0.05	)
Net Realized and Unrealized Gain (Loss)		4.86			7.79			(1.30	)		7.70			0.20			2.65
Total from Investment Operations		4.77			7.65			(1.30	)		7.65			0.14			2.60
Distributions from and/or in Excess of:
Net Realized Gain		—			—			(0.17	)		(0.09	)		(1.08	)		(0.21	)
Net Asset Value, End of Period	$	33.95		$	29.18		$	21.53		$	23.00		$	15.44		$	16.38
Total Return(4)		16.35	%(8)		35.53	%		(5.78	)%		49.54	%		1.11	%		18.64	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	221,601		$	124,173		$	2,156		$	1,650		$	23		$	804
Ratio of Expenses Before Expense Limitation		N/A			0.86	%		N/A			1.24	%		3.82	%		3.56	%
Ratio of Expenses After Expense Limitation		0.83	%(5)(9)		0.84	%(5)		0.88	%(5)(7)		0.71	%(5)		0.71	%(5)		0.77	%(5)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.84	%(5)		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(0.60	)%(5)(9)		(0.51	)%(5)		(0.02	)%(5)		(0.23	)%(5)		(0.41	)%(5)		(0.28	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		17	%(8)		15	%		28	%		30	%		37	%		115	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective December 7, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.72% for Class IS shares. Prior to December 7, 2015, the maximum ratio was 1.03% for Class IS shares. Prior to January 23, 2015, the maximum ratio was 1.18% for Class IS shares.

(7)  Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.95% for Class IS shares. Prior to January 1, 2018, the maximum ratio was 0.72% for Class IS shares.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Opportunity Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	29.22		$	21.56		$	26.67
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.09	)		(0.09	)		(0.06	)
Net Realized and Unrealized Gain on Investments Gain (Loss)		4.86			7.75			(4.88	)
Total from Investment Operations		4.77			7.66			(4.94	)
Distributions from and/or in Excess of:
Net Realized Gain		—			—			(0.17	)
Net Asset Value, End of Period	$	33.99		$	29.22		$	21.56
Total Return(3)		16.32	%(5)		35.53	%		(18.63	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	85,579		$	73,569		$	54,284
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A
Ratio of Expenses After Expense Limitation		0.83	%(4)(6)		0.84	%(4)		0.88	%(4)(6)
Ratios of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.84	%(4)		N/A
Ratio of Net Investment Loss		(0.59	)%(4)(6)		(0.35	)%(4)		(0.46	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%		(0.01	)%(6)
Portfolio Turnover Rate		17	%(5)		15	%		28	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Not annualized.

(6)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Opportunity Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official

exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee

provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	188,038	$	—		$	188,038
Banks		—		207,536		—			207,536
Beverages		—		53,383		—			53,383
Construction Materials		24,312		—		—			24,312
Diversified Consumer Services		283,356		—		—			283,356
Electronic Equipment, Instruments & Components		—		104,975		—			104,975
Entertainment		232,139		—		—			232,139
Food Products		—		45,741		—			45,741
Health Care Equipment & Supplies 63,979 — — 63,979 Health Care Technology		45,212		—		13,765			58,977
Information Technology Services		798,241		—		—			798,241
Interactive Media & Services		412,338		44,086		—			456,424
Internet & Direct Marketing Retail		596,399		170,686		—			767,085
Road & Rail		184,194		—		—			184,194
Software		852,014		—		—			852,014
Textiles, Apparel & Luxury Goods		—		247,366		—			247,366
Total Common Stocks		3,492,184		1,061,811		13,765			4,567,760
Preferred Stocks
Electronic Equipment, Instruments & Components		—		—		—	†		—	†
Internet & Direct Marketing Retail		—		—		3,134			3,134
Total Preferred Stocks		—		—		3,134	†		3,134	†

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Call Option Purchased	$	—	$	97	$	—		$	97
Short-Term Investment
Investment Company		418,922		—		—			418,922
Total Assets	$	3,911,106	$	1,061,908	$	16,899	†	$	4,989,913	†

†  Includes one security valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stock (000)		Preferred Stocks (000)
Beginning Balance	$	13,521	$	8,503
Purchases		—		—
Sales		—		—
Amortization of discount		—		—
Transfers in		—		—
Transfers out		—		—
Corporate actions		—		—
Change in unrealized appreciation (depreciation)		244		(5,369	)
Realized gains (losses)		—		—
Ending Balance	$	13,765	$	3,134	†
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2020	$	244	$	(5,369	)

†  Includes one security valued at zero.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2020. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance. The Fund calculated the weighted averages of the unobservable inputs relative to each investment's fair value as of June 30, 2020.

	Fair Value at June 30, 2020 (000)		Valuation Technique	Unobservable Input	Amount*			Impact to Valuation from an Increase in Input**
Common Stock	$	13,765	Discounted Cash Flow	Weighted Average Cost of Capital		13.0	%	Decrease
				Perpetual Growth Rate		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/Revenue		1.4	x	Increase
				Discount for Lack of Marketability		12.0	%	Decrease
Preferred Stocks	$	3,134	Discounted Cash Flow	Weighted Average Cost of Capital		15.0	%	Decrease
				Perpetual Growth Rate		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/Revenue		5.6	x	Increase
				Discount for Lack of Marketability		16.5	%	Decrease

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and

unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Option	Investments, at Value (Purchased Options)	Currency Risk	$	97	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(5,789	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	4,786	(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Option	$	97	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	97	(a)	$	—	$	(97	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	1,143,938,000

5.  Restricted Securities: The Fund invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

6.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $750 million			Next $750 million			Over $1.5 billion
	0.80	%		0.75	%		0.70	%

For the six months ended June 30, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.71% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.40% for Class L shares, 2.10% for Class C shares, 0.95% for Class IS shares and 0.95% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. This arrangement had no effect for the six months ended June 30, 2020.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares. The Distributor has agreed to waive for at least one year from the date of the Fund's prospectus or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate, the 12b-1 fees on Class L shares of the Fund to the extent it exceeds 0.30% of the average daily net assets of such shares on an annualized basis. For the six months ended June 30, 2020, this waiver amounted to approximately $89,000.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $1,026,822,000 and $647,882,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $276,000 relating to the Fund's investment in the Liquidity Funds.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	295,110	$	795,904	$	672,092	$	949

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	418,922

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	—	$	—	$	12,718	$	6,448

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	18,982	$	(18,982	)

At December 31, 2019, the Fund had no distributable earnings on a tax basis.

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $50,341,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2019, the Fund intends to defer to January 1, 2020 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	12,127	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 33.6%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were higher but close to its peer group averages. After discussion, the Board concluded that the Fund's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

28

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

29

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

30

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

31

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGOSAN
3180182 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Permanence Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	9
Notes to Financial Statements	13
Investment Advisory Agreement Approval	21
Liquidity Risk Management Program	23
Privacy Notice	24
Director and Officer Information	26

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Permanence Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Global Permanence Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Permanence Portfolio Class I	$	1,000.00	$	1,045.20	$	1,019.89	$	5.09	$	5.02		1.00	%
Global Permanence Portfolio Class A		1,000.00		1,042.40		1,018.20		6.80		6.72		1.34
Global Permanence Portfolio Class C		1,000.00		1,038.80		1,014.42		10.65		10.52		2.10
Global Permanence Portfolio Class IS		1,000.00		1,044.20		1,020.14		4.83		4.77		0.95

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Global Permanence Portfolio

	Shares		Value (000)
Common Stocks (96.1%)
Canada (9.4%)
Brookfield Asset Management, Inc., Class A		1,169	$	38
Canadian National Railway Co.		427		38
Constellation Software, Inc.		60		68
FirstService Corp.		1,049		106
				250
Denmark (3.6%)
Chr Hansen Holding A/S		935		96
France (13.8%)
Christian Dior SE		278		118
EssilorLuxottica SA (a)		307		40
Hermes International		144		121
L'Oreal SA (a)		138		45
Remy Cointreau SA		333		45
				369
India (2.4%)
HDFC Bank Ltd. ADR		1,407		64
Netherlands (3.4%)
JDE Peet's BV (a)		2,202		89
United Kingdom (9.3%)
Abcam PLC		2,140		35
Intertek Group PLC		584		39
Rentokil Initial PLC		5,976		38
Royalty Pharma PLC, Class A (a)		2,819		137
				249
United States (54.2%)
Amazon.com, Inc. (a)		55		152
ASML Holding NV		385		142
Autodesk, Inc. (a)		342		82
Costco Wholesale Corp.		200		61
Ecolab, Inc.		489		97
Facebook, Inc., Class A (a)		171		39
HEICO Corp., Class A		1,212		98
IHS Markit Ltd.		549		41
Intercontinental Exchange, Inc.		661		61
Intuitive Surgical, Inc. (a)		223		127
Linde PLC		189		40
Microsoft Corp.		211		43
NIKE, Inc., Class B		388		38
Royal Gold, Inc.		187		23
S&P Global, Inc.		218		72
Sherwin-Williams Co. (The)		73		42
Starbucks Corp.		482		36

	Shares		Value (000)
Texas Pacific Land Trust		83	$	49
Veeva Systems, Inc., Class A (a)		701		164
Waste Connections, Inc.		426		40
				1,447
Total Investments Excluding Purchased Options (96.1%) (Cost $2,182)				2,564
Total Purchased Options Outstanding (0.1%) (Cost $8)				3
Total Investments (96.2%) (Cost $2,190) (b)(c)				2,567
Other Assets in Excess of Liabilities (3.8%)				102
Net Assets (100.0%)			$	2,669

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  The approximate fair value and percentage of net assets, $577,000 and 21.6%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $401,000 and the aggregate gross unrealized depreciation is approximately $24,000, resulting in net unrealized appreciation of approximately $377,000.

ADR  American Depositary Receipt.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Global Permanence Portfolio

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
Royal Bank of Scotland	CNH/USD	USD	8.48	May-21		402,840		403	$	1		$	3	$	(2	)
Royal Bank of Scotland	USD/CNH	CNH	7.75	Jan-21		584,065		584		2			3		(1	)
Royal Bank of Scotland	USD/CNH	CNH	8.09	Sep-20		457,174		457		—	@		2		(2	)
									$	3		$	8	$	(5	)

@  —  Value is less than $500.

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Other*		34.6	%
Textiles, Apparel & Luxury Goods		12.4
Chemicals		10.7
Software		7.5
Capital Markets		6.7
Health Care Technology		6.4
Internet & Direct Marketing Retail		5.9
Semiconductors & Semiconductor Equipment		5.5
Pharmaceuticals		5.3
Health Care Equipment & Supplies		5.0
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Permanence Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $2,190)	$	2,567
Foreign Currency, at Value (Cost $10)		10
Receivable for Investments Sold		61
Due from Adviser		53
Dividends Receivable		1
Tax Reclaim Receivable		—	@
Receivable from Affiliate		—	@
Other Assets		52
Total Assets		2,744
Liabilities:
Payable for Offering Costs		40
Payable for Professional Fees		25
Bank Overdraft		4
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Custodian Fees		—	@
Payable for Administration Fees		—	@
Other Liabilities		6
Total Liabilities		75
Net Assets	$	2,669
Net Assets Consist of:
Paid-in-Capital	$	2,410
Total Distributable Earnings		259
Net Assets	$	2,669
CLASS I:
Net Assets	$	2,635
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		237,221
Net Asset Value, Offering and Redemption Price Per Share	$	11.11
CLASS A:
Net Assets	$	12
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,046
Net Asset Value, Redemption Price Per Share	$	11.06
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.61
Maximum Offering Price Per Share	$	11.67
CLASS C:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	10.97
CLASS IS:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	11.11

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Permanence Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $-@ of Foreign Taxes Withheld)	$	7
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		7
Expenses:
Professional Fees		49
Offering Costs		42
Registration Fees		11
Advisory Fees (Note B)		10
Shareholder Reporting Fees		7
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Custodian Fees (Note F)		3
Administration Fees (Note C)		1
Directors' Fees and Expenses		1
Pricing Fees		1
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		9
Total Expenses		138
Expenses Reimbursed by Adviser (Note B)		(112	)
Waiver of Advisory Fees (Note B)		(10	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		12
Net Investment Loss		(5	)
Realized Gain (Loss):
Investments Sold		(124	)
Foreign Currency Translation		—	@
Net Realized Loss		(124	)
Change in Unrealized Appreciation (Depreciation):
Investments		251
Foreign Currency Translation		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		251
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		127
Net Increase in Net Assets Resulting from Operations	$	122

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Permanence Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Period from April 30, 2019^ to December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(5	)	$	8
Net Realized Gain (Loss)		(124	)		3
Net Change in Unrealized Appreciation (Depreciation)		251			126
Net Increase in Net Assets Resulting from Operations		122			137
Capital Share Transactions:(1)
Class I:
Subscribed		42			2,337
Class A:
Subscribed		1			11
Redeemed		(—	@)		(1	)
Class C:
Subscribed		—			10
Class IS:
Subscribed		—			10
Net Increase in Net Assets Resulting from Capital Share Transactions		43			2,367
Total Increase in Net Assets		165			2,504
Net Assets:
Beginning of Period		2,504			—
End of Period	$	2,669		$	2,504
(1) Capital Share Transactions:
Class I:
Shares Subscribed		5			232
Class A:
Shares Subscribed		—	@@		1
Shares Redeemed		(—	@@)		(—	@@)
Net Increase in Class A Shares Outstanding		—	@@		1
Class C:
Shares Subscribed		—			1
Class IS:
Shares Subscribed		—			1

^  Commencement of Operations.

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Permanence Portfolio

	Class I
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Period from April 30, 2019(1) to December 31, 2019
Net Asset Value, Beginning of Period	$	10.63		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.02	)		0.04
Net Realized and Unrealized Gain		0.50			0.59
Total from Investment Operations		0.48			0.63
Net Asset Value, End of Period	$	11.11		$	10.63
Total Return(3)		4.52	%(6)		6.30	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,635		$	2,471
Ratio of Expenses Before Expense Limitation		11.17	%(7)		12.79	%(7)
Ratio of Expenses After Expense Limitation		1.00	%(4)(7)		0.99	%(4)(7)
Ratio of Net Investment Income (Loss)		(0.39	)%(4)(7)		0.53	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.01	%(7)
Portfolio Turnover Rate		82	%(6)		35	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Permanence Portfolio

	Class A
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Period from April 30, 2019(1) to December 31, 2019
Net Asset Value, Beginning of Period	$	10.61		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.04	)		0.01
Net Realized and Unrealized Gain		0.49			0.60
Total from Investment Operations		0.45			0.61
Net Asset Value, End of Period	$	11.06		$	10.61
Total Return(3)		4.24	%(5)		6.10	%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	12		$	11
Ratio of Expenses Before Expense Limitation		29.51	%(6)		30.61	%(6)
Ratio of Expenses After Expense Limitation		1.34	%(4)(6)		1.34	%(4)(6)
Ratio of Net Investment Income (Loss)		(0.74	)%(4)(6)		0.17	%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		82	%(5)		35	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Not annualized.

(6)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Permanence Portfolio

	Class C
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Period from April 30, 2019(1) to December 31, 2019
Net Asset Value, Beginning of Period	$	10.56		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.07	)		(0.04	)
Net Realized and Unrealized Gain		0.48			0.60
Total from Investment Operations		0.41			0.56
Net Asset Value, End of Period	$	10.97		$	10.56
Total Return(3)		3.88	%(6)		5.60	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11		$	11
Ratio of Expenses Before Expense Limitation		30.63	%(7)		31.59	%(7)
Ratio of Expenses After Expense Limitation		2.10	%(4)(7)		2.09	%(4)(7)
Ratio of Net Investment Loss		(1.49	)%(4)(7)		(0.57	)%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.01	%(7)
Portfolio Turnover Rate		82	%(6)		35	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Permanence Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Period from April 30, 2019(1) to December 31, 2019
Net Asset Value, Beginning of Period	$	10.64		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.02	)		0.04
Net Realized and Unrealized Gain		0.49			0.60
Total from Investment Operations		0.47			0.64
Net Asset Value, End of Period	$	11.11		$	10.64
Total Return(3)		4.42	%(6)		6.40	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11		$	11
Ratio of Expenses Before Expense Limitation		28.98	%(7)		30.53	%(7)
Ratio of Expenses After Expense Limitation		0.95	%(4)(7)		0.94	%(4)(7)
Ratio of Net Investment Income (Loss)		(0.35	)%(4)(7)		0.59	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.01	%(7)
Portfolio Turnover Rate		82	%(6)		35	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Permanence Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant

exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at

least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	98	$	—	$	—	$	98
Banks		64		—		—		64
Beverages		—		45		—		45
Biotechnology		—		35		—		35
Capital Markets		171		—		—		171
Chemicals		179		96		—		275
Commercial Services & Supplies		40		38		—		78
Food & Staples Retailing		61		—		—		61
Food Products		89		—		—		89
Health Care Equipment & Supplies		127		—		—		127
Health Care Technology		164		—		—		164
Hotels, Restaurants & Leisure		36		—		—		36
Interactive Media & Services		39		—		—		39
Internet & Direct Marketing Retail		152		—		—		152
Metals & Mining		23		—		—		23
Oil, Gas & Consumable Fuels		49		—		—		49
Personal Products		—		45		—		45
Pharmaceuticals		137		—		—		137
Professional Services		41		39		—		80
Real Estate Management & Development		106		—		—		106
Road & Rail		38		—		—		38
Semiconductors & Semiconductor Equipment		142		—		—		142
Software		193		—		—		193
Textiles, Apparel & Luxury Goods		38		279		—		317
Total Common Stocks		1,987		577		—		2,564
Call Options Purchased		—		3		—		3
Total Assets	$	1,987	$	580	$	—	$	2,567

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are

maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative

transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	3	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(2	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(1	)(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	3	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	3	(a)	$	—	$	—	$	3

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	1,506,000

5.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution

and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.80	%		0.75	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $10,000 of advisory fees were waived and approximately $116,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $1,983,000 and $2,039,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management

investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	51	$	788	$	839	$	—	@

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	—

@  Amount is less than $500.

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. The tax year ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. There were no distributions paid during fiscal year 2019.

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2019.

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	22	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 34.9%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the period since the end of April 2019, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's contractual management fee was higher than but close to its peer average and actual management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

23

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

24

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

26

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGPERMSAN
3183629 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Real Estate Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	7
Statement of Operations	9
Statements of Changes in Net Assets	10
Financial Highlights	12
Notes to Financial Statements	18
Investment Advisory Agreement Approval	26
Liquidity Risk Management Program	28
Privacy Notice	29
Director and Officer Information	31

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Real Estate Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Global Real Estate Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Real Estate Portfolio Class I	$	1,000.00	$	733.50	$	1,019.89	$	4.31	$	5.02		1.00	%
Global Real Estate Portfolio Class A		1,000.00		732.00		1,018.15		5.81		6.77		1.35
Global Real Estate Portfolio Class L		1,000.00		730.30		1,015.66		7.96		9.27		1.85
Global Real Estate Portfolio Class C		1,000.00		729.10		1,014.42		9.03		10.52		2.10
Global Real Estate Portfolio Class IS		1,000.00		733.50		1,020.19		4.05		4.72		0.94
Global Real Estate Portfolio Class IR		1,000.00		733.50		1,020.19		4.05		4.72		0.94

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Global Real Estate Portfolio

	Shares		Value (000)
Common Stocks (98.6%)
Australia (2.4%)
Dexus REIT		472,436	$	3,032
Goodman Group REIT		30,175		311
GPT Group (The) REIT		519,694		1,510
Mirvac Group REIT		592,837		896
Scentre Group REIT		830,034		1,260
Stockland REIT		46,347		107
Vicinity Centres REIT		480,595		482
				7,598
Austria (0.0 %)
CA Immobilien Anlagen AG		1,334		45
Canada (1.5 %)
Boardwalk REIT		2,331		51
Crombie Real Estate Investment Trust REIT		56,705		535
First Capital Real Estate Investment Trust		177,412		1,814
H&R Real Estate Investment Trust REIT		40,053		288
RioCan Real Estate Investment Trust REIT		161,163		1,823
SmartCentres Real Estate Investment Trust REIT		14,294		220
				4,731
China (1.8 %)
China Overseas Land & Investment Ltd. (a)		113,000		345
China Resources Land Ltd. (a)		434,000		1,659
KWG Property Holding Ltd. (a)(b)		88,000		150
Longfor Group Holdings Ltd. (a)		541,500		2,592
Poly Property Development Co., Ltd., Class H (a)		18,000		182
Shimao Property Holdings Ltd. (a)		117,000		500
Sunac China Holdings Ltd. (a)		28,000		119
				5,547
Finland (0.3 %)
Kojamo Oyj		43,493		919
France (3.7 %)
Carmila SA REIT		27,463		378
Covivio REIT		3,757		272
Gecina SA REIT		25,397		3,137
ICADE REIT		825		58
Klepierre SA REIT		189,802		3,794
Mercialys SA REIT		143,841		1,206
Unibail-Rodamco-Westfield REIT		46,165		2,602
				11,447
Germany (4.4 %)
ADO Properties SA (b)		12,322		336
Alstria Office AG REIT		94,590		1,408
Deutsche Wohnen SE		89,759		4,033
LEG Immobilien AG		11,735		1,489
Vonovia SE		105,907		6,473
				13,739
Hong Kong (7.8 %)
CK Asset Holdings Ltd.		235,000		1,409
Hang Lung Properties Ltd.		642,000		1,526
Hongkong Land Holdings Ltd.		721,300		3,001

	Shares		Value (000)
Hysan Development Co., Ltd.		97,014	$	313
Link REIT		538,875		4,424
New World Development Co. Ltd.		383,439		1,821
Sun Hung Kai Properties Ltd.		518,367		6,622
Swire Properties Ltd.		1,254,700		3,204
Wharf Real Estate Investment Co., Ltd.		418,075		2,007
				24,327
Ireland (0.7 %)
Hibernia REIT PLC		1,635,973		2,065
Japan (10.9 %)
Activia Properties, Inc. REIT		106		367
Advance Residence Investment Corp. REIT		420		1,250
Daiwa Office Investment Corp. REIT		157		867
GLP J-REIT		881		1,273
Hulic Co., Ltd.		72,500		684
Hulic REIT, Inc.		249		310
Invincible Investment Corp. REIT		1,756		456
Japan Hotel REIT Investment Corp.		1,434		595
Japan Prime Realty Investment Corp. REIT		75		220
Japan Real Estate Investment Corp. REIT		522		2,679
Japan Retail Fund Investment Corp. REIT		184		230
Kenedix Office Investment Corp. REIT		144		805
Kenedix, Inc.		63,200		312
Mitsubishi Estate Co., Ltd.		321,900		4,797
Mitsubishi Estate Logistics REIT Investment Corp. REIT		216		795
Mitsui Fudosan Co., Ltd.		263,400		4,679
Mitsui Fudosan Logistics Park, Inc. REIT		279		1,247
Mori Trust Sogo Reit, Inc.		289		357
Nippon Building Fund, Inc. REIT		701		3,992
Nippon Prologis, Inc. REIT		684		2,078
Nomura Real Estate Master Fund, Inc. REIT		1,033		1,237
Orix, Inc. J-REIT		239		315
Premier Investment Corp. REIT		284		316
Sumitomo Realty & Development Co., Ltd.		120,900		3,337
United Urban Investment Corp. REIT		765		824
				34,022
Malta (0.0 %)
BGP Holdings PLC (b)(c)		12,867,024		19
Netherlands (0.6 %)
Eurocommercial Properties N.V. CVA REIT		80,517		1,038
NSI N.V. REIT		20,797		803
				1,841
Norway (0.5 %)
Entra ASA		105,195		1,348
Norwegian Property ASA		235,558		300
				1,648
Singapore (1.8 %)
Ascendas Real Estate Investment Trust REIT		669,189		1,535
CapitaLand Commercial Trust REIT		131,395		161
CapitaLand Mall Trust REIT		168,800		240
Frasers Logistics & Industrial Trust REIT		122,400		105

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Global Real Estate Portfolio

	Shares		Value (000)
Singapore (cont'd)
Keppel DC REIT		781,300	$	1,431
Mapletree Commercial Trust REIT		461,246		645
Mapletree Industrial Trust REIT		298,800		622
Mapletree Logistics Trust REIT		356,500		501
UOL Group Ltd.		54,976		270
				5,510
Spain (1.1 %)
Inmobiliaria Colonial Socimi SA REIT		146,418		1,294
Merlin Properties Socimi SA REIT		252,917		2,108
				3,402
Sweden (1.1 %)
Atrium Ljungberg AB, Class B		36,105		510
Castellum AB		19,207		360
Fabege AB		99,684		1,172
Hufvudstaden AB, Class A		87,960		1,097
Kungsleden AB		58,038		434
				3,573
Switzerland (0.3 %)
PSP Swiss Property AG (Registered)		9,256		1,043
United Kingdom (5.4 %)
British Land Co., PLC (The) REIT		858,143		4,105
Capital & Counties Properties PLC		249,310		452
Derwent London PLC REIT		66,600		2,291
Grainger PLC		67,765		240
Great Portland Estates PLC REIT		244,258		1,914
Hammerson PLC REIT		583,870		579
Land Securities Group PLC REIT		641,563		4,384
Segro PLC REIT		63,374		701
Shaftesbury PLC REIT		21,709		142
St. Modwen Properties PLC		95,061		408
Urban & Civic PLC		414,133		1,197
Workspace Group PLC REIT		44,661		362
				16,775
United States (54.3 %)
Alexandria Real Estate Equities, Inc. REIT		18,387		2,983
American Campus Communities, Inc. REIT		125,230		4,378
American Homes 4 Rent, Class A REIT		41,784		1,124
AvalonBay Communities, Inc. REIT		67,909		10,501
Boston Properties, Inc. REIT		86,002		7,773
Brixmor Property Group, Inc. REIT		5,990		77
Camden Property Trust REIT		58,622		5,348
Cousins Properties, Inc. REIT		77,500		2,312
CubeSmart REIT		117,054		3,159
DiamondRock Hospitality Co. REIT		130,922		724
Digital Realty Trust, Inc. REIT		46,390		6,593
Duke Realty Corp. REIT		54,870		1,942
Equity Lifestyle Properties, Inc. REIT		7,017		438
Equity Residential REIT		99,105		5,829
Essex Property Trust, Inc. REIT		15,146		3,471
Exeter Industrial Value Fund, LP (b)(c)(d)		1,860,000		110
Extra Space Storage, Inc. REIT		20,565		1,900

	Shares		Value (000)
Five Star Senior Living, Inc. (b)		3,789	$	15
Gaming and Leisure Properties, Inc. REIT		56,332		1,949
Healthcare Realty Trust, Inc. REIT		152,038		4,453
Healthcare Trust of America, Inc., Class A REIT		61,219		1,624
Healthpeak Properties, Inc. REIT		74,727		2,060
Highwoods Properties, Inc. REIT		18,700		698
Host Hotels & Resorts, Inc. REIT		627,759		6,774
Hudson Pacific Properties, Inc. REIT		151,449		3,810
Invitation Homes, Inc. REIT		182,261		5,018
JBG SMITH Properties REIT		64,369		1,903
Kilroy Realty Corp. REIT		53,707		3,153
Lexington Realty Trust REIT		80,680		851
Life Storage, Inc. REIT		7,874		748
Macerich Co. (The) REIT		24,650		221
Mack-Cali Realty Corp. REIT		95,012		1,453
Mid-America Apartment Communities, Inc. REIT		15,372		1,763
Paramount Group, Inc. REIT		194,928		1,503
ProLogis, Inc. REIT		165,641		15,459
Public Storage REIT		22,056		4,232
QTS Realty Trust, Inc., Class A REIT		4,839		310
Regency Centers Corp. REIT		70,255		3,224
RLJ Lodging Trust REIT		178,070		1,681
Simon Property Group, Inc. REIT		211,676		14,474
SL Green Realty Corp. REIT		271,480		13,381
Sunstone Hotel Investors, Inc. REIT		318,659		2,597
Taubman Centers, Inc. REIT		26,480		1,000
UDR, Inc. REIT		8,834		330
Ventas, Inc. REIT		194,849		7,135
Vornado Realty Trust REIT		98,943		3,781
Weingarten Realty Investors REIT		184,911		3,500
Welltower, Inc. REIT		28,085		1,453
				169,215
Total Common Stocks (Cost $274,319)				307,466
Short-Term Investment (0.3 %)
Investment Company (0.3 %)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $958)		958,234		958
Total Investments (98.9%) (Cost $275,277) (e)(f)				308,424
Other Assets in Excess of Liabilities (1.1%)				3,461
Net Assets (100.0%)			$	311,885

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Security trades on the Hong Kong exchange.

(b)  Non-income producing security.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Global Real Estate Portfolio

(c)  At June 30, 2020, the Fund held fair valued securities valued at approximately $129,000, representing less than 0.05% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(d)  Restricted security valued at fair value and not registered under the Securities Act of 1933. Exeter Industrial Value Fund, LP was acquired between 11/07 — 4/11 and has a current cost basis of $0. At June 30, 2020, this security had an aggregate market value of approximately $110,000, representing less than 0.05% of net assets.

(e)  The approximate fair value and percentage of net assets, $131,680,000 and 42.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(f)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $66,704,000 and the aggregate gross unrealized depreciation is approximately $33,557,000, resulting in net unrealized appreciation of approximately $33,147,000.

CVA  Certificaten Van Aandelen.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Diversified		24.2	%
Office		21.0
Residential		17.9
Retail		14.0
Other*		9.3
Industrial		8.2
Health Care		5.4
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Real Estate Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $274,319)	$	307,466
Investment in Security of Affiliated Issuer, at Value (Cost $958)		958
Total Investments in Securities, at Value (Cost $275,277)		308,424
Foreign Currency, at Value (Cost $584)		582
Cash		32
Receivable for Fund Shares Sold		2,517
Dividends Receivable		1,238
Receivable for Investments Sold		466
Tax Reclaim Receivable		105
Receivable from Affiliate		—	@
Other Assets		145
Total Assets		313,509
Liabilities:
Payable for Advisory Fees		592
Payable for Investments Purchased		342
Deferred Capital Gain Country Tax		206
Payable for Fund Shares Redeemed		180
Payable for Sub Transfer Agency Fees — Class I		114
Payable for Sub Transfer Agency Fees — Class A		3
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Professional Fees		41
Payable for Custodian Fees		28
Payable for Administration Fees		22
Payable for Transfer Agency Fees — Class I		4
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		3
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		85
Total Liabilities		1,624
Net Assets	$	311,885
Net Assets Consist of:
Paid-in-Capital	$	317,246
Total Accumulated Loss		(5,361	)
Net Assets	$	311,885

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Real Estate Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	91,417
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		12,626,230
Net Asset Value, Offering and Redemption Price Per Share	$	7.24
CLASS A:
Net Assets	$	4,591
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		636,691
Net Asset Value, Redemption Price Per Share	$	7.21
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.40
Maximum Offering Price Per Share	$	7.61
CLASS L:
Net Assets	$	814
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		114,336
Net Asset Value, Offering and Redemption Price Per Share	$	7.12
CLASS C:
Net Assets	$	271
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		38,936
Net Asset Value, Offering and Redemption Price Per Share	$	6.97
CLASS IS:
Net Assets	$	214,785
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		29,671,308
Net Asset Value, Offering and Redemption Price Per Share	$	7.24
CLASS IR:
Net Assets	$	7
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		994
Net Asset Value, Offering and Redemption Price Per Share	$	7.24

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Real Estate Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $317 of Foreign Taxes Withheld)	$	7,377
Dividends from Security of Affiliated Issuer (Note G)		10
Total Investment Income		7,387
Expenses:
Advisory Fees (Note B)		1,776
Administration Fees (Note C)		178
Sub Transfer Agency Fees — Class I		152
Sub Transfer Agency Fees — Class A		6
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		—	@
Custodian Fees (Note F)		62
Professional Fees		58
Registration Fees		34
Shareholder Reporting Fees		30
Transfer Agency Fees — Class I (Note E)		6
Transfer Agency Fees — Class A (Note E)		15
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		3
Transfer Agency Fees — Class IR (Note E)		1
Shareholder Services Fees — Class A (Note D)		9
Distribution and Shareholder Services Fees — Class L (Note D)		4
Distribution and Shareholder Services Fees — Class C (Note D)		2
Directors' Fees and Expenses		6
Pricing Fees		5
Other Expenses		15
Expenses Before Non Operating Expenses		2,364
Bank Overdraft Expense		43
Total Expenses		2,407
Reimbursement of Class Specific Expenses — Class I (Note B)		(111	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(15	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(3	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(1	)
Waiver of Advisory Fees (Note B)		(78	)
Rebate from Morgan Stanley Affiliate (Note G)		(3	)
Net Expenses		2,194
Net Investment Income		5,193
Realized Loss:
Investments Sold (Net of $107 of Capital Gain Country Tax)		(8,722	)
Foreign Currency Translation		(101	)
Net Realized Loss		(8,823	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of $10)		(141,790	)
Foreign Currency Translation		(31	)
Net Change in Unrealized Appreciation (Depreciation)		(141,821	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(150,644	)
Net Decrease in Net Assets Resulting from Operations	$	(145,451	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Real Estate Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	5,193		$	19,731
Net Realized Gain (Loss)		(8,823	)		51,608
Net Change in Unrealized Appreciation (Depreciation)		(141,821	)		74,806
Net Increase (Decrease) in Net Assets Resulting from Operations		(145,451	)		146,145
Dividends and Distributions to Shareholders:
Class I		—			(30,795	)
Class A		—			(992	)
Class L		—			(121	)
Class C		—			(33	)
Class IS		—			(31,992	)
Class IR		—			(1	)
Total Dividends and Distributions to Shareholders		—			(63,934	)
Capital Share Transactions:(1)
Class I:
Subscribed		24,082			52,386
Distributions Reinvested		—			21,514
Redeemed		(200,281	)		(143,648	)
Class A:
Subscribed		232			1,398
Distributions Reinvested		—			985
Redeemed		(3,295	)		(5,586	)
Class L:
Exchanged		101			25
Distributions Reinvested		—			121
Redeemed		(328	)		(39	)
Class C:
Subscribed		—			110
Distributions Reinvested		—			33
Redeemed		(19	)		(208	)
Class IS:
Subscribed		31,151			44,869
Distributions Reinvested		—			30,673
Redeemed		(80,610	)		(292,311	)
Class IR:
Distributions Reinvested		—			1
Net Decrease in Net Assets Resulting from Capital Share Transactions		(228,967	)		(289,677	)
Total Decrease in Net Assets		(374,418	)		(207,466	)
Net Assets:
Beginning of Period		686,303			893,769
End of Period	$	311,885		$	686,303

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Real Estate Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		3,360			5,134
Shares Issued on Distributions Reinvested		—			2,227
Shares Redeemed		(23,487	)		(13,954	)
Net Decrease in Class I Shares Outstanding		(20,127	)		(6,593	)
Class A:
Shares Subscribed		28			136
Shares Issued on Distributions Reinvested		—			102
Shares Redeemed		(481	)		(543	)
Net Decrease in Class A Shares Outstanding		(453	)		(305	)
Class L:
Shares Exchanged		15			3
Shares Issued on Distributions Reinvested		—			13
Shares Redeemed		(47	)		(4	)
Net Increase (Decrease) in Class L Shares Outstanding		(32	)		12
Class C:
Shares Subscribed		—			11
Shares Issued on Distributions Reinvested		—			4
Shares Redeemed		(3	)		(21	)
Net Decrease in Class C Shares Outstanding		(3	)		(6	)
Class IS:
Shares Subscribed		4,468			4,341
Shares Issued on Distributions Reinvested		—			3,175
Shares Redeemed		(10,294	)		(28,336	)
Net Decrease in Class IS Shares Outstanding		(5,826	)		(20,820	)
Class IR:
Shares Issued on Distributions Reinvested		—			—	@@

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Real Estate Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	9.87		$	9.19		$	11.13		$	10.76		$	10.80		$	11.10
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.09			0.24			0.27			0.25			0.21			0.18
Net Realized and Unrealized Gain (Loss)		(2.72	)		1.43			(1.11	)		0.80			0.15			(0.28	)
Total from Investment Operations		(2.63	)		1.67			(0.84	)		1.05			0.36			(0.10	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.54	)		(0.51	)		(0.15	)		(0.34	)		(0.20	)
Net Realized Gain		—			(0.45	)		(0.59	)		(0.53	)		(0.04	)		—
Paid-in-Capital		—			—			—			—			(0.02	)		—
Total Distributions		—			(0.99	)		(1.10	)		(0.68	)		(0.40	)		(0.20	)
Net Asset Value, End of Period	$	7.24		$	9.87		$	9.19		$	11.13		$	10.76		$	10.80
Total Return(3)		(26.65	)%(8)		18.35	%		(7.92	)%		9.73	%		3.42	%		(0.94	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	91,417		$	323,386		$	361,680		$	553,319		$	471,790		$	1,192,624
Ratio of Expenses Before Expense Limitation		1.18	%(9)		1.05	%		1.10	%		1.07	%		1.04	%		1.05	%
Ratio of Expenses After Expense Limitation		1.02	%(4)(6)(9)		1.00	%(4)		1.03	%(4)(5)		1.05	%(4)		1.04	%(4)		1.05	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.00	%(4)(9)		1.00	%(4)		1.03	%(4)		1.05	%(4)		N/A			1.05	%(4)
Ratio of Net Investment Income		2.20	%(4)(9)		2.36	%(4)		2.54	%(4)		2.20	%(4)		1.88	%(4)		1.65	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		20	%(8)		24	%		38	%		39	%		26	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% for Class I shares. Prior to July 1, 2018, the maximum ratio was 1.05% for Class I shares.

(6)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Real Estate Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	9.85		$	9.17		$	11.10		$	10.71		$	10.74		$	11.05
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.08			0.21			0.23			0.17			0.17			0.16
Net Realized and Unrealized Gain (Loss)		(2.72	)		1.41			(1.10	)		0.84			0.16			(0.30	)
Total from Investment Operations		(2.64	)		1.62			(0.87	)		1.01			0.33			(0.14	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.49	)		(0.47	)		(0.09	)		(0.30	)		(0.17	)
Net Realized Gain		—			(0.45	)		(0.59	)		(0.53	)		(0.04	)		—
Paid-in-Capital		—			—			—			—			(0.02	)		—
Total Distributions		—			(0.94	)		(1.06	)		(0.62	)		(0.36	)		(0.17	)
Net Asset Value, End of Period	$	7.21		$	9.85		$	9.17		$	11.10		$	10.71		$	10.74
Total Return(3)		(26.80	)%(8)		17.90	%		(8.19	)%		9.44	%		3.12	%		(1.25	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,591		$	10,728		$	12,775		$	17,701		$	92,730		$	135,517
Ratio of Expenses Before Expense Limitation		1.77	%(9)		1.37	%		1.39	%		N/A			1.36	%		N/A
Ratio of Expenses After Expense Limitation		1.37	%(4)(6)(9)		1.35	%(4)		1.38	%(4)(5)		1.35	%(4)		1.35	%(4)		1.34	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.35	%(4)(9)		1.35	%(4)		1.38	%(4)		1.35	%(4)		N/A			1.34	%(4)
Ratio of Net Investment Income		1.98	%(4)(9)		2.00	%(4)		2.18	%(4)		1.55	%(4)		1.51	%(4)		1.47	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		20	%(8)		24	%		38	%		39	%		26	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to July 1, 2018, the maximum ratio was 1.40% for Class A shares.

(6)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Real Estate Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	9.75		$	9.09		$	11.01		$	10.64		$	10.61		$	10.91
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.06			0.16			0.17			0.14			0.12			0.12
Net Realized and Unrealized Gain (Loss)		(2.69	)		1.40			(1.09	)		0.81			0.16			(0.31	)
Total from Investment Operations		(2.63	)		1.56			(0.92	)		0.95			0.28			(0.19	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.45	)		(0.41	)		(0.05	)		(0.19	)		(0.11	)
Net Realized Gain		—			(0.45	)		(0.59	)		(0.53	)		(0.04	)		—
Paid-in-Capital		—			—			—			—			(0.02	)		—
Total Distributions		—			(0.90	)		(1.00	)		(0.58	)		(0.25	)		(0.11	)
Net Asset Value, End of Period	$	7.12		$	9.75		$	9.09		$	11.01		$	10.64		$	10.61
Total Return(3)		(26.97	)%(8)		17.37	%		(8.74	)%		8.89	%		2.65	%		(1.71	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	814		$	1,419		$	1,220		$	1,344		$	1,483		$	4,509
Ratio of Expenses Before Expense Limitation		2.00	%(9)		1.91	%		2.02	%		1.93	%		1.82	%		N/A
Ratio of Expenses After Expense Limitation		1.87	%(4)(6)(9)		1.85	%(4)		1.88	%(4)(5)		1.90	%(4)		1.82	%(4)		1.78	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.85	%(4)(9)		1.85	%(4)		1.88	%(4)		1.90	%(4)		N/A			1.77	%(4)
Ratio of Net Investment Income		1.47	%(4)(9)		1.54	%(4)		1.64	%(4)		1.32	%(4)		1.07	%(4)		1.12	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		20	%(8)		24	%		38	%		39	%		26	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.85% for Class L shares. Prior to July 1, 2018, the maximum ratio was 1.90% for Class L shares.

(6)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Real Estate Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	9.56		$	8.92		$	10.83		$	10.49		$	10.56		$	11.23
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.05			0.13			0.16			0.12			0.08			0.07
Net Realized and Unrealized Gain (Loss)		(2.64	)		1.37			(1.09	)		0.78			0.16			(0.60	)
Total from Investment Operations		(2.59	)		1.50			(0.93	)		0.90			0.24			(0.53	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.41	)		(0.39	)		(0.03	)		(0.25	)		(0.14	)
Net Realized Gain		—			(0.45	)		(0.59	)		(0.53	)		(0.04	)		—
Paid-in-Capital		—			—			—			—			(0.02	)		—
Total Distributions		—			(0.86	)		(0.98	)		(0.56	)		(0.31	)		(0.14	)
Net Asset Value, End of Period	$	6.97		$	9.56		$	8.92		$	10.83		$	10.49		$	10.56
Total Return(4)		(27.09	)%(9)		16.98	%		(8.93	)%		8.54	%		2.31	%		(4.71	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	271		$	397		$	428		$	327		$	305		$	191
Ratio of Expenses Before Expense Limitation		2.84	%(10)		2.51	%		2.47	%		2.69	%		2.86	%		3.25	%(10)
Ratio of Expenses After Expense Limitation		2.12	%(5)(7)(10)		2.10	%(5)		2.12	%(5)(6)		2.15	%(5)		2.15	%(5)		2.15	%(5)(10)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		2.10	%(5)(10)		2.10	%(5)		2.12	%(5)		2.15	%(5)		N/A			2.15	%(5)(10)
Ratio of Net Investment Income		1.24	%(5)(10)		1.26	%(5)		1.53	%(5)		1.11	%(5)		0.75	%(5)		1.01	%(5)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(8)(10)		0.00	%(8)		0.00	%(8)		0.00	%(8)		0.00	%(8)		0.00	%(8)(10)
Portfolio Turnover Rate		20	%(9)		24	%		38	%		39	%		26	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.10% for Class C shares. Prior to July 1, 2018, the maximum ratio was 2.15% for Class C shares.

(7)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Real Estate Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	9.87		$	9.19		$	11.13		$	10.76		$	10.81		$	11.11
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.10			0.25			0.28			0.25			0.22			0.20
Net Realized and Unrealized Gain (Loss)		(2.73	)		1.43			(1.11	)		0.81			0.15			(0.29	)
Total from Investment Operations		(2.63	)		1.68			(0.83	)		1.06			0.37			(0.09	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.55	)		(0.52	)		(0.16	)		(0.36	)		(0.21	)
Net Realized Gain		—			(0.45	)		(0.59	)		(0.53	)		(0.04	)		—
Paid-in-Capital		—			—			—			—			(0.02	)		—
Total Distributions		—			(1.00	)		(1.11	)		(0.69	)		(0.42	)		(0.21	)
Net Asset Value, End of Period	$	7.24		$	9.87		$	9.19		$	11.13		$	10.76		$	10.81
Total Return(3)		(26.65	)%(8)		18.43	%		(7.83	)%		9.80	%		3.45	%		(0.84	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	214,785		$	350,363		$	517,658		$	1,049,646		$	1,255,498		$	1,012,883
Ratio of Expenses Before Expense Limitation		0.98	%(9)		0.94	%		N/A			N/A			0.97	%		N/A
Ratio of Expenses After Expense Limitation		0.96	%(4)(6)(9)		0.94	%(4)		0.95	%(4)(5)		0.97	%(4)		0.96	%(4)		0.97	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		0.94	%(4)(9)		0.94	%(4)		0.95	%(4)		0.97	%(4)		N/A			0.97	%(4)
Ratio of Net Investment Income		2.40	%(4)(9)		2.41	%(4)		2.58	%		2.26	%(4)		2.01	%(4)		1.78	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		20	%(8)		24	%		38	%		39	%		26	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.94% for Class IS shares. Prior to July 1, 2018, the maximum ratio was 0.99% for Class IS shares.

(6)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Real Estate Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	9.87		$	9.19		$	11.09
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.11			0.25			0.23
Net Realized and Unrealized Gain (Loss)		(2.74	)		1.43			(1.02	)
Total from Investment Operations		(2.63	)		1.68			(0.79	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.55	)		(0.52	)
Net Realized Gain		—			(0.45	)		(0.59	)
Total Distributions		—			(1.00	)		(1.11	)
Net Asset Value, End of Period	$	7.24		$	9.87		$	9.19
Total Return(3)		(26.65	)%(8)		18.44	%		(7.49	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	7		$	10		$	8
Ratio of Expenses Before Expense Limitation		26.73	%(9)		21.38	%		18.72	%(9)
Ratio of Expenses After Expense Limitation		0.96	%(4)(6)(9)		0.94	%(4)		0.94	%(4)(5)(9)
Ratios of Expenses After Expense Limitation Excluding Non-Operating Expenses		0.94	%(4)(9)		0.94	%(4)		N/A
Ratio of Net Investment Income		2.44	%(4)(9)		2.45	%(4)		3.94	%(4)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		20	%(8)		24	%		38	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.94% for Class IR shares. Prior to July 1, 2018, the maximum ratio was 0.99% for Class IR shares.

(6)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Real Estate Portfolio. The Fund seeks to provide current income and capital appreciation. The Fund has capital subscription commitments to an investee company for this same purpose, the details of which are disclosed in the Unfunded Commitments note.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS, and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest

reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") and

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's

valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Fund invests a significant portion of its assets in securities of real estate investment trusts ("REITs"). The market's perception of prospective declines in private real estate values and other financial assets may result in increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Fund.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Diversified	$	16,149	$	58,526	$	—	$	74,675
Health Care		16,740		—		—		16,740
Industrial		18,252		7,011		110		25,373
Industrial/Office Mixed		—		2,951		—		2,951
Lodging/Resorts		11,776		1,051		—		12,827
Office		35,613		28,982		—		64,595
Residential		38,251		16,926		19		55,196
Retail		26,888		16,233		—		43,121
Self Storage		10,039		—		—		10,039
Specialty		1,949		—		—		1,949
Total Common Stocks		175,657		131,680		129		307,466
Short-Term Investment
Investment Company		958		—		—		958
Total Assets	$	176,615	$	131,680	$	129	$	308,424

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

Global Real Estate	Common Stocks (000)
Beginning Balance	$	147
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		(18	)
Realized gains (losses)		—
Ending Balance	$	129
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2020	$	(18	)

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2020. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance.

	Fair Value at June 30, 2020 (000)		Valuation Technique	Unobservable Input	Amount*			Impact to Valuation from an Increase in Input**
Common Stocks	$	129	Reported Capital balance, adjustments for NAV practical expedient; including adjustments for subsequent Capital Calls, Return of Capital and Significant Market Changes between last Capital Statement and Valuation Date	Adjusted Capital Balance Transaction Valuation	$	0.001		Increase
			Market Transaction Method	Discount for Lack of Marketability		50.0	%	Decrease

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are

treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Unfunded Commitments: Subject to the terms of a Subscription Agreement between the Fund and Exeter Industrial Value Fund LP, the Fund has made a subscription commitment of $2,000,000 for which it will receive 2,000,000 shares of common stock. As of June 30, 2020, Exeter Industrial Value Fund LP has drawn down approximately $1,860,000, which represents 93.0% of the commitment.

5.  Restricted Securities: The Fund invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

6. Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7. Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment in-

come, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

8. Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $2 billion			Over $2 billion
	0.80	%		0.75	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.76% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares, 0.94% for

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Class IS shares and 0.94% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time that the Directors act to discontinue all or a portion of such waivers or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $78,000 of advisory fees were waived and approximately $132,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser has entered into Sub-Advisory Agreements with the Sub-Advisers, each a wholly-owned subsidiary of Morgan Stanley. The Sub-Advisers provide the Fund with advisory services subject to the overall supervision of the Adviser and the Company's Officers and Directors. The Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid

monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $88,494,000 and $308,701,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

ended June 30, 2020, advisory fees paid were reduced by approximately $3,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	287	$	92,018	$	91,347	$	10

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	958

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency

and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	37,385	$	26,549	$	53,497	$	50,771

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(13,077	)	$	13,077

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	—	$	3,138

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 42.0%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Advisers, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Advisers and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's contractual management fee was higher than but close to its peer group average and actual management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

28

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

29

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

30

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

31

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGRESAN
3181965 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Sustain Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	10
Notes to Financial Statements	15
Investment Advisory Agreement Approval	21
Liquidity Risk Management Program	23
Privacy Notice	24
Director and Officer Information	26

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Sustain Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Global Sustain Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Sustain Portfolio Class I	$	1,000.00	$	1,014.30	$	1,020.39	$	4.51	$	4.52		0.90	%
Global Sustain Portfolio Class A		1,000.00		1,012.30		1,018.70		6.20		6.22		1.24
Global Sustain Portfolio Class L		1,000.00		1,010.40		1,016.16		8.75		8.77		1.75
Global Sustain Portfolio Class C		1,000.00		1,008.40		1,014.92		9.99		10.02		2.00
Global Sustain Portfolio Class IS		1,000.00		1,014.30		1,020.64		4.26		4.27		0.85

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Global Sustain Portfolio

	Shares		Value (000)
Common Stocks (98.0%)
Canada (2.9%)
Constellation Software, Inc.		1,007	$	1,137
France (2.6%)
L'Oreal SA (a)		2,342		756
Sanofi		2,283		233
				989
Germany (10.5%)
Henkel AG & Co., KGaA (Preference)		19,053		1,778
SAP SE		16,013		2,238
				4,016
Hong Kong (1.6%)
AIA Group Ltd.		64,800		606
Taiwan (1.5%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		10,235		581
United Kingdom (13.5%)
Experian PLC		3,255		114
GlaxoSmithKline PLC		20,882		422
Prudential PLC		34,945		527
Reckitt Benckiser Group PLC		29,561		2,720
RELX PLC (Euronext N.V)		10,395		241
RELX PLC (LSE)		32,749		758
Unilever PLC		7,851		423
				5,205
United States (65.4%)
Abbott Laboratories		13,737		1,256
Accenture PLC, Class A		9,600		2,061
Alphabet, Inc., Class A (a)		1,341		1,902
Amphenol Corp., Class A		7,922		759
Automatic Data Processing, Inc.		7,540		1,123
Baxter International, Inc.		18,900		1,627
Becton Dickinson & Co.		6,805		1,628
Cerner Corp.		8,991		616
Coca-Cola Co. (The)		8,351		373
Danaher Corp.		6,559		1,160
Factset Research Systems, Inc.		1,248		410
Fidelity National Information Services, Inc.		5,782		775
Fox Corp., Class A		9,182		246
Fox Corp., Class B (a)		7,855		211
Medtronic PLC		14,123		1,295
Microsoft Corp.		13,913		2,831
Moody's Corp.		808		222
NIKE, Inc., Class B		4,470		438
Procter & Gamble Co. (The)		12,218		1,461
Roper Technologies, Inc.		1,001		389
Texas Instruments, Inc.		3,517		447
Thermo Fisher Scientific, Inc.		2,709		982
Visa, Inc., Class A		11,122		2,148
Zoetis, Inc.		5,195		712
				25,072
Total Common Stocks (Cost $31,502)				37,606

	Shares		Value (000)
Short-Term Investment (1.6%)
Investment Company (1.6%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $603)		602,640	$	603
Total Investments (99.6%) (Cost $32,105) (b)(c)				38,209
Other Assets in Excess of Liabilities (0.4%)				146
Net Assets (100.0%)			$	38,355

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)    Non-income producing security.

(b)    The approximate fair value and percentage of net assets, $10,816,000 and 28.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c)    At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $6,513,000 and the aggregate gross unrealized depreciation is approximately $409,000, resulting in net unrealized appreciation of approximately $6,104,000.

ADR    American Depositary Receipt.

LSE    London Stock Exchange.

Euronext N.V.  Euronext Amsterdam Stock Market.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		29.0	%
Health Care Equipment & Supplies		18.2
Software		16.2
Information Technology Services		16.0
Household Products		15.6
Interactive Media & Services		5.0
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Sustain Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $31,502)	$	37,606
Investment in Security of Affiliated Issuer, at Value (Cost $603)		603
Total Investments in Securities, at Value (Cost $32,105)		38,209
Receivable for Fund Shares Sold		97
Dividends Receivable		40
Tax Reclaim Receivable		22
Interest Receivable		—	@
Receivable from Affiliate		—	@
Other Assets		54
Total Assets		38,422
Liabilities:
Payable for Professional Fees		41
Payable for Advisory Fees		9
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		3
Payable for Custodian Fees		3
Payable for Administration Fees		2
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		1
Payable for Fund Shares Redeemed		1
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Other Liabilities		5
Total Liabilities		67
Net Assets	$	38,355
Net Assets Consist of:
Paid-in-Capital	$	31,767
Total Distributable Earnings		6,588
Net Assets	$	38,355

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Sustain Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	22,351
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,502,874
Net Asset Value, Offering and Redemption Price Per Share	$	14.87
CLASS A:
Net Assets	$	3,336
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		225,365
Net Asset Value, Redemption Price Per Share	$	14.80
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.82
Maximum Offering Price Per Share	$	15.62
CLASS L:
Net Assets	$	1,352
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		92,458
Net Asset Value, Offering and Redemption Price Per Share	$	14.63
CLASS C:
Net Assets	$	3,168
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		220,833
Net Asset Value, Offering and Redemption Price Per Share	$	14.34
CLASS IS:
Net Assets	$	8,148
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		547,886
Net Asset Value, Offering and Redemption Price Per Share	$	14.87

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Global Sustain Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $13 of Foreign Taxes Withheld)	$	293
Dividends from Security of Affiliated Issuer (Note G)		3
Total Investment Income		296
Expenses:
Advisory Fees (Note B)		116
Professional Fees		56
Registration Fees		25
Shareholder Services Fees — Class A (Note D)		4
Distribution and Shareholder Services Fees — Class L (Note D)		5
Distribution and Shareholder Services Fees — Class C (Note D)		14
Administration Fees (Note C)		13
Custodian Fees (Note F)		12
Sub Transfer Agency Fees — Class I		5
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		1
Shareholder Reporting Fees		7
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		2
Directors' Fees and Expenses		1
Pricing Fees		1
Other Expenses		6
Total Expenses		273
Waiver of Advisory Fees (Note B)		(96	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		172
Net Investment Income		124
Realized Gain:
Investments Sold		454
Foreign Currency Translation		1
Net Realized Gain		455
Change in Unrealized Appreciation (Depreciation):
Investments		469
Foreign Currency Translation		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		469
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		924
Net Increase in Net Assets Resulting from Operations	$	1,048

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Sustain Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	124		$	118
Net Realized Gain		455			553
Net Change in Unrealized Appreciation (Depreciation)		469			4,945
Net Increase in Net Assets Resulting from Operations		1,048			5,616
Dividends and Distributions to Shareholders:
Class I		—			(382	)
Class A		—			(66	)
Class L		—			(31	)
Class C		—			(62	)
Class IS		—			(198	)
Total Dividends and Distributions to Shareholders		—			(739	)
Capital Share Transactions:(1)
Class I:
Subscribed		11,407			7,782
Distributions Reinvested		—			383
Redeemed		(4,623	)		(1,403	)
Class A:
Subscribed		996			1,369
Distributions Reinvested		—			66
Redeemed		(601	)		(871	)
Class L:
Exchanged		34			—
Distributions Reinvested		—			31
Redeemed		(130	)		(303	)
Class C:
Subscribed		474			715
Distributions Reinvested		—			62
Redeemed		(214	)		(264	)
Class IS:
Subscribed		500			1,000
Distributions Reinvested		—			199
Redeemed		(—	@)		(—	@)
Net Increase in Net Assets Resulting from Capital Share Transactions		7,843			8,766
Total Increase in Net Assets		8,891			13,643
Net Assets:
Beginning of Period		29,464			15,821
End of Period	$	38,355		$	29,464

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Global Sustain Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		840			573
Shares Issued on Distributions Reinvested		—			26
Shares Redeemed		(343	)		(102	)
Net Increase in Class I Shares Outstanding		497			497
Class A:
Shares Subscribed		70			101
Shares Issued on Distributions Reinvested		—			5
Shares Redeemed		(47	)		(65	)
Net Increase in Class A Shares Outstanding		23			41
Class L:
Shares Exchanged		2			—
Shares Issued on Distributions Reinvested		—			2
Shares Redeemed		(9	)		(22	)
Net Decrease in Class L Shares Outstanding		(7	)		(20	)
Class C:
Shares Subscribed		35			55
Shares Issued on Distributions Reinvested		—			4
Shares Redeemed		(16	)		(20	)
Net Increase in Class C Shares Outstanding		19			39
Class IS:
Shares Subscribed		40			75
Shares Issued on Distributions Reinvested		—			14
Shares Redeemed		(—	@@)		(—	@@)
Net Increase in Class IS Shares Outstanding		40			89

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Sustain Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	14.66		$	11.58		$	12.47		$	10.81		$	11.43		$	11.34
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.07			0.09			0.12			0.13			0.17			0.15
Net Realized and Unrealized Gain (Loss)		0.14			3.38			(0.04	)		2.35			0.29			0.46
Total from Investment Operations		0.21			3.47			0.08			2.48			0.46			0.61
Distributions from and/or in Excess of:
Net Investment Income		—			(0.08	)		(0.07	)		(0.13	)		(0.20	)		(0.18	)
Net Realized Gain		—			(0.31	)		(0.90	)		(0.69	)		(0.88	)		(0.34	)
Total Distributions		—			(0.39	)		(0.97	)		(0.82	)		(1.08	)		(0.52	)
Net Asset Value, End of Period	$	14.87		$	14.66		$	11.58		$	12.47		$	10.81		$	11.43
Total Return(3)		1.43	%(7)		30.03	%		0.60	%		22.86	%		4.20	%		5.27	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	22,351		$	14,756		$	5,891		$	5,334		$	3,993		$	8,531
Ratio of Expenses Before Expense Limitation		1.50	%(8)		1.92	%		2.86	%		3.54	%		2.45	%		2.21	%
Ratio of Expenses After Expense Limitation		0.90	%(4)(8)		0.90	%(4)		0.93	%(4)(5)		1.00	%(4)		0.99	%(4)		0.97	%(4)
Ratio of Net Investment Income		0.93	%(4)(8)		0.68	%(4)		0.97	%(4)		1.10	%(4)		1.46	%(4)		1.26	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		13	%(7)		14	%		76	%		39	%		35	%		61	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.90% for Class I shares. Prior to April 30, 2018, the maximum ratio was 1.00% for Class I shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Sustain Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	14.62		$	11.56		$	12.44		$	10.79		$	11.40		$	11.32
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.04			0.05			0.07			0.08			0.11			0.11
Net Realized and Unrealized Gain (Loss)		0.14			3.36			(0.03	)		2.35			0.32			0.45
Total from Investment Operations		0.18			3.41			0.04			2.43			0.43			0.56
Distributions from and/or in Excess of:
Net Investment Income		—			(0.04	)		(0.02	)		(0.09	)		(0.16	)		(0.14	)
Net Realized Gain		—			(0.31	)		(0.90	)		(0.69	)		(0.88	)		(0.34	)
Total Distributions		—			(0.35	)		(0.92	)		(0.78	)		(1.04	)		(0.48	)
Net Asset Value, End of Period	$	14.80		$	14.62		$	11.56		$	12.44		$	10.79		$	11.40
Total Return(3)		1.23	%(7)		29.53	%		0.26	%		22.45	%		3.83	%		4.91	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,336		$	2,949		$	1,872		$	2,243		$	2,182		$	3,246
Ratio of Expenses Before Expense Limitation		1.82	%(8)		2.25	%		3.21	%		3.90	%		2.85	%		2.52	%
Ratio of Expenses After Expense Limitation		1.24	%(4)(8)		1.25	%(4)		1.28	%(4)(5)		1.35	%(4)		1.33	%(4)		1.30	%(4)
Ratio of Net Investment Income		0.50	%(4)(8)		0.35	%(4)		0.57	%(4)		0.66	%(4)		0.98	%(4)		0.98	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		13	%(7)		14	%		76	%		39	%		35	%		61	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class A shares. Prior to April 30, 2018, the maximum ratio was 1.35% for Class A shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Sustain Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	14.48		$	11.47		$	12.41		$	10.76		$	11.37		$	11.29
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.00	)(3)		(0.01	)		0.01			0.03			0.06			0.05
Net Realized and Unrealized Gain (Loss)		0.15			3.33			(0.04	)		2.32			0.31			0.45
Total from Investment Operations		0.15			3.32			(0.03	)		2.35			0.37			0.50
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.01	)		(0.01	)		(0.10	)		(0.08	)
Net Realized Gain		—			(0.31	)		(0.90	)		(0.69	)		(0.88	)		(0.34	)
Total Distributions		—			(0.31	)		(0.91	)		(0.70	)		(0.98	)		(0.42	)
Net Asset Value, End of Period	$	14.63		$	14.48		$	11.47		$	12.41		$	10.76		$	11.37
Total Return(4)		1.04	%(8)		28.87	%		(0.25	)%		21.80	%		3.31	%		4.49	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,352		$	1,437		$	1,365		$	1,611		$	2,194		$	2,848
Ratio of Expenses Before Expense Limitation		2.38	%(9)		2.77	%		3.73	%		4.39	%		3.35	%		3.06	%
Ratio of Expenses After Expense Limitation		1.75	%(5)(9)		1.75	%(5)		1.78	%(5)(6)		1.85	%(5)		1.81	%(5)		1.81	%(5)
Ratio of Net Investment Income (Loss)		(0.06	)%(5)(9)		(0.09	)%(5)		0.04	%(5)		0.24	%(5)		0.52	%(5)		0.46	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		13	%(8)		14	%		76	%		39	%		35	%		61	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.75% for Class L shares. Prior to April 30, 2018, the maximum ratio was 1.85% for Class L shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Sustain Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	14.22		$	11.30		$	12.26		$	10.67		$	11.30		$	11.77
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		(0.02	)		(0.05	)		(0.03	)		(0.01	)		0.02			(0.03	)
Net Realized and Unrealized Gain (Loss)		0.14			3.28			(0.02	)		2.30			0.32			0.02
Total from Investment Operations		0.12			3.23			(0.05	)		2.29			0.34			(0.01	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.01	)		(0.01	)		(0.09	)		(0.12	)
Net Realized Gain		—			(0.31	)		(0.90	)		(0.69	)		(0.88	)		(0.34	)
Total Distributions		—			(0.31	)		(0.91	)		(0.70	)		(0.97	)		(0.46	)
Net Asset Value, End of Period	$	14.34		$	14.22		$	11.30		$	12.26		$	10.67		$	11.30
Total Return(4)		0.84	%(8)		28.63	%		(0.50	)%		21.46	%		3.06	%		(0.13	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,168		$	2,872		$	1,846		$	1,430		$	819		$	648
Ratio of Expenses Before Expense Limitation		2.58	%(9)		2.97	%		4.00	%		4.71	%		3.83	%		3.80	%(9)
Ratio of Expenses After Expense Limitation		2.00	%(5)(9)		1.98	%(5)		2.02	%(5)(6)		2.10	%(5)		2.10	%(5)		2.10	%(5)(9)
Ratio of Net Investment Income (Loss)		(0.25	)%(5)(9)		(0.38	)%(5)		(0.24	)%(5)		(0.06	)%(5)		0.17	%(5)		(0.39	)%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		13	%(8)		14	%		76	%		39	%		35	%		61	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.00% for Class C shares. Prior to April 30, 2018, the maximum ratio was 2.10% for Class C shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Global Sustain Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	14.66		$	11.58		$	12.47		$	10.81		$	11.43		$	11.34
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.06			0.11			0.05			0.14			0.16			0.16
Net Realized and Unrealized Gain		0.15			3.37			0.04			2.34			0.31			0.45
Total from Investment Operations		0.21			3.48			0.09			2.48			0.47			0.61
Distributions from and/or in Excess of:
Net Investment Income		—			(0.09	)		(0.08	)		(0.13	)		(0.21	)		(0.18	)
Net Realized Gain		—			(0.31	)		(0.90	)		(0.69	)		(0.88	)		(0.34	)
Total Distributions		—			(0.40	)		(0.98	)		(0.82	)		(1.09	)		(0.52	)
Net Asset Value, End of Period	$	14.87		$	14.66		$	11.58		$	12.47		$	10.81		$	11.43
Total Return(3)		1.43	%(7)		30.08	%		0.66	%		22.91	%		4.17	%		5.38	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8,148		$	7,450		$	4,847		$	12		$	11		$	11
Ratio of Expenses Before Expense Limitation		1.48	%(8)		1.88	%		3.12	%		19.10	%		19.36	%		16.35	%
Ratio of Expenses After Expense Limitation		0.85	%(4)(8)		0.85	%(4)		0.85	%(4)(5)		0.95	%(4)		0.95	%(4)		0.95	%(4)
Ratio of Net Investment Income		0.90	%(4)(8)		0.79	%(4)		0.41	%(4)		1.15	%(4)		1.35	%(4)		1.31	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		13	%(7)		14	%		76	%		39	%		35	%		61	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.85% for Class IS shares. Prior to April 30, 2018, the maximum ratio was 0.95% for Class IS shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Sustain Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official

exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Beverages	$	373	$	—	$	—	$	373
Capital Markets		632		—		—		632
Electronic Equipment, Instruments & Components		759		—		—		759
Health Care Equipment & Supplies		6,966		—		—		6,966
Health Care Technology		616		—		—		616
Household Products		1,461		4,498		—		5,959
Industrial Conglomerates		389		—		—		389
Information Technology Services		6,107		—		—		6,107
Insurance		—		1,133		—		1,133
Interactive Media & Services		1,902		—		—		1,902
Life Sciences Tools & Services		982		—		—		982
Media		457		—		—		457
Personal Products		—		1,179		—		1,179
Pharmaceuticals		712		655		—		1,367
Professional Services		—		1,113		—		1,113
Semiconductors & Semiconductor Equipment		1,028		—		—		1,028
Software		3,968		2,238		—		6,206
Textiles, Apparel & Luxury Goods		438		—		—		438
Total Common Stocks		26,790		10,816		—		37,606
Short-Term Investment
Investment Company		603		—		—		603
Total Assets	$	27,393	$	10,816	$	—	$	38,209

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of

the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result,

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

5.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

6.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million			Over $500 million
	0.70	%		0.65	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.12% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.90% for Class I shares, 1.25% for Class A shares, 1.75% for Class L shares, 2.00% for Class C shares and 0.85% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $96,000 of advisory fees were waived and approximately $4,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley. The Sub-Adviser provides the Fund with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $12,483,000 and $4,376,000, respectively. There were no purchases and sales of long-term

U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	848	$	10,006	$	10,251	$	3

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	603

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	294	$	445	$	66	$	1,105

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2019.

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	8	$	9

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 44.9%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the three- and five-year periods but below its peer group average for the one-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

23

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

24

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Adviser

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

26

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGQSAN
3179087 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Growth Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	17
Investment Advisory Agreement Approval	27
Liquidity Risk Management Program	29
Privacy Notice	30
Director and Officer Information	32

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Growth Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Growth Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Growth Portfolio Class I	$	1,000.00	$	1,522.30	$	1,022.13	$	3.45	$	2.77		0.55	%
Growth Portfolio Class A		1,000.00		1,520.80		1,020.84		5.08		4.07		0.81
Growth Portfolio Class L		1,000.00		1,517.00		1,018.40		8.14		6.52		1.30
Growth Portfolio Class C		1,000.00		1,515.00		1,017.16		9.69		7.77		1.55
Growth Portfolio Class IS		1,000.00		1,523.20		1,022.53		2.95		2.36		0.47
Growth Portfolio Class IR		1,000.00		1,523.00		1,022.53		2.95		2.36		0.47

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Growth Portfolio

	Shares		Value (000)
Common Stocks (96.0%)
Biotechnology (1.2%)
Alnylam Pharmaceuticals, Inc. (a)		406,899	$	60,266
Moderna, Inc. (a)		1,301,682		83,581
				143,847
Entertainment (6.8%)
Netflix, Inc. (a)		329,394		149,888
Spotify Technology SA (a)		2,456,433		634,226
				784,114
Health Care Equipment & Supplies (6.9%)
DexCom, Inc. (a)		1,053,019		426,894
Intuitive Surgical, Inc. (a)		650,921		370,914
				797,808
Health Care Providers & Services (1.9%)
Covetrus, Inc. (a)		3,882,112		69,451
Guardant Health, Inc. (a)		1,823,480		147,939
				217,390
Health Care Technology (4.9%)
Agilon Health Topco, Inc. (a)(b)(c) (acquisition cost — $25,030; acquired 11/7/18)		66,188		30,286
Veeva Systems, Inc., Class A (a)		2,300,497		539,283
				569,569
Information Technology Services (26.1%)
Adyen N.V. (Netherlands) (a)		157,981		230,178
MongoDB, Inc. (a)		1,306,628		295,742
Okta, Inc. (a)		2,572,549		515,101
Shopify, Inc., Class A (Canada) (a)		892,186		846,862
Square, Inc., Class A (a)		5,794,864		608,113
Twilio, Inc., Class A (a)		2,378,141		521,812
				3,017,808
Interactive Media & Services (5.5%)
Snap, Inc., Class A (a)		8,327,270		195,608
Twitter, Inc. (a)		9,178,431		273,425
Zillow Group, Inc., Class C (a)		2,898,467		166,981
				636,014
Internet & Direct Marketing Retail (10.8%)
Amazon.com, Inc. (a)		237,763		655,945
Chewy, Inc., Class A (a) (See Note G)		5,335,900		238,462
Farfetch Ltd., Class A (a)		6,302,533		108,845
Wayfair, Inc., Class A (a)		1,242,681		245,566
				1,248,818
Life Sciences Tools & Services (4.8%)
10X Genomics, Inc., Class A (a)		1,919,088		171,394
Illumina, Inc. (a)		1,043,559		386,482
				557,876
Metals & Mining (0.2%)
Royal Gold, Inc.		163,583		20,337
Oil, Gas & Consumable Fuels (0.2%)
Texas Pacific Land Trust		41,372		24,603

	Shares		Value (000)
Road & Rail (3.7%)
Uber Technologies, Inc. (a)		13,917,429	$	432,554
Semiconductors & Semiconductor Equipment (1.4%)
NVIDIA Corp.		427,211		162,302
Software (18.9%)
Atlassian Corp., PLC, Class A (United Kingdom) (a)		860,817		155,180
Coupa Software, Inc. (a)		1,493,735		413,824
Datadog, Inc., Class A (a)		2,150,563		186,991
Slack Technologies, Inc., Class A (a)		14,411,808		448,063
Trade Desk, Inc. (The), Class A (a)		858,722		349,071
Zoom Video Communications, Inc., Class A (a)		2,520,969		639,166
				2,192,295
Specialty Retail (2.7%)
Carvana Co. (a)		2,563,416		308,122
Total Common Stocks (Cost $6,083,819)				11,113,457
Preferred Stocks (0.3%)
Electronic Equipment, Instruments & Components (0.0%)
Magic Leap Series C (a)(b)(c) (acquisition cost — $18,812; acquired 12/22/15)		816,725		—
Internet & Direct Marketing Retail (0.3%)
Airbnb, Inc. Series D (a)(b)(c) (acquisition cost — $20,638; acquired 4/16/14)		506,928		40,570
Total Preferred Stocks (Cost $39,450)				40,570
Short-Term Investment (3.7%)
Investment Company (3.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $428,826)		428,826,250		428,826
Total Investments Excluding Purchased Options (100.0%) (Cost $6,552,095)				11,582,853
Total Purchased Options Outstanding (0.1%) (Cost $24,138)				7,844
Total Investments (100.1%) (Cost $6,576,233) (d)(e)				11,590,697
Liabilities in Excess of Other Assets (–0.1%)				(14,705	)
Net Assets (100.0%)			$	11,575,992

(a)  Non-income producing security.

(b)  At June 30, 2020, the Fund held fair valued securities valued at approximately $70,856,000, representing 0.6% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(c)  Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Fund has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at June 30, 2020 amounts to approximately $70,856,000 and represents 0.6% of net assets.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Growth Portfolio

(d)  The approximate fair value and percentage of net assets, $230,178,000 and 2.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $5,171,858,000 and the aggregate gross unrealized depreciation is approximately $157,394,000, resulting in net unrealized appreciation of approximately $5,014,464,000.

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
Royal Bank of Scotland	USD/CNH	CNH	7.75	Jan-21		1,640,578,609		1,640,579	$	4,193	$	7,164	$	(2,971	)
Royal Bank of Scotland	USD/CNH	CNH	8.09	Sep-20		1,328,514,158		1,328,514		209		7,170		(6,961	)
Royal Bank of Scotland	USD/CNH	CNH	8.48	May-21		1,570,361,464		1,570,361		3,442		9,804		(6,362	)
									$	7,844	$	24,138	$	(16,294	)

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Information Technology Services		26.1	%
Other*		24.7
Software		18.9
Internet & Direct Marketing Retail		11.1
Health Care Equipment & Supplies		6.9
Entertainment		6.8
Interactive Media & Services		5.5
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Growth Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $5,985,470)	$	10,923,409
Investment in Security of Affiliated Issuer, at Value (Cost $590,763)		667,288
Total Investments in Securities, at Value (Cost $6,576,233)		11,590,697
Foreign Currency, at Value (Cost $1)		1
Receivable for Fund Shares Sold		14,228
Dividends Receivable		85
Receivable from Affiliate		20
Receivable from Securities Lending Income		—	@
Other Assets		704
Total Assets		11,605,735
Liabilities:
Payable for Fund Shares Redeemed		9,579
Due to Broker		8,801
Payable for Advisory Fees		8,509
Payable for Shareholder Services Fees — Class A		703
Payable for Distribution and Shareholder Services Fees — Class L		78
Payable for Distribution and Shareholder Services Fees — Class C		234
Payable for Administration Fees		713
Payable for Sub Transfer Agency Fees — Class I		207
Payable for Sub Transfer Agency Fees — Class A		458
Payable for Sub Transfer Agency Fees — Class L		13
Payable for Sub Transfer Agency Fees — Class C		16
Payable for Directors' Fees and Expenses		42
Payable for Custodian Fees		38
Payable for Transfer Agency Fees — Class I		7
Payable for Transfer Agency Fees — Class A		25
Payable for Transfer Agency Fees — Class L		3
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		1
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Professional Fees		19
Other Liabilities		296
Total Liabilities		29,743
Net Assets	$	11,575,992
Net Assets Consist of:
Paid-in-Capital	$	5,967,738
Total Distributable Earnings		5,608,254
Net Assets	$	11,575,992

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Growth Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	4,589,196
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		65,062,794
Net Asset Value, Offering and Redemption Price Per Share	$	70.53
CLASS A:
Net Assets	$	3,637,290
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		54,893,230
Net Asset Value, Redemption Price Per Share	$	66.26
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	3.67
Maximum Offering Price Per Share	$	69.93
CLASS L:
Net Assets	$	132,783
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,146,846
Net Asset Value, Offering and Redemption Price Per Share	$	61.85
CLASS C:
Net Assets	$	309,532
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		5,078,085
Net Asset Value, Offering and Redemption Price Per Share	$	60.95
CLASS IS:
Net Assets	$	2,560,294
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		35,971,620
Net Asset Value, Offering and Redemption Price Per Share	$	71.18
CLASS IR:
Net Assets	$	346,897
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,873,985
Net Asset Value, Offering and Redemption Price Per Share	$	71.17

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Growth Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Security of Affiliated Issuer (Note G)	$	747
Income from Securities Loaned — Net		189
Dividends from Securities of Unaffiliated Issuers		32
Total Investment Income		968
Expenses:
Advisory Fees (Note B)		15,737
Shareholder Services Fees — Class A (Note D)		3,339
Distribution and Shareholder Services Fees — Class L (Note D)		384
Distribution and Shareholder Services Fees — Class C (Note D)		1,013
Administration Fees (Note C)		3,256
Sub Transfer Agency Fees — Class I		1,201
Sub Transfer Agency Fees — Class A		1,063
Sub Transfer Agency Fees — Class L		30
Sub Transfer Agency Fees — Class C		64
Shareholder Reporting Fees		157
Transfer Agency Fees — Class I (Note E)		40
Transfer Agency Fees — Class A (Note E)		91
Transfer Agency Fees — Class L (Note E)		8
Transfer Agency Fees — Class C (Note E)		12
Transfer Agency Fees — Class IS (Note E)		4
Transfer Agency Fees — Class IR (Note E)		1
Professional Fees		142
Registration Fees		128
Custodian Fees (Note F)		75
Directors' Fees and Expenses		72
Pricing Fees		2
Other Expenses		96
Total Expenses		26,915
Rebate from Morgan Stanley Affiliate (Note G)		(248	)
Net Expenses		26,667
Net Investment Loss		(25,699	)
Realized Gain (Loss):
Investments Sold		549,226
Foreign Currency Translation		(—	@)
Net Realized Gain		549,226
Change in Unrealized Appreciation (Depreciation):
Investments		3,232,882
Investments in Affiliates		66,715
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		3,299,597
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		3,848,823
Net Increase in Net Assets Resulting from Operations	$	3,823,124

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Growth Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(25,699	)	$	(33,430	)
Net Realized Gain		549,226			905,247
Net Change in Unrealized Appreciation (Depreciation)		3,299,597			374,645
Net Increase in Net Assets Resulting from Operations		3,823,124			1,246,462
Dividends and Distributions to Shareholders:
Class I		—			(250,375	)
Class A		—			(249,460	)
Class L		—			(10,223	)
Class C		—			(18,689	)
Class IS		—			(141,597	)
Class IR		—			(25,723	)
Total Dividends and Distributions to Shareholders		—			(696,067	)
Capital Share Transactions:(1)
Class I:
Subscribed		1,392,832			1,270,157
Distributions Reinvested		—			224,217
Redeemed		(706,395	)		(1,016,032	)
Class A:
Subscribed		386,014			531,381
Distributions Reinvested		—			241,503
Redeemed		(369,646	)		(629,164	)
Class L:
Exchanged		23			74
Distributions Reinvested		—			10,041
Redeemed		(6,137	)		(9,094	)
Class C:
Subscribed		69,645			91,888
Distributions Reinvested		—			16,680
Redeemed		(21,956	)		(36,785	)
Class IS:
Subscribed		277,145			304,283
Distributions Reinvested		—			140,426
Redeemed		(151,504	)		(226,568	)
Class IR:
Subscribed		20,104			93,649
Distributions Reinvested		—			25,723
Redeemed		(66,092	)		(12,024	)
Net Increase in Net Assets Resulting from Capital Share Transactions		824,033			1,020,355
Total Increase in Net Assets		4,647,157			1,570,750
Net Assets:
Beginning of Period		6,928,835			5,358,085
End of Period	$	11,575,992		$	6,928,835

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Growth Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		26,049			25,589
Shares Issued on Distributions Reinvested		—			4,970
Shares Redeemed		(13,669	)		(20,652	)
Net Increase in Class I Shares Outstanding		12,380			9,907
Class A:
Shares Subscribed		7,455			11,250
Shares Issued on Distributions Reinvested		—			5,690
Shares Redeemed		(7,628	)		(13,463	)
Net Increase (Decrease) in Class A Shares Outstanding		(173	)		3,477
Class L:
Shares Exchanged		—	@@		2
Shares Issued on Distributions Reinvested		—			253
Shares Redeemed		(135	)		(207	)
Net Increase (Decrease) in Class L Shares Outstanding		(135	)		48
Class C:
Shares Subscribed		1,450			2,072
Shares Issued on Distributions Reinvested		—			426
Shares Redeemed		(506	)		(851	)
Net Increase in Class C Shares Outstanding		944			1,647
Class IS:
Shares Subscribed		5,484			6,239
Shares Issued on Distributions Reinvested		—			3,086
Shares Redeemed		(2,901	)		(4,547	)
Net Increase in Class IS Shares Outstanding		2,583			4,778
Class IR:
Shares Subscribed		416			1,883
Shares Issued on Distributions Reinvested		—			565
Shares Redeemed		(1,304	)		(244	)
Net Increase (Decrease) in Class IR Shares Outstanding		(888	)		2,204

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Growth Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	46.33		$	41.75		$	41.65		$	35.19		$	40.44		$	38.86
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.14	)		(0.19	)		(0.08	)		(0.11	)		0.01			(0.07	)
Net Realized and Unrealized Gain (Loss)		24.34			9.73			3.50			15.39			(0.79	)		4.70
Total from Investment Operations		24.20			9.54			3.42			15.28			(0.78	)		4.63
Distributions from and/or in Excess of:
Net Realized Gain		—			(4.96	)		(3.32	)		(8.82	)		(4.47	)		(3.05	)
Net Asset Value, End of Period	$	70.53		$	46.33		$	41.75		$	41.65		$	35.19		$	40.44
Total Return(3)		52.23	%(7)		23.16	%		7.66	%		43.83	%		(1.91	)%		11.91	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,589,196		$	2,440,640		$	1,785,893		$	991,362		$	726,787		$	876,660
Ratio of Expenses Before Expense Limitation		N/A			0.59	%		N/A			N/A			0.63	%		N/A
Ratio of Expenses After Expense Limitation		0.55	%(4)(8)		0.58	%(4)		0.58	%(4)		0.61	%(4)		0.63	%(4)(5)		0.61	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.58	%(4)		N/A			0.61	%(4)		N/A			N/A
Ratio of Net Investment Income (Loss)		(0.53	)%(4)(8)		(0.38	)%(4)		(0.17	)%(4)		(0.25	)%(4)		0.02	%(4)		(0.18	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		18	%(7)		87	%		41	%		55	%		39	%		34	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.80% for Class I shares. Prior to April 7, 2016, the maximum ratio was 0.70% for Class I shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Growth Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	43.57		$	39.61		$	39.77		$	33.97		$	39.31		$	37.98
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.20	)		(0.30	)		(0.19	)		(0.22	)		(0.10	)		(0.21	)
Net Realized and Unrealized Gain (Loss)		22.89			9.22			3.35			14.84			(0.77	)		4.59
Total from Investment Operations		22.69			8.92			3.16			14.62			(0.87	)		4.38
Distributions from and/or in Excess of:
Net Realized Gain		—			(4.96	)		(3.32	)		(8.82	)		(4.47	)		(3.05	)
Net Asset Value, End of Period	$	66.26		$	43.57		$	39.61		$	39.77		$	33.97		$	39.31
Total Return(3)		52.08	%(7)		22.81	%		7.39	%		43.45	%		(2.21	)%		11.53	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,637,290		$	2,399,450		$	2,043,706		$	1,827,833		$	1,376,836		$	1,630,538
Ratio of Expenses Before Expense Limitation		N/A			0.84	%		N/A			N/A			0.92	%		0.96	%
Ratio of Expenses After Expense Limitation		0.81	%(4)(8)		0.83	%(4)		0.84	%(4)		0.88	%(4)		0.92	%(4)(5)		0.96	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.83	%(4)		N/A			0.88	%(4)		N/A			N/A
Ratio of Net Investment Loss		(0.79	)%(4)(8)		(0.64	)%(4)		(0.43	)%(4)		(0.52	)%(4)		(0.26	)%(4)		(0.52	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		18	%(7)		87	%		41	%		55	%		39	%		34	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.005% higher and the Ratio of Net Investment Loss would have been 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.15% for Class A shares. Prior to April 7, 2016, the maximum ratio was 1.05% for Class A shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Growth Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	40.77		$	37.51		$	37.99		$	32.90		$	38.41		$	37.40
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.30	)		(0.50	)		(0.39	)		(0.43	)		(0.29	)		(0.44	)
Net Realized and Unrealized Gain (Loss)		21.38			8.72			3.23			14.34			(0.75	)		4.50
Total from Investment Operations		21.08			8.22			2.84			13.91			(1.04	)		4.06
Distributions from and/or in Excess of:
Net Realized Gain		—			(4.96	)		(3.32	)		(8.82	)		(4.47	)		(3.05	)
Net Asset Value, End of Period	$	61.85		$	40.77		$	37.51		$	37.99		$	32.90		$	38.41
Total Return(3)		51.70	%(7)		22.22	%		6.89	%		42.69	%		(2.72	)%		10.85	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	132,783		$	93,053		$	83,818		$	90,177		$	74,324		$	89,277
Ratio of Expenses Before Expense Limitation		N/A			1.33	%		N/A			N/A			1.45	%		1.57	%
Ratio of Expenses After Expense Limitation		1.30	%(4)(8)		1.32	%(4)		1.31	%(4)		1.42	%(4)		1.45	%(4)(5)		1.55	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.32	%(4)		N/A			1.42	%(4)		N/A			N/A
Ratio of Net Investment Loss		(1.28	)%(4)(8)		(1.12	)%(4)		(0.90	)%(4)		(1.05	)%(4)		(0.79	)%(4)		(1.11	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		18	%(7)		87	%		41	%		55	%		39	%		34	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Loss would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.65% for Class L shares. Prior to April 7, 2016, the maximum ratio was 1.55% for Class L shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Growth Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	40.23		$	37.17		$	37.76		$	32.81		$	38.40		$	40.33
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.35	)		(0.61	)		(0.51	)		(0.51	)		(0.38	)		(0.35	)
Net Realized and Unrealized Gain (Loss)		21.07			8.63			3.24			14.28			(0.74	)		1.47
Total from Investment Operations		20.72			8.02			2.73			13.77			(1.12	)		1.12
Distributions from and/or in Excess of:
Net Realized Gain		—			(4.96	)		(3.32	)		(8.82	)		(4.47	)		(3.05	)
Net Asset Value, End of Period	$	60.95		$	40.23		$	37.17		$	37.76		$	32.81		$	38.40
Total Return(4)		51.50	%(8)		21.91	%		6.61	%		42.37	%		(2.93	)%		2.71	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	309,532		$	166,303		$	92,431		$	37,524		$	16,613		$	13,544
Ratio of Expenses Before Expense Limitation		N/A			1.59	%		N/A			N/A			1.70	%		N/A
Ratio of Expenses After Expense Limitation		1.55	%(5)(9)		1.58	%(5)		1.57	%(5)		1.63	%(5)		1.70	%(5)(6)		1.62	%(5)(9)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			1.58	%(5)		N/A			1.63	%		N/A			N/A
Ratio of Net Investment Loss		(1.53	)%(5)(9)		(1.38	)%(5)		(1.17	)%(5)		(1.26	)%(5)		(1.04	)%(5)		(1.29	)%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		18	%(8)		87	%		41	%		55	%		39	%		34	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Loss would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.90% for Class C shares. Prior to April 7, 2016, the maximum ratio was 1.80% for Class C shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Growth Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	46.73		$	42.04		$	41.89		$	35.32		$	40.54		$	38.92
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.12	)		(0.15	)		(0.04	)		(0.07	)		0.05			(0.04	)
Net Realized and Unrealized Gain (Loss)		24.57			9.80			3.51			15.46			(0.80	)		4.71
Total from Investment Operations		24.45			9.65			3.47			15.39			(0.75	)		4.67
Distributions from and/or in Excess of:
Net Realized Gain		—			(4.96	)		(3.32	)		(8.82	)		(4.47	)		(3.05	)
Net Asset Value, End of Period	$	71.18		$	46.73		$	42.04		$	41.89		$	35.32		$	40.54
Total Return(3)		52.32	%(7)		23.26	%		7.74	%		43.98	%		(1.83	)%		11.97	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,560,294		$	1,560,148		$	1,202,659		$	1,131,543		$	875,021		$	1,019,889
Ratio of Expenses Before Expense Limitation		N/A			0.50	%		N/A			N/A			0.54	%		N/A
Ratio of Expenses After Expense Limitation		0.47	%(4)(8)		0.49	%(4)		0.50	%(4)		0.53	%(4)		0.54	%(4)(5)		0.54	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.49	%(4)		N/A			0.53	%(4)		N/A			N/A
Ratio of Net Investment Income (Loss)		(0.44	)%(4)(8)		(0.29	)%(4)		(0.09	)%(4)		(0.16	)%(4)		0.12	%(4)		(0.10	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		18	%(7)		87	%		41	%		55	%		39	%		34	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.73% for Class IS shares. Prior to April 7, 2016, the maximum ratio was 0.67% for Class IS shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Growth Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	46.73		$	42.04		$	52.16
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.12	)		(0.15	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		24.56			9.80			(6.76	)
Total from Investment Operations		24.44			9.65			(6.80	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(4.96	)		(3.32	)
Net Asset Value, End of Period	$	71.17		$	46.73		$	42.04
Total Return(3)		52.30	%(5)		23.26	%		(13.48	)(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	346,897		$	269,241		$	149,578
Ratio of Expenses Before Expense Limitation		N/A			0.50	%		N/A
Ratio of Expenses After Expense Limitation		0.47	%(4)(6)		0.49	%(4)		0.49	%(4)(6)
Ratios of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			0.49	%(4)		N/A
Ratio of Net Investment Loss		(0.44	)%(4)(6)		(0.30	)%(4)		(0.14	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%		0.01	%(6)
Portfolio Turnover Rate		18	%(5)		87	%		41	%

(1)  Commencement of Offering

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Not annualized

(6)  Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Growth Portfolio. The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of large capitalization companies.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at

the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

will be the mean of bid and asked prices obtained from brokers or dealers; (4) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's

valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Biotechnology	$	143,847	$	—	$	—	$	143,847
Entertainment		784,114		—		—		784,114
Health Care Equipment & Supplies		797,808		—		—		797,808
Health Care Providers & Services		217,390		—		—		217,390
Health Care Technology		539,283		—		30,286		569,569
Information Technology Services		2,787,630		230,178		—		3,017,808
Interactive Media & Services		636,014		—		—		636,014
Internet & Direct Marketing Retail		1,248,818		—		—		1,248,818
Life Sciences Tools & Services		557,876		—		—		557,876
Metals & Mining		20,337		—		—		20,337
Oil, Gas & Consumable Fuels		24,603		—		—		24,603
Road & Rail		432,554		—		—		432,554
Semiconductors & Semiconductor Equipment		162,302		—		—		162,302
Software		2,192,295		—		—		2,192,295
Specialty Retail		308,122		—		—		308,122
Total Common Stocks		10,852,993		230,178		30,286		11,113,457

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Preferred Stocks
Electronic Equipment, Instruments & Components	$	—	$	—	$	—	†	$	—	†
Internet & Direct Marketing Retail		—		—		40,570			40,570
Total Preferred Stocks		—		—		40,570	†		40,570	†
Call Options Purchased		—		7,844		—			7,844
Short-Term Investment
Investment Company		428,826		—		—			428,826
Total Assets	$	11,281,819	$	238,022	$	70,856	†	$	11,590,697	†

†  Includes one security valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stock (000)		Preferred Stocks (000)
Beginning Balance	$	29,749	$	86,499
Purchases		—		—
Sales		—		—
Amortization of discount		—		—
Transfers in		—		—
Transfers out		—		—
Corporate actions		—		—
Change in unrealized appreciation (depreciation)		537		(45,929	)†
Realized gains (losses)		—		—
Ending Balance	$	30,286	$	40,570	†
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2020	$	537	$	(45,929	)†

†  Includes one security valued at zero.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2020. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance. The Fund calculated the weighted averages of the unobservable inputs relative to each investment's fair value as of June 30, 2020.

	Fair Value at June 30, 2020 (000)		Valuation Technique	Unobservable Input	Amount*			Impact to Valuation from an Increase in Input**
Common Stock	$	30,286	Discounted Cash Flow	Weighted Average Cost of Capital		13.0	%	Decrease
				Perpetual Growth Rate		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		1.4	x	Increase
				Discount for Lack of Marketability		12.0	%	Decrease
Preferred Stock	$	40,570	Discounted Cash Flow	Weighted Average Cost of Capital		15.0	%	Decrease
				Perpetual Growth Rate		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		5.6	x	Increase
				Discount for Lack of Marketability		16.5	%	Decrease

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of

gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and

Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	7,844	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(13,293	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	1,734	(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	7,884	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	7,844	$	—	$	(7,844	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	4,708,227,000

5.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

At June 30, 2020, the Fund did not have any outstanding securities on loan.

6.  Restricted Securities: The Fund invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing of such

assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

7.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

9.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Next $1 billion			Next $1 billion			Over $3 billion
	0.50	%		0.45	%		0.40	%		0.35	%

For the six months ended June 30, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.38% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.80% for Class I shares, 1.15% for Class A shares, 1.65% for Class L shares, 1.90% for Class C shares, 0.73% for Class IS shares and 0.73% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. This arrangement had no effect for the six months ended June 30, 2020.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $1,941,740,000 and $1,430,152,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $248,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company/Issuer	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	81,979	$	1,207,517	$	860,670	$	747
Chewy, Inc.		108,298		63,448		—		—
	$	190,277	$	1,270,965	$	860,670	$	747

Affiliated Investment Company/Issuer (cont'd)	Realized Gain Loss (Loss)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	428,826
Chewy, Inc.		—		66,716		238,462
	$	—	$	66,716	$	667,288

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund engaged in cross-trade purchases of approximately $9,714,000.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	32,348	$	663,719	$	21,258	$	387,224

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Permanent differences, primarily due to equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(91,874	)	$	91,874

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	72,193	$	5,391

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 30.3%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the three- and five-year periods but below its peer group average for the one-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

29

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

30

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

31

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

32

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGRWSAN
3179778 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Inception Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	16
Investment Advisory Agreement Approval	27
Liquidity Risk Management Program	29
Privacy Notice	30
Director and Officer Information	32

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Inception Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Inception Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Inception Portfolio Class I	$	1,000.00	$	1,436.60	$	1,019.94	$	6.00	$	4.97		0.99	%
Inception Portfolio Class A		1,000.00		1,434.80		1,018.45		7.81		6.47		1.29
Inception Portfolio Class L		1,000.00		1,430.80		1,015.71		11.12		9.22		1.84
Inception Portfolio Class C		1,000.00		1,429.60		1,014.47		12.63		10.47		2.09
Inception Portfolio Class IS		1,000.00		1,437.60		1,020.29		5.58		4.62		0.92

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Inception Portfolio

	Shares		Value (000)
Common Stocks (90.2%)
Biotechnology (1.8%)
Editas Medicine, Inc. (a)		41,435	$	1,226
Intellia Therapeutics, Inc. (a)(b)		50,954		1,071
Passage Bio, Inc. (a)		92,252		2,521
				4,818
Diversified Holding Companies (0.2%)
Healthcare Merger Corp. (a)		55,502		605
Diversified Telecommunication Services (3.4%)
Anterix, Inc.		197,890		8,972
Health Care Equipment & Supplies (5.8%)
Penumbra, Inc. (a)		31,936		5,711
Quotient Ltd. (a)(b)		767,558		5,680
Shockwave Medical, Inc. (a)		75,645		3,583
				14,974
Health Care Providers & Services (2.0%)
Covetrus, Inc. (a)		99,142		1,774
HealthEquity, Inc. (a)		57,239		3,358
				5,132
Health Care Technology (3.9%)
Inspire Medical Systems, Inc. (a)		91,201		7,936
Phreesia, Inc. (a)		75,558		2,137
				10,073
Hotels, Restaurants & Leisure (1.2%)
Shake Shack, Inc., Class A (a)		60,954		3,229
Information Technology Services (8.8%)
Fastly, Inc., Class A (a)		269,243		22,922
Internet & Direct Marketing Retail (13.7%)
Farfetch Ltd., Class A (a)		241,008		4,162
Overstock.com, Inc. (a)		338,032		9,610
RealReal, Inc. (The) (a)		74,296		950
Stitch Fix, Inc., Class A (a)(b)		692,779		17,278
zooplus AG (Germany) (a)		21,642		3,555
				35,555
Investment Companies (4.5%)
Collier Creek Holdings, Class A (a)		854,045		11,701
Life Sciences Tools & Services (4.5%)
Adaptive Biotechnologies Corp. (a)		28,689		1,388
NanoString Technologies, Inc. (a)		351,255		10,309
				11,697
Media (4.6%)
Cardlytics, Inc. (a)		170,440		11,927
Metals & Mining (0.2%)
Royal Gold, Inc.		4,520		562
Oil, Gas & Consumable Fuels (0.2%)
Texas Pacific Land Trust		968		576
Real Estate Management & Development (9.8%)
FirstService Corp. (Canada)		117,788		11,865
Redfin Corp. (a)		325,652		13,648
				25,513

	Shares		Value (000)
Software (19.1%)
Appfolio, Inc., Class A (a)		74,311	$	12,091
Appian Corp. (a)(b)		234,688		12,028
Avalara, Inc. (a)		54,738		7,285
Bill.Com Holdings, Inc. (a)		54,164		4,886
Elastic N.V. (a)		39,560		3,648
Smartsheet, Inc., Class A (a)		121,624		6,193
Zynga, Inc., Class A (a)		364,873		3,481
				49,612
Specialty Retail (4.7%)
Party City Holdco, Inc. (a)(b)		1,705,970		2,542
Vroom, Inc. (a)		183,912		9,589
				12,131
Textiles, Apparel & Luxury Goods (1.1%)
Brunello Cucinelli SpA (Italy) (a)		100,507		2,994
Trading Companies & Distributors (0.7%)
EVI Industries, Inc. (a)(b)		88,238		1,916
Total Common Stocks (Cost $187,612)				234,909
Preferred Stocks (3.6%)
Health Care Technology (2.4%)
Grand Rounds, Inc. Series B (a)(c)(d) (acquisition cost — $3,362; acquired 7/3/14)		3,269,139		6,179
Internet & Direct Marketing Retail (0.1%)
Overstock.com, Inc. Series A-1		14,625		287
Software (1.1%)
Lookout, Inc. Series F (a)(c)(d) (acquisition cost — $13,476; acquired 6/17/14)		1,179,743		2,996
Total Preferred Stocks (Cost $16,933)				9,462
Short-Term Investments (19.3%)
Securities held as Collateral on Loaned Securities (12.6%)
Investment Company (9.9%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		25,742,716		25,743
	Face Amount (000)
Repurchase Agreements (2.7%)
HSBC Securities USA, Inc., (0.07%, dated 6/30/20, due 7/1/20; proceeds $2,532; fully collateralized by a U.S. Government obligation; 0.50% due 3/15/23; valued at $2,583)	$	2,532		2,532
Merrill Lynch & Co., Inc., (0.07%, dated 6/30/20, due 7/1/20; proceeds $4,452; fully collateralized by U.S. Government obligations; 1.38% - 3.88% due 9/30/20 - 8/15/40; valued at $4,542)		4,452		4,452
				6,984
Total Securities held as Collateral on Loaned Securities (Cost $32,727)				32,727

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Inception Portfolio

	Shares		Value (000)
Investment Company (6.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $17,481)		17,481,164	$	17,481
Total Short-Term Investments (Cost $50,208)				50,208
Total Investments Excluding Purchased Options (113.1%) (Cost $254,753)				294,579
Total Purchased Options Outstanding (0.1%) (Cost $589)				181
Total Investments (113.2%) (Cost $255,342) Including $32,587 of Securities Loaned (e)(f)				294,760
Liabilities in Excess of Other Assets (–13.2%)				(34,465	)
Net Assets (100.0%)			$	260,295

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2020.

(c)  Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Fund has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at June 30, 2020 amounts to approximately $9,175,000 and represents 3.5% of net assets.

(d)  At June 30, 2020, the Fund held fair valued securities valued at approximately $9,175,000, representing 3.5% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(e)  The approximate fair value and percentage of net assets, $6,549,000 and 2.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(f)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $57,439,000 and the aggregate gross unrealized depreciation is approximately $18,021,000, resulting in net unrealized appreciation of approximately $39,418,000.

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2020:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
Royal Bank of Scotland	USD/CNH	CNH	7.75	Jan-21		39,285,388		39,285	$	100	$	172	$	(72	)
Royal Bank of Scotland	USD/CNH	CNH	8.09	Sep-20		37,829,268		37,829		6		204		(198	)
Royal Bank of Scotland	USD/CNH	CNH	8.48	May-21		34,162,018		34,162		75		213		(138	)
									$	181	$	589	$	(408	)

CNH  Chinese Yuan Renminbi Offshore

USD  United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		29.1	%
Software		20.1
Internet & Direct Marketing Retail		13.7
Real Estate Management & Development		9.7
Information Technology Services		8.8
Short-Term Investments		6.7
Health Care Technology		6.2
Health Care Equipment & Supplies		5.7
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2020.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Inception Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $212,118)	$	251,536
Investment in Security of Affiliated Issuer, at Value (Cost $43,224)		43,224
Total Investments in Securities, at Value (Cost $255,342)		294,760
Foreign Currency, at Value (Cost $1)		1
Receivable for Investments Sold		7,956
Receivable for Fund Shares Sold		616
Receivable from Securities Lending Income		103
Dividends Receivable		15
Receivable from Affiliate		1
Other Assets		93
Total Assets		303,545
Liabilities:
Collateral on Securities Loaned, at Value		32,727
Payable for Investments Purchased		9,174
Payable for Fund Shares Redeemed		529
Due to Broker		350
Payable for Advisory Fees		323
Payable for Professional Fees		35
Payable for Sub Transfer Agency Fees — Class I		13
Payable for Sub Transfer Agency Fees — Class A		11
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		16
Payable for Shareholder Services Fees — Class A		12
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		1
Payable for Transfer Agency Fees — Class I		2
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		1
Payable for Custodian Fees		4
Other Liabilities		49
Total Liabilities		43,250
Net Assets	$	260,295
Net Assets Consist of:
Paid-in-Capital	$	168,775
Total Distributable Earnings		91,520
Net Assets	$	260,295

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Inception Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	96,037
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		5,967,475
Net Asset Value, Offering and Redemption Price Per Share	$	16.09
CLASS A:
Net Assets	$	63,584
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		5,207,630
Net Asset Value, Redemption Price Per Share	$	12.21
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.68
Maximum Offering Price Per Share	$	12.89
CLASS L:
Net Assets	$	1,571
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		143,340
Net Asset Value, Offering and Redemption Price Per Share	$	10.96
CLASS C:
Net Assets	$	1,751
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		148,656
Net Asset Value, Offering and Redemption Price Per Share	$	11.78
CLASS IS:
Net Assets	$	97,352
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		5,998,088
Net Asset Value, Offering and Redemption Price Per Share	$	16.23
(1) Including: Securities on Loan, at Value:	$	32,587

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Inception Portfolio

Statement of Operations		Six Months Ended June 30, 2020 (000)
Investment Income:
Income from Securities Loaned — Net		$	354
Dividends from Security of Affiliated Issuer (Note G)			30
Dividends from Securities of Unaffiliated Issuers (Net of $4 of Foreign Taxes Withheld)			24
Total Investment Income			408
Expenses:
Advisory Fees (Note B)			856
Administration Fees (Note C)			74
Professional Fees			70
Shareholder Services Fees — Class A (Note D)			59
Distribution and Shareholder Services Fees — Class L (Note D)			5
Distribution and Shareholder Services Fees — Class C (Note D)			5
Sub Transfer Agency Fees — Class I			28
Sub Transfer Agency Fees — Class A			23
Sub Transfer Agency Fees — Class L			—	@
Sub Transfer Agency Fees — Class C			1
Registration Fees			32
Shareholder Reporting Fees			21
Transfer Agency Fees — Class I (Note E)			4
Transfer Agency Fees — Class A (Note E)			4
Transfer Agency Fees — Class L (Note E)			1
Transfer Agency Fees — Class C (Note E)			1
Transfer Agency Fees — Class IS (Note E)			1
Custodian Fees (Note F)			9
Directors' Fees and Expenses			2
Pricing Fees			2
Other Expenses			15
Expenses Before Non Operating Expenses			1,213
Bank Overdraft Expense			1
Total Expenses			1,214
Waiver of Advisory Fees (Note B)			(216	)
Reimbursement of Class Specific Expenses — Class I (Note B)			(10	)
Reimbursement of Class Specific Expenses — Class L (Note B)			(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)			(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)			(1	)
Rebate from Morgan Stanley Affiliate (Note G)			(8	)
Net Expenses			977
Net Investment Loss			(569	)
Realized Gain (Loss):
Investments Sold	��		55,111
Foreign Currency Translation			(26	)
Net Realized Gain			55,085
Change in Unrealized Appreciation (Depreciation):
Investments			19,924
Foreign Currency Translation			(—	@)
Net Change in Unrealized Appreciation (Depreciation)			19,924
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)			75,009
Net Increase in Net Assets Resulting from Operations		$	74,440

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Inception Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(569	)	$	67
Net Realized Gain		55,085			39,847
Net Change in Unrealized Appreciation (Depreciation)		19,924			33,285
Net Increase in Net Assets Resulting from Operations		74,440			73,199
Dividends and Distributions to Shareholders:
Class I		—			(11,439	)
Class A		—			(8,493	)
Class L		—			(248	)
Class C		—			(123	)
Class IS		—			(10,309	)
Total Dividends and Distributions to Shareholders		—			(30,612	)
Capital Share Transactions:(1)
Class I:
Subscribed		27,580			32,246
Distributions Reinvested		—			11,410
Redeemed		(17,023	)		(55,438	)
Class A:
Subscribed		10,071			16,436
Distributions Reinvested		—			8,337
Redeemed		(9,900	)		(17,154	)
Class L:
Distributions Reinvested		—			248
Redeemed		(123	)		(355	)
Class C:
Subscribed		726			528
Distributions Reinvested		—			123
Redeemed		(42	)		(6	)
Class IS:
Subscribed		13,491			27,521
Distributions Reinvested		—			10,309
Redeemed		(9,738	)		(113,142	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		15,042			(78,937	)
Redemption Fees		6			22
Total Increase (Decrease) in Net Assets		89,488			(36,328	)
Net Assets:
Beginning of Period		170,807			207,135
End of Period	$	260,295		$	170,807

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Inception Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		2,139			2,532
Shares Issued on Distributions Reinvested		—			1,045
Shares Redeemed		(1,450	)		(4,613	)
Net Increase (Decrease) in Class I Shares Outstanding		689			(1,036	)
Class A:
Shares Subscribed		969			1,626
Shares Issued on Distributions Reinvested		—			1,005
Shares Redeemed		(1,064	)		(1,777	)
Net Increase (Decrease) in Class A Shares Outstanding		(95	)		854
Class L:
Shares Issued on Distributions Reinvested		—			33
Shares Redeemed		(16	)		(37	)
Net Decrease in Class L Shares Outstanding		(16	)		(4	)
Class C:
Shares Subscribed		72			54
Shares Issued on Distributions Reinvested		—			15
Shares Redeemed		(7	)		(1	)
Net Increase in Class C Shares Outstanding		65			68
Class IS:
Shares Subscribed		1,097			2,199
Shares Issued on Distributions Reinvested		—			936
Shares Redeemed		(833	)		(8,850	)
Net Increase (Decrease) in Class IS Shares Outstanding		264			(5,715	)

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Inception Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	11.19		$	9.62		$	10.90		$	13.26		$	13.75		$	16.50
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.03	)		0.01			(0.05	)	��	(0.11	)		0.00	(3)		(0.05	)
Net Realized and Unrealized Gain (Loss)		4.93			3.50			0.16			2.91			(0.05	)		(1.51	)
Total from Investment Operations		4.90			3.51			0.11			2.80			(0.05	)		(1.56	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(1.94	)		(1.39	)		(5.16	)		(0.44	)		(1.19	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	16.09		$	11.19		$	9.62		$	10.90		$	13.26		$	13.75
Total Return(4)		43.66	%(8)		37.11	%		0.29	%		21.87	%		(0.35	)%		(9.58	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	96,037		$	59,092		$	60,777		$	141,954		$	305,945		$	718,386
Ratio of Expenses Before Expense Limitation		1.26	%(9)		1.21	%		1.17	%		1.20	%		1.17	%		1.11	%
Ratio of Expenses After Expense Limitation		0.99	%(5)(9)		0.99	%(5)		0.98	%(5)		0.99	%(5)		1.02	%(5)(6)		1.05	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		0.99	%(5)(9)		N/A			0.98	%(5)		0.99	%(5)		N/A			N/A
Ratio of Net Investment Income (Loss)		(0.55	)%(5)(9)		0.09	%(5)		(0.41	)%(5)		(0.77	)%(5)		0.02	%(5)		(0.29	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		100	%(8)		99	%		79	%		97	%		51	%		42	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% for Class I shares. Prior to July 1, 2016, the maximum ratio was 1.05% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Inception Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	8.51		$	7.68		$	8.99		$	11.72		$	12.25		$	14.89
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.04	)		(0.02	)		(0.07	)		(0.14	)		(0.04	)		(0.09	)
Net Realized and Unrealized Gain (Loss)		3.74			2.79			0.15			2.57			(0.05	)		(1.36	)
Total from Investment Operations		3.70			2.77			0.08			2.43			(0.09	)		(1.45	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(1.94	)		(1.39	)		(5.16	)		(0.44	)		(1.19	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	12.21		$	8.51		$	7.68		$	8.99		$	11.72		$	12.25
Total Return(4)		43.48	%(8)		36.71	%		0.02	%		21.57	%		(0.73	)%		(9.88	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	63,584		$	45,097		$	34,166		$	40,531		$	87,864		$	136,621
Ratio of Expenses Before Expense Limitation		1.53	%(9)		1.52	%		1.44	%		1.51	%		1.45	%		1.38	%
Ratio of Expenses After Expense Limitation		1.29	%(5)(9)		1.29	%(5)		1.25	%(5)		1.34	%(5)		1.37	%(5)(6)		1.37	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.29	%(5)(9)		N/A			1.25	%(5)		1.34	%(5)		N/A			N/A
Ratio of Net Investment Loss		(0.85	)%(5)(9)		(0.23	)%(5)		(0.69	)%(5)		(1.12	)%(5)		(0.35	)%(5)		(0.61	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		100	%(8)		99	%		79	%		97	%		51	%		42	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to July 1, 2016, the maximum ratio was 1.40% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Inception Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	7.65		$	7.10		$	8.46		$	11.34		$	11.92		$	14.60
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.06	)		(0.07	)		(0.11	)		(0.19	)		(0.10	)		(0.16	)
Net Realized and Unrealized Gain (Loss)		3.37			2.56			0.14			2.47			(0.04	)		(1.33	)
Total from Investment Operations		3.31			2.49			0.03			2.28			(0.14	)		(1.49	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(1.94	)		(1.39	)		(5.16	)		(0.44	)		(1.19	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	10.96		$	7.65		$	7.10		$	8.46		$	11.34		$	11.92
Total Return(4)		43.08	%(8)		35.91	%		(0.58	)%		20.95	%		(1.17	)%		(10.36	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,571		$	1,218		$	1,157		$	1,310		$	1,524		$	1,874
Ratio of Expenses Before Expense Limitation		2.20	%(9)		2.15	%		2.07	%		2.27	%		2.21	%		2.10	%
Ratio of Expenses After Expense Limitation		1.84	%(5)(9)		1.84	%(5)		1.84	%(5)		1.84	%(5)		1.87	%(5)(6)		1.90	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.84	%(5)(9)		N/A			1.84	%(5)		1.84	%(5)		N/A			N/A
Ratio of Net Investment Loss		(1.41	)%(5)(9)		(0.78	)%(5)		(1.28	)%(5)		(1.61	)%(5)		(0.88	)%(5)		(1.33	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		100	%(8)		99	%		79	%		97	%		51	%		42	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.85% for Class L shares. Prior to July 1, 2016, the maximum ratio was 1.90% for Class L shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Inception Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,						Period from May 31, 2017(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			December 31, 2017
Net Asset Value, Beginning of Period	$	8.24		$	7.55		$	8.93		$	13.59
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.07	)		(0.10	)		(0.03	)		(0.13	)
Net Realized and Unrealized Gain		3.61			2.73			0.04			0.63
Total from Investment Operations		3.54			2.63			0.01			0.50
Distributions from and/or in Excess of:
Net Realized Gain		—			(1.94	)		(1.39	)		(5.16	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	11.78		$	8.24		$	7.55		$	8.93
Total Return(4)		42.96	%(7)		35.48	%		(0.78	)%		4.36	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,751		$	688		$	116		$	30
Ratio of Expenses Before Expense Limitation		2.50	%(8)		2.75	%		4.73	%		21.29	%(8)
Ratio of Expenses After Expense Limitation		2.09	%(5)(8)		2.09	%(5)		2.09	%(5)		2.10	%(5)(8)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		2.09	%(5)(8)		N/A			2.09	%(5)		2.10	%(5)(8)
Ratio of Net Investment Loss		(1.63	)%(5)(8)		(0.99	)%(5)		(1.50	)%(5)		(1.82	)%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.00	%(6)(8)
Portfolio Turnover Rate		100	%(7)		99	%		79	%		97	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Inception Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	11.29		$	9.69		$	10.96		$	13.29		$	13.77		$	16.51
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.03	)		0.01			(0.04	)		(0.10	)		0.01			(0.03	)
Net Realized and Unrealized Gain (Loss)		4.97			3.53			0.16			2.93			(0.05	)		(1.52	)
Total from Investment Operations		4.94			3.54			0.12			2.83			(0.04	)		(1.55	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(1.94	)		(1.39	)		(5.16	)		(0.44	)		(1.19	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	16.23		$	11.29		$	9.69		$	10.96		$	13.29		$	13.77
Total Return(4)		43.76	%(8)		37.04	%		0.38	%		22.08	%		(0.28	)%		(9.52	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	97,352		$	64,712		$	110,919		$	129,126		$	361,586		$	660,134
Ratio of Expenses Before Expense Limitation		1.17	%(9)		1.15	%		1.11	%		1.09	%		1.03	%		0.99	%
Ratio of Expenses After Expense Limitation		0.92	%(5)(9)		0.92	%(5)		0.92	%(5)		0.92	%(5)		0.95	%(5)(6)		0.98	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		0.92	%(5)(9)		N/A			0.92	%(5)		0.92	%(5)		N/A			N/A
Ratio of Net Investment Income (Loss)		(0.49	)%(5)(9)		0.12	%(5)		(0.36	)%(5)		(0.71	)%(5)		0.08	%(5)		(0.21	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		100	%(8)		99	%		79	%		97	%		51	%		42	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.93% for Class IS shares. Prior to July 1, 2016, the maximum ratio was 0.98% for Class IS shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Inception Portfolio. The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of small capitalization companies.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if

there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are

approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Biotechnology	$	4,818	$	—	$	—	$	4,818
Diversified Holding Companies		605		—		—		605
Diversified Telecommunication Services		8,972		—		—		8,972
Health Care Equipment & Supplies		14,974		—		—		14,974
Health Care Providers & Services		5,132		—		—		5,132
Health Care Technology		10,073		—		—		10,073
Hotels, Restaurants & Leisure		3,229		—		—		3,229
Information Technology Services		22,922		—		—		22,922
Internet & Direct Marketing Retail		32,000		3,555		—		35,555
Investment Companies		11,701		—		—		11,701
Life Sciences Tools & Services		11,697		—		—		11,697
Media		11,927		—		—		11,927
Metals & Mining		562		—		—		562
Oil, Gas & Consumable Fuels		576		—		—		576
Real Estate Management & Development		25,513		—		—		25,513
Software		49,612		—		—		49,612
Specialty Retail		12,131		—		—		12,131
Textiles, Apparel & Luxury Goods		—		2,994		—		2,994
Trading Companies & Distributors		1,916		—		—		1,916
Total Common Stocks		228,360		6,549		—		234,909

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Preferred Stocks
Health Care Technology	$	—	$	—	$	6,179	$	6,179
Internet & Direct Marketing Retail		287		—		—		287
Software		—		—		2,996		2,996
Total Preferred Stocks		287		—		9,175		9,462
Call Options Purchased		—		181		—		181
Short-Term Investments
Investment Company		43,224		—		—		43,224
Repurchase Agreements		—		6,984		—		6,984
Total Short-Term Investments		43,224		6,984		—		50,208
Total Assets	$	271,871	$	13,714	$	9,175	$	294,760

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Preferred Stocks (000)
Beginning Balance	$	9,440
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		(265	)
Realized gains (losses)		—
Ending Balance	$	9,175
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2020	$	(265	)

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2020. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance. The Fund calculated the weighted averages of the unobservable inputs relative to each investment's fair value as of June 30, 2020.

	Fair Value at June 30, 2020 (000)		Valuation Technique	Unobservable Input	Amount or Range/ Weighted Average*	Impact to Valuation from an Increase in Input**
Preferred Stocks	$	9,175	Market Transaction Method	Precedent Transaction	$8.41	Increase
			Discounted Cash Flow	Weighted Average Cost of Capital	14.5%–19.0%/16.3%	Decrease
				Perpetual Growth Rate	3.0%–4.0%/3.5%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue	0.7x–27.1x/6.4x	Increase
				Discount for Lack of Marketability	17.0%–20.0%/19.0%	Decrease
			Comparable Transactions	Enterprise Value/Revenue	2.3x–7.9x/3.6x	Increase

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

5.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing

interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure		Value (000)
Purchased Options	Investments, at Value (Purchased Options)		Currency Risk	$	181	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(460	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	183	(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	181	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities(a) (000)		Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	181	$	—	$	(181	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	127,856,000

6.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	32,587	(f)	$	—	$	(32,587	)(g)(h)	$	0

(f)  Represents market value of loaned securities at period end.

(g)  The Fund received cash collateral of approximately $32,727,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $650,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(h)  The actual collateral received is greater than the amount shown here due to overcollateralization.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2020:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	32,727	$	—	$	—	$	—	$	32,727
Total Borrowings	$	32,727	$	—	$	—	$	—	$	32,727
Gross amount of recognized liabilities for securities lending transactions									$	32,727

7.  Restricted Securities: The Fund invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

8.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets.

9.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

10.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

11.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Next $500 million			Next $500 million			Over $2 billion
	0.92	%		0.85	%		0.80	%		0.75	%

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.68% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares and 0.93% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $216,000 of advisory fees were waived and approximately $13,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of

0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $184,772,000 and $182,784,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $8,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	12,044	$	99,525	$	68,345	$	30

Affiliated Investment Company (cont'd)	Realized Gain Loss (Loss)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	43,224

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund engaged in cross-trade purchases of approximately $185,000.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net

unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	4,250	$	26,362	$	9,040	$	18,960

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to equalization debits and a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(8,021	)	$	8,021

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	642	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 60.4%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the five-year period but better than its peer group average for the one- and three-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's contractual management fee was higher than its peer group average and actual management fee and total expense ratio were higher than but close to its peer group averages. After discussion, the Board concluded that the Fund's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

29

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

30

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

31

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

32

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFISCGSAN
3179182 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Advantage Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	16
Investment Advisory Agreement Approval	26
Liquidity Risk Management Program	28
Privacy Notice	29
Director and Officer Information	31

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in International Advantage Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

International Advantage Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Advantage Portfolio Class I	$	1,000.00	$	1,026.40	$	1,020.04	$	4.89	$	4.87		0.97	%
International Advantage Portfolio Class A		1,000.00		1,024.30		1,018.60		6.34		6.32		1.26
International Advantage Portfolio Class L		1,000.00		1,021.50		1,015.76		9.20		9.17		1.83
International Advantage Portfolio Class C		1,000.00		1,021.20		1,015.07		9.90		9.87		1.97
International Advantage Portfolio Class IS		1,000.00		1,026.90		1,020.49		4.43		4.42		0.88

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

  Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

International Advantage Portfolio

	Shares		Value (000)
Common Stocks (90.7%)
Australia (3.2%)
Brookfield Infrastructure Partners LP		2,287,632	$	94,045
Canada (6.9%)
Brookfield Asset Management, Inc., Class A		2,379,804		78,296
Brookfield Infrastructure Partners LP (a)		212,692		9,686
Canada Goose Holdings, Inc. (See Note G) (a)(b)		3,660,686		84,818
Constellation Software, Inc.		26,484		29,903
				202,703
China (10.0%)
Alibaba Group Holding Ltd. ADR (b)		317,090		68,396
Foshan Haitian Flavouring & Food Co., Ltd., Class A		5,125,742		90,285
TAL Education Group ADR (b)		1,972,152		134,856
				293,537
Denmark (10.5%)
Chr Hansen Holding A/S		844,349		87,091
DSV A/S		1,807,589		222,035
				309,126
France (9.6%)
Dassault Systemes SE		284,473		49,383
Hermes International		218,968		183,847
Pernod Ricard SA		300,204		47,272
				280,502
Germany (1.5%)
Adidas AG (b)		163,841		43,197
Hong Kong (2.9%)
AIA Group Ltd.		9,220,300		86,280
India (6.4%)
HDFC Bank Ltd.		10,345,607		145,413
Kotak Mahindra Bank Ltd.		2,406,582		43,439
				188,852
Italy (5.5%)
Davide Campari-Milano SpA		5,547,015		46,911
Moncler SpA (b)		3,006,132		115,596
				162,507
Japan (9.6%)
Keyence Corp.		404,600		169,552
Pigeon Corp.		2,908,200		112,562
				282,114
Netherlands (7.5%)
Adyen N.V. (b)		50,379		73,402
ASML Holding N.V.		401,784		146,978
				220,380
Sweden (1.8%)
Vitrolife AB (b)		2,338,681		52,253
Switzerland (5.0%)
Chocoladefabriken Lindt & Spruengli AG (Registered)		603		52,013
Kuehne & Nagel International AG (Registered) (b)		252,744		42,099

	Shares		Value (000)
Straumann Holding AG (Registered)		60,160	$	52,008
				146,120
Taiwan (2.5%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		1,270,106		72,104
United Kingdom (3.7%)
Diageo PLC		1,046,395		34,779
Rightmove PLC		11,079,261		74,891
				109,670
United States (4.1%)
EPAM Systems, Inc. (b)		475,348		119,792
Total Common Stocks (Cost $2,219,065)				2,663,182
Short-Term Investments (9.7%)
Securities held as Collateral on Loaned Securities (0.2%)
Investment Company (0.1%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		5,946,617		5,947
	Face Amount (000)
Repurchase Agreements (0.1%)
HSBC Securities USA, Inc., (0.07%, dated 6/30/20, due 7/1/20; proceeds $585; fully collateralized by a U.S. Government obligation; 0.5% due 3/15/23; valued at $597)	$	585		585
Merrill Lynch & Co., Inc., (0.07%, dated 6/30/20, due 7/1/20; proceeds $1,028; fully collateralized by U.S. Government obligations; 1.38% - 3.88% due 9/30/20 - 8/15/40; valued at $1,049)		1,028		1,028
				1,613
Total Securities held as Collateral on Loaned Securities (Cost $7,560)				7,560
	Shares
Investment Company (9.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $278,649)		278,649,344		278,649
Total Short-Term Investments (Cost $286,209)				286,209
Total Investments Excluding Purchased Options (100.4%) (Cost $2,505,274)				2,949,391
Total Purchased Options Outstanding (0.0%) (Cost $1,858)				54
Total Investments (100.4%) (Cost $2,507,132) Including $31,955 of Securities Loaned (c)(d)				2,949,445
Liabilities in Excess of Other Assets (–0.4%)				(12,045	)
Net Assets (100.0%)			$	2,937,400

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

International Advantage Portfolio

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  All or a portion of this security was on loan at June 30, 2020.

(b)  Non-income producing security.

(c)  The approximate fair value and percentage of net assets, $1,971,286,000 and 67.1%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $483,565,000 and the aggregate gross unrealized depreciation is approximately $41,252,000, resulting in net unrealized appreciation of approximately $442,313,000.

ADR  American Depositary Receipt.

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2020:

Counterparty	Description		Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
Royal Bank of Scotland		USD/CNH	CNH	8.09	Sep-20		344,233,201		344,233	$	54	$	1,858	$	(1,804	)

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		42.3	%
Textiles, Apparel & Luxury Goods		14.5
Short-Term Investments		9.5
Air Freight & Logistics		7.5
Semiconductors & Semiconductor Equipment		7.4
Information Technology Services		6.6
Banks		6.4
Electronic Equipment, Instruments & Components		5.8
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2020.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

International Advantage Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $2,125,494)	$	2,580,031
Investment in Security of Affiliated Issuer, at Value (Cost $381,638)		369,414
Total Investments in Securities, at Value (Cost $2,507,132)		2,949,445
Foreign Currency, at Value (Cost $1,793)		1,783
Cash		1,293
Receivable for Fund Shares Sold		4,477
Dividends Receivable		1,317
Tax Reclaim Receivable		1,198
Receivable from Securities Lending Income		35
Receivable from Affiliate		13
Other Assets		312
Total Assets		2,959,873
Liabilities:
Payable for Fund Shares Redeemed		9,325
Collateral on Securities Loaned, at Value		7,560
Payable for Advisory Fees		4,752
Payable for Sub Transfer Agency Fees — Class I		198
Payable for Sub Transfer Agency Fees — Class A		52
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		2
Payable for Administration Fees		188
Due to Broker		180
Payable for Shareholder Services Fees — Class A		84
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		14
Payable for Custodian Fees		46
Payable for Professional Fees		42
Deferred Capital Gain Country Tax		9
Payable for Transfer Agency Fees — Class I		6
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		—	@
Other Liabilities		12
Total Liabilities		22,473
Net Assets	$	2,937,400
Net Assets Consist of:
Paid-in-Capital	$	2,523,030
Total Distributable Earnings		414,370
Net Assets	$	2,937,400

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

International Advantage Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	2,452,528
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		116,867,949
Net Asset Value, Offering and Redemption Price Per Share	$	20.99
CLASS A:
Net Assets	$	414,153
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		20,052,527
Net Asset Value, Redemption Price Per Share	$	20.65
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.14
Maximum Offering Price Per Share	$	21.79
CLASS L:
Net Assets	$	231
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		11,557
Net Asset Value, Offering and Redemption Price Per Share	$	19.98
CLASS C:
Net Assets	$	17,545
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		889,854
Net Asset Value, Offering and Redemption Price Per Share	$	19.72
CLASS IS:
Net Assets	$	52,943
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,520,319
Net Asset Value, Offering and Redemption Price Per Share	$	21.01
(1) Including: Securities on Loan, at Value:	$	31,955

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

International Advantage Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $1,098 of Foreign Taxes Withheld)	$	10,263
Dividends from Security of Affiliated Issuer (Note G)		768
Income from Securities Loaned — Net		185
Total Investment Income		11,216
Expenses:
Advisory Fees (Note B)		9,381
Sub Transfer Agency Fees — Class I		919
Sub Transfer Agency Fees — Class A		248
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		7
Administration Fees (Note C)		974
Shareholder Services Fees — Class A (Note D)		469
Distribution and Shareholder Services Fees — Class L (Note D)		1
Distribution and Shareholder Services Fees — Class C (Note D)		85
Custodian Fees (Note F)		173
Registration Fees		109
Transfer Agency Fees — Class I (Note E)		60
Transfer Agency Fees — Class A (Note E)		8
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		1
Professional Fees		63
Shareholder Reporting Fees		56
Directors' Fees and Expenses		23
Pricing Fees		1
Other Expenses		62
Expenses Before Non-Operating Expenses		12,643
Bank Overdraft Expense		1
Total Expenses		12,644
Rebate from Morgan Stanley Affiliate (Note G)		(217	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Net Expenses		12,426
Net Investment Loss		(1,210	)
Realized Gain (Loss):
Investments Sold		(18,780	)
Foreign Currency Translation		179
Net Realized Loss		(18,601	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of $2,317)		121,568
Investments in Affiliates		(12,224	)
Foreign Currency Translation		44
Net Change in Unrealized Appreciation (Depreciation)		109,388
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		90,787
Net Increase in Net Assets Resulting from Operations	$	89,577

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

International Advantage Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(1,210	)	$	3,976
Net Realized Loss		(18,601	)		(6,448	)
Net Change in Unrealized Appreciation (Depreciation)		109,388			360,936
Net Increase in Net Assets Resulting from Operations		89,577			358,464
Dividends and Distributions to Shareholders:
Class I		—			(2,413	)
Class A		—			(439	)
Class L		—			(—	@)
Class C		—			(23	)
Class IS		—			(2	)
Total Dividends and Distributions to Shareholders		—			(2,877	)
Capital Share Transactions:(1)
Class I:
Subscribed		835,098			1,253,603
Distributions Reinvested		—			2,396
Redeemed		(356,863	)		(210,412	)
Class A:
Subscribed		122,158			233,415
Distributions Reinvested		—			439
Redeemed		(96,204	)		(124,341	)
Class L:
Exchanged		—			53
Distributions Reinvested		—			—	@
Redeemed		(—	@)		(42	)
Class C:
Subscribed		2,549			9,422
Distributions Reinvested		—			23
Redeemed		(3,230	)		(5,722	)
Class IS:
Subscribed		47,886			750
Distributions Reinvested		—			1
Redeemed		(2,207	)		(—	@)
Net Increase in Net Assets Resulting from Capital Share Transactions		549,187			1,159,585
Redemption Fees		—			68
Total Increase in Net Assets		638,764			1,515,240
Net Assets:
Beginning of Period		2,298,636			783,396
End of Period	$	2,937,400		$	2,298,636

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

International Advantage Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		43,255			67,897
Shares Issued on Distributions Reinvested		—			117
Shares Redeemed		(19,306	)		(11,270	)
Net Increase in Class I Shares Outstanding		23,949			56,744
Class A:
Shares Subscribed		6,381			12,831
Shares Issued on Distributions Reinvested		—			22
Shares Redeemed		(5,143	)		(7,067	)
Net Increase in Class A Shares Outstanding		1,238			5,786
Class L:
Shares Exchanged		—			3
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(—	@@)		(2	)
Net Increase (Decrease) in Class L Shares Outstanding		(—	@@)		1
Class C:
Shares Subscribed		135			530
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(187	)		(328	)
Net Increase (Decrease) in Class C Shares Outstanding		(52	)		203
Class IS:
Shares Subscribed		2,604			37
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(122	)		(—	@@)
Net Increase in Class IS Shares Outstanding		2,482			37

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Advantage Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	20.45		$	15.74		$	16.89		$	11.91		$	11.80		$	12.36
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.00	(3)		0.06			0.04			0.00	(3)		0.02			0.10
Net Realized and Unrealized Gain (Loss)		0.54			4.67			(0.91	)		5.32			0.29			1.18
Total from Investment Operations		0.54			4.73			(0.87	)		5.32			0.31			1.28
Distributions from and/or in Excess of:
Net Investment Income		—			(0.00	)(3)		—			—			—			(0.10	)
Net Realized Gain		—			(0.02	)		(0.28	)		(0.34	)		(0.20	)		(1.74	)
Total Distributions		—			(0.02	)		(0.28	)		(0.34	)		(0.20	)		(1.84	)
Redemption Fees		—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		—
Net Asset Value, End of Period	$	20.99		$	20.45		$	15.74		$	16.89		$	11.91		$	11.80
Total Return(4)		2.64	%(8)		30.09	%		(5.19	)%		44.75	%		2.47	%		10.23	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,452,528		$	1,900,219		$	569,408		$	166,189		$	29,781		$	2,361
Ratio of Expenses Before Expense Limitation		0.99	%(9)		1.03	%		1.11	%		1.21	%		2.26	%		4.82	%
Ratio of Expenses After Expense Limitation		0.97	%(5)(9)		0.98	%(5)		0.98	%(5)		0.98	%(5)		0.99	%(5)		1.16	%(5)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		0.97	%(5)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.05	)%(5)(9)		0.32	%(5)		0.21	%(5)		0.02	%(5)		0.20	%(5)		0.76	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(9)		0.02	%		0.02	%		0.02	%		0.01	%		0.00	%(7)
Portfolio Turnover Rate		17	%(8)		15	%		29	%		30	%		23	%		96	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% for Class I shares. Prior to July 1, 2015, the maximum ratio was 1.25% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Advantage Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	20.16		$	15.56		$	16.75		$	11.86		$	11.79		$	12.37
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.03	)		0.01			(0.02	)		(0.07	)		(0.00	)(3)		0.01
Net Realized and Unrealized Gain (Loss)		0.52			4.61			(0.89	)		5.30			0.27			1.23
Total from Investment Operations		0.49			4.62			(0.91	)		5.23			0.27			1.24
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.08	)
Net Realized Gain		—			(0.02	)		(0.28	)		(0.34	)		(0.20	)		(1.74	)
Total Distributions		—			(0.02	)		(0.28	)		(0.34	)		(0.20	)		(1.82	)
Redemption Fees		—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		—
Net Asset Value, End of Period	$	20.65		$	20.16		$	15.56		$	16.75		$	11.86		$	11.79
Total Return(4)		2.43	%(8)		29.72	%		(5.48	)%		44.18	%		2.13	%		9.92	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	414,153		$	379,237		$	202,732		$	144,112		$	10,822		$	2,966
Ratio of Expenses Before Expense Limitation		1.28	%(9)		1.30	%		1.37	%		1.42	%		2.55	%		5.77	%
Ratio of Expenses After Expense Limitation		1.26	%(5)(9)		1.28	%(5)		1.33	%(5)		1.31	%(5)		1.34	%(5)		1.46	%(5)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.26	%(5)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.35	)%(5)(9)		0.04	%(5)		(0.10	)%(5)		(0.46	)%(5)		(0.04	)%(5)		0.09	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(9)		0.02	%		0.02	%		0.02	%		0.01	%		0.00	%(7)
Portfolio Turnover Rate		17	%(8)		15	%		29	%		30	%		23	%		96	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to July 1, 2015, the maximum ratio was 1.60% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Advantage Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	19.56		$	15.18		$	16.43		$	11.70		$	11.69		$	12.31
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.09	)		(0.09	)		(0.09	)		(0.11	)		(0.06	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		0.51			4.49			(0.88	)		5.18			0.27			1.20
Total from Investment Operations		0.42			4.40			(0.97	)		5.07			0.21			1.16
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.04	)
Net Realized Gain		—			(0.02	)		(0.28	)		(0.34	)		(0.20	)		(1.74	)
Total Distributions		—			(0.02	)		(0.28	)		(0.34	)		(0.20	)		(1.78	)
Redemption Fees		—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		—
Net Asset Value, End of Period	$	19.98		$	19.56		$	15.18		$	16.43		$	11.70		$	11.69
Total Return(4)		2.15	%(8)		29.01	%		(5.95	)%		43.41	%		1.64	%		9.34	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	231		$	226		$	161		$	135		$	75		$	211
Ratio of Expenses Before Expense Limitation		2.60	%(9)		2.59	%		2.82	%		3.82	%		3.96	%		6.87	%
Ratio of Expenses After Expense Limitation		1.83	%(5)(9)		1.83	%(5)		1.83	%(5)		1.84	%(5)		1.84	%(5)		1.97	%(5)(6)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.83	%(5)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(0.93	)%(5)(9)		(0.48	)%(5)		(0.55	)%(5)		(0.77	)%(5)		(0.52	)%(5)		(0.31	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(9)		0.02	%		0.02	%		0.01	%		0.01	%		0.00	%(7)
Portfolio Turnover Rate		17	%(8)		15	%		29	%		30	%		23	%		96	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.85% for Class L shares. Prior to July 1, 2015, the maximum ratio was 2.10% for Class L shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Advantage Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	19.31		$	15.02		$	16.30		$	11.63		$	11.66		$	13.80
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.10	)		(0.12	)		(0.15	)		(0.17	)		(0.11	)		(0.08	)
Net Realized and Unrealized Gain (Loss)		0.51			4.43			(0.85	)		5.18			0.28			(0.26	)
Total from Investment Operations		0.41			4.31			(1.00	)		5.01			0.17			(0.34	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.06	)
Net Realized Gain		—			(0.02	)		(0.28	)		(0.34	)		(0.20	)		(1.74	)
Total Distributions		—			(0.02	)		(0.28	)		(0.34	)		(0.20	)		(1.80	)
Redemption Fees		—			0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		—
Net Asset Value, End of Period	$	19.72		$	19.31		$	15.02		$	16.30		$	11.63		$	11.66
Total Return(5)		2.12	%(9)		28.72	%		(6.18	)%		43.16	%		1.38	%		(2.63	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	17,545		$	18,180		$	11,087		$	6,760		$	1,067		$	247
Ratio of Expenses Before Expense Limitation		1.99	%(10)		2.03	%		2.10	%		2.25	%		3.60	%		9.11	%(10)
Ratio of Expenses After Expense Limitation		1.97	%(6)(10)		2.01	%(6)		2.07	%(6)		2.08	%(6)		2.09	%(6)		2.11	%(6)(7)(10)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.97	%(6)(10)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.08	)%(6)(10)		(0.69	)%(6)		(0.88	)%(6)		(1.12	)%(6)		(0.91	)%(6)		(0.94	)%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(10)		0.02	%		0.02	%		0.02	%		0.01	%		0.00	%(8)(10)
Portfolio Turnover Rate		17	%(9)		15	%		29	%		30	%		23	%		96	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.10% for Class C shares. Prior to July 1, 2015, the maximum ratio was 2.35% for Class C shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Advantage Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	20.46		$	15.75		$	18.90
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.02			0.05			(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		0.53			4.69			(2.87	)
Total from Investment Operations		0.55			4.74			(2.87	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.01	)		—
Net Realized Gain		—			(0.02	)		(0.28	)
Total Distributions		—			(0.03	)		(0.28	)
Redemption Fees		—			0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	21.01		$	20.46		$	15.75
Total Return(4)		2.69	%(6)		30.14	%		(15.22	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	52,943		$	774		$	8
Ratio of Expenses Before Expense Limitation		0.90	%(7)		3.28	%		19.51	%(7)
Ratio of Expenses After Expense Limitation		0.88	%(5)(7)		0.93	%(5)		0.93	%(5)(7)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		0.88	%(5)(7)		N/A			N/A
Ratio of Net Investment Income (Loss)		0.21	%(5)(7)		0.24	%(5)		(0.04	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.02	%(7)
Portfolio Turnover Rate		17	%(6)		15	%		29	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the International Advantage Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official

exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee

provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	222,035	$	—	$	222,035
Banks		—		188,852		—		188,852
Beverages		—		128,962		—		128,962
Biotechnology		—		52,253		—		52,253
Capital Markets		78,296		—		—		78,296
Chemicals		—		87,091		—		87,091
Diversified Consumer Services		134,856		—		—		134,856
Electric Utilities		9,686		—		—		9,686
Electronic Equipment, Instruments & Components		—		169,552		—		169,552
Food Products		—		142,298		—		142,298
Health Care Equipment & Supplies		—		52,008		—		52,008
Household Products		—		112,562		—		112,562
Information Technology Services		119,792		73,402		—		193,194
Insurance		—		86,280		—		86,280
Interactive Media & Services		—		74,891		—		74,891
Internet & Direct Marketing Retail		68,396		—		—		68,396
Marine		—		42,099		—		42,099
Multi-Utilities		94,045		—		—		94,045
Semiconductors & Semiconductor Equipment		72,104		146,978		—		219,082
Software		29,903		49,383		—		79,286
Textiles, Apparel & Luxury Goods		84,818		342,640		—		427,458
Total Common Stocks		691,896		1,971,286		—		2,663,182
Call Options Purchased		—		54		—		54
Short-Term Investments
Investment Company		284,596		—		—		284,596
Repurchase Agreements		—		1,613		—		1,613
Total Short-Term Investments		284,596		1,613		—		286,209
Total Assets	$	976,492	$	1,972,953	$	—	$	2,949,445

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

5.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing

interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	54	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)		$(2,352)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)		$1,829(c)

c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	54	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
BNP Paribas	$	54	(a)	$	—	$	(54	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	590,459,000

6.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	31,955	(f)	$	—	$	(31,955	)(g)(h)	$	0

(f) Represents market value of loaned securities at period end.

(g) The Fund received cash collateral of approximately $7,560,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $24,830,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(h) The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

contractual maturity of those transactions as of June 30, 2020:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	7,560	$	—	$	—	$	—	$	7,560
Total Borrowings	$	7,560	$	—	$	—	$	—	$	7,560
Gross amount of recognized liabilities for securities lending transactions									$	7,560

7.  Redemption Fees: The Fund will assess a 2% redemption fee, on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets. Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

8.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

9.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

10.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where

collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.80	%		0.75	%

For the six months ended June 30, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.75% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $1,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $831,911,000 and $373,231,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $217,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company/Issuer	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	215,987	$	553,101	$	484,492	$	768
Canada Goose Holdings, Inc.		—		97,042		—		—
	$	215,987	$	650,143	$	484,492	$	768

Affiliated Investment Company/Issuer (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)			Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—		$	284,596
Canada Goose Holdings, Inc.		—		(12,224	)		84,818
	$	—	$	(12,224	)	$	369,414

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	258	$	2,619	$	44	$	11,201

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(2,217	)	$	2,217

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	2,506	$	—

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2019, the Fund intends to defer to January 1, 2020 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	—	$	6,330

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 48.8%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's management fee and total expense ratio were higher than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was competitive with its peer group average and (ii) management fee and total expense ratio were acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

28

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

29

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

30

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

31

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIIASAN
3182113 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Equity Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	16
Investment Advisory Agreement Approval	23
Liquidity Risk Management Program	25
Privacy Notice	26
Director and Officer Information	28

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in International Equity Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

International Equity Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Equity Portfolio Class I	$	1,000.00	$	941.70	$	1,020.14	$	4.59	$	4.77		0.95	%
International Equity Portfolio Class A		1,000.00		940.00		1,018.40		6.27		6.52		1.30
International Equity Portfolio Class L		1,000.00		937.20		1,015.91		8.67		9.02		1.80
International Equity Portfolio Class C		1,000.00		936.20		1,014.67		9.87		10.27		2.05
International Equity Portfolio Class IS		1,000.00		941.70		1,020.34		4.39		4.57		0.91

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

  Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

International Equity Portfolio

	Shares		Value (000)
Common Stocks (98.4%)
Australia (0.5%)
Aristocrat Leisure Ltd.		554,759	$	9,934
Canada (6.6%)
Barrick Gold Corp.		1,997,451		53,747
Cameco Corp.		1,889,031		19,369
Constellation Software, Inc.		49,117		55,459
				128,575
China (3.3%)
Tencent Holdings Ltd. (a)		996,800		63,873
Finland (1.2%)
Neste Oyj		610,387		23,973
France (12.3%)
AXA SA		1,572,422		33,088
L'Oreal SA (BSRM) (b)		43,196		13,941
LVMH Moet Hennessy Louis Vuitton SE		66,377		29,305
Pernod Ricard SA		208,565		32,842
Safran SA (b)		365,301		36,746
Sanofi		670,999		68,432
Thales SA		313,188		25,348
				239,702
Germany (16.0%)
Adidas AG (b)		40,871		10,776
Bayer AG (Registered)		612,159		45,375
Deutsche Post AG (Registered)		1,165,630		42,802
Fresenius SE & Co., KGaA		1,243,103		61,786
Henkel AG & Co., KGaA (Preference)		791,839		73,873
Infineon Technologies AG		420,826		9,861
SAP SE		488,478		68,284
				312,757
Hong Kong (3.3%)
AIA Group Ltd.		5,642,600		52,801
Minth Group Ltd.		4,050,000		11,626
				64,427
Italy (1.4%)
Moncler SpA (b)		727,381		27,970
Japan (11.3%)
FANUC Corp.		197,000		35,316
Hoya Corp.		277,100		26,535
Keyence Corp.		77,400		32,435
Kirin Holdings Co., Ltd. (c)		1,654,200		34,870
Lion Corp.		1,603,900		38,576
Shiseido Co., Ltd.		233,500		14,879
Sumitomo Mitsui Financial Group, Inc.		1,072,851		30,278
USS Co., Ltd.		556,300		8,918
				221,807
Korea, Republic of (2.8%)
LG Household & Health Care Ltd.		23,737		26,605
Samsung Electronics Co., Ltd.		619,767		27,435
				54,040

	Shares		Value (000)
Netherlands (3.6%)
Heineken N.V.		299,205	$	27,589
ING Groep N.V.		2,088,706		14,560
Unilever N.V. CVA		549,451		29,296
				71,445
Norway (1.0%)
Mowi ASA		1,042,071		19,864
Portugal (0.1%)
Banco Comercial Portugues SA (b)		21,927,977		2,634
Singapore (1.1%)
United Overseas Bank Ltd.		1,442,100		21,072
Spain (0.5%)
Bankinter SA		2,024,379		9,703
Sweden (2.3%)
Boliden AB		245,827		5,638
Epiroc AB, Class A		974,006		12,205
Hexagon AB, Class B (b)		452,475		26,572
				44,415
Switzerland (5.9%)
Alcon, Inc. (b)		143,885		8,268
Novartis AG (Registered)		675,547		58,854
Roche Holding AG (Genusschein)		137,694		47,704
				114,826
Taiwan (1.5%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		509,559		28,928
United Kingdom (23.7%)
Anglo American PLC		489,869		11,293
Associated British Foods PLC		1,263,277		29,869
Aviva PLC		3,139,141		10,640
BHP Group PLC (c)		1,574,979		32,229
British American Tobacco PLC		1,549,518		59,428
Experian PLC		253,570		8,900
GlaxoSmithKline PLC		2,828,625		57,137
Imperial Brands PLC		1,863,614		35,477
M&G PLC		4,706,110		9,772
Man Group PLC		7,502,872		12,147
Prudential PLC		2,907,701		43,814
Reckitt Benckiser Group PLC		996,209		91,650
RELX PLC (Euronext N.V.)		1,418,867		32,873
RELX PLC (LSE)		1,184,893		27,425
				462,654
Total Common Stocks (Cost $1,478,185)				1,922,599

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

International Equity Portfolio

	Shares		Value (000)
Short-Term Investment (1.2%)
Investment Company (1.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $24,013)		24,013,365	$	24,013
Total Investments (99.6%) (Cost $1,502,198) Including $42,933 of Securities Loaned (d)(e)				1,946,612
Other Assets in Excess of Liabilities (0.4%)				8,318
Net Assets (100.0%)			$	1,954,930

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Security trades on the Hong Kong exchange.

(b)  Non-income producing security.

(c)  All or a portion of this security was on loan at June 30, 2020.

(d)  The approximate fair value and percentage of net assets, $1,765,096,000 and 90.3%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $546,293,000 and the aggregate gross unrealized depreciation is approximately $101,879,000, resulting in net unrealized appreciation of approximately $444,414,000.

ADR  American Depositary Receipt.

CVA  Certificaten Van Aandelen.

Euronext N.V.  Euronext Amsterdam Stock Market.

LSE  London Stock Exchange.

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		56.4	%
Pharmaceuticals		14.2
Household Products		10.5
Insurance		7.2
Software		6.4
Metals & Mining		5.3
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2020.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

International Equity Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $1,478,185)	$	1,922,599
Investment in Security of Affiliated Issuer, at Value (Cost $24,013)		24,013
Total Investments in Securities, at Value (Cost $1,502,198)		1,946,612
Foreign Currency, at Value (Cost $4,027)		4,026
Tax Reclaim Receivable		7,452
Dividends Receivable		1,563
Receivable for Fund Shares Sold		552
Receivable from Securities Lending Income		4
Receivable from Affiliate		1
Other Assets		294
Total Assets		1,960,504
Liabilities:
Payable for Advisory Fees		3,431
Payable for Fund Shares Redeemed		1,353
Payable for Sub Transfer Agency Fees — Class I		260
Payable for Sub Transfer Agency Fees — Class A		70
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		129
Payable for Custodian Fees		69
Payable for Professional Fees		36
Payable for Shareholder Services Fees — Class A		11
Payable for Distribution and Shareholder Services Fees — Class H		3
Payable for Distribution and Shareholder Services Fees — Class L		3
Payable for Distribution and Shareholder Services Fees — Class C		1
Payable for Transfer Agency Fees — Class I		6
Payable for Transfer Agency Fees — Class A		4
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		1
Other Liabilities		194
Total Liabilities		5,574
Net Assets	$	1,954,930
Net Assets Consist of:
Paid-in-Capital	$	1,544,222
Total Distributable Earnings		410,708
Net Assets	$	1,954,930

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

International Equity Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	1,482,302
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		106,782,279
Net Asset Value, Offering and Redemption Price Per Share	$	13.88
CLASS A:
Net Assets	$	53,751
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,898,122
Net Asset Value, Redemption Price Per Share	$	13.79
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.76
Maximum Offering Price Per Share	$	14.55
CLASS L:
Net Assets	$	4,984
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		366,697
Net Asset Value, Offering and Redemption Price Per Share	$	13.59
CLASS C:
Net Assets	$	646
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		48,388
Net Asset Value, Offering and Redemption Price Per Share	$	13.35
CLASS IS:
Net Assets	$	413,247
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		29,766,634
Net Asset Value, Offering and Redemption Price Per Share	$	13.88
(1) Including: Securities on Loan, at Value:	$	42,933

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

International Equity Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $2,391 of Foreign Taxes Withheld)	$	25,177
Dividends from Security of Affiliated Issuer (Note G)		119
Income from Securities Loaned — Net		52
Total Investment Income		25,348
Expenses:
Advisory Fees (Note B)		7,752
Sub Transfer Agency Fees — Class I		670
Sub Transfer Agency Fees — Class A		140
Sub Transfer Agency Fees — Class L		2
Sub Transfer Agency Fees — Class C		—	@
Administration Fees (Note C)		775
Shareholder Services Fees — Class A (Note D)		154
Distribution and Shareholder Services Fees — Class L (Note D)		19
Distribution and Shareholder Services Fees — Class C (Note D)		3
Custodian Fees (Note F)		136
Professional Fees		57
Registration Fees		41
Shareholder Reporting Fees		32
Transfer Agency Fees — Class I (Note E)		10
Transfer Agency Fees — Class A (Note E)		6
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		2
Directors' Fees and Expenses		21
Pricing Fees		2
Other Expenses		34
Total Expenses		9,859
Reimbursement of Class Specific Expenses — Class I (Note B)		(398	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(60	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Waiver of Advisory Fees (Note B)		(32	)
Rebate from Morgan Stanley Affiliate (Note G)		(29	)
Net Expenses		9,336
Net Investment Income		16,012
Realized Loss:
Investments Sold		(13,518	)
Foreign Currency Translation		(169	)
Net Realized Loss		(13,687	)
Change in Unrealized Appreciation (Depreciation):
Investments		(132,137	)
Foreign Currency Translation		80
Net Change in Unrealized Appreciation (Depreciation)		(132,057	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(145,744	)
Net Decrease in Net Assets Resulting from Operations	$	(129,732	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

International Equity Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	16,012		$	43,378
Net Realized Gain (Loss)		(13,687	)		158,994
Net Change in Unrealized Appreciation (Depreciation)		(132,057	)		245,605
Net Increase (Decrease) in Net Assets Resulting from Operations		(129,732	)		447,977
Dividends and Distributions to Shareholders:
Class I		—			(143,434	)
Class A		—			(20,667	)
Class L		—			(514	)
Class C		—			(58	)
Class IS		—			(43,082	)
Total Dividends and Distributions to Shareholders		—			(207,755	)
Capital Share Transactions:(1)
Class I:
Subscribed		185,118			107,722
Distributions Reinvested		—			138,564
Redeemed		(169,336	)		(600,557	)
Class A:
Subscribed		36,326			15,796
Distributions Reinvested		—			20,480
Redeemed		(165,983	)		(92,281	)
Class L:
Exchanged		178			24
Distributions Reinvested		—			509
Redeemed		(653	)		(1,210	)
Class C:
Subscribed		147			41
Distributions Reinvested		—			58
Redeemed		(124	)		(280	)
Class IS:
Subscribed		8,638			15,435
Distributions Reinvested		—			37,186
Redeemed		(25,116	)		(105,825	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(130,805	)		(464,338	)
Redemption Fees		—			8
Total Decrease in Net Assets		(260,537	)		(224,108	)
Net Assets:
Beginning of Period		2,215,467			2,439,575
End of Period	$	1,954,930		$	2,215,467

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

International Equity Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		15,215			7,357
Shares Issued on Distributions Reinvested		—			9,420
Shares Redeemed		(12,868	)		(40,279	)
Net Increase (Decrease) in Class I Shares Outstanding		2,347			(23,502	)
Class A:
Shares Subscribed		3,144			1,090
Shares Issued on Distributions Reinvested		—			1,400
Shares Redeemed		(13,740	)		(6,224	)
Net Decrease in Class A Shares Outstanding		(10,596	)		(3,734	)
Class L:
Shares Exchanged		16			2
Shares Issued on Distributions Reinvested		—			35
Shares Redeemed		(55	)		(84	)
Net Decrease in Class L Shares Outstanding		(39	)		(47	)
Class C:
Shares Subscribed		11			3
Shares Issued on Distributions Reinvested		—			4
Shares Redeemed		(10	)		(20	)
Net Increase (Decrease) in Class C Shares Outstanding		1			(13	)
Class IS:
Shares Subscribed		645			1,046
Shares Issued on Distributions Reinvested		—			2,528
Shares Redeemed		(1,852	)		(6,916	)
Net Decrease in Class IS Shares Outstanding		(1,207	)		(3,342	)

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Equity Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	14.74		$	13.49		$	17.97		$	14.64		$	15.10		$	15.47
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.11			0.28			0.31			0.26			0.27			0.30
Net Realized and Unrealized Gain (Loss)		(0.97	)		2.47			(2.78	)		3.41			(0.57	)		(0.23	)
Total from Investment Operations		(0.86	)		2.75			(2.47	)		3.67			(0.30	)		0.07
Distributions from and/or in Excess of:
Net Investment Income		—			(0.32	)		(0.39	)		(0.34	)		(0.16	)		(0.44	)
Net Realized Gain		—			(1.18	)		(1.62	)		—			—			—
Total Distributions		—			(1.50	)		(2.01	)		(0.34	)		(0.16	)		(0.44	)
Redemption Fees		—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	13.88		$	14.74		$	13.49		$	17.97		$	14.64		$	15.10
Total Return(4)		(5.83	)%(7)		20.37	%		(13.80	)%		25.17	%		(2.00	)%		0.36	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,482,302		$	1,539,709		$	1,725,392		$	1,691,807		$	1,719,699		$	2,073,782
Ratio of Expenses Before Expense Limitation		1.01	%(8)		1.00	%		0.99	%		0.99	%		0.98	%		1.01	%
Ratio of Expenses After Expense Limitation		0.95	%(5)(8)		0.95	%(5)		0.95	%(5)		0.95	%(5)		0.95	%(5)		0.95	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			0.95	%(5)		N/A			N/A			0.95	%(5)		0.95	%(5)
Ratio of Net Investment Income		1.71	%(5)(8)		1.86	%(5)		1.82	%(5)		1.54	%(5)		1.86	%(5)		1.85	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		15	%(7)		20	%		34	%		18	%		33	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The annualized expense and net investment income ratios would be unchanged as the reimbursement of custodian fees was offset against current period expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Equity Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	14.67		$	13.42		$	17.75		$	14.46		$	14.91		$	15.28
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.06			0.24			0.32			0.19			0.23			0.24
Net Realized and Unrealized Gain (Loss)		(0.94	)		2.46			(2.82	)		3.38			(0.58	)		(0.23	)
Total from Investment Operations		(0.88	)		2.70			(2.50	)		3.57			(0.35	)		0.01
Distributions from and/or in Excess of:
Net Investment Income		—			(0.27	)		(0.21	)		(0.28	)		(0.10	)		(0.38	)
Net Realized Gain		—			(1.18	)		(1.62	)		—			—			—
Total Distributions		—			(1.45	)		(1.83	)		(0.28	)		(0.10	)		(0.38	)
Redemption Fees		—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	13.79		$	14.67		$	13.42		$	17.75		$	14.46		$	14.91
Total Return(4)		(6.00	)%(7)		20.11	%		(14.13	)%		24.77	%		(2.33	)%		(0.02	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	53,751		$	212,578		$	244,622		$	1,231,279		$	1,176,835		$	1,369,566
Ratio of Expenses Before Expense Limitation		1.40	%(8)		1.25	%		1.31	%		1.31	%		1.30	%		1.32	%
Ratio of Expenses After Expense Limitation		1.30	%(5)(8)		1.25	%(5)		1.30	%(5)		1.30	%(5)		1.29	%(5)		1.30	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			1.25	%(5)		N/A			N/A			1.29	%(5)		1.30	%(5)
Ratio of Net Investment Income		0.91	%(5)(8)		1.62	%(5)		1.83	%		1.16	%		1.60	%		1.48	%
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.01	%		0.00	%(6)
Portfolio Turnover Rate		15	%(7)		20	%		34	%		18	%		33	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Equity Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	14.50		$	13.28		$	17.70		$	14.43		$	14.87		$	15.23
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.05			0.15			0.10			0.11			0.16			0.15
Net Realized and Unrealized Gain (Loss)		(0.96	)		2.44			(2.66	)		3.35			(0.58	)		(0.21	)
Total from Investment Operations		(0.91	)		2.59			(2.56	)		3.46			(0.42	)		(0.06	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.19	)		(0.24	)		(0.19	)		(0.02	)		(0.30	)
Net Realized Gain		—			(1.18	)		(1.62	)		—			—			—
Total Distributions		—			(1.37	)		(1.86	)		(0.19	)		(0.02	)		(0.30	)
Redemption Fees		—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	13.59		$	14.50		$	13.28		$	17.70		$	14.43		$	14.87
Total Return(4)		(6.28	)%(7)		19.48	%		(14.49	)%		24.06	%		(2.82	)%		(0.47	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,984		$	5,888		$	6,022		$	7,099		$	7,008		$	9,053
Ratio of Expenses Before Expense Limitation		1.84	%(8)		1.79	%		N/A			1.90	%		1.93	%		1.89	%
Ratio of Expenses After Expense Limitation		1.80	%(5)(8)		1.78	%(5)		1.72	%(5)		1.80	%(5)		1.80	%(5)		1.80	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			1.78	%(5)		N/A			N/A			1.80	%(5)		1.80	%(5)
Ratio of Net Investment Income		0.79	%(5)(8)		1.06	%(5)		1.17	%(5)		0.69	%(5)		1.09	%(5)		0.97	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		15	%(7)		20	%		34	%		18	%		33	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Equity Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	14.26		$	13.08		$	17.51		$	14.31		$	14.77		$	16.70
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		0.04			0.10			0.05			0.04			0.14			(0.03	)
Net Realized and Unrealized Gain (Loss)		(0.95	)		2.41			(2.64	)		3.35			(0.58	)		(1.53	)
Total from Investment Operations		(0.91	)		2.51			(2.59	)		3.39			(0.44	)		(1.56	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.15	)		(0.22	)		(0.19	)		(0.02	)		(0.37	)
Net Realized Gain		—			(1.18	)		(1.62	)		—			—			—
Total Distributions		—			(1.33	)		(1.84	)		(0.19	)		(0.02	)		(0.37	)
Redemption Fees		—			0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	13.35		$	14.26		$	13.08		$	17.51		$	14.31		$	14.77
Total Return(5)		(6.38	)%(8)		19.18	%		(14.82	)%		23.78	%		(3.01	)%		(9.41	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	646		$	674		$	787		$	677		$	476		$	372
Ratio of Expenses Before Expense Limitation		2.47	%(9)		2.35	%		2.27	%		2.41	%		2.40	%		2.75	%(9)
Ratio of Expenses After Expense Limitation		2.05	%(6)(9)		2.05	%(6)		2.05	%(6)		2.05	%(6)		2.05	%(6)		2.05	%(6)(9)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			2.05	%(6)		N/A			N/A			2.05	%(6)		2.05	%(6)(9)
Ratio of Net Investment Income (Loss)		0.59	%(6)(9)		0.73	%(6)		0.83	%(6)		0.22	%(6)		0.95	%(6)		(0.27	)%(6)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		15	%(8)		20	%		34	%		18	%		33	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Equity Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	14.74		$	13.48		$	17.97		$	14.64		$	15.10		$	15.47
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.11			0.29			0.38			0.26			0.29			0.30
Net Realized and Unrealized Gain (Loss)		(0.97	)		2.48			(2.86	)		3.42			(0.59	)		(0.23	)
Total from Investment Operations		(0.86	)		2.77			(2.48	)		3.68			(0.30	)		0.07
Distributions from and/or in Excess of:
Net Investment Income		—			(0.33	)		(0.39	)		(0.35	)		(0.16	)		(0.44	)
Net Realized Gain		—			(1.18	)		(1.62	)		—			—			—
Total Distributions		—			(1.51	)		(2.01	)		(0.35	)		(0.16	)		(0.44	)
Redemption Fees		—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	13.88		$	14.74		$	13.48		$	17.97		$	14.64		$	15.10
Total Return(4)		(5.83	)%(7)		20.42	%		(13.76	)%		25.22	%		(1.95	)%		0.40	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	413,247		$	456,618		$	462,752		$	1,230,104		$	1,058,165		$	872,167
Ratio of Expenses Before Expense Limitation		0.91	%(8)		0.91	%		N/A			0.91	%		0.91	%		0.91	%
Ratio of Expenses After Expense Limitation		0.91	%(5)(8)		0.91	%(5)		0.90	%(5)		0.91	%(5)		0.91	%(5)		0.91	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			0.91	%(5)		N/A			N/A			0.91	%(5)		0.91	%(5)
Ratio of Net Investment Income		1.71	%(5)(8)		1.94	%(5)		2.19	%(5)		1.52	%(5)		1.96	%(5)		1.84	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		15	%(7)		20	%		34	%		18	%		33	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the International Equity Portfolio. The Fund seeks long-term capital appreciation by investing primarily in equity securities of non-U.S. issuers.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if

there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services,

quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	—	$	62,094	$	—	$	62,094
Air Freight & Logistics		—		42,802		—		42,802
Auto Components		—		11,626		—		11,626
Banks		—		78,247		—		78,247
Beverages		—		95,301		—		95,301
Capital Markets		—		12,147		—		12,147
Diversified Financial Services		—		9,772		—		9,772
Electronic Equipment, Instruments & Components		—		59,007		—		59,007
Food Products		—		49,733		—		49,733
Health Care Equipment & Supplies		—		34,803		—		34,803
Health Care Providers & Services		—		61,786		—		61,786
Hotels, Restaurants & Leisure		—		9,934		—		9,934
Household Products		—		204,099		—		204,099
Insurance		—		140,343		—		140,343
Interactive Media & Services		—		63,873		—		63,873
Machinery		—		47,521		—		47,521
Metals & Mining		53,747		49,160		—		102,907
Oil, Gas & Consumable Fuels		19,369		23,973		—		43,342
Personal Products		—		84,721		—		84,721
Pharmaceuticals		—		277,502		—		277,502
Professional Services		—		69,198		—		69,198
Semiconductors & Semiconductor Equipment		28,928		9,861		—		38,789
Software		55,459		68,284		—		123,743
Specialty Retail		—		8,918		—		8,918
Tech Hardware, Storage & Peripherals		—		27,435		—		27,435
Textiles, Apparel & Luxury Goods		—		68,051		—		68,051
Tobacco		—		94,905		—		94,905
Total Common Stocks		157,503		1,765,096		—		1,922,599
Short-Term Investment
Investment Company		24,013		—		—		24,013
Total Assets	$	181,516	$	1,765,096	$	—	$	1,946,612

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	42,933	(a)	$	—	$	(42,933	)(b)(c)	$	0

(a) Represents market value of loaned securities at period end.

(b) The Fund received non-cash collateral of approximately $44,802,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(c) The actual collateral received is greater than the amount shown here due to overcollateralization.

5.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets. Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

6.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $3 billion			Over $3 billion
	0.80	%		0.75	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.79% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.95% for Class I shares, 1.30% for Class A shares, 1.80% for Class L shares, 2.05% for Class C shares and 0.91% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $32,000 of advisory fees were waived and approximately $462,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley. The Sub-Adviser provides the Fund with advisory services subject to the overall supervision of the Adviser and the Fund's

Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $287,945,000 and $393,412,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $29,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	33,370	$	204,090	$	213,447	$	119

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	24,013

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	43,718	$	164,037	$	62,556	$	274,501

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to equalization debits and redemptions in kind, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(18,012	)	$	18,012

At December 31, 2019, the Fund had no distributable earnings on a tax basis.

For the year ended December 31, 2019, the Fund realized gains from in-kind redemptions of approximately $7,831,000. The gains are not taxable income to the Fund.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 52.8%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were higher than but close to its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

25

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

26

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Adviser

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

28

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIIESAN
3179151 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Opportunity Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	10
Notes to Financial Statements	16
Investment Advisory Agreement Approval	26
Liquidity Risk Management Program	28
Privacy Notice	29
Director and Officer Information	31

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in International Opportunity Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

International Opportunity Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Opportunity Portfolio Class I	$	1,000.00	$	1,139.20	$	1,019.99	$	5.21	$	4.92		0.98	%
International Opportunity Portfolio Class A		1,000.00		1,137.60		1,018.55		6.75		6.37		1.27
International Opportunity Portfolio Class L		1,000.00		1,134.40		1,015.76		9.71		9.17		1.83
International Opportunity Portfolio Class C		1,000.00		1,133.10		1,014.97		10.55		9.97		1.99
International Opportunity Portfolio Class IS		1,000.00		1,139.70		1,020.49		4.68		4.42		0.88
International Opportunity Portfolio Class IR		1,000.00		1,139.70		1,020.49		4.68		4.42		0.88

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

International Opportunity Portfolio

	Shares		Value (000)
Common Stocks (90.5%)
Argentina (1.3%)
Globant SA (a)		193,942	$	29,062
Canada (7.6%)
Canada Goose Holdings, Inc. (See Note G) (a)(b)		3,661,007		84,826
Shopify, Inc., Class A (a)		98,064		93,082
				177,908
China (24.3%)
Alibaba Group Holding Ltd. ADR (a)		330,873		71,369
China Resources Beer Holdings Co., Ltd. (c)		6,626,666		36,990
Foshan Haitian Flavouring & Food Co., Ltd., Class A		3,588,704		63,212
Meituan Dianping, Class B (a)(c)		5,242,200		117,144
New Frontier Health Corp. (a)		1,583,308		13,110
Shenzhou International Group Holdings Ltd. (c)		1,371,600		16,675
TAL Education Group ADR (a)		2,421,460		165,580
Tencent Holdings Ltd. (c)		457,300		29,303
Trip.com Group Ltd. ADR (a)		1,996,489		51,749
				565,132
Denmark (4.3%)
DSV A/S		824,099		101,228
France (3.5%)
Hermes International		98,156		82,412
Germany (3.5%)
Adidas AG (a)		125,576		33,109
HelloFresh SE (a)		892,744		47,757
				80,866
India (6.7%)
HDFC Bank Ltd.		7,653,164		107,569
ICICI Bank Ltd. ADR		2,427,946		22,556
Kotak Mahindra Bank Ltd.		1,417,109		25,579
				155,704
Italy (3.7%)
Moncler SpA (a)		2,233,086		85,870
Japan (4.8%)
Keyence Corp.		203,400		85,237
Pigeon Corp.		696,000		26,939
				112,176
Korea, Republic of (2.5%)
NAVER Corp.		261,381		58,806
Netherlands (5.3%)
Adyen N.V. (a)		33,379		48,633
ASML Holding N.V.		126,435		46,252
Just Eat Takeaway.com N.V (a)		274,530		28,695
				123,580

	Shares		Value (000)
Sweden (1.6%)
Vitrolife AB (a)		1,677,497	$	37,480
Switzerland (1.5%)
Straumann Holding AG (Registered)		39,651		34,278
Taiwan (2.8%)
Taiwan Semiconductor Manufacturing Co., Ltd.		6,135,000		65,519
United Kingdom (2.6%)
Fevertree Drinks PLC		1,274,493		32,307
Rightmove PLC		4,129,835		27,916
				60,223
United States (14.5%)
EPAM Systems, Inc. (a)		352,745		88,895
Farfetch Ltd., Class A (a)		2,938,763		50,753
MercadoLibre, Inc. (a)		47,650		46,972
Spotify Technology SA (a)		588,014		151,819
				338,439
Total Common Stocks (Cost $1,506,610)				2,108,683
Short-Term Investments (9.3%)
Securities held as Collateral on Loaned Securities (0.1%)
Investment Company (0.1%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		2,452,908		2,453
	Face Amount (000)
Repurchase Agreements (0.0%)
HSBC Securities USA, Inc., (0.07%, dated 6/30/20, due 7/1/20; proceeds $241; fully collateralized by a U.S. Government obligation; 0.5% due 3/15/23; valued at $246)	$	241		241
Merrill Lynch & Co., Inc., (0.07%, dated 6/30/20, due 7/1/20; proceeds $424; fully collateralized by U.S. Government obligations; 1.38% - 3.88% due 9/30/20 - 8/15/40; valued at $433)		424		424
				665
Total Securities held as Collateral on Loaned Securities (Cost $3,118)				3,118

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

International Opportunity Portfolio

	Shares		Value (000)
Investment Company (9.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $213,097)		213,096,668	$	213,097
Total Short-Term Investments (Cost $216,215)				216,215
Total Investments Excluding Purchased Options (99.8%) (Cost $1,722,825)				2,324,898
Total Purchased Options Outstanding (0.0%) (Cost $1,522)				44
Total Investments (99.8%) (Cost $1,724,347) Including $3,075 of Securities Loaned (d)(e)				2,324,942
Other Assets in Excess of Liabilities (0.2%)				3,740
Net Assets (100.0%)			$	2,328,682

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2020.

(c)  Security trades on the Hong Kong exchange.

(d)  The approximate fair value and percentage of net assets, $1,238,910,000 and 53.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $655,737,000 and the aggregate gross unrealized depreciation is approximately $55,142,000, resulting in net unrealized appreciation of approximately $600,595,000.

ADR  American Depositary Receipt.

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2020:

Counterparty	Description		Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
Royal Bank of Scotland		USD/CNH	CNH	8.09	Sep-20		282,130,187		282,130	$	44	$	1,522	$	(1,478	)

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		24.6	%
Internet & Direct Marketing Retail		17.9
Textiles, Apparel & Luxury Goods		13.1
Information Technology Services		9.9
Short-Term Investments		9.2
Diversified Consumer Services		7.1
Banks		6.7
Entertainment		6.5
Interactive Media & Services		5.0
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2020.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

International Opportunity Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $1,416,813)	$	2,024,566
Investment in Security of Affiliated Issuer, at Value (Cost $307,534)		300,376
Total Investments in Securities, at Value (Cost $1,724,347)		2,324,942
Foreign Currency, at Value (Cost $906)		897
Receivable for Fund Shares Sold		11,921
Dividends Receivable		620
Tax Reclaim Receivable		314
Receivable from Affiliate		10
Receivable from Securities Lending Income		10
Other Assets		224
Total Assets		2,338,938
Liabilities:
Payable for Advisory Fees		3,614
Collateral on Securities Loaned, at Value		3,118
Payable for Fund Shares Redeemed		2,585
Due to Broker		270
Payable for Sub Transfer Agency Fees — Class I		124
Payable for Sub Transfer Agency Fees — Class A		47
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		5
Payable for Administration Fees		144
Payable for Shareholder Services Fees — Class A		75
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		44
Deferred Capital Gain Country Tax		100
Payable for Professional Fees		65
Payable for Transfer Agency Fees — Class I		11
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		2
Payable for Transfer Agency Fees — Class IS		1
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Custodian Fees		8
Other Liabilities		41
Total Liabilities		10,256
Net Assets	$	2,328,682
Net Assets Consist of:
Paid-in-Capital	$	1,767,801
Total Distributable Earnings		560,881
Net Assets	$	2,328,682

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

International Opportunity Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	1,727,142
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		56,729,129
Net Asset Value, Offering and Redemption Price Per Share	$	30.45
CLASS A:
Net Assets	$	387,763
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		12,995,756
Net Asset Value, Redemption Price Per Share	$	29.84
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.65
Maximum Offering Price Per Share	$	31.49
CLASS L:
Net Assets	$	491
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		17,151
Net Asset Value, Offering and Redemption Price Per Share	$	28.62
CLASS C:
Net Assets	$	56,653
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,004,416
Net Asset Value, Offering and Redemption Price Per Share	$	28.26
CLASS IS:
Net Assets	$	65,108
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,133,829
Net Asset Value, Offering and Redemption Price Per Share	$	30.51
CLASS IR:
Net Assets	$	91,525
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,998,491
Net Asset Value, Offering and Redemption Price Per Share	$	30.52
(1) Including: Securities on Loan, at Value:	$	3,075

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

International Opportunity Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $524 of Foreign Taxes Withheld)	$	3,723
Dividends from Security of Affiliated Issuer (Note G)		472
Income from Securities Loaned — Net		285
Total Investment Income		4,480
Expenses:
Advisory Fees (Note B)		7,194
Sub Transfer Agency Fees — Class I		603
Sub Transfer Agency Fees — Class A		212
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		19
Shareholder Services Fees — Class A (Note D)		401
Distribution and Shareholder Services Fees — Class L (Note D)		2
Distribution and Shareholder Services Fees — Class C (Note D)		250
Administration Fees (Note C)		741
Custodian Fees (Note F)		184
Registration Fees		73
Transfer Agency Fees — Class I (Note E)		46
Transfer Agency Fees — Class A (Note E)		6
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		8
Transfer Agency Fees — Class IS (Note E)		4
Transfer Agency Fees — Class IR (Note E)		1
Professional Fees		50
Shareholder Reporting Fees		45
Pricing Fees		2
Other Expenses		12
Total Expenses		9,854
Rebate from Morgan Stanley Affiliate (Note G)		(144	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(3	)
Net Expenses		9,706
Net Investment Loss		(5,226	)
Realized Gain (Loss):
Investments Sold		8,536
Investments in Affiliates		(71	)
Foreign Currency Translation		(64	)
Net Realized Gain		8,401
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of $1,331)		279,506
Investments in Affiliates		(7,158	)
Foreign Currency Translation		11
Net Change in Unrealized Appreciation (Depreciation)		272,359
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		280,760
Net Increase in Net Assets Resulting from Operations	$	275,534

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

International Opportunity Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(5,226	)	$	(3,384	)
Net Realized Gain (Loss)		8,401			(17,368	)
Net Change in Unrealized Appreciation (Depreciation)		272,359			417,116
Net Increase in Net Assets Resulting from Operations		275,534			396,364
Capital Share Transactions:(1)
Class I:
Subscribed		507,227			585,257
Redeemed		(267,861	)		(219,531	)
Class A:
Subscribed		78,823			121,390
Redeemed		(71,646	)		(88,729	)
Class L:
Exchanged		11			—
Redeemed		(83	)		—
Class C:
Subscribed		5,639			15,512
Redeemed		(8,033	)		(9,844	)
Class IS:
Subscribed		14,216			43,659
Redeemed		(10,226	)		(13,026	)
Class IR:
Redeemed		(30,000	)		—
Net Increase in Net Assets Resulting from Capital Share Transactions		218,067			434,688
Redemption Fees		41			23
Total Increase in Net Assets		493,642			831,075
Net Assets:
Beginning of Period		1,835,040			1,003,965
End of Period	$	2,328,682		$	1,835,040
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		19,555			24,447
Shares Redeemed		(10,893	)		(9,242	)
Net Increase in Class I Shares Outstanding		8,662			15,205
Class A:
Shares Subscribed		3,064			5,170
Shares Redeemed		(2,881	)		(3,822	)
Net Increase in Class A Shares Outstanding		183			1,348
Class L:
Shares Exchanged		—	@@		—
Shares Redeemed		(3	)		—
Net Increase (Decrease) in Class L Shares Outstanding		(3	)		—
Class C:
Shares Subscribed		227			682
Shares Redeemed		(358	)		(440	)
Net Increase (Decrease) in Class C Shares Outstanding		(131	)		242
Class IS:
Shares Subscribed		629			1,703
Shares Redeemed		(366	)		(540	)
Net Increase in Class IS Shares Outstanding		263			1,163
Class IR:
Shares Redeemed		(1,124	)		—
Net Increase (Decrease) in Class IR Shares Outstanding		(1,124	)		—

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Opportunity Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	26.73		$	19.77		$	22.52		$	14.93		$	15.03		$	13.92
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.06	)		(0.04	)		(0.04	)		(0.08	)		(0.03	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		3.78			7.00			(2.66	)		8.04			(0.07	)		1.58
Total from Investment Operations		3.72			6.96			(2.70	)		7.96			(0.10	)		1.58
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.00	)(3)		(0.03	)
Net Realized Gain		—			—			(0.05	)		(0.37	)		—			(0.44	)
Total Distributions		—			—			(0.05	)		(0.37	)		(0.00	)(3)		(0.47	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	30.45		$	26.73		$	19.77		$	22.52		$	14.93		$	15.03
Total Return(4)		13.92	%(8)		35.20	%		(12.04	)%		53.38	%		(0.65	)%		11.40	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,727,142		$	1,284,678		$	649,580		$	358,141		$	62,440		$	52,128
Ratio of Expenses Before Expense Limitation		0.99	%(9)		1.03	%		1.04	%		1.10	%		1.34	%		1.95	%
Ratio of Expenses After Expense Limitation		0.98	%(5)(9)		0.99	%(5)		0.99	%(5)		0.98	%(5)		1.00	%(5)		1.01	%(5)(6)
Ratio of Net Investment Loss		(0.49	)%(5)(9)		(0.15	)%(5)		(0.19	)%(5)		(0.42	)%(5)		(0.22	)%(5)		(0.01	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.02	%		0.00	%(7)		0.01	%
Portfolio Turnover Rate		29	%(8)		20	%		36	%		30	%		42	%		51	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% for Class I shares. Prior to July 1, 2015, the maximum ratio was 1.15% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Opportunity Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	26.23		$	19.46		$	22.25		$	14.79		$	14.93		$	13.87
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.10	)		(0.10	)		(0.11	)		(0.15	)		(0.08	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		3.71			6.87			(2.63	)		7.98			(0.06	)		1.57
Total from Investment Operations		3.61			6.77			(2.74	)		7.83			(0.14	)		1.51
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.01	)
Net Realized Gain		—			—			(0.05	)		(0.37	)		—			(0.44	)
Total Distributions		—			—			(0.05	)		(0.37	)		—			(0.45	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	29.84		$	26.23		$	19.46		$	22.25		$	14.79		$	14.93
Total Return(4)		13.76	%(8)		34.79	%		(12.36	)%		53.01	%		(1.00	)%		10.99	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	387,763		$	336,109		$	223,098		$	186,988		$	11,727		$	9,520
Ratio of Expenses Before Expense Limitation		1.28	%(9)		1.30	%		1.34	%		1.36	%		1.66	%		2.28	%
Ratio of Expenses After Expense Limitation		1.27	%(5)(9)		1.29	%(5)		1.33	%(5)		1.27	%(5)		1.35	%(5)		1.34	%(5)(6)
Ratio of Net Investment Loss		(0.78	)%(5)(9)		(0.44	)%(5)		(0.51	)%(5)		(0.74	)%(5)		(0.55	)%(5)		(0.39	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.02	%		0.00	%(7)		0.01	%
Portfolio Turnover Rate		29	%(8)		20	%		36	%		30	%		42	%		51	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to July 1, 2015, the maximum ratio was 1.50% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Opportunity Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	25.23		$	18.82		$	21.63		$	14.47		$	14.69		$	13.71
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.16	)		(0.23	)		(0.22	)		(0.22	)		(0.14	)		(0.12	)
Net Realized and Unrealized Gain (Loss)		3.55			6.64			(2.54	)		7.75			(0.08	)		1.54
Total from Investment Operations		3.39			6.41			(2.76	)		7.53			(0.22	)		1.42
Distributions from and/or in Excess of:
Net Realized Gain		—			—			(0.05	)		(0.37	)		—			(0.44	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	28.62		$	25.23		$	18.82		$	21.63		$	14.47		$	14.69
Total Return(4)		13.44	%(8)		34.06	%		(12.81	)%		52.11	%		(1.50	)%		10.38	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	491		$	512		$	382		$	364		$	221		$	266
Ratio of Expenses Before Expense Limitation		2.18	%(9)		2.19	%		2.28	%		2.51	%		3.16	%		3.54	%
Ratio of Expenses After Expense Limitation		1.83	%(5)(9)		1.84	%(5)		1.84	%(5)		1.84	%(5)		1.85	%(5)		1.91	%(5)(6)
Ratio of Net Investment Loss		(1.36	)%(5)(9)		(0.99	)%(5)		(1.02	)%(5)		(1.16	)%(5)		(1.00	)%(5)		(0.80	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.00	%(7)		0.01	%
Portfolio Turnover Rate		29	%(8)		20	%		36	%		30	%		42	%		51	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.85% for Class L shares. Prior to July 1, 2015, the maximum ratio was 2.00% for Class L shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Opportunity Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	24.94		$	18.63		$	21.46		$	14.39		$	14.63		$	15.39
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.18	)		(0.26	)		(0.27	)		(0.29	)		(0.19	)		(0.13	)
Net Realized and Unrealized Gain (Loss)		3.50			6.57			(2.51	)		7.73			(0.05	)		(0.16	)
Total from Investment Operations		3.32			6.31			(2.78	)		7.44			(0.24	)		(0.29	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.03	)
Net Realized Gain		—			—			(0.05	)		(0.37	)		—			(0.44	)
Total Distributions		—			—			(0.05	)		(0.37	)		—			(0.47	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	28.26		$	24.94		$	18.63		$	21.46		$	14.39		$	14.63
Total Return(5)		13.31	%(9)		33.87	%		(13.00	)%		51.77	%		(1.71	)%		(1.85	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	56,653		$	53,257		$	35,297		$	23,334		$	1,862		$	1,776
Ratio of Expenses Before Expense Limitation		2.00	%(10)		2.03	%		2.06	%		2.10	%		2.43	%		3.03	%(10)
Ratio of Expenses After Expense Limitation		1.99	%(6)(10)		2.02	%(6)		2.04	%(6)		2.01	%(6)		2.10	%(6)		2.10	%(6)(7)(10)
Ratio of Net Investment Loss		(1.51	)%(6)(10)		(1.17	)%(6)		(1.24	)%(6)		(1.45	)%(6)		(1.32	)%(6)		(1.28	)%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(10)		0.01	%		0.01	%		0.02	%		0.00	%(8)		0.01	%(10)
Portfolio Turnover Rate		29	%(9)		20	%		36	%		30	%		42	%		51	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.10% for Class C shares. Prior to July 1, 2015, the maximum ratio was 2.25% for Class C shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Opportunity Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	26.77		$	19.79		$	22.54		$	14.94		$	15.03		$	13.92
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.05	)		(0.02	)		0.02			(0.12	)		(0.03	)		0.02
Net Realized and Unrealized Gain (Loss)		3.79			7.00			(2.72	)		8.09			(0.06	)		1.56
Total from Investment Operations		3.74			6.98			(2.70	)		7.97			(0.09	)		1.58
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.00	)(3)		(0.03	)
Net Realized Gain		—			—			(0.05	)		(0.37	)		—			(0.44	)
Total Distributions		—			—			(0.05	)		(0.37	)		(0.00	)(3)		(0.47	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	30.51		$	26.77		$	19.79		$	22.54		$	14.94		$	15.03
Total Return(4)		13.97	%(8)		35.27	%		(12.03	)%		53.41	%		(0.64	)%		11.40	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	65,108		$	50,083		$	14,016		$	57,629		$	1,030		$	12
Ratio of Expenses Before Expense Limitation		0.91	%(9)		0.98	%		0.95	%		1.03	%		5.64	%		15.79	%
Ratio of Expenses After Expense Limitation		0.88	%(5)(9)		0.91	%(5)		0.92	%(5)		0.92	%(5)		0.93	%(5)		1.01	%(5)(6)
Ratio of Net Investment Income (Loss)		(0.39	)%(5)(9)		(0.07	)%(5)		0.09	%(5)		(0.56	)%(5)		(0.20	)%(5)		0.12	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.02	%		0.02	%		0.01	%		0.00	%(7)
Portfolio Turnover Rate		29	%(8)		20	%		36	%		30	%		42	%		51	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.94% for Class IS shares. Prior to July 1, 2015, the maximum ratio was 1.09% for Class IS shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Opportunity Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	26.78		$	19.79		$	25.37
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.05	)		(0.02	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		3.79			7.01			(5.47	)
Total from Investment Operations		3.74			6.99			(5.53	)
Distributions from and/or in Excess of:
Net Realized Gain		—			—			(0.05	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	30.52		$	26.78		$	19.79
Total Return(4)		13.97	%(6)		35.32	%		(21.84	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	91,525		$	110,401		$	81,592
Ratio of Expenses Before Expense Limitation		0.90	%(7)		0.93	%		0.95	%(7)
Ratio of Expenses After Expense Limitation		0.88	%(5)(7)		0.91	%(5)		0.93	%(5)(7)
Ratio of Net Investment Loss		(0.42	)%(5)(7)		(0.07	)%(5)		(0.46	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.01	%(7)
Portfolio Turnover Rate		29	%(6)		20	%		36	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the International Opportunity Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015 the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official

exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee

provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	—	$	101,228	$	—	$	101,228
Banks		22,556		133,148		—		155,704
Beverages		—		69,297		—		69,297
Biotechnology		—		37,480		—		37,480
Diversified Consumer Services		165,580		—		—		165,580
Electronic Equipment, Instruments & Components		—		85,237		—		85,237
Entertainment		151,819		—		—		151,819
Food Products		—		63,212		—		63,212
Health Care Equipment & Supplies		—		34,278		—		34,278
Health Care Providers & Services		13,110		—		—		13,110
Household Products		—		26,939		—		26,939
Information Technology Services		181,977		48,633		—		230,610
Interactive Media & Services		—		116,025		—		116,025
Internet & Direct Marketing Retail		220,843		193,596		—		414,439
Semiconductors & Semiconductor Equipment		—		111,771		—		111,771
Software		29,062		—		—		29,062
Textiles, Apparel & Luxury Goods		84,826		218,066		—		302,892
Total Common Stocks		869,773		1,238,910		—		2,108,683
Call Options Purchased		—		44		—		44
Short-Term Investments
Investment Company		215,550		—		—		215,550
Repurchase Agreements		—		665		—		665
Total Short-Term Investments		215,550		665		—		216,215
Total Assets	$	1,085,323	$	1,239,619	$	—	$	2,324,942

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

5.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options (Purchased Options)	Investments, at Value Currency Risk		$44(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(2,480	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	2,029	(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	44	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	44	(a)	$	—	$	(44	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	512,338,000

6.  Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the

term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	3,075	(f)	$	—	$	(3,075	)(g)(h)	$	0

(f)  Represents market value of loaned securities at period end.

(g)  The Fund received cash collateral of approximately $3,118,000, which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments.

(h)  The actual collateral received is greater than the amount shown here due to overcollateralization.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2020:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	3,118	$	—	$	—	$	—	$	3,118
Total Borrowings	$	3,118	$	—	$	—	$	—	$	3,118
Gross amount of recognized liabilities for securities lending transactions									$	3,118

7.  Redemption Fees: The Fund will assess a 2% redemption fee, on Class I shares, Class A shares, Class L shares, Class C shares, Class IS shares and Class IR shares which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets.

8.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

9.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

10.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where

collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.80	%		0.75	%

For the six months ended June 30, 2020, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.76% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares, 0.94% for Class IS shares and 0.94% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $4,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $643,363,000 and $502,842,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $144,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company/ Issuer	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	161,533	$	452,791	$	398,774	$	472
Canada Goose Holdings, Inc.		—		92,863		808		—
	$	161,533	$	545,654	$	399,582	$	472

Affiliated Investment Company/ Issuer (cont'd)	Realized Gain (Loss) (000)			Change in Unrealized Appreciation (Depreciation) (000)			Value June 30, 2020 (000)
Liquidity Funds	$	—		$	—		$	215,550
Canada Goose Holdings, Inc.		(71	)		(7,158	)		84,826
	$	(71	)	$	(7,158	)	$	300,376

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	—	$	—	$	608	$	1,906

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	7,247	$	(7,247	)

At December 31, 2019, the Fund had no distributable earnings on a tax basis.

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $34,868,000 and $5,162,000, respectively, that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2019, the Fund intends to defer to January 1, 2020 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	66	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 26.3%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Fund's management fee and total expense ratio were higher than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was competitive with its peer group average and (ii) management fee and total expense ratio were acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

28

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

29

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

30

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

31

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIIIOSAN
3182135 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Real Estate Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	10
Notes to Financial Statements	15
Investment Advisory Agreement Approval	22
Liquidity Risk Management Program	24
Privacy Notice	25
Director and Officer Information	27

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in International Real Estate Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

International Real Estate Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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 information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Real Estate Portfolio Class I	$	1,000.00	$	758.20	$	1,019.89	$	4.37	$	5.02		1.00	%
International Real Estate Portfolio Class A		1,000.00		756.70		1,018.15		5.90		6.77		1.35
International Real Estate Portfolio Class L		1,000.00		751.80		1,015.66		8.06		9.27		1.85
International Real Estate Portfolio Class C		1,000.00		753.80		1,014.42		9.16		10.52		2.10
International Real Estate Portfolio Class IS		1,000.00		758.10		1,020.04		4.24		4.87		0.97

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

  Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

International Real Estate Portfolio

	Shares		Value (000)
Common Stocks (98.0%)
Australia (5.3%)
Dexus REIT		13,945	$	89
Goodman Group REIT		1,105		11
GPT Group (The) REIT		14,509		42
Mirvac Group REIT		15,837		24
Scentre Group REIT		28,815		44
Stockland REIT		1,538		4
Vicinity Centres REIT		15,493		16
				230
Austria (0.0%)
CA Immobilien Anlagen AG		44		1
China (4.3%)
China Overseas Land & Investment Ltd. (a)		7,500		23
China Resources Land Ltd. (a)		16,000		61
Longfor Group Holdings Ltd. (a)		16,500		79
Poly Property Development Co., Ltd., Class H (a)		600		6
Shimao Property Holdings Ltd. (a)		3,000		13
Sunac China Holdings Ltd. (a)		1,000		4
				186
Finland (0.8%)
Kojamo Oyj		1,655		35
France (7.8%)
Carmila SA REIT		1,016		14
Covivio REIT		144		11
Gecina SA REIT		933		115
Klepierre SA REIT		3,136		63
Mercialys SA REIT		5,057		42
Unibail-Rodamco-Westfield REIT		1,672		94
				339
Germany (11.6%)
ADO Properties SA (b)		449		12
Alstria Office AG REIT		3,551		53
Deutsche Wohnen SE		3,275		147
LEG Immobilien AG		426		54
Vonovia SE		3,920		240
				506
Hong Kong (17.0%)
CK Asset Holdings Ltd.		6,500		39
Hang Lung Properties Ltd.		20,000		47
Hongkong Land Holdings Ltd.		22,200		92
Hysan Development Co., Ltd.		3,836		12
Link REIT		15,200		125
New World Development Co. Ltd.		13,197		63
Sun Hung Kai Properties Ltd.		15,956		204
Swire Properties Ltd.		36,300		93
Wharf Real Estate Investment Co., Ltd.		13,370		64
				739
Ireland (1.7%)
Hibernia REIT PLC		57,767		73

	Shares		Value (000)
Japan (25.9%)
Activia Properties, Inc. REIT		3	$	10
Advance Residence Investment Corp. REIT		17		51
Daiwa Office Investment Corp. REIT		5		28
GLP J-REIT		29		42
Hulic Co., Ltd.		2,700		25
Hulic REIT, Inc.		8		10
Invincible Investment Corp. REIT		50		13
Japan Hotel REIT Investment Corp.		42		17
Japan Prime Realty Investment Corp. REIT		3		9
Japan Real Estate Investment Corp. REIT		20		103
Japan Retail Fund Investment Corp. REIT		6		7
Kenedix Office Investment Corp. REIT		5		28
Kenedix, Inc.		2,100		10
Mitsubishi Estate Co., Ltd.		10,400		155
Mitsubishi Estate Logistics REIT Investment Corp. REIT		7		26
Mitsui Fudosan Co., Ltd.		8,300		147
Mitsui Fudosan Logistics Park, Inc. REIT		9		40
Mori Trust Sogo Reit, Inc.		10		12
Nippon Building Fund, Inc. REIT		23		131
Nippon Prologis, Inc. REIT		15		46
Nomura Real Estate Master Fund, Inc. REIT		38		46
Orix, Inc. J-REIT		9		12
Premier Investment Corp. REIT		7		8
Sumitomo Realty & Development Co., Ltd.		4,300		119
United Urban Investment Corp. REIT		32		34
				1,129
Malta (0.1%)
BGP Holdings PLC (b)(c)		4,769,371		7
Netherlands (1.6%)
Eurocommercial Properties N.V. CVA REIT		2,971		39
NSI N.V. REIT		809		31
				70
Norway (1.3%)
Entra ASA		3,837		49
Norwegian Property ASA		4,968		6
				55
Singapore (3.8%)
Ascendas Real Estate Investment Trust REIT		21,504		49
CapitaLand Commercial Trust REIT		4,560		6
CapitaLand Mall Trust REIT		5,900		8
Frasers Logistics & Industrial Trust REIT		4,000		4
Keppel DC REIT		19,300		35
Mapletree Commercial Trust REIT		14,892		21
Mapletree Industrial Trust REIT		9,000		19
Mapletree Logistics Trust REIT		9,500		13
UOL Group Ltd.		2,013		10
				165

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

International Real Estate Portfolio

	Shares		Value (000)
Spain (2.9%)
Inmobiliaria Colonial Socimi SA REIT		5,124	$	45
Merlin Properties Socimi SA REIT		9,578		80
				125
Sweden (2.8%)
Atrium Ljungberg AB, Class B		1,308		19
Castellum AB		495		9
Fabege AB		3,611		42
Hufvudstaden AB, Class A		3,120		39
Kungsleden AB		1,963		15
				124
Switzerland (0.9%)
PSP Swiss Property AG (Registered)		344		39
United Kingdom (10.2%)
British Land Co., PLC (The) REIT		18,949		91
Capital & Counties Properties PLC		8,990		16
Derwent London PLC REIT		1,703		59
Grainger PLC		2,470		9
Great Portland Estates PLC REIT		5,452		43
Hammerson PLC REIT		17,913		18
Land Securities Group PLC REIT		15,745		107
Segro PLC REIT		2,310		25
Shaftesbury PLC REIT		791		5
St. Modwen Properties PLC		3,458		15
Urban & Civic PLC		15,000		43
Workspace Group PLC REIT		1,445		12
				443
Total Common Stocks (Cost $4,237)				4,266
Short-Term Investment (0.3%)
Investment Company (0.3%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $14)13,564				14
Total Investments (98.3%) (Cost $4,251) (d)(e)				4,280
Other Assets in Excess of Liabilities (1.7%)				74
Net Assets (100.0%)			$	4,354

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Security trades on the Hong Kong exchange.

(b)  Non-income producing security.

(c)  At June 30, 2020, the Fund held a fair valued security valued at approximately $7,000, representing 0.2% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(d)  The approximate fair value and percentage of net assets, $4,196,000 and 96.4%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $597,000 and the aggregate gross unrealized depreciation is approximately $568,000, resulting in net unrealized appreciation of approximately $29,000.

CVA  Certificaten Van Aandelen.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Diversified		43.2	%
Office		22.7
Residential		15.1
Retail		11.0
Other*		8.0
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

International Real Estate Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $4,237)	$	4,266
Investment in Security of Affiliated Issuer, at Value (Cost $14)		14
Total Investments in Securities, at Value (Cost $4,251)		4,280
Foreign Currency, at Value (Cost $11)		12
Due from Adviser		65
Dividends Receivable		18
Receivable for Investments Sold		7
Tax Reclaim Receivable		6
Receivable from Affiliate		—	@
Other Assets		58
Total Assets		4,446
Liabilities:
Payable for Professional Fees		47
Payable for Custodian Fees		14
Deferred Capital Gain Country Tax		13
Payable for Investments Purchased		4
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Administration Fees		—	@
Payable for Sub Transfer Agency Fees — Class I		1
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		11
Total Liabilities		92
Net Assets	$	4,354
Net Assets Consist of:
Paid-in-Capital	$	228,888
Total Accumulated Loss		(224,534	)
Net Assets	$	4,354

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

International Real Estate Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	3,630
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		241,813
Net Asset Value, Offering and Redemption Price Per Share	$	15.02
CLASS A:
Net Assets	$	700
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		46,592
Net Asset Value, Redemption Price Per Share	$	15.02
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.83
Maximum Offering Price Per Share	$	15.85
CLASS L:
Net Assets	$	9
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		580
Net Asset Value, Offering and Redemption Price Per Share	$	14.84
CLASS C:
Net Assets	$	7
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		470
Net Asset Value, Offering and Redemption Price Per Share	$	14.85
CLASS IS:
Net Assets	$	8
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		507
Net Asset Value, Offering and Redemption Price Per Share	$	15.01

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

International Real Estate Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $7 of Foreign Taxes Withheld)	$	98
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		98
Expenses:
Professional Fees		55
Custodian Fees (Note F)		36
Registration Fees		25
Advisory Fees (Note B)		23
Shareholder Reporting Fees		8
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Sub Transfer Agency Fees — Class I		3
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class C		—	@
Pricing Fees		3
Administration Fees (Note C)		2
Shareholder Services Fees — Class A (Note D)		1
Distribution and Shareholder Services Fees — Class L (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Directors' Fees and Expenses		—	@
Other Expenses		7
Expenses Before Non Operating Expenses		169
Bank Overdraft Expense		3
Total Expenses		172
Expenses Reimbursed by Adviser (Note B)		(108	)
Waiver of Advisory Fees (Note B)		(23	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(4	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		33
Net Investment Income		65
Realized Gain (Loss):
Investments Sold (Net of $10 of Capital Gain Country Tax)		1,750
Foreign Currency Translation		(23	)
Net Realized Gain		1,727
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Decrease in Deferred Capital Gain Country Tax of $3)		(3,589	)
Foreign Currency Translation		(1	)
Net Change in Unrealized Appreciation (Depreciation)		(3,590	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(1,863	)
Net Decrease in Net Assets Resulting from Operations	$	(1,798	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

International Real Estate Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	65		$	484
Net Realized Gain		1,727			863
Net Change in Unrealized Appreciation (Depreciation)		(3,590	)		2,103
Net Increase (Decrease) in Net Assets Resulting from Operations		(1,798	)		3,450
Dividends and Distributions to Shareholders:
Class I		—			(81	)
Class A		—			(7	)
Class L		—			(—	@)
Class C		—			(—	@)
Class IS		—			(104	)
Total Dividends and Distributions to Shareholders		—			(192	)
Capital Share Transactions:(1)
Class I:
Subscribed		3			403
Distributions Reinvested		—			77
Redeemed		(1,889	)		(8,390	)
Class A:
Subscribed		3			6
Distributions Reinvested		—			6
Redeemed		(84	)		(634	)
Class L:
Distributions Reinvested		—			—	@
Class C:
Distributions Reinvested		—			—	@
Class IS:
Distributions Reinvested		—			104
Redeemed		—			(9,934	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(1,967	)		(18,362	)
Total Decrease in Net Assets		(3,765	)		(15,104	)
Net Assets:
Beginning of Period		8,119			23,223
End of Period	$	4,354		$	8,119
(1) Capital Share Transactions:
Class I:
Shares Subscribed		—	@@		21
Shares Issued on Distributions Reinvested		—			4
Shares Redeemed		(115	)		(449	)
Net Decrease in Class I Shares Outstanding		(115	)		(424	)
Class A:
Shares Subscribed		—	@@		—	@@
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(4	)		(33	)
Net Decrease in Class A Shares Outstanding		(4	)		(33	)
Class L:
Shares Issued on Distributions Reinvested		—			—	@@
Class C:
Shares Issued on Distributions Reinvested		—			—	@@
Class IS:
Shares Issued on Distributions Reinvested		—			5
Shares Redeemed		—			(505	)
Net Decrease in Class IS Shares Outstanding		—			(500	)

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Real Estate Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	19.81		$	16.99		$	19.36		$	17.53		$	18.72		$	19.84
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.19			0.46			0.52			0.59			0.46			0.37
Net Realized and Unrealized Gain (Loss)		(4.98	)		2.58			(2.05	)		2.69			(0.73	)		(1.00	)
Total from Investment Operations		(4.79	)		3.04			(1.53	)		3.28			(0.27	)		(0.63	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.22	)		(0.84	)		(1.45	)		(0.92	)		(0.49	)
Redemption Fees		—			—			—			0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	15.02		$	19.81		$	16.99		$	19.36		$	17.53		$	18.72
Total Return(4)		(24.18	)%(8)		17.94	%		(8.14	)%		19.13	%		(1.38	)%		(3.29	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,630		$	7,076		$	13,276		$	19,846		$	26,213		$	67,459
Ratio of Expenses Before Expense Limitation		5.74	%(9)		2.44	%		1.90	%		1.76	%		1.37	%		1.29	%
Ratio of Expenses After Expense Limitation		1.10	%(5)(9)		1.02	%(5)(6)		1.00	%(5)		1.00	%(5)		1.00	%(5)		1.00	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.00	%(5)(9)		1.00	%(5)		N/A			1.00	%(5)		N/A			N/A
Ratio of Net Investment Income		2.22	%(5)(9)		2.44	%(5)		2.74	%(5)		3.13	%(5)		2.47	%(5)		1.84	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		41	%(8)		31	%		28	%		23	%		21	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Real Estate Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	19.85		$	17.01		$	19.37		$	17.54		$	18.73		$	19.84
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.17			0.40			0.45			0.51			0.39			0.30
Net Realized and Unrealized Gain (Loss)		(5.00	)		2.58			(2.04	)		2.71			(0.73	)		(1.00	)
Total from Investment Operations		(4.83	)		2.98			(1.59	)		3.22			(0.34	)		(0.70	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.14	)		(0.77	)		(1.39	)		(0.85	)		(0.41	)
Redemption Fees		—			—			—			0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	15.02		$	19.85		$	17.01		$	19.37		$	17.54		$	18.73
Total Return(4)		(24.33	)%(8)		17.53	%		(8.45	)%		18.78	%		(1.78	)%		(3.61	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	700		$	1,013		$	1,422		$	1,917		$	1,512		$	2,308
Ratio of Expenses Before Expense Limitation		6.23	%(9)		2.85	%		2.22	%		2.23	%		1.85	%		1.70	%
Ratio of Expenses After Expense Limitation		1.45	%(5)(9)		1.37	%(5)(6)		1.35	%(5)		1.35	%(5)		1.35	%(5)		1.35	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.35	%(5)(9)		1.35	%(5)		N/A			1.35	%(5)		N/A			N/A
Ratio of Net Investment Income		1.96	%(5)(9)		2.11	%(5)		2.40	%(5)		2.71	%(5)		2.10	%(5)		1.48	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		41	%(8)		31	%		28	%		23	%		21	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Real Estate Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	19.74		$	16.94		$	19.29		$	17.42		$	18.61		$	19.69
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.07			0.30			0.36			0.50			0.29			0.18
Net Realized and Unrealized Gain (Loss)		(4.97	)		2.57			(2.03	)		2.59			(0.71	)		(0.97	)
Total from Investment Operations		(4.90	)		2.87			(1.67	)		3.09			(0.42	)		(0.79	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.07	)		(0.68	)		(1.22	)		(0.77	)		(0.29	)
Redemption Fees		—			—			—			0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	14.84		$	19.74		$	16.94		$	19.29		$	17.42		$	18.61
Total Return(4)		(24.82	)%(8)		16.93	%		(8.88	)%		18.14	%		(2.23	)%		(4.11	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9		$	11		$	10		$	11		$	53		$	55
Ratio of Expenses Before Expense Limitation		28.44	%(9)		20.03	%		20.23	%		14.81	%		5.51	%		4.58	%
Ratio of Expenses After Expense Limitation		1.95	%(5)(9)		1.87	%(5)(6)		1.85	%(5)		1.85	%(5)		1.85	%(5)		1.85	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		1.85	%(5)(9)		1.85	%(5)		N/A			1.85	%(5)		N/A			N/A
Ratio of Net Investment Income		1.47	%(5)(9)		1.61	%(5)		1.90	%(5)		2.70	%(5)		1.58	%(5)		0.90	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		41	%(8)		31	%		28	%		23	%		21	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Real Estate Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	19.70		$	16.91		$	19.00		$	17.32		$	18.50		$	21.28
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.11			0.25			0.35			0.30			0.25			0.06
Net Realized and Unrealized Gain (Loss)		(4.96	)		2.56			(2.04	)		2.71			(0.71	)		(2.48	)
Total from Investment Operations		(4.85	)		2.81			(1.69	)		3.01			(0.46	)		(2.42	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.02	)		(0.40	)		(1.33	)		(0.72	)		(0.36	)
Redemption Fees		—			—			—			0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	14.85		$	19.70		$	16.91		$	19.00		$	17.32		$	18.50
Total Return(5)		(24.62	)%(9)		16.62	%		(9.11	)%		17.78	%		(2.44	)%		(11.47	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	7		$	9		$	8		$	128		$	21		$	22
Ratio of Expenses Before Expense Limitation		36.92	%(10)		25.57	%		5.51	%		5.62	%		12.39	%		10.98	%(10)
Ratio of Expenses After Expense Limitation		2.20	%(6)(10)		2.12	%(6)(7)		2.10	%(6)		2.10	%(6)		2.10	%(6)		2.10	%(6)(10)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		2.10	%(6)(10)		2.10	%(6)		N/A			2.10	%(6)		N/A			N/A
Ratio of Net Investment Income		1.22	%(6)(10)		1.36	%(6)		1.84	%(6)		1.58	%(6)		1.33	%(6)		0.45	%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(8)(10)		0.00	%(8)		0.00	%(8)		0.00	%(8)		0.00	%(8)		0.00	%(8)(10)
Portfolio Turnover Rate		41	%(9)		31	%		28	%		23	%		21	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

International Real Estate Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	19.80		$	16.98		$	19.35		$	17.52		$	18.71		$	19.83
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.20			0.47			0.52			0.59			0.47			0.37
Net Realized and Unrealized Gain (Loss)		(4.99	)		2.58			(2.04	)		2.70			(0.73	)		(1.00	)
Total from Investment Operations		(4.79	)		3.05			(1.52	)		3.29			(0.26	)		(0.63	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.23	)		(0.85	)		(1.46	)		(0.93	)		(0.49	)
Redemption Fees		—			—			—			0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	15.01		$	19.80		$	16.98		$	19.35		$	17.52		$	18.71
Total Return(4)		(24.19	)%(8)		18.00	%		(8.11	)%		19.19	%		(1.33	)%		(3.26	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8		$	10		$	8,507		$	11,359		$	11,573		$	20,944
Ratio of Expenses Before Expense Limitation		31.20	%(9)		2.34	%		1.81	%		1.70	%		1.33	%		1.30	%
Ratio of Expenses After Expense Limitation		1.07	%(5)(9)		0.99	%(5)(6)		0.97	%(5)		0.97	%(5)		0.97	%(5)		0.97	%(5)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		0.97	%(5)(9)		0.97	%(5)		N/A			0.97	%(5)		N/A			N/A
Ratio of Net Investment Income		2.35	%(5)(9)		2.51	%(5)		2.76	%(5)		3.11	%(5)		2.52	%(5)		1.86	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		41	%(8)		31	%		28	%		23	%		21	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the International Real Estate Portfolio. The Fund seeks to provide current income and long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at

the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Fund invests a significant portion of its assets in securities of real estate investment trusts ("REITs"). The market's perception of prospective declines in private real estate values and other financial assets may result in increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Fund.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Diversified	$	63	$	1,787	$	—	$	1,850
Industrial		—		207		—		207
Industrial/Office Mixed		—		92		—		92
Lodging/Resorts		—		30		—		30
Office		—		972		—		972
Residential		—		638		7		645
Retail		—		470		—		470
Total Common Stocks		63		4,196		7		4,266
Short-Term Investment
Investment Company		14		—		—		14
Total Assets	$	77	$	4,196	$	7	$	4,280

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

International Real Estate	Common Stock (000)
Beginning Balance	$	7
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		—	@
Realized gains (losses)		—
Ending Balance	$	7
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2020		—	@

@  Value is less than $500.

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2020. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance.

	Fair Value at June 30, 2020 (000)		Valuation Technique	Unobservable Input	Amount*			Impact to Valuation from an increase in input**
Common Stock	$	7	Market Transaction Method	Transaction Valuation	$	0.001		Increase
				Discount for Lack of Marketability		50.0	%	Decrease

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares,

Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty 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. These fees, if any, are included in the Statements of Changes in Net Assets. Effective April 30, 2020, the Board of Directors of the Fund approved the elimination of redemption fees charged by the Fund.

5.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 0.80% of the daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares and 0.97% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $23,000 of advisory fees were waived and approximately $116,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser has entered into Sub-Advisory Agreements with the Sub-Advisers, each a wholly-owned subsidiary of Morgan Stanley. The Sub-Advisers provide the Fund with advisory services subject to the overall supervision of the Adviser and the Company's Officers and Directors. The Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor

of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

investments were approximately $2,851,000 and $13,585,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	163	$	877	$	1,026	$	—	@

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	14

@  Amount is less than $500.

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From: Ordinary Income (000)		2018 Distributions Paid From: Ordinary Income (000)
$	192	$	1,223

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2019.

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	1,039	$	—

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $3,108,000 and $221,640,000, respectively that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 38.1%.

K. Subsequent Events: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

The Directors of the Company approved a Plan of liquidation with respect to the Fund. Pursuant to the Plan of Liquidation, substantially all of the assets of the Fund were liquidated, known liabilities of the Fund were satisfied, the remaining proceeds were distributed to the Fund's shareholders, and all of the issued and outstanding shares of the Fund were redeemed (the "Liquidation"). The Fund suspended the offering of its shares to all investors at the close of business on July 13, 2020. The Liquidation occurred on July 15, 2020.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Advisers, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Advisers and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which does not include breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

On June 16, 2020, the Board approved a Plan of Liquidation with respect to the Fund. Pursuant to the Plan of Liquidation, substantially all of the assets of the Fund were liquidated, known liabilities of the Fund were satisfied, the remaining proceeds were distributed to the Fund's shareholders, and all of the issued and outstanding shares of the Fund were redeemed (the "Liquidation"). The Fund suspended the offering of its shares to all investors at the close of business on July 13, 2020 and the Liquidation occurred on July 15, 2020.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

24

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

25

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc..
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

27

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIIRESAN
3179202 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Multi-Asset Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Consolidated Expense Example	3
Consolidated Portfolio of Investments	4
Consolidated Statement of Assets and Liabilities	26
Consolidated Statement of Operations	28
Consolidated Statements of Changes in Net Assets	29
Consolidated Financial Highlights	31
Notes to Consolidated Financial Statements	36
Investment Advisory Agreement Approval	47
Liquidity Risk Management Program	49
Privacy Notice	50
Director and Officer Information	52

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Multi-Asset Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Consolidated Expense Example (unaudited)

Multi-Asset Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Multi-Asset Portfolio Class I	$	1,000.00	$	898.00	$	1,019.84	$	4.77	$	5.07		1.01	%
Multi-Asset Portfolio Class A		1,000.00		896.00		1,018.10		6.41		6.82		1.36
Multi-Asset Portfolio Class L		1,000.00		894.60		1,051.61		8.76		9.32		1.86
Multi-Asset Portfolio Class C		1,000.00		893.50		1,014.37		9.93		10.57		2.11
Multi-Asset Portfolio Class IS		1,000.00		897.90		1,019.99		4.62		4.92		0.98

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments

Multi-Asset Portfolio

	Shares		Value (000)
Common Stocks (22.6%)
Australia (0.0%)
Goodman Group REIT		33	$	1
Stockland REIT		70		—	@
				1
China (0.0%)
China Common Rich Renewable Energy Investments Ltd. (a)		178,000		—	@
France (0.4%)
Accor SA (a)		3,051		83
Hong Kong (0.0%)
Shangri-La Asia Ltd.		10,000		9
Japan (3.5%)
Mitsubishi Estate Co., Ltd.		12,385		184
Mitsui Fudosan Co., Ltd.		12,294		218
Nomura Real Estate Holdings, Inc.		2,296		43
Sumitomo Realty & Development Co., Ltd.		7,063		195
Tokyo Tatemono Co., Ltd.		5,960		69
Tokyu Fudosan Holdings Corp.		13,387		63
				772
Netherlands (0.1%)
Basic-Fit N.V. (a)		583		15
Spain (0.0%)
Melia Hotels International SA		2,494		11
United Kingdom (0.8%)
InterContinental Hotels Group PLC		2,037		90
InterContinental Hotels Group PLC ADR		900		40
Whitbread PLC (a)		2,006		55
				185
United States (17.8%)
Bank of America Corp.		2,905		69
Choice Hotels International, Inc.		529		42
CIT Group, Inc.		29		1
Citigroup, Inc.		748		38
Citizens Financial Group, Inc.		148		4
Comerica, Inc.		49		2
DR Horton, Inc.		10,964		608
Eagle Materials, Inc.		302		21
East West Bancorp, Inc.		47		2
Extended Stay America, Inc. (Units) (b)		1,936		22
Fidelity National Financial, Inc.		2,097		64
Fifth Third Bancorp		236		4
First American Financial Corp.		715		34
First Republic Bank		54		6
Hilton Worldwide Holdings, Inc.		3,217		236
Huntington Bancshares, Inc.		339		3
Hyatt Hotels Corp., Class A		1,183		59
JPMorgan Chase & Co.		1,048		99
KB Home		2,639		81
KeyCorp		325		4
Lennar Corp., Class A		9,032		557
Louisiana-Pacific Corp.		708		18

	Shares		Value (000)
M&T Bank Corp.		41	$	4
M/I Homes, Inc. (a)		770		26
Marriott International, Inc., Class A		3,616		310
Marriott Vacations Worldwide Corp.		405		33
Martin Marietta Materials, Inc.		488		101
Masco Corp.		1,793		90
MDC Holdings, Inc.		1,946		69
Meritage Homes Corp. (a)		1,257		96
MGIC Investment Corp.		2,548		21
Mohawk Industries, Inc. (a)		380		39
NVR, Inc. (a)		122		398
Owens Corning		655		36
People's United Financial, Inc.		138		2
PNC Financial Services Group, Inc. (The)		148		16
Pulte Group, Inc.		7,936		270
Regions Financial Corp.		325		4
Scotts Miracle-Gro Co. (The), Class A		425		57
Signature Bank		20		2
Skyline Champion Corp. (a)		427		10
Stewart Information Services Corp.		177		6
SVB Financial Group (a)		18		4
Toll Brothers, Inc.		3,707		121
Truist Financial Corp.		430		16
UFP Industries, Inc.		432		21
US Bancorp		485		18
Vulcan Materials Co.		908		105
Watsco, Inc.		281		50
Wells Fargo & Co.		1,373		35
Wyndham Hotels & Resorts, Inc.		907		39
Zions Bancorp NA		59		2
				3,975
Total Common Stocks (Cost $5,081)				5,051
	Face Amount (000)
Fixed Income Securities (9.6%)
Sovereign (9.6%)
Argentina (1.0%)
Argentine Republic Government International Bond, 5.88%, 1/11/28 (c)(d)	$	554		222
Greece (8.6%)
Hellenic Republic Government Bond, 3.75%, 1/30/28	EUR	1,429		1,925
Total Sovereign (Cost $2,110)				2,147
Total Fixed Income Securities (Cost $2,110)				2,147
	Shares
Short-Term Investments (64.5%)
Investment Company (54.2%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $12,121)		12,121,202		12,121

The accompanying notes are an integral part of the consolidated financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

	Face Amount (000)		Value (000)
U.S. Treasury Security (10.3%)
U.S. Treasury Bill, 0.16%, 1/28/21 (Cost $2,315) (e)(f)	$	2,317	$	2,315
Total Short-Term Investments (Cost $14,436)				14,436
Total Investments (96.7%) (Cost $21,627) (g)(h)(i)				21,634
Other Assets in Excess of Liabilities (3.3%)				735
Net Assets (100.0%)			$	22,369

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Consists of one or more classes of securities traded together as a unit; stocks with attached warrants.

(c)  Non-income producing security; bond in default.

(d)  Issuer in bankruptcy.

(e)  Rate shown is the yield to maturity at June 30, 2020.

(f)  All or a portion of the security was pledged to cover margin requirements for swap agreements.

(g)  Securities are available for collateral in connection with open foreign currency forward exchange contracts, futures contracts and swap agreements.

(h)  The approximate fair value and percentage of net assets, $1,036,000 and 4.6%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Consolidated Financial Statements.

(i)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $816,000 and the aggregate gross unrealized depreciation is approximately $783,000, resulting in net unrealized appreciation of approximately $33,000.

@  Value is less than $500.

ADR  American Depositary Receipt.

REIT  Real Estate Investment Trust.

Foreign Currency Forward Exchange Contracts:

The Fund had the following foreign currency forward exchange contracts open at June 30, 2020:

Counterparty	Contracts to Deliver (000)			In Exchange For (000)			Delivery Date	Unrealized Appreciation (Depreciation) (000)
Bank of America NA	$	51		EUR	45		7/7/20	$	(—	@)
Barclays Bank PLC	$	11		EUR	10		7/7/20		(—	@)
BNP Paribas SA	CAD	11		$	8		7/7/20		(—	@)
BNP Paribas SA	JPY	7,719		$	72		7/7/20		—	@
BNP Paribas SA	JPY	15,563		$	145		7/7/20		1
BNP Paribas SA	JPY	6,030		$	56		7/7/20		1
BNP Paribas SA	$	56		CHF	53		7/7/20		—	@
BNP Paribas SA	$	2,642		EUR	2,350		7/7/20		(2	)
BNP Paribas SA	$	338		GBP	269		7/7/20		(5	)
Citibank NA	$	327		EUR	291		7/7/20		(—	@)
Goldman Sachs International	HKD	126		$	16		7/7/20		—	@
Goldman Sachs International	$	941		EUR	836		7/7/20		(1	)
JPMorgan Chase Bank NA	$	215		EUR	191		7/7/20		(—	@)
State Street Bank and Trust Co.	CAD	15		$	11		7/7/20		(—	@)
UBS AG	CHF	11		$	11		7/7/20		—	@
UBS AG	HKD	99		$	13		7/7/20		(—	@)
UBS AG	MXN	562		$	25		7/7/20		1
UBS AG	$	589		CHF	560		7/7/20		2
UBS AG	$	22		EUR	20		7/7/20		(—	@)
UBS AG	$	70		EUR	62		7/7/20		(—	@)
UBS AG	$	3,117		EUR	2,772		7/7/20		(2	)
UBS AG	$	23		GBP	18		7/7/20		—	@
UBS AG	$	338		GBP	269		7/7/20		(5	)
UBS AG	$	29		HKD	226		7/7/20		(—	@)
Barclays Bank PLC	PEN	11		$	3		9/17/20		—	@
BNP Paribas SA	COP	1,251		$	—	@	9/17/20		—	@
BNP Paribas SA	EUR	40		$	45		9/17/20		—	@
BNP Paribas SA	$	—	@	CLP	222		9/17/20		(—	@)
BNP Paribas SA	$	1		IDR	17,025		9/17/20		—	@
BNP Paribas SA	$	2		INR	152		9/17/20		—	@
BNP Paribas SA	$	—	@	RUB	22		9/17/20		(—	@)
BNP Paribas SA	$	3		TWD	88		9/17/20		(—	@)
Citibank NA	$	—	@	KRW	596		9/17/20		(—	@)
UBS AG	EUR	21		$	24		9/17/20		—	@
UBS AG	JPY	2,886		$	27		9/17/20		—	@
UBS AG	JPY	1,554		$	15		9/17/20		—	@
								$	(10	)

The accompanying notes are an integral part of the consolidated financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Futures Contracts:

The Fund had the following futures contracts open at June 30, 2020:

	Number of Contracts		Expiration Date	Notional Amount (000)			Value (000)			Unrealized Appreciation (Depreciation) (000)
Long:
100 oz Gold Future (United States)		8	Aug-20	$	1		$	1,440		$	49
NYMEX WTI Crude Oil Futures (United States)		5	Nov-21		5			204			(1	)
Short:
Euro FX Currency (United States)		63	Sep-20		(7,875	)		(8,862	)		52
Euro Stoxx 50 (Germany)		7	Sep-20	EUR	(—	@)		(253	)		(6	)
German Euro BTP (Germany)		10	Sep-20		(1,000	)		(1,616	)		(30	)
MSCI Emerging Market E Mini (United States)		2	Sep-20	$	(—	@)		(99	)		(2	)
NIKKEI 225 Index (Japan)		1	Sep-20	JPY	(1	)		(103	)		4
S&P 500 E MINI Index (United States)		18	Sep-20	$	(1	)		(2,781	)		(31	)
TOPIX Index (Japan)		5	Sep-20	JPY	(50	)		(722	)		29
U.S. Treasury Ultra Bond (United States)		4	Sep-20	$	(400	)		(873	)		6
U.S. Treasury Ultra Long Bond (United States)		2	Sep-20		(200	)		(315	)		(1	)
										$	69

Credit Default Swap Agreement:

The Fund had the following credit default swap agreement open at June 30, 2020:

Swap Counterparty and Reference Obligation	Credit Rating of Reference Obligation†	Buy/Sell Protection	Pay/ Receive Fixed Rate			Payment Frequency	Maturity Date	Notional Amount (000)		Value (000)		Upfront Payment Paid (000)		Unrealized Depreciation (000)
Morgan Stanley & Co. LLC* CDX.EM.32	NR	Buy		1.00	%	Quarterly	12/20/24	$	243	$	9	$	13	$	(4	)

Interest Rate Swap Agreements:

The Fund had the following interest rate swap agreements open at June 30, 2020:

Swap Counterparty	Floating Rate Index	Pay/ Receive Floating Rate	Fixed Rate			Payment Frequency Paid/ Received	Maturity Date	Notional Amount (000)		Value (000)		Upfront Payment Paid (000)		Unrealized Appreciation (000)
Morgan Stanley & Co. LLC* US CPI All Urban Semi-Annual/	Consumers Index	Receive		1.24	%	Quarterly	3/30/30	$	267	$	6	$	—	$	6
Morgan Stanley & Co. LLC* US CPI All Urban  Semi-Annual/	Consumers Index	Receive		1.27		Quarterly	3/30/30		1,068		19		—		19
Morgan Stanley & Co. LLC* US CPI All Urban  Semi-Annual/	Consumers Index	Receive		1.30		Quarterly	3/30/30		267		4		—		4
Morgan Stanley & Co. LLC* US CPI All Urban  Semi-Annual/	Consumers Index	Receive		1.18		Quarterly	3/31/30		445		12		—		12
Morgan Stanley & Co. LLC* US CPI All Urban  Semi-Annual/	Consumers Index	Receive		1.31		Quarterly	4/28/30		159		2		—		2
Morgan Stanley & Co. LLC* US CPI All Urban  Semi-Annual/	Consumers Index	Receive		1.37		Quarterly	5/29/30		50		1		—		1
										$	44	$	—	$	44

The accompanying notes are an integral part of the consolidated financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Total Return Swap Agreements:

The Fund had the following total return swap agreements open at June 30, 2020:

Swap Counterparty	Index	Pay/ Receive Total Return of Referenced Index	Floating Rate	Payment Frequency	Maturity Date	Notional Amount (000)		Value (000)			Upfront Payment Paid (000)		Unrealized Appreciation (Depreciation) (000)
JPMorgan Chase Bank NA Long SP500  3 Month USD	Value Index††	Receive	LIBOR plus 0.10%	Quarterly	5/14/21	$	1,353	$	(49	)	$	—	$	(49	)
JPMorgan Chase Bank NA Long SP500  3 Month USD	Value Index††	Receive	LIBOR plus 0.10%	Quarterly	5/14/21		1,074		(28	)		—		(28	)
JPMorgan Chase Bank NA Long SP500  3 Month USD	Value Index††	Receive	LIBOR plus 0.10%	Quarterly	5/14/21		1,078		(26	)		—		(26	)
JPMorgan Chase Bank NA Long U.S. Value  3 Month USD	(SP1500) Index††	Receive	LIBOR plus 0.10%	Quarterly	5/14/21		879		29			—		29
JPMorgan Chase Bank NA Long U.S. Value  3 Month USD	(SP1500) Index††	Receive	LIBOR plus 0.10%	Quarterly	5/14/21		976		39			—		39
JPMorgan Chase Bank NA Long U.S. Value  3 Month USD	(SP1500) Index††	Receive	LIBOR plus 0.10%	Quarterly	5/14/21		458		—	@		—		—	@
JPMorgan Chase Bank NA Short SP500 Anti  3 Month USD	Value Index††	Pay	LIBOR plus 0.10%	Quarterly	5/14/21		606		4			—		4
JPMorgan Chase Bank NA Short SP500 Anti  3 Month USD	Value Index††	Pay	LIBOR plus 0.10%	Quarterly	5/14/21		605		2			—		2
JPMorgan Chase Bank NA Short SP500 Anti  3 Month USD	Value Index††	Pay	LIBOR plus 0.10%	Quarterly	5/14/21		605		6			—		6
JPMorgan Chase Bank NA Short SP500  3 Month USD	Low Vol Index††	Pay	LIBOR plus 0.10%	Quarterly	5/14/21		561		8			—		8
JPMorgan Chase Bank NA Short SP500  3 Month USD	Low Vol Index††	Pay	LIBOR plus 0.10%	Quarterly	5/14/21		560		5			—		5
JPMorgan Chase Bank NA Short SP500  3 Month USD	Low Vol Index††	Pay	LIBOR plus 0.10%	Quarterly	5/14/21		562		6			—		6
JPMorgan Chase Bank NA Short U.S. Low Vol  3 Month USD	(SP1500) Index††	Pay	LIBOR plus 0.10%	Quarterly	5/14/21		456		1			—		1
JPMorgan Chase Bank NA Short U.S. Low Vol  3 Month USD	(SP1500) Index††	Pay	LIBOR plus 0.10%	Quarterly	5/14/21		898		(14	)		—		(14	)
JPMorgan Chase Bank NA Short U.S. Low Vol  3 Month USD	(SP1500) Index††	Pay	LIBOR plus 0.10%	Quarterly	5/14/21		943		(28	)		—		(28	)
JPMorgan Chase Bank NA Long EMU  3 Month EUR	Value Index††	Pay	EURIBOR plus 0.14%	Quarterly	6/16/21	EUR	492		—	@		—		—	@
JPMorgan Chase Bank NA Long EMU  3 Month EUR	Value index††	Receive	EURIBOR plus 0.14%	Quarterly	6/16/21		519		(16	)		—		(16	)
JPMorgan Chase Bank NA Short EMU Anti  3 Month EUR	Value Index††	Pay	EURIBOR plus 0.05%	Quarterly	6/16/21		520		(1	)		—		(1	)
JPMorgan Chase Bank NA Short EMU Low  3 Month EUR	Vol Index††	Pay	EURIBOR plus 0.05%	Quarterly	6/16/21		503		(11	)		—		(11	)
								$	(73	)	$	—	$	(73	)

††  See tables below for details of the equity basket holdings underlying the swap.

The accompanying notes are an integral part of the consolidated financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

The following table represents the equity basket holdings underlying the total return swap with Long SP500 Value Index as of June 30, 2020:

Security Description	Shares		Value (000)		Index Weight
Long SP500 Value Index
AES Corp.		7,427	$	108		1.14	%
Alliance Data Systems Corp.		1,911		86		0.90
Allstate Corp.		527		51		0.54
American International Group		3,047		95		1.00
AmerisourceBergen Corp.		1,024		103		1.08
Anthem, Inc.		379		100		1.05
Archer-Daniels-Midland Co.		2,489		99		1.04
Baker Hughes Co.		6,024		93		0.97
Bank Of New York Mellon Corp.		2,620		101		1.06
Biogen, Inc.		360		96		1.01
BorgWarner, Inc.		3,019		107		1.12
Cardinal Health, Inc.		1,861		97		1.02
Carrier Global Corp.		2,366		53		0.55
CBRE Group Inc — A		2,097		95		0.99
Centene Corp.		1,583		101		1.05
CenterPoint Energy, Inc.		5,516		103		1.08
CenturyLink, Inc.		9,708		97		1.02
CF Industries Holdings, Inc.		3,293		93		0.97
Cigna Corp.		526		99		1.03
Cisco Systems, Inc.		2,183		102		1.07
Citigroup, Inc.		1,863		95		1.00
Cognizant Tech Solutions-A		1,832		104		1.09
CVS Health Corp.		1,547		101		1.05
Davita, Inc.		1,285		102		1.07
Delta Air Lines, Inc.		3,241		91		0.95
Devon Energy Corp.		7,628		86		0.91
Discovery, Inc. — A		4,557		96		1.01
Discovery, Inc. — C		5,065		98		1.02
Dow, Inc.		2,401		98		1.03
DXC Technology Co.		6,254		103		1.08
Eastman Chemical Co.		1,418		99		1.03
Edison International		1,676		91		0.95
Exelon Corp.		2,629		95		1.00
FedEx Corp.		748		105		1.10
Fifth Third Bancorp, Inc.		4,603		89		0.93
General Dynamics Corp.		650		97		1.02
General Motors Co.		3,652		92		0.97
Hanesbrands, Inc.		8,384		95		0.99
Harley-Davidson, Inc.		3,991		95		0.99
Hartford Financial SVCS Group		2,445		94		0.99
Hewlett Packard Enterprise		9,745		95		0.99
Host Hotels & Resorts, Inc.		7,919		85		0.90
Howmet Aerospace, Inc.		6,661		106		1.11
HP, Inc.		5,881		103		1.07
Huntington Ingalls Industries		547		95		1.00
Intel Corp.		1,680		100		1.05
International Paper Co.		2,841		100		1.05
Interpublic Group Of Cos, Inc.		2,927		50		0.53
Intl Business Machines Corp.		811		98		1.03
Invesco Ltd.		9,107		98		1.03
JM Smucker Co. (The)		939		99		1.04
Johnson Controls International		2,863		98		1.02
Juniper Networks, Inc.		4,163		95		1.00

The accompanying notes are an integral part of the consolidated financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Long SP500 Value Index (cont'd)
Kimco Realty Corp.		7,180	$	92		0.97	%
Kinder Morgan, Inc.		3,270		50		0.52
Kohls Corp.		4,087		85		0.89
Kraft Heinz Co. (The)		3,100		99		1.04
Kroger Co.		3,119		106		1.11
Lennar Corp. — A		1,587		98		1.02
Lincoln National Corp.		2,389		88		0.92
Lyondellbasell Indu — Class A		1,469		97		1.01
Metlife, Inc.		2,622		96		1.00
Micron Technology, Inc.		1,988		102		1.07
Mohawk Industries, Inc.		1,033		105		1.10
Molson Coors Beverage Co. — B		2,549		88		0.92
Mylan N.V.		6,289		101		1.06
NetApp, Inc.		2,287		101		1.06
Newell Brands, Inc.		6,449		102		1.07
Nielsen Holdings PLC		6,679		99		1.04
NRG Energy, Inc.		3,005		98		1.03
Oneok, Inc.		2,642		88		0.92
Perrigo Co. PLC		1,897		105		1.10
Pfizer, Inc.		1,564		51		0.54
Phillips 66		1,317		95		0.99
PPL Corp.		3,732		96		1.01
Principal Financial Group		2,295		95		1.00
Pultegroup, Inc.		2,777		95		0.99
PVH Corp.		1,930		93		0.97
Quanta Services, Inc.		2,617		103		1.08
Seagate Technology		1,963		95		1.00
Simon Property Group Inc.		1,343		92		0.96
Sl Green Realty Corp.		1,887		93		0.97
Snap-on, Inc.		739		102		1.07
Synchrony Financial		4,032		89		0.94
Tapestry, Inc.		6,768		90		0.94
Te Connectivity Ltd.		1,234		101		1.05
Textron, Inc.		2,900		95		1.00
Tyson Foods, Inc. — Class A		1,564		93		0.98
United Airlines Holdings, Inc.		2,523		87		0.92
United Rentals, Inc.		641		96		1.00
Universal Health Services — B		995		92		0.97
Unum Group		5,777		96		1.00
Viacomcbs, Inc. — Class B		4,194		98		1.03
Vornado Realty Trust		2,450		94		0.98
Wabtec Corp.		1,613		93		0.97
Walgreens Boots Alliance, Inc.		2,407		102		1.07
Wells Fargo & Co.		3,557		91		0.95
Western Digital Corp.		2,281		101		1.06
Western Union Co.		4,613		100		1.05
Westrock Co.		3,507		99		1.04
Xerox Holdings Corp.		5,834		89		0.93
			$	9,543.00		100.00	%

The accompanying notes are an integral part of the consolidated financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

The following table represents the equity basket holdings underlying the total return swap with Long U.S. Value (SP1500) Index as of June 30, 2020:

Security Description	Shares		Value (000)		Index Weight
Long U.S. Value (SP1500) Index
AAR Corp.		2,576	$	53		0.54	%
Acuity Brands, Inc.		604		58		0.58
Advansix, Inc.		3,502		41		0.41
Alexion Pharmaceuticals, Inc.		462		52		0.52
Alliance Data Systems Corp.		1,139		51		0.52
American Equity Invt Life Hl		2,326		57		0.58
American International Group		1,698		53		0.53
American Woodmark Corp.		749		57		0.57
Apogee Enterprises, Inc.		2,474		57		0.57
Arcbest Corp.		2,072		55		0.55
Archer-Daniels-Midland Co.		1,350		54		0.54
Archrock, Inc.		8,821		57		0.58
Atlas Air Worldwide Holdings		1,334		57		0.58
Autonation, Inc.		1,412		53		0.53
AZZ, Inc.		1,599		55		0.55
Baker Hughes Co.		3,517		54		0.54
Bank Of New York Mellon Corp.		1,401		54		0.54
Big Lots, Inc.		1,598		67		0.67
Biogen, Inc.		204		55		0.55
Bonanza Creek Energy, Inc.		3,266		48		0.49
Brinker International, Inc.		2,365		57		0.57
Brixmor Property Group, Inc.		4,198		54		0.54
Brunswick Corp.		858		55		0.55
Cadence Bancorp		5,786		51		0.52
Caleres, Inc.		6,673		56		0.56
Callon Petroleum Co.		38,286		44		0.44
Capri Holdings Ltd.		3,421		53		0.54
Cardinal Health, Inc.		1,003		52		0.53
Cardtronics PLC — A		2,246		54		0.54
Carnival Corp.		3,133		51		0.52
Cato Corp. — Class A		3,174		26		0.26
CenterPoint Energy, Inc.		2,991		56		0.56
Central Garden And Pet Co. — A		1,708		58		0.58
Century Communities, Inc.		1,771		54		0.55
CenturyLink, Inc.		5,319		53		0.54
Chart Industries, Inc.		1,285		62		0.63
Cheesecake Factory, Inc. (The)		2,395		55		0.55
Cigna Corp.		57		11		0.11
Citigroup, Inc.		1,037		53		0.53
Citizens Financial Group		2,123		54		0.54
Cno Financial Group, Inc.		3,524		55		0.55
Commercial Metals Co.		2,623		54		0.54
Computer Programs & Systems		1,214		28		0.28
Comtech Telecommunications		3,223		54		0.55
Conn's Inc		5,952		60		0.60
Consol Energy, Inc.		7,596		39		0.39
Cooper-Standard Holding		2,941		39		0.39
Corecivic, Inc.		5,345		50		0.50
Crane Co.		973		58		0.58
Customers Bancorp, Inc.		3,238		39		0.39
Cvs Health Corp.		840		55		0.55
Dana, Inc.		4,525		55		0.55
Darling Ingredients, Inc.		2,238		55		0.55

The accompanying notes are an integral part of the consolidated financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Long U.S. Value (SP1500) Index (cont'd)
Dave & Buster'S Entertainment		3,680	$	49		0.49	%
Deluxe Corp.		2,390		56		0.57
Designer Brands, Inc. — Class A		7,927		54		0.54
Diamondrock Hospitality Co.		9,504		53		0.53
Diodes, Inc.		1,079		55		0.55
Discovery, Inc. — C		2,715		52		0.53
Donnelley Financial Solution		2,510		21		0.21
Dxc Technology Co.		3,485		58		0.58
Eastman Chemical Co.		779		54		0.55
Ebay, Inc.		1,098		58		0.58
Ebix, Inc.		2,357		53		0.53
Edgewell Personal Care Co.		1,914		60		0.60
Endo International PLC		15,293		52		0.53
Enova International, Inc.		3,726		55		0.56
Exelon Corp.		1,437		52		0.52
Fifth Third Bancorp, Inc.		2,568		50		0.50
First Financial Bancorp		3,946		55		0.55
First Horizon National Corp.		5,236		52		0.52
First Solar, Inc.		1,084		54		0.54
Fnb Corp.		7,122		53		0.54
Garrett Motion, Inc.		8,798		49		0.49
Genworth Financial, Inc. — Class A		20,763		48		0.48
Geo Group, Inc. (The)		4,429		52		0.53
G-Iii Apparel Group Ltd.		4,059		54		0.54
Gms, Inc.		2,354		58		0.58
Graham Holdings Co. — Class B		166		57		0.57
Greenbrier Companies, Inc.		2,394		54		0.55
Greif, Inc. — Class A		1,623		56		0.56
Group 1 Automotive, Inc.		826		54		0.55
Hartford Financial SVCS Group		1,380		53		0.54
Heidrick & Struggles International		2,133		46		0.46
Herman Miller, Inc.		2,231		53		0.53
Hologic, Inc.		978		56		0.56
Hope Bancorp, Inc.		5,874		54		0.54
Howmet Aerospace, Inc.		3,685		58		0.59
Ichor Holdings Ltd.		2,292		61		0.61
Insight Enterprises, Inc.		1,099		54		0.54
Integer Holdings, Corp.		731		53		0.54
Integra Lifesciences Holding		1,125		53		0.53
Intel Corp.		180		11		0.11
Interface, Inc.		6,568		53		0.54
Intl Business Machines Corp.		446		54		0.54
Invesco Ltd.		4,765		51		0.52
Istar, Inc.		4,214		52		0.52
J2 Global, Inc.		146		9		0.09
Kelly Services, Inc. — A		2,683		42		0.43
Koppers Holdings, Inc.		2,228		42		0.42
Kraton Corp.		3,336		58		0.58
Lannett Co., Inc.		7,227		52		0.53
Lantheus Holdings, Inc.		3,861		55		0.56
Laredo Petroleum, Inc.		3,463		48		0.48
Lyondellbasell Indu — Class A		809		53		0.54
M/I Homes, Inc.		1,611		55		0.56
Macerich Co. (The)		6,066		54		0.55
Marcus Corp.		3,733		50		0.50

The accompanying notes are an integral part of the consolidated financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Long U.S. Value (SP1500) Index (cont'd)
Mastec, Inc.		1,189	$	53		0.54	%
Matrix Service Co.		2,543		25		0.25
Mdu Resources Group, Inc.		2,504		56		0.56
Medtronic PLC		116		11		0.11
Meredith Corp.		3,458		50		0.51
Meridian Bioscience, Inc.		2,742		64		0.64
Meritor, Inc.		2,709		54		0.54
Meta Financial Group, Inc.		2,969		54		0.54
Metlife, Inc.		1,462		53		0.54
Micron Technology, Inc.		1,055		54		0.55
Minerals Technologies, Inc.		1,180		55		0.56
Molson Coors Beverage Co. — B		1,422		49		0.49
Moog, Inc.- Class A		1,101		58		0.59
Mts Systems Corp.		3,174		56		0.56
Mylan N.V.		3,280		53		0.53
MYR Group, Inc.		1,126		36		0.36
Natus Medical, Inc.		2,557		56		0.56
Navient Corp.		7,029		49		0.50
Netgear, Inc.		2,120		55		0.55
NRG Energy, Inc.		1,581		51		0.52
Oge Energy Corp.		1,750		53		0.53
Oracle Corp.		196		11		0.11
Oshkosh Corp.		744		53		0.54
Owens & Minor, Inc.		7,603		58		0.58
Pebblebrook Hotel Trust		3,952		54		0.54
Penn Virginia Corp.		4,850		46		0.47
Perspecta, Inc.		2,284		53		0.53
Photronics, Inc.		4,868		54		0.55
Pilgrim'S Pride Corp.		3,019		51		0.51
Plantronics, Inc.		3,949		58		0.58
Pra Health Sciences, Inc.		564		55		0.55
Principal Financial Group		1,309		54		0.55
Progress Software Corp.		1,436		56		0.56
Propetro Holding Corp.		9,797		50		0.51
Quinstreet, Inc.		4,792		50		0.50
Renewable Energy Group, Inc.		1,925		48		0.48
Resideo Technologies, Inc.		4,618		54		0.54
Ring Energy, Inc.		8,456		10		0.10
RPT Realty		7,892		55		0.55
Sabra Health Care REIT, Inc.		3,754		54		0.54
Sanmina Corp.		2,139		54		0.54
Scansource, Inc.		1,593		38		0.39
Schweitzer-Mauduit International, Inc.		1,799		60		0.60
Select Medical Holdings Corp.		3,751		55		0.56
Service Properties Trust		6,591		47		0.47
Signet Jewelers Ltd.		4,521		46		0.47
Simmons First National Corp. — Class A		3,128		54		0.54
Skywest, Inc.		1,652		54		0.54
Sl Green Realty Corp.		1,036		51		0.51
Smart Global Holdings, Inc.		2,070		56		0.57
Spartannash Co.		2,885		61		0.62
Standex International Corp.		713		41		0.41
Sterling Bancorp		4,418		52		0.52
Summit Hotel Properties, Inc.		8,938		53		0.53
Suncoke Energy, Inc.		10,948		32		0.33

The accompanying notes are an integral part of the consolidated financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Long U.S. Value (SP1500) Index (cont'd)
Sykes Enterprises, Inc.		2,015	$	56		0.56	%
Syneos Health, Inc.		987		58		0.58
Synnex Corp.		519		62		0.63
Synovus Financial Corp.		2,512		52		0.52
Tanger Factory Outlet Center		7,571		54		0.54
Timken Co.		1,220		56		0.56
Toll Brothers, Inc.		1,667		54		0.55
Tri Pointe Group, Inc.		3,834		56		0.57
Tyson Foods, Inc. — Class A		879		52		0.53
UGI Corp.		1,688		54		0.54
United Therapeutics Corp.		91		11		0.11
Universal Health Services — B		562		52		0.52
Unum Group		3,290		55		0.55
Urban Edge Properties		4,989		59		0.60
Vanda Pharmaceuticals, Inc.		4,606		53		0.53
Varex Imaging Corp.		3,552		54		0.54
Vera Bradley, Inc.		3,455		15		0.15
Veritiv Corp.		1,022		17		0.17
Viacomcbs, Inc. — Class B		2,298		54		0.54
Virtus Investment Partners		471		55		0.55
Wabash National Corp.		5,542		59		0.59
Waddell & Reed Financial — A		3,499		54		0.55
Walgreens Boots Alliance, Inc.		1,248		53		0.53
Walker & Dunlop, Inc.		1,087		55		0.56
Warrior Met Coal, Inc.		3,447		53		0.53
Weingarten Realty Investors		2,865		54		0.55
Wells Fargo & Co.		1,974		51		0.51
Werner Enterprises, Inc.		1,275		56		0.56
Westrock Co.		1,972		56		0.56
Whitestone REIT		5,535		40		0.40
Wyndham Destinations, Inc.		1,775		50		0.50
Xerox Holdings Corp.		3,286		50		0.51
Xperi Holding Corp.		3,990		59		0.59
Total			$	9,938.00		100.00	%

The accompanying notes are an integral part of the consolidated financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

The following table represents the equity basket holdings underlying the total return swap with Short SP500 Anti Value Index as of June 30, 2020:

Security Description	Shares		Value (000)		Index Weight
Short SP500 Anti Value Index
Abiomed, Inc.		397	$	96		0.97	%
Adobe, Inc.		241		105		1.05
Advanced Micro Devices		1,818		96		0.96
Air Products & Chemicals, Inc.		416		100		1.01
Alexandria Real Estate Equities		585		95		0.95
Align Technology, Inc.		374		103		1.03
Amazon.Com, Inc.		38		104		1.05
American Tower Corp.		374		97		0.97
American Water Works Co., Inc.		764		98		0.99
Ansys, Inc.		350		102		1.03
Aon PLC — Class A		532		102		1.03
Apache Corp.		6,795		92		0.92
Arthur J Gallagher & Co.		1,035		101		1.01
Autodesk, Inc.		411		98		0.99
Ball Corp.		1,411		98		0.99
Blackrock, Inc.		180		98		0.98
Boeing Co. (The)		501		92		0.92
Booking Holdings, Inc.		59		94		0.95
Brown-Forman Corp. — Class B		1,498		95		0.96
Cadence Design Sys, Inc.		1,076		103		1.04
Cboe Global Markets, Inc.		976		91		0.92
Chipotle Mexican Grill, Inc.		96		101		1.02
Cintas Corp.		362		96		0.97
Clorox Company		474		104		1.05
Cme Group, Inc.		562		91		0.92
Colgate-Palmolive Co.		1,347		99		0.99
Copart, Inc.		1,121		93		0.94
Costco Wholesale Corp.		329		100		1.00
Crown Castle Intl Corp.		584		98		0.98
Dexcom, Inc.		252		102		1.03
Domino'S Pizza, Inc.		264		98		0.98
Ecolab, Inc.		480		96		0.96
Edwards Lifesciences Corp.		1,410		97		0.98
Equifax, Inc.		583		100		1.01
Equinix, Inc.		142		100		1.00
Estee Lauder Companies — Class A		505		95		0.96
Eversource Energy		1,176		98		0.98
Fastenal Co.		2,368		101		1.02
First Republic Bank		891		94		0.95
Firstenergy Corp.		2,444		95		0.95
Fortinet, Inc.		724		99		1.00
Freeport-Mcmoran, Inc.		9,185		106		1.07
Hess Corp.		1,896		98		0.99
Hilton Worldwide Holdings In		1,265		93		0.93
IDEX Corp.		639		101		1.01
Idexx Laboratories, Inc.		317		105		1.05
Illinois Tool Works		584		102		1.03
Illumina, Inc.		279		103		1.04
Incyte Corp.		1,036		108		1.07
Intercontinental Exchange In		1,046		96		0.96
Intuit, Inc.		343		102		1.02
Intuitive Surgical, Inc.		172		98		0.99
Jack Henry & Associates, Inc.		563		104		1.04

The accompanying notes are an integral part of the consolidated financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Short SP500 Anti Value Index (cont'd)
Linde PLC		475	$	101		1.01	%
Live Nation Entertainment In		2,012		89		0.90
Marathon Petroleum Corp.		2,562		96		0.96
Marketaxess Holdings, Inc.		198		99		1.00
Marriott International -Class A		1,053		90		0.91
Marsh & Mclennan Cos		922		99		1.00
Mastercard, Inc. — A		325		96		0.97
Mccormick & Co-Non Vtg Shrs		572		103		1.03
Mcdonald'S Corp.		520		96		0.96
Mettler-Toledo International		126		102		1.02
Monster Beverage Corp.		1,425		99		0.99
Moody'S Corp.		361		99		1.00
Msci, Inc.		307		102		1.03
Nasdaq, Inc.		835		100		1.00
National Oilwell Varco, Inc.		7,628		93		0.94
Netflix, Inc.		227		103		1.04
Nextera Energy, Inc.		399		96		0.96
Nike, Inc. -Class B		1,000		98		0.99
Nvidia Corp.		273		104		1.04
Old Dominion Freight Line		610		103		1.04
Otis Worldwide Corp.		1,711		97		0.98
Paycom Software, Inc.		317		98		0.99
Paypal Holdings, Inc.		614		107		1.08
Resmed, Inc.		586		112		1.12
Rockwell Automation, Inc.		463		99		0.99
Rollins, Inc.		2,337		99		1.00
Roper Technologies, Inc.		248		96		0.97
S&P Global, Inc.		305		100		1.01
Salesforce.Com, Inc.		549		103		1.03
Sba Communications Corp.		328		98		0.98
Schlumberger Ltd.		5,064		93		0.94
Servicenow, Inc.		248		101		1.01
Sherwin-Williams Co. (The)		172		99		1.00
Starbucks Corp.		1,272		94		0.94
T-Mobile Us, Inc.		962		100		1.01
Transdigm Group, Inc.		213		94		0.95
UDR, Inc.		2,469		92		0.93
Under Armour, Inc. — Class A		9,557		93		0.94
Under Armour, Inc. — Class C		10,669		94		0.95
Verisign, Inc.		477		99		0.99
Verisk Analytics, Inc.		595		101		1.02
Visa, Inc.-Class A Shares		513		99		1.00
Wec Energy Group, Inc.		1,090		96		0.96
West Pharmaceutical Services		470		107		1.07
Wynn Resorts Ltd.		1,094		81		0.82
Xcel Energy, Inc.		1,553		97		0.98
Yum! Brands, Inc.		1,078		94		0.94
Zoetis, Inc.		727		100		1.00
Total			$	9,944		100.00	%

The accompanying notes are an integral part of the consolidated financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

The following table represents the equity basket holdings underlying the total return swap with Short SP500 Low Vol Index as of June 30, 2020:

Security Description	Shares		Value (000)		Index Weight
Short SP500 Low Vol Index
Abbott Laboratories		1,173	$	107		1.09	%
Accenture PLC — Class A		515		111		1.12
Aflac, Inc.		2,818		102		1.03
Air Products & Chemicals, Inc.		442		107		1.08
Akamai Technologies, Inc.		1,052		113		1.15
Alexandria Real Estate Equities		622		101		1.02
Alphabet, Inc. — Class A		73		103		1.05
Alphabet, Inc.-Class C		73		103		1.05
Ameren Corp.		1,451		102		1.03
American Tower Corp.		398		103		1.04
Aon PLC-Class A		566		109		1.10
Arthur J Gallagher & Co.		1,101		107		1.09
Atmos Energy Corp.		1,029		103		1.04
Automatic Data Processing		694		103		1.05
Autozone, Inc.		92		104		1.06
Ball Corp.		1,500		104		1.06
Berkshire Hathaway, Inc.-Class B		577		103		1.04
Booking Holdings, Inc.		63		100		1.02
C.H. Robinson Worldwide, Inc.		1,348		107		1.08
Cabot Oil & Gas Corp.		5,451		94		0.95
Cerner Corp.		1,516		104		1.05
Chevron Corp.		1,119		100		1.01
Cme Group, Inc.		598		97		0.98
Cms Energy Corp.		1,780		104		1.05
Coca-Cola Co. (The)		2,251		101		1.02
Colgate-Palmolive Co.		1,432		105		1.06
Comcast Corp. — Class A		2,648		103		1.05
Crown Castle Intl Corp.		621		104		1.05
Danaher Corp.		602		106		1.08
Dollar General Corp.		551		105		1.06
Duke Realty Corp.		2,852		101		1.02
Ecolab, Inc.		510		102		1.03
Eli Lilly & Co.		643		106		1.07
Eversource Energy		1,250		104		1.06
Expeditors Intl Wash, Inc.		1,423		108		1.10
Extra Space Storage, Inc.		1,078		100		1.01
Exxon Mobil Corp		2,184		98		0.99
Fidelity National Info Serv		749		100		1.02
Fiserv, Inc.		1,019		99		1.01
Garmin Ltd.		1,107		108		1.09
Hershey Co. (The)		794		103		1.04
Hilton Worldwide Holdings In		1,345		99		1.00
Home Depot, Inc.		421		105		1.07
Honeywell International, Inc.		706		102		1.03
IDEX Corp.		679		107		1.09
IHS Markit Ltd.		1,457		110		1.11
Illinois Tool Works		621		109		1.10
Intercontinental Exchange In		1,112		102		1.03
Intuit, Inc.		365		108		1.10
Jack Henry & Associates, Inc.		598		110		1.12
Johnson & Johnson		729		102		1.04
Kimberly-Clark Corp.		748		106		1.07
Leidos Holdings, Inc.		1,050		98		1.00

The accompanying notes are an integral part of the consolidated financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Short SP500 Low Vol Index (cont'd)
Linde PLC		505	$	107		1.09	%
Marsh & Mclennan Cos		980		105		1.07
Mastercard, Inc. — A		346		102		1.04
Mcdonald'S Corp.		553		102		1.03
Medtronic PLC		1,102		101		1.02
Merck & Co., Inc.		1,368		106		1.07
Microsoft Corp.		544		111		1.12
Mondelez International, Inc. — A		2,002		102		1.04
Nasdaq, Inc.		888		106		1.08
Nextera Energy, Inc.		424		102		1.03
Nike, Inc. — Class B		1,063		104		1.06
Northrop Grumman Corp.		324		100		1.01
Omnicom Group		1,868		102		1.03
Oracle Corp.		1,928		107		1.08
Packaging Corp Of America		1,043		104		1.06
Paychex, Inc.		1,377		104		1.06
Pepsico, Inc.		799		106		1.07
Procter & Gamble Co. (The)		891		107		1.08
Progressive Corp.		1,309		105		1.06
Public Storage		529		102		1.03
Republic Services, Inc.		1,272		104		1.06
Resmed, Inc.		623		120		1.22
Rollins, Inc.		2,484		105		1.07
Roper Technologies, Inc.		264		103		1.04
Ross Stores, Inc.		1,078		92		0.93
S&P Global, Inc.		324		107		1.08
Sherwin-Williams Co. (The)		183		106		1.07
Starbucks Corp.		1,352		100		1.01
Steris PLC		680		104		1.06
Stryker Corp		550		99		1.00
Tjx Companies, Inc.		1,895		96		0.97
T-Mobile US, Inc.		1,023		107		1.08
Trane Technologies PLC		1,148		102		1.04
Verisign, Inc.		508		105		1.06
Verisk Analytics, Inc.		633		108		1.09
Visa, Inc.-Class A Shares		546		105		1.07
Walt Disney Co. (The)		889		99		1.00
Waste Management, Inc.		996		105		1.07
Wec Energy Group, Inc.		1,159		102		1.03
Williams Cos, Inc.		5,437		103		1.05
Wr Berkley Corp		1,798		103		1.04
Zoetis, Inc.		773		106		1.07
Total			$	9,868		100.00	%

The accompanying notes are an integral part of the consolidated financial statements.
17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

The following table represents the equity basket holdings underlying the total return swap with Short U.S. Low Vol (SP1500) Index as of June 30, 2020:

Security Description	Shares		Value (000)		Index Weight
Short U.S. Low Vol (SP1500) Index
Abbott Laboratories		582	$	53		0.53	%
Adobe, Inc.		120		52		0.52
Agilent Technologies, Inc.		594		53		0.53
Air Products & Chemicals, Inc.		222		54		0.54
Akamai Technologies, Inc.		518		55		0.55
Alexandria Real Estate Equities		312		51		0.51
Allstate Corp.		541		53		0.53
Ameren Corp.		745		52		0.52
American Express Co.		529		50		0.50
American Tower Corp.		199		51		0.51
Amerisafe, Inc.		879		54		0.54
Amerisourcebergen Corp.		517		52		0.52
Ametek, Inc.		589		53		0.53
Amgen, Inc.		225		53		0.53
Amphenol Corp. — Class A		539		52		0.52
Analog Devices, Inc.		436		54		0.54
Aptargroup, Inc.		489		55		0.55
Arthur J Gallagher & Co.		544		53		0.53
AT&T, Inc.		1,747		53		0.53
Atmos Energy Corp.		525		52		0.52
Autozone, Inc.		46		52		0.52
Badger Meter, Inc.		842		53		0.53
Baxter International, Inc.		626		54		0.54
Becton Dickinson And Co.		224		54		0.54
Booking Holdings, Inc.		32		51		0.51
Brady Corp. — Class A		1,105		52		0.52
Broadcom, Inc.		168		53		0.53
Brown & Brown, Inc.		1,270		52		0.52
C.H. Robinson Worldwide, Inc.		683		54		0.54
Cable One, Inc.		29		52		0.52
Cabot Oil & Gas Corp.		2,911		50		0.50
Carrier Global Corp.		2,313		51		0.51
CDW Corp.		453		53		0.53
Cerner Corp.		739		51		0.51
Chemed Corp.		116		52		0.52
Chevron Corp.		574		51		0.51
Cisco Systems, Inc.		1,165		54		0.54
City Holding Co.		840		55		0.55
Cme Group, Inc.		300		49		0.49
Cms Energy Corp.		895		52		0.52
Columbia Sportswear Co.		662		53		0.53
Comcast Corp. — Class A		1,368		53		0.53
Commerce Bancshares, Inc.		864		51		0.51
Community Bank System, Inc.		937		53		0.53
Conocophillips		1,207		51		0.51
Corning, Inc.		1,982		51		0.51
Costco Wholesale Corp.		175		53		0.53
Crown Castle Intl Corp.		316		53		0.53
Cvb Financial Corp.		2,826		53		0.53
Danaher Corp.		301		53		0.53
Deckers Outdoor Corp.		262		51		0.51
Digital Realty Trust, Inc.		370		53		0.53
Dollar General Corp.		274		52		0.52

The accompanying notes are an integral part of the consolidated financial statements.
18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Short U.S. Low Vol (SP1500) Index (cont'd)
Domino'S Pizza, Inc.		137	$	51		0.51	%
Dorman Products, Inc.		771		52		0.52
Dril-Quip, Inc.		1,732		52		0.52
Dsp Group, Inc.		3,300		52		0.52
Duke Realty Corp.		1,484		53		0.53
Dunkin' Brands Group, Inc.		819		53		0.53
Easterly Government Properties		2,231		52		0.52
Eastgroup Properties, Inc.		439		52		0.52
Eaton Corp. PLC		604		53		0.53
Ecolab, Inc.		261		52		0.52
Emcor Group, Inc.		827		55		0.55
Equinix, Inc.		75		53		0.53
Estee Lauder Co. — Class A		274		52		0.52
Ethan Allen Interiors, Inc.		4,372		52		0.52
Eversource Energy		625		52		0.52
Extra Space Storage, Inc.		567		52		0.52
Exxon Mobil Corp.		1,133		51		0.51
Factset Research Systems, Inc.		170		56		0.56
Fidelity National Info Serv		379		51		0.51
First Finl Bankshares, Inc.		1,728		50		0.50
Firstcash, Inc.		791		53		0.53
Fiserv, Inc.		519		51		0.51
Flowers Foods, Inc.		2,347		52		0.53
Fmc Corp.		524		52		0.52
Fulton Financial Corp.		4,929		52		0.52
Garmin Ltd.		539		53		0.53
Gatx Corp.		856		52		0.52
Gentex Corp.		1,969		51		0.51
Gilead Sciences, Inc.		695		53		0.54
Glacier BanCorp., Inc.		1,477		52		0.52
Graco, Inc.		1,096		53		0.53
Hasbro, Inc.		719		54		0.54
Hawaiian Electric Industries		1,454		52		0.52
Heartland Express, Inc.		2,581		54		0.54
Helen Of Troy Ltd.		293		55		0.55
Henry Schein, Inc.		884		52		0.52
Heritage Financial Corp.		2,724		54		0.55
Hershey Co. (The)		403		52		0.52
Hilton Worldwide Holdings In		691		51		0.51
Home Depot, Inc.		211		53		0.53
Hp, Inc.		3,107		54		0.54
IDEX Corp.		343		54		0.54
IHS Markit Ltd		718		54		0.54
Illinois Tool Works		306		54		0.54
Intercontinental Exchange In		558		51		0.51
Intuit, Inc.		179		53		0.53
Jack Henry & Associates, Inc.		287		53		0.53
Jacobs Engineering Group, Inc.		614		52		0.52
Johnson & Johnson		367		52		0.52
Juniper Networks, Inc.		2,273		52		0.52
Kinder Morgan, Inc.		3,369		51		0.51
Kkr Real Estate Finance Trust		3,004		50		0.50
L3Harris Technologies, Inc.		286		48		0.48
Lennox International, Inc.		235		55		0.55
Life Storage, Inc.		554		53		0.53

The accompanying notes are an integral part of the consolidated financial statements.
19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Short U.S. Low Vol (SP1500) Index (cont'd)
LIncoln Electric Holdings		636	$	54		0.54	%
Linde PLC		250		53		0.53
Lindsay Corp.		594		55		0.55
Lowe'S Cos, Inc.		390		53		0.53
Marsh & Mclennan Cos		498		53		0.54
Maxim Integrated Products		868		53		0.53
Maximus, Inc.		768		54		0.54
Mcdonald's Corp.		281		52		0.52
Merck & Co., Inc.		685		53		0.53
Microsoft Corp.		262		53		0.53
Mid-America Apartment Communities		461		53		0.53
Mondelez International, Inc. — A		1,005		51		0.51
N B T BanCorp., Inc.		1,736		53		0.53
Nasdaq, Inc.		439		52		0.53
National Instruments Corp.		1,336		52		0.52
National Oilwell Varco, Inc.		4,453		55		0.55
National Storage Affiliates		1,832		53		0.53
Neenah, Inc.		1,060		52		0.52
Netscout Systems, Inc.		2,117		54		0.54
Newmarket Corp.		127		51		0.51
Newmont Corp.		903		56		0.56
Nextera Energy, Inc.		213		51		0.51
Nike, Inc. — Class B		529		52		0.52
Northfield BanCorp., Inc.		2,794		32		0.32
Northrop Grumman Corp.		167		51		0.51
Northwest Bancshares, Inc.		5,189		53		0.53
Nucor Corp.		1,243		51		0.52
NVR, Inc.		16		52		0.52
Old National BanCorp.		3,798		52		0.52
Omnicom Group		997		54		0.54
O'Reilly Automotive, Inc.		122		51		0.52
Paccar, Inc.		704		53		0.53
Pepsico, Inc.		401		53		0.53
Power Integrations, Inc.		440		52		0.52
Procter & Gamble Co. (The)		447		53		0.53
Progressive Corp.		651		52		0.52
Prologis, Inc.		568		53		0.53
Ps Business Parks, Inc.		397		53		0.53
Public Storage		276		53		0.53
Reliance Steel & Aluminum		546		52		0.52
Republic Services, Inc.		647		53		0.53
Resmed, Inc.		294		56		0.56
Rex American Resources Corp.		576		40		0.40
Rollins, Inc.		1,255		53		0.53
Ross Stores, Inc.		580		49		0.49
S&P Global, Inc.		161		53		0.53
Safety Insurance Group, Inc.		699		53		0.53
Seacor Holdings, Inc.		1,498		42		0.42
Service Corp. International		1,323		51		0.52
Sherwin-Williams Co. (The)		90		52		0.52
Sonoco Products Co.		1,026		54		0.54
Southside Bancshares, Inc.		1,912		53		0.53
Southwest Airlines Co.		1,531		52		0.52
Standard Motor Prods		1,298		53		0.54
Starbucks Corp.		698		51		0.51

The accompanying notes are an integral part of the consolidated financial statements.
20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Short U.S. Low Vol (SP1500) Index (cont'd)
Steris PLC		343	$	53		0.53	%
Stryker Corp.		284		51		0.51
Te Connectivity Ltd.		650		53		0.53
Teledyne Technologies, Inc.		162		50		0.50
Texas Instruments, Inc.		420		53		0.53
Thermo Fisher Scientific, Inc.		149		54		0.54
Tiffany & Co.		431		53		0.53
TJX Companies, Inc.		996		50		0.50
Tompkins Financial Corp.		841		54		0.55
Tootsie Roll Inds		1,520		52		0.52
Toro Co.		794		53		0.53
Tractor Supply Company		404		53		0.53
Trane Technologies PLC		583		52		0.52
Tyler Technologies, Inc.		155		54		0.54
UDR, Inc.		1,393		52		0.52
Union Pacific Corp.		313		53		0.53
Unitedhealth Group, Inc.		180		53		0.53
Verisk Analytics, Inc.		314		54		0.54
Vertex Pharmaceuticals, Inc.		179		52		0.52
Visa, Inc. — Class A Shares		270		52		0.52
Walmart, Inc.		432		52		0.52
Waste Management, Inc.		507		54		0.54
Watsco, Inc.		299		53		0.53
Watts Water Technologies — A		648		52		0.53
Westamerica BanCorp.		962		55		0.55
Williams Cos, Inc.		2,692		51		0.51
Yum! Brands, Inc.		599		52		0.52
Zoetis, Inc.		384		53		0.53
Total			$	9,989		100.00	%

The following table represents the equity basket holdings underlying the total return swap with Long EMU Value Index as of June 30, 2020:

Security Description	Shares		Value (000)		Index Weight
Long EMU Value Index
Acs Actividades Cons Y Serv		7,278	$	183		1.95	%
Aercap Holdings N.V.		5,831		179		1.91
Atlantia SpA		11,800		190		2.01
Atos SE		2,512		214		2.27
Banco Bilbao Vizcaya Argenta		54,264		187		1.98
Banco Santander SA		73,967		181		1.92
Bayer AG-Reg		2,677		198		2.10
Bayerische Motoren Werke AG		3,053		195		2.07
Bayerische Motoren Werke-Pref		3,956		192		2.04
Bnp Paribas		4,813		191		2.03
Bollore		61,065		192		2.04
Bouygues SA		6,208		212		2.25
Capgemini SE		1,850		212		2.25
Carrefour SA		12,437		192		2.04
Casino Guichard Perrachon		5,020		186		1.97
CNP Assurances		15,511		179		1.90
Compagnie De Saint Gobain		5,705		205		2.18
Credit Agricole SA		20,958		198		2.11
EDF Energy		21,316		197		2.09
Eiffage		2,150		197		2.09

The accompanying notes are an integral part of the consolidated financial statements.
21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Long EMU Value Index (cont'd)
Engie		15,770	$	195		2.07	%
Fresenius Medical Care AG		2,335		200		2.12
Fresenius SE & Co. KGaA		4,073		202		2.14
Heidelbergcement AG		3,705		198		2.10
Hochtief AG		2,214		196		2.08
Ipsen		2,365		201		2.13
Klepierre		9,098		181		1.92
Koninklijke Ahold Delhaize N		7,463		203		2.16
Lanxess AG		3,712		196		2.08
Leonardo SpA		26,961		179		1.90
Metro AG		20,337		192		2.04
Naturgy Energy Group SA		10,495		195		2.07
Nn Group N.V.		5,890		198		2.10
Nokia Oyj		46,102		201		2.13
Omv AG		5,458		182		1.94
Peugeot SA		12,515		204		2.16
Porsche Automobil Holding SE		3,391		195		2.07
Proximus		8,852		180		1.91
Publicis Groupe		5,867		190		2.02
Raiffeisen Bank International		10,151		181		1.92
Repsol SA		19,635		172		1.82
Societe Generale SA		11,393		189		2.01
Solvay SA		2,407		193		2.05
Stora Enso Oyj		16,410		196		2.08
Telefonica SA		37,453		179		1.90
Unibail-Rodamco-Westfield		2,855		161		1.71
Uniper SE		6,335		204		2.17
Volkswagen AG		1,158		186		1.98
Volkswagen AG-Pref		1,256		190		2.02
Total			$	9,419		100.00	%

The following table represents the equity basket holdings underlying the total return swap with Short EMU Anti Value Index as of June 30, 2020:

Security Description	Shares		Value (000)		Index Weight
Short EMU Anti Value Index
ADP		1,809	$	186		1.85	%
Adyen N.V.		147		214		2.12
Air Liquide SA		1,441		208		2.07
Airbus SE		2,601		186		1.85
Amundi SA		2,663		209		2.07
Beiersdorf AG		1,818		206		2.05
Cellnex Telecom SA		3,510		214		2.13
Davide Campari-Milano SpA		23,984		202		2.01
Delivery Hero SE		2,098		214		2.13
Deutsche Bank AG-Registered		21,416		204		2.03
Deutsche Boerse AG		1,174		212		2.11
Deutsche Wohnen SE		4,482		201		2.00
Diasorin SpA		1,063		204		2.02
E.On SE		18,400		207		2.06
Elia Group SA		1,912		207		2.06
Ferrari N.V.		1,193		204		2.02
Ferrovial SA		7,083		189		1.88
Finecobank SpA		15,003		202		2.01
Galapagos N.V.		1,015		200		1.99

The accompanying notes are an integral part of the consolidated financial statements.
22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Short EMU Anti Value Index (cont'd)
Gea Group AG		6,440	$	204		2.03	%
Getlink SE		13,727		198		1.97
Groupe Bruxelles Lambert SA		2,416		203		2.02
Hannover Rueck SE		1,136		196		1.95
Hermes International		243		203		2.02
Iberdrola SA		18,142		210		2.09
Iliad SA		1,094		213		2.12
Just Eat Takeaway		2,122		221		2.21
Knorr-Bremse AG		1,897		192		1.91
Koninklijke Dsm N.V.		1,510		209		2.08
L'Oreal		667		214		2.13
Muenchener Rueckver AG-Reg		790		205		2.04
Nemetschek SE		2,953		203		2.02
Pernod Ricard SA		1,253		197		1.96
Prosus N.V.		2,313		215		2.14
Sartorius AG-Vorzug		614		202		2.01
Sartorius Stedim Biotech		836		211		2.10
Scout24 AG		2,688		209		2.07
Symrise AG		1,893		220		2.20
Teamviewer AG		4,003		219		2.17
Teleperformance		832		211		2.10
Tenaris SA		28,121		182		1.81
Terna SpA		28,663		197		1.96
Ubisoft Entertainment		2,659		219		2.18
Umicore		4,239		200		1.99
Vonovia SE		3,348		205		2.04
Vopak		3,705		196		1.95
Wendel		2,113		201		2.00
Wolters Kluwer		2,703		211		2.10
Zalando SE		3,092		218		2.17
Total			$	10,053		100.00	%

The following table represents the equity basket holdings underlying the total return swap with Short EMU Low Vol Index as of June 30, 2020:

Security Description	Shares		Value (000)		Index Weight
Short EMU Low Vol Index
Aena Sme SA		1,328	$	177		1.81	%
Ageas		5,080		180		1.83
Air Liquide SA		1,424		205		2.09
Akzo Nobel N.V.		2,296		206		2.10
Allianz SE-Reg		959		196		2.00
Alstom		4,212		196		2.00
Asml Holding N.V.		581		213		2.17
Assicurazioni Generali		12,600		191		1.94
Axa SA		9,262		194		1.97
Cellnex Telecom SA		3,732		227		2.32
Dassault Systemes SA		1,174		203		2.06
Deutsche Boerse AG		1,169		212		2.16
Deutsche Telekom AG-Reg		11,833		199		2.02
Endesa SA		8,056		198		2.02
Essilorluxottica		1,481		190		1.94
Ferrovial SA		6,961		185		1.89
Grifols SA		6,417		195		1.99
Groupe Bruxelles Lambert SA		2,285		192		1.95

The accompanying notes are an integral part of the consolidated financial statements.
23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Short EMU Low Vol Index (cont'd)
Hannover Rueck SE		1,118	$	193		1.96	%
Heineken Holding N.V.		2,315		189		1.93
Heineken N.V.		2,094		193		1.97
Hermes International		235		196		2.00
ICADE		2,586		180		1.84
Industria De Diseno Textiles		6,999		185		1.89
Koninklijke Dsm N.V.		1,547		214		2.18
Legrand SA		2,784		211		2.16
L'Oreal		676		217		2.21
Lvmh Moet Hennessy Louis Vui		455		199		2.03
Michelin		1,843		191		1.95
Muenchener Rueckver AG		760		198		2.01
Orange		16,288		195		1.98
Pernod Ricard SA		1,225		193		1.96
Prosus N.V.		2,367		220		2.24
Recordati SpA		4,333		216		2.20
Red Electrica Corporacion SA		10,763		201		2.05
Sanofi		1,987		202		2.06
Sap SE		1,489		208		2.12
Schneider Electric SE		1,889		210		2.14
Snam SpA		40,039		195		1.99
Symrise AG		1,885		219		2.23
Teleperformance		831		211		2.15
Terna SpA		29,065		200		2.04
Total SA		4,768		182		1.85
Ucb SA		2,011		233		2.38
Vinci SA		2,058		190		1.93
Vivendi		7,862		202		2.06
Vonovia SE		3,389		208		2.12
Vopak		3,698		196		1.99
Wolters Kluwer		2,663		208		2.12
Total			$	9,814		100.00	%

@    Value is less than $500.

†    Credit rating as issued by Standard & Poor's.

*    Cleared swap agreement, the broker is Morgan Stanley & Co. LLC.

NR    Not rated.

BTP    Buoni del Tesoro Poliennali.

CPI    Consumer Price Index.

EURIBOR  Euro Interbank Offered Rate.

LIBOR  London Interbank Offered Rate.

NYMEX  New York Mercantile Exchange.

TOPIX  Tokyo Stock Price Index.

WTI    West Texas Intermediate.

CAD  —  Canadian Dollar

CHF  —  Swiss Franc

CLP  —  Chilean Peso

COP  —  Colombian Peso

EUR  —  Euro

GBP  —  British Pound

HKD  —  Hong Kong Dollar

IDR  —  Indonesian Rupiah

INR  —  Indian Rupee

JPY  —  Japanese Yen

KRW  —  South Korean Won

MXN  —  Mexican Peso

PEN  —  Peruvian Nuevo Sol

RUB  —  Russian Ruble

TWD  —  Taiwan Dollar

USD  —  United States Dollar

The accompanying notes are an integral part of the consolidated financial statements.
24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Portfolio Composition

Classification	Percentage of Total Investments
Short-Term Investments		66.7	%
Other**		12.9
Household Durables		10.5
Sovereign		9.9
Total Investments		100.0	%***

**  Industries and/or investment types representing less than 5% of total investments.

***  Does not include open long/short futures contracts with a value of approximately $17,268,000 and net unrealized appreciation of approximately $69,000. Does not include open foreign currency forward exchange contracts with net unrealized depreciation of approximately $10,000 and does not include open swap agreements with net unrealized depreciation of approximately $33,000.

The accompanying notes are an integral part of the consolidated financial statements.
25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Multi-Asset Portfolio

Consolidated Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $9,506)	$	9,513
Investment in Security of Affiliated Issuer, at Value (Cost $12,121)		12,121
Total Investments in Securities, at Value (Cost $21,627)		21,634
Foreign Currency, at Value (Cost $7)		6
Receivable for Variation Margin on Futures Contracts		703
Unrealized Appreciation on Swap Agreements		100
Receivable for Investments Sold		70
Due from Adviser		61
Interest Receivable		25
Tax Reclaim Receivable		13
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		5
Receivable for Variation Margin on Swap Agreements		3
Dividends Receivable		2
Receivable from Affiliate		1
Other Assets		85
Total Assets		22,708
Liabilities:
Unrealized Depreciation on Swap Agreements		173
Payable for Professional Fees		72
Payable for Custodian Fees		21
Payable for Transfer Agency Fees — Class I		18
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—-	@
Payable for Transfer Agency Fees — Class IS		—-	@
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		15
Payable for Fund Shares Redeemed		13
Payable for Sub Transfer Agency Fees — Class I		3
Payable for Sub Transfer Agency Fees — Class A		—-	@
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Sub Transfer Agency Fees — Class C		—-	@
Payable for Shareholder Services Fees — Class A		—-	@
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		—-	@
Bank Overdraft		1
Payable for Administration Fees		1
Other Liabilities		19
Total Liabilities		339
Net Assets	$	22,369
Net Assets Consist of:
Paid-in-Capital	$	110,500
Total Accumulated Loss		(88,131	)
Net Assets	$	22,369

The accompanying notes are an integral part of the consolidated financial statements.
26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Multi-Asset Portfolio

Consolidated Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	19,852
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,424,813
Net Asset Value, Offering and Redemption Price Per Share	$	8.19
CLASS A:
Net Assets	$	1,033
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		127,527
Net Asset Value, Redemption Price Per Share	$	8.10
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.45
Maximum Offering Price Per Share	$	8.55
CLASS L:
Net Assets	$	1,413
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		177,141
Net Asset Value, Offering and Redemption Price Per Share	$	7.98
CLASS C:
Net Assets	$	63
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		7,998
Net Asset Value, Offering and Redemption Price Per Share	$	7.89
CLASS IS:
Net Assets	$	8
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		934
Net Asset Value, Offering and Redemption Price Per Share	$	8.18

@  Amount is less than $500.

The accompanying notes are an integral part of the consolidated financial statements.
27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Multi-Asset Portfolio

Consolidated Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers	$	55
Dividends from Securities of Unaffiliated Issuers (Net of $—@ of foreign Taxes Withheld)		33
Dividends from Security of Affiliated Issuer (Note G)		30
Total Investment Income		118
Expenses:
Advisory Fees (Note B)		94
Professional Fees		82
Custodian Fees (Note F)		78
Registration Fees		23
Pricing Fees		15
Administration Fees (Note C)		9
Shareholder Services Fees — Class A (Note D)		2
Distribution and Shareholder Services Fees — Class L (Note D)		6
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Shareholder Reporting Fees		8
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Sub Transfer Agency Fees — Class I		6
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		—	@
Directors' Fees and Expenses		—	@
Other Expenses		7
Total Expenses		338
Expenses Reimbursed by Adviser (Note B)		(103	)
Waiver of Advisory Fees (Note B)		(94	)
Rebate from Morgan Stanley Affiliate (Note G)		(10	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(4	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Net Expenses		123
Net Investment Loss		(5	)
Realized Loss:
Investments Sold		(138	)
Foreign Currency Forward Exchange Contracts		(286	)
Foreign Currency Translation		(15	)
Futures Contracts		(287	)
Swap Agreements		(844	)
Net Realized Loss		(1,570	)
Change in Unrealized Appreciation (Depreciation):
Investments		(819	)
Foreign Currency Forward Exchange Contracts		(50	)
Foreign Currency Translation		(3	)
Futures Contracts		119
Swap Agreements		(68	)
Net Change in Unrealized Appreciation (Depreciation)		(821	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(2,391	)
Net Decrease in Net Assets Resulting from Operations	$	(2,396	)

@  Amount is less than $500.

The accompanying notes are an integral part of the consolidated financial statements.
28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Multi-Asset Portfolio

Consolidated Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(5	)	$	364
Net Realized Loss		(1,570	)		(1,053	)
Net Change in Unrealized Appreciation (Depreciation)		(821	)		1,046
Net Increase (Decrease) in Net Assets Resulting from Operations		(2,396	)		357
Dividends and Distributions to Shareholders:
Class I		—			(688	)
Class A		—			(69	)
Class L		—			(48	)
Class C		—			(1	)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(806	)
Capital Share Transactions:(1)
Class I:
Subscribed		2,295			126
Distributions Reinvested		—			687
Redeemed		(288	)		(18,919	)
Class A:
Subscribed		116			108
Distributions Reinvested		—			58
Redeemed		(1,044	)		(1,288	)
Class L:
Subscribed		26			—
Distributions Reinvested		—			48
Redeemed		(158	)		(569	)
Class C:
Subscribed		24			13
Distributions Reinvested		—			1
Redeemed		(5	)		(90	)
Class IS:
Distributions Reinvested		—			—	@
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		966			(19,825	)
Total Decrease in Net Assets		(1,430	)		(20,274	)
Net Assets:
Beginning of Period		23,799			44,073
End of Period	$	22,369		$	23,799

The accompanying notes are an integral part of the consolidated financial statements.
29

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Multi-Asset Portfolio

Consolidated Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		289			14
Shares Issued on Distributions Reinvested		—			75
Shares Redeemed		(36	)		(2,008	)
Net Increase (Decrease) in Class I Shares Outstanding		253			(1,919	)
Class A:
Shares Subscribed		13			12
Shares Issued on Distributions Reinvested		—			6
Shares Redeemed		(130	)		(140	)
Net Decrease in Class A Shares Outstanding		(117	)		(122	)
Class L:
Shares Subscribed		3			—
Shares Issued on Distributions Reinvested		—			5
Shares Redeemed		(19	)		(62	)
Net Decrease in Class L Shares Outstanding		(16	)		(57	)
Class C:
Shares Subscribed		3			2
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(1	)		(10	)
Net Increase (Decrease) in Class C Shares Outstanding		2			(8	)
Class IS:
Shares Issued on Distributions Reinvested		—			—	@@

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the consolidated financial statements.
30

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Consolidated Financial Highlights

Multi-Asset Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015(2)
Net Asset Value, Beginning of Period	$	9.12		$	9.35		$	9.65		$	9.72		$	10.17		$	11.55
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.00	(4)		0.13			0.11			0.19			0.03			0.07
Net Realized and Unrealized Loss		(0.93	)		(0.03	)		(0.14	)		(0.26	)		(0.31	)		(1.29	)
Total from Investment Operations		(0.93	)		0.10			(0.03	)		(0.07	)		(0.28	)		(1.22	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.33	)		(0.27	)		—			(0.17	)		(0.16	)
Net Asset Value, End of Period	$	8.19		$	9.12		$	9.35		$	9.65		$	9.72		$	10.17
Total Return(5)		(10.20	)%(7)		1.05	%		(0.32	)%		(0.72	)%		(2.75	)%		(10.60	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	19,852		$	19,805		$	38,254		$	65,156		$	109,692		$	280,423
Ratio of Expenses Before Expense Limitation		2.92	%(8)		2.68	%		1.78	%		1.44	%		1.25	%		1.14	%
Ratio of Expenses After Expense Limitation		1.01	%(6)(8)		1.06	%(6)		1.06	%(6)		1.03	%(6)		1.04	%(6)		1.05	%(6)
Ratio of Net Investment Income		0.03	%(6)(8)		1.39	%(6)		1.17	%(6)		1.91	%(6)		0.35	%(6)		0.60	%(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.09	%(8)		0.04	%		0.04	%		0.07	%		0.06	%		0.04	%
Portfolio Turnover Rate		69	%(7)		178	%		187	%		386	%		353	%		355	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Not consolidated.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the consolidated financial statements.
31

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Consolidated Financial Highlights

Multi-Asset Portfolio

	Class A
	Six Months Ended June 30,2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015(2)
Net Asset Value, Beginning of Period	$	9.04		$	9.27		$	9.54		$	9.68		$	10.09		$	11.50
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		(0.01	)		0.11			0.15			0.14			(0.00	)(4)		0.03
Net Realized and Unrealized Loss		(0.93	)		(0.05	)		(0.19	)		(0.28	)		(0.31	)		(1.28	)
Total from Investment Operations		(0.94	)		0.06			(0.04	)		(0.14	)		(0.31	)		(1.25	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.29	)		(0.23	)		—			(0.10	)		(0.16	)
Net Asset Value, End of Period	$	8.10		$	9.04		$	9.27		$	9.54		$	9.68		$	10.09
Total Return(5)		(10.40	)%(7)		0.62	%		(0.59	)%		(1.24	)%		(2.94	)%		(11.00	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,033		$	2,210		$	3,392		$	3,791		$	12,914		$	29,123
Ratio of Expenses Before Expense Limitation		3.49	%(8)		3.04	%		2.21	%		1.76	%		1.59	%		1.47	%
Ratio of Expenses After Expense Limitation		1.36	%(6)(8)		1.41	%(6)		1.41	%(6)		1.38	%(6)		1.39	%(6)		1.37	%(6)
Ratio of Net Investment Income (Loss)		(0.17	)%(6)(8)		1.19	%(6)		1.64	%(6)		1.46	%(6)		(0.01	)%(6)		0.27	%(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.09	%(8)		0.04	%		0.04	%		0.07	%		0.06	%		0.04	%
Portfolio Turnover Rate		69	%(7)		178	%		187	%		386	%		353	%		355	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Not consolidated.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the consolidated financial statements.
32

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Consolidated Financial Highlights

Multi-Asset Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015(2)
Net Asset Value, Beginning of Period	$	8.92		$	9.16		$	9.44		$	9.60		$	9.94		$	11.39
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		(0.03	)		0.06			0.08			0.10			(0.04	)		(0.02	)
Net Realized and Unrealized Loss		(0.91	)		(0.05	)		(0.18	)		(0.26	)		(0.30	)		(1.27	)
Total from Investment Operations		(0.94	)		0.01			(0.10	)		(0.16	)		(0.34	)		(1.29	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.25	)		(0.18	)		—			—			(0.16	)
Net Asset Value, End of Period	$	7.98		$	8.92		$	9.16		$	9.44		$	9.60		$	9.94
Total Return(4)		(10.54	)%(6)		0.06	%		(1.04	)%		(1.67	)%		(3.42	)%		(11.37	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,413		$	1,724		$	2,291		$	3,242		$	6,357		$	14,443
Ratio of Expenses Before Expense Limitation		3.76	%(7)		3.49	%		2.57	%		2.24	%		2.02	%		1.92	%
Ratio of Expenses After Expense Limitation		1.86	%(5)(7)		1.91	%(5)		1.88	%(5)		1.86	%(5)		1.85	%(5)		1.85	%(5)
Ratio of Net Investment Income (Loss)		(0.77	)%(5)(7)		0.63	%(5)		0.83	%(5)		1.09	%(5)		(0.43	)%(5)		(0.18	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.09	%(7)		0.04	%		0.04	%		0.07	%		0.06	%		0.04	%
Portfolio Turnover Rate		69	%(6)		178	%		187	%		386	%		353	%		355	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Not consolidated.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the consolidated financial statements.
33

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Consolidated Financial Highlights

Multi-Asset Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015(3)
Net Asset Value, Beginning of Period	$	8.83		$	8.99		$	9.28		$	9.47		$	9.93		$	11.09
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(4)		(0.04	)		0.03			0.13			0.07			(0.09	)		(0.07	)
Net Realized and Unrealized Loss		(0.90	)		(0.05	)		(0.25	)		(0.26	)		(0.28	)		(0.93	)
Total from Investment Operations		(0.94	)		(0.02	)		(0.12	)		(0.19	)		(0.37	)		(1.00	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.14	)		(0.17	)		—			(0.09	)		(0.16	)
Net Asset Value, End of Period	$	7.89		$	8.83		$	8.99		$	9.28		$	9.47		$	9.93
Total Return(5)		(10.65	)%(7)		(0.07	)%		(1.48	)%		(1.90	)%		(3.70	)%		(9.07	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	63		$	51		$	128		$	126		$	272		$	420
Ratio of Expenses Before Expense Limitation		8.09	%(8)		5.22	%		4.57	%		3.67	%		2.88	%		2.59	%(8)
Ratio of Expenses After Expense Limitation		2.11	%(6)(8)		2.16	%(6)		2.16	%(6)		2.13	%(6)		2.14	%(6)		2.17	%(6)(8)
Ratio of Net Investment Income (Loss)		(1.09	)%(6)(8)		0.37	%(6)		1.39	%(6)		0.70	%(6)		(0.95	)%(6)		(1.07	)%(6)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.09	%(8)		0.04	%		0.04	%		0.07	%		0.06	%		0.03	%(8)
Portfolio Turnover Rate		69	%(7)		178	%		187	%		386	%		353	%		355	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Not consolidated.

(4)  Per share amount is based on average shares outstanding.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income (Loss) reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the consolidated financial statements.
34

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Consolidated Financial Highlights

Multi-Asset Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from May 29, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015(3)
Net Asset Value, Beginning of Period	$	9.11		$	9.34		$	9.65		$	9.72		$	10.17		$	11.09
Income (Loss) from Investment Operations:
Net Investment Income(4)		0.00	(5)		0.14			0.22			0.25			0.13			0.01
Net Realized and Unrealized Loss		(0.93	)		(0.04	)		(0.26	)		(0.32	)		(0.41	)		(0.77	)
Total from Investment Operations		(0.93	)		0.10			(0.04	)		(0.07	)		(0.28	)		(0.76	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.33	)		(0.27	)		—			(0.17	)		(0.16	)
Net Asset Value, End of Period	$	8.18		$	9.11		$	9.34		$	9.65		$	9.72		$	10.17
Total Return(6)		(10.21	)%(8)		1.08	%		(0.28	)%		(0.82	)%		(2.65	)%		(6.89	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8		$	9		$	8		$	9		$	9		$	9
Ratio of Expenses Before Expense Limitation		27.26	%(9)		24.55	%		24.87	%		22.88	%		22.77	%		17.31	%(9)
Ratio of Expenses After Expense Limitation		0.98	%(7)(9)		1.03	%(7)		1.03	%(7)		1.01	%(7)		1.01	%(7)		1.04	%(7)(9)
Ratio of Net Investment Income		0.07	%(7)(9)		1.51	%(7)		2.31	%(7)		2.53	%(7)		1.36	%(7)		0.23	%(7)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.09	%(9)		0.04	%		0.04	%		0.06	%		0.06	%		0.03	%(9)
Portfolio Turnover Rate		69	%(8)		178	%		187	%		386	%		353	%		355	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Not consolidated.

(4)  Per share amount is based on average shares outstanding.

(5)  Amount is less than 0.005%.

(6)  Calculated based on the net asset value as of the last business day of the period.

(7)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the consolidated financial statements.
35

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Consolidated Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying consolidated financial statements relate to the Multi- Asset Portfolio. The Fund seeks total return. The Fund's "Adviser", Morgan Stanley Investment Management Inc., seeks to achieve this objective with an emphasis on positive absolute return and controlling downside portfolio risk.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its consolidated financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Actual results may differ from those estimates.

The Fund may, consistent with its principal investment strategies, invest up to 25% of its total assets in a wholly-owned subsidiary of the Fund organized as a company under the laws of the Cayman Islands, Multi-Asset Cayman Portfolio, Ltd. (the "Subsidiary"). The Subsidiary may invest, directly or indirectly through the use of derivatives, in securities, commodities, commodity-related instruments and other investments, primarily futures, swaps and notes. The Fund is the sole shareholder of the Subsidiary, and it is not currently expected that shares of the Subsidiary will be sold or offered to other investors. The consolidated portfolio of investments and consolidated financial statements include the positions and accounts of the Fund and the Subsidiary. All intercompany accounts and transactions of the Fund and the Subsidiary have been eliminated in consolidation. As of June 30, 2020, the Subsidiary represented approximately $5,281,000 or approximately 23.6% of the total net assets of the Fund.

Investments in the Subsidiary are expected to provide the Fund with exposure to the commodity markets within the

limitations of Subchapter M of the Code and recent Internal Revenue Service ("IRS") revenue rulings, which require that a mutual fund receive no more than ten percent of its gross income from such investments in order to receive favorable tax treatment as a regulated investment company ("RIC"). Tax treatment of the income received from the Subsidiary may potentially be affected by changes in legislation, regulations or other legally binding authority, which could affect the character, timing and amount of the Fund's taxable income and distributions. If such changes occur, the Fund may need to significantly change its investment strategy and recognize unrealized gains in order to remain qualified for taxation as a RIC, which could adversely affect the Fund.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's consolidated financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which

36

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Consolidated Financial Statements (unaudited) (cont'd)

over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If the Adviser, a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) futures are valued at the settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; (5) OTC swaps may be valued by an outside pricing service approved by the Directors or quotes from a broker or dealer. Swaps cleared on a clearinghouse or exchange may be valued using the closing price provided by the clearinghouse or exchange; (6) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the

mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (7) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (8) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the

37

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Consolidated Financial Statements (unaudited) (cont'd)

investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)			Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	335		$	—		$	—	$	335
Building Products		147			—			—		147
Chemicals		57			—			—		57
Construction Materials		227			—			—		227
Equity Real Estate Investment Trusts (REITs)		—			1			—		1
Hotels, Restaurants & Leisure		781			263			—		1,044
Household Durables		2,275			—			—		2,275
Insurance		104			—			—		104
Investment Companies		—			—	†		—		—	†
Paper & Forest Products		18			—			—		18
Real Estate Management & Development		—			772			—		772
Thrifts & Mortgage Finance		21			—			—		21
Trading Companies & Distributors		50			—			—		50
Total Common Stocks		4,015			1,036	†		—		5,051	†
Fixed Income Securities		—			2,147			—		2,147
Short-Term Investments
Investment Company		12,121			—			—		12,121
U.S. Treasury Security		—			2,315			—		2,315
Total Short-Term Investments		12,121			2,315			—		14,436
Foreign Currency Forward Exchange Contracts		—			5			—		5
Futures Contracts		140			—			—		140
Interest Rate Swap Agreements		—			44			—		44
Total Return Swap Agreements		—			100			—		100
Total Assets		16,276			5,647	†		—		21,923	†
Liabilities:
Foreign Currency Forward Exchange Contracts		—			(15	)		—		(15	)
Futures Contracts		(71	)		—			—		(71	)
Credit Default Swap Agreement		—			(4	)		—		(4	)
Total Return Swap Agreements		—			(173	)		—		(173	)
Total Liabilities		(71	)		(192	)		—		(263	)
Total	$	16,205		$	5,455	†	$	—	$	21,660	†

†  Includes one security valued at zero.

38

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Consolidated Financial Statements (unaudited) (cont'd)

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Consolidated Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Consolidated Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including

39

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Consolidated Financial Statements (unaudited) (cont'd)

derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Fund's securities are

not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

Futures: A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return and the potential loss from futures contracts can exceed the Fund's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

Swaps: The Fund may enter into OTC swap contracts or cleared swap transactions. A swap contract is an agreement between two parties pursuant to which the parties exchange payments at specified dates on the basis of a specified notional amount, with the payments

40

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Consolidated Financial Statements (unaudited) (cont'd)

calculated by reference to specified securities, indices, reference rates, currencies or other instruments. Typically swap agreements provide that when the period payment dates for both parties are the same, the payments are made on a net basis (i.e., the two payment streams are netted out, with only the net amount paid by one party to the other). The Fund's obligations or rights under a swap contract entered into on a net basis will generally be equal only to the net amount to be paid or received under the agreement, based on the relative values of the positions held by each party. Cleared swap transactions may help reduce counterparty credit risk. In a cleared swap, the Fund's ultimate counterparty is a clearinghouse rather than a swap dealer, bank or other financial institution. OTC swap agreements are not entered into or traded on exchanges and often there is no central clearing or guaranty function for OTC swaps. These OTC swaps are often subject to credit risk or the risk of default or non-performance by the counterparty. Both OTC and cleared swaps could result in losses if interest rates, foreign currency exchange rates or other factors are not correctly anticipated by the Fund or if the reference index, security or investments do not perform as expected. During the period swap agreements are open, payments are received from or made to the clearinghouse or counterparty based upon changes in the value of the contract (variation margin). The Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulatory developments require the clearing and exchange-trading of certain standardized swap transactions. Mandatory exchange-trading and clearing is occurring on a phased-in basis.

When the Fund has an unrealized loss on a swap agreement, the Fund has instructed the custodian to pledge cash or liquid securities as collateral with a value approximately equal to the amount of the unrealized loss. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate. If applicable, cash collateral is included with "Due from (to) Broker" in the Consolidated Statement of Assets and Liabilities.

Upfront payments paid or received by the Fund will be reflected as an asset or liability, respectively, in the Consolidated Statement of Assets and Liabilities.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures

to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Appreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	5
Futures Contract	Variation Margin on Futures Contract	Commodity Risk		49	(a)
Futures Contract	Variation Margin on Futures Contract	Currency Risk		52	(a)
Futures Contracts	Variation Margin on Futures Contracts	Equity Risk		33	(a)
Futures Contract	Variation Margin on Futures Contract	Interest Rate Risk		6	(a)
Swap Agreements	Variation Margin on Swap Agreements	Interest Rate Risk		44	(a)
Swap Agreements	Unrealized Appreciation on Swap Agreements	Equity Risk		100
Total			$	289
	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Depreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	(15	)
Futures Contract	Variation Margin on Futures Contract	Commodity Risk		(1	)(a)
Futures Contracts	Variation Margin on Futures Contracts	Equity Risk		(39	)(a)
Futures Contracts	Variation Margin on Futures Contracts	Interest Rate Risk		(31	)(a)
Swap Agreement	Variation Margin on Swap Agreement	Credit Risk		(4	)(a)
Swap Agreements	Unrealized Depreciation on Swap Agreements	Equity Risk		(173	)
Total			$	(263	)

(a) This amount represents the cumulative appreciation (depreciation) as reported in the Consolidated Portfolio of Investments. The Consolidated Statement of Assets and Liabilities only reflects the current day's net variation margin.

41

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Consolidated Financial Statements (unaudited) (cont'd)

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(286	)
Commodity Risk	Futures Contracts		221
Currency Risk	Futures Contracts		(79	)
Equity Risk	Futures Contracts		(296	)
Interest Rate Risk	Futures Contracts		(133	)
Credit Risk	Swap Agreements		11
Equity Risk	Swap Agreements		(619	)
Interest Rate Risk	Swap Agreements		(236	)
Total		$	(1,417	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(50	)
Commodity Risk	Futures Contracts		(6	)
Currency Risk	Futures Contracts		155
Equity Risk	Futures Contracts		20
Interest Rate Risk	Futures Contracts		(50	)
Equity Risk	Swap Agreements		(77	)
Credit Risk	Swap Agreements		1
Interest Rate Risk	Swap Agreements		8
Total		$	1

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Consolidated Statement of Assets and Liabilities
Derivatives(b)	Assets(c) (000)		Liabilities(c) (000)
Foreign Currency Forward Exchange Contracts	$	5	$	(15	)
Swap Agreements		100		(173	)
Total	$	105	$	(188	)

(b) Excludes exchange-traded derivatives.

(c) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Consolidated Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the

counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Consolidated Statement of Assets and Liabilities
COUNTERPARTY	Gross Asset Derivatives Presented in the Consolidated Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Received (000)		Net Amount (not less than $0) (000)
Barclays Bank PLC	$	—	@	$	(—	@)	$	—	$	0
BNP Paribas SA		2			(2	)		—		0
Goldman Sachs International		—	@		(—	@)		—		0
JPMorgan Chase Bank NA		100			(100	)		—		0
UBS AG		3			(3	)		—		0
Total	$	105		$	(105	)	$	—	$	0

42

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Consolidated Financial Statements (unaudited) (cont'd)

Gross Amounts Not Offset in the Consolidated Statement of Assets and Liabilities
COUNTERPARTY	Gross Liability Derivatives Presented in the Consolidated Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Pledged (000)		Net Amount (not less than $0) (000)
Bank of America NA	$	—	@	$	—		$	—	$	—	@
Barclays Bank PLC		—	@		(—	@)		—		0
BNP Paribas SA		7			(2	)		—		5
Citibank NA		—	@		—			—		—	@
Goldman Sachs International		1			(—	@)		—		1
JPMorgan Chase Bank NA		173			(100	)		—		73
State Street Bank and Trust Co.		—	@		—			—		—	@
UBS AG		7			(3	)		—		4
Total	$	188		$	(105	)	$	—	$	83

@ Value is less than $500.

For the six months ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	14,576,000
Futures Contracts:
Average monthly notional value	$	20,516,000
Swap Agreements:
Average monthly notional amount	$	8,255,000

5.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest

income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $750 million			Next $750 million			Over $1.5 billion
	0.85	%		0.80	%		0.75	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.10% for Class I shares, 1.45% for Class A shares, 1.95% for Class L shares, 2.20% for Class C shares and 1.07% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $94,000 of advisory fees were waived and approximately $111,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser provides investment advisory services to the Subsidiary pursuant to the Subsidiary Investment Management Agreement (the "Agreement"). Under the Agreement, the Subsidiary will pay the Adviser at the end of each fiscal quarter, calculated by applying a quarterly rate, based on the annual rate of 0.05%, to the average daily net assets of the Subsidiary.

The Adviser has agreed to waive its advisory fees by the amount of advisory fees it receives from the Subsidiary.

43

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Consolidated Financial Statements (unaudited) (cont'd)

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $8,550,000 and $10,750,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $10,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	9,542	$	16,773	$	14,194	$	30

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	12,121

44

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Consolidated Financial Statements (unaudited) (cont'd)

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the consolidated financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", sets forth a minimum threshold for consolidated financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the consolidated financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Consolidated Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years

in the four-year period ended December 31, 2019, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From: Ordinary Income (000)		2018 Distributions Paid From: Ordinary Income (000)
$	806	$	1,199

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Accumulated Loss (000)		Paid-in- Capital (000)
$	236	$	(236	)

At December 31, 2019, the Fund had no distributable earnings on a tax basis.

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $85,178,000 and $1,180,000 respectively that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a

45

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Consolidated Financial Statements (unaudited) (cont'd)

commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 84.1%.

K. Subsequent Events: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

The Directors of the Company approved a Plan of liquidation with respect to the Fund. Pursuant to the Plan of Liquidation, substantially all of the assets of the Fund were liquidated, known liabilities of the Fund were satisfied, the remaining proceeds were distributed to the Fund's shareholders, and all of the issued and outstanding shares of the Fund were redeemed (the "Liquidation"). The Fund suspended the offering of its shares to all investors at the close of business on July 13, 2020. The Liquidation occurred on July 15, 2020.

46

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

47

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

On June 16, 2020, the Board approved a Plan of Liquidation with respect to the Fund. Pursuant to the Plan of Liquidation, substantially all of the assets of the Fund were liquidated, known liabilities of the Fund were satisfied, the remaining proceeds were distributed to the Fund's shareholders, and all of the issued and outstanding shares of the Fund were redeemed (the "Liquidation"). The Fund suspended the offering of its shares to all investors at the close of business on July 13, 2020 and the Liquidation occurred on July 15, 2020.

48

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

49

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

50

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

51

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas, 22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

52

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIMASAN
3179131 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Permanence Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	7
Statement of Changes in Net Assets	8
Financial Highlights	9
Notes to Financial Statements	13
Investment Advisory Agreement Approval	21
Liquidity Risk Management Program	23
Privacy Notice	24
Director and Officer Information	26

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Permanence Portfolio (the "Fund") performed during the period beginning March 31, 2020 (when the Fund commenced operations) and ended June 30, 2020.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Permanence Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period 3/31/20-6/30/20.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 3/31/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Permanence Portfolio Class I^	$	1,000.00	$	1,257.00	$	1,010.32	$	2.39	$	2.12		0.85	%
Permanence Portfolio Class A^		1,000.00		1,256.00		1,009.45		3.37		3.00		1.20
Permanence Portfolio Class C^		1,000.00		1,254.00		1,007.58		5.46		4.87		1.95
Permanence Portfolio Class IS^		1,000.00		1,258.00		1,010.44		2.25		2.00		0.80

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 91/366 (to reflect the actual days in the period).

**  Annualized.

^  The Fund commenced operations on March 31, 2020.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Permanence Portfolio

	Shares		Value (000)
Common Stocks (99.0%)
Aerospace & Defense (5.0%)
HEICO Corp., Class A		1,606	$	130
Capital Markets (4.9%)
Intercontinental Exchange, Inc.		644		59
S&P Global, Inc.		206		68
				127
Chemicals (8.3%)
Ecolab, Inc.		649		129
Sherwin-Williams Co. (The)		147		85
				214
Commercial Services & Supplies (3.0%)
Cintas Corp.		105		28
Copart, Inc. (a)		287		24
Rollins, Inc.		610		26
				78
Construction Materials (1.0%)
Martin Marietta Materials, Inc.		121		25
Distributors (1.0%)
Pool Corp.		98		27
Diversified Consumer Services (1.0%)
Service Corp. International		640		25
Entertainment (1.8%)
Madison Square Garden Co. (The), Class A (a)		154		23
Walt Disney Co. (The)		218		24
				47
Equity Real Estate Investment Trusts (REITs) (2.0%)
American Tower Corp. REIT		98		25
Equinix, Inc. REIT		37		26
				51
Food & Staples Retailing (3.2%)
Costco Wholesale Corp.		278		84
Health Care Equipment & Supplies (5.9%)
IDEXX Laboratories, Inc. (a)		83		28
Intuitive Surgical, Inc. (a)		218		124
				152
Health Care Technology (6.0%)
Veeva Systems, Inc., Class A (a)		660		155
Hotels, Restaurants & Leisure (3.8%)
Starbucks Corp.		1,015		74
Vail Resorts, Inc.		136		25
				99
Industrial Conglomerates (2.5%)
Roper Technologies, Inc.		164		64
Information Technology Services (0.9%)
Gartner, Inc. (a)		200		24
Insurance (1.0%)
Brown & Brown, Inc.		644		26
Interactive Media & Services (3.5%)
Alphabet, Inc., Class C (a)		18		25
Facebook, Inc., Class A (a)		291		66
				91

	Shares		Value (000)
Internet & Direct Marketing Retail (7.4%)
Amazon.com, Inc. (a)		69	$	190
Metals & Mining (0.9%)
Royal Gold, Inc.		182		23
Oil, Gas & Consumable Fuels (1.8%)
Texas Pacific Land Trust		79		47
Pharmaceuticals (5.2%)
Royalty Pharma PLC, Class A (United Kingdom) (a)		1,983		96
Zoetis, Inc.		284		39
				135
Professional Services (2.0%)
CoStar Group, Inc. (a)		37		26
Verisk Analytics, Inc.		149		26
				52
Road & Rail (1.0%)
Union Pacific Corp.		151		25
Semiconductors & Semiconductor Equipment (3.7%)
ASML Holding NV		257		95
Software (14.1%)
ANSYS, Inc. (a)		89		26
Appfolio, Inc., Class A (a)		159		26
Autodesk, Inc. (a)		457		109
Cadence Design Systems, Inc. (a)		268		26
Guidewire Software, Inc. (a)		254		28
Microsoft Corp.		482		98
Synopsys, Inc. (a)		132		26
Tyler Technologies, Inc. (a)		75		26
				365
Specialty Retail (1.0%)
AutoZone, Inc. (a)		22		25
Tech Hardware, Storage & Peripherals (2.7%)
Apple, Inc.		189		69		��
Textiles, Apparel & Luxury Goods (3.4%)
NIKE, Inc., Class B		885		87
Trading Companies & Distributors (1.0%)
Fastenal Co.		622		27
Total Common Stocks (Cost $2,112)				2,559
Short-Term Investment (1.0%)
Investment Company (1.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $26)		26,490		26
Total Investments Excluding Purchased Options (100.0%) (Cost $2,138)				2,585
Total Purchased Options Outstanding (0.0%) (Cost $3)				1
Total Investments (100.0%) (Cost $2,141) (b)				2,586
Liabilities in Excess of Other Assets (0.0%) (c)				(1	)
Net Assets (100.0%)			$	2,585

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Permanence Portfolio

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $449,000 and the aggregate gross unrealized depreciation is approximately $4,000, resulting in net unrealized appreciation of approximately $445,000.

(c)  Amount is less than 0.05%.

REIT  Real Estate Investment Trust.

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2020:

Counterparty	Description		Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
JP Morgan Chase Bank NA		USD/CNH	CNH	8.49	May-21		425,580		426	$	1	$	3	$	(2	)

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Other*		48.1	%
Software		14.1
Chemicals		8.3
Internet & Direct Marketing Retail		7.4
Health Care Technology		6.0
Health Care Equipment & Supplies		5.9
Pharmaceuticals		5.2
Aerospace & Defense		5.0
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Permanence Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $2,115)	$	2,560
Investment in Security of Affiliated Issuer, at Value (Cost $26)		26
Total Investments in Securities, at Value (Cost $2,141)		2,586
Prepaid Offering Costs		99
Receivable for Investments Sold		77
Due from Adviser		61
Dividends Receivable		1
Receivable from Affiliate		—	@
Other Assets		7
Total Assets		2,831
Liabilities:
Payable for Offering Costs		130
Payable for Investments Purchased		101
Payable for Professional Fees		11
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Custodian Fees		1
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Administration Fees		—	@
Other Liabilities		3
Total Liabilities		246
Net Assets	$	2,585
Net Assets Consist of:
Paid-in-Capital	$	2,055
Total Distributable Earnings		530
Net Assets	$	2,585
CLASS I:
Net Assets	$	2,546
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		202,500
Net Asset Value, Offering and Redemption Price Per Share	$	12.58
CLASS A:
Net Assets	$	13
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Redemption Price Per Share	$	12.57
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.70
Maximum Offering Price Per Share	$	13.27
CLASS C:
Net Assets	$	13
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	12.54
CLASS IS:
Net Assets	$	13
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	12.58

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Permanence Portfolio

Statement of Operations	Period from March 31, 2020^ to June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers	$	4
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		4
Expenses:
Offering Costs		33
Professional Fees		25
Advisory Fees (Note B)		4
Shareholder Reporting Fees		4
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		—	@
Transfer Agency Fees — Class C (Note E)		—	@
Transfer Agency Fees — Class IS (Note E)		—	@
Custodian Fees (Note F)		1
Registration Fees		1
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Administration Fees (Note C)		—	@
Pricing Fees		—	@
Other Expenses		—	@
Total Expenses		69
Expenses Reimbursed by Adviser (Note B)		(60	)
Waiver of Advisory Fees (Note B)		(4	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class A (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(—	@)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		5
Net Investment Loss		(1	)
Realized Gain:
Investments Sold		85
Foreign Currency Translation		1
Net Realized Gain		86
Change in Unrealized Appreciation (Depreciation):
Investments		445
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		531
Net Increase in Net Assets Resulting from Operations	$	530

^  Commencement of Operations.

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Permanence Portfolio

Statement of Changes in Net Assets	Period from March 31, 2020^ to June 30, 2020 (unaudited) (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(1	)
Net Realized Gain		86
Net Change in Unrealized Appreciation (Depreciation)		445
Net Increase in Net Assets Resulting from Operations		530
Capital Share Transactions:(1)
Class I:
Subscribed		2,025
Class A:
Subscribed		10
Class C:
Subscribed		10
Class IS:
Subscribed		10
Net Increase in Net Assets Resulting from Capital Share Transactions		2,055
Total Increase in Net Assets		2,585
Net Assets:
Beginning of Period		—
End of Period	$	2,585
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		203
Class A:
Shares Subscribed		1
Class C:
Shares Subscribed		1
Class IS:
Shares Subscribed		1

^  Commencement of Operations.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Permanence Portfolio

	Class I
Selected Per Share Data and Ratios	Period from March 31, 2020(1) to June 30, 2020 (unaudited)
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.01	)
Net Realized and Unrealized Gain		2.59
Total from Investment Operations		2.58
Net Asset Value, End of Period	$	12.58
Total Return(3)		25.70	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,546
Ratio of Expenses Before Expense Limitation		11.69	%(7)
Ratio of Expenses After Expense Limitation		0.85	%(4)(7)
Ratio of Net Investment Loss		(0.19	)%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)
Portfolio Turnover Rate		35	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Permanence Portfolio

	Class A
Selected Per Share Data and Ratios	Period from March 31, 2020(1) to June 30, 2020 (unaudited)
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.02	)
Net Realized and Unrealized Gain		2.59
Total from Investment Operations		2.57
Net Asset Value, End of Period	$	12.57
Total Return(3)		25.60	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	13
Ratio of Expenses Before Expense Limitation		27.11	%(7)
Ratio of Expenses After Expense Limitation		1.20	%(4)(7)
Ratio of Net Investment Loss		(0.54	)%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)
Portfolio Turnover Rate		35	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Permanence Portfolio

	Class C
Selected Per Share Data and Ratios	Period from March 31, 2020(1) to June 30, 2020 (unaudited)
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.04	)
Net Realized and Unrealized Gain		2.58
Total from Investment Operations		2.54
Net Asset Value, End of Period	$	12.54
Total Return(3)		25.40	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	13
Ratio of Expenses Before Expense Limitation		27.73	%(7)
Ratio of Expenses After Expense Limitation		1.95	%(4)(7)
Ratio of Net Investment Loss		(1.29	)%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)
Portfolio Turnover Rate		35	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Permanence Portfolio

	Class IS
Selected Per Share Data and Ratios	Period from March 31, 2020(1) to June 30, 2020 (unaudited)
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.00	)(3)
Net Realized and Unrealized Gain		2.58
Total from Investment Operations		2.58
Net Asset Value, End of Period	$	12.58
Total Return(4)		25.80	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	13
Ratio of Expenses Before Expense Limitation		26.71	%(8)
Ratio of Expenses After Expense Limitation		0.80	%(5)(8)
Ratio of Net Investment Loss		(0.14	)%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)
Portfolio Turnover Rate		35	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Permanence Portfolio. The Fund seeks long-term capital appreciation.

The Fund commenced operations on March 31, 2020 and offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant

exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) listed options are valued at the

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at

least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	130	$	—	$	—	$	130
Capital Markets		127		—		—		127
Chemicals		214		—		—		214
Commercial Services & Supplies		78		—		—		78
Construction Materials		25		—		—		25
Distributors		27		—		—		27
Diversified Consumer Services		25		—		—		25
Entertainment		47		—		—		47
Equity Real Estate Investment Trusts (REITs)		51		—		—		51
Food & Staples Retailing		84		—		—		84
Health Care Equipment & Supplies		152		—		—		152
Health Care Technology		155		—		—		155
Hotels, Restaurants & Leisure		99		—		—		99
Industrial Conglomerates		64		—		—		64
Information Technology Services		24		—		—		24
Insurance		26		—		—		26
Interactive Media & Services		91		—		—		91
Internet & Direct Marketing Retail		190		—		—		190
Metals & Mining		23		—		—		23
Oil, Gas & Consumable Fuels		47		—		—		47
Pharmaceuticals		135		—		—		135
Professional Services		52		—		—		52
Road & Rail		25		—		—		25
Semiconductors & Semiconductor Equipment		95		—		—		95
Software		365		—		—		365
Specialty Retail		25		—		—		25
Tech Hardware, Storage & Peripherals		69		—		—		69
Textiles, Apparel & Luxury Goods		87		—		—		87
Trading Companies & Distributors		27		—		—		27
Total Common Stocks		2,559		—		—		2,559
Call Options Purchased		—		1		—		1
Short-Term Investment
Investment Company		26		—		—		26
Total Assets	$	2,585	$	1	$	—	$	2,586

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with

the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2020:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	1	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following table sets forth by primary risk exposure the Fund's change in unrealized appreciation (depreciation) by type of derivative contract for the period ended June 30, 2020 in accordance with ASC 815:

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(2	)(b)

(b) Amounts are included in Investments in the Statement of Operations.

At June 30, 2020, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(c) (000)			Liabilities(c) (000)
Purchased Options	$	1	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(c) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2020:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received(e) (000)		Net Amount (not less than $0) (000)
JP Morgan Chase Bank NA	$	1	(a)	$	—	$	—	$	1

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the period ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	106,000

5.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon

relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.65	%		0.60	%

For the period ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.85% for Class I shares, 1.20% for Class A shares, 1.95% for Class C shares and 0.80% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the period ended June 30, 2020, approximately $4,000 of advisory fees were waived and approximately $60,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the period ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $2,851,000 and $824,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the period ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities

Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Liquidity Funds. For the period ended June 30, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the period ended June 30, 2020 is as follows:

Affiliated Investment Company	Value March 31, 2020 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	—	$	2,324	$	2,298	$	—	@

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	26

@ Amount is less than $500.

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the period ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the period ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 48.7%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

The Board considered the following factors at the time of approval of the contracts which occurred prior to commencement of operations.

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services to be provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services to be provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers.

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who will provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services to be provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board considered that the Adviser plans to arrange for a public offering of shares of the Fund to raise assets for investment and that the offering had not yet begun and concluded that, since the Fund currently had no assets to invest (other than seed capital required under the Investment Company Act) and had no track record of performance, this was not a factor it needed to address at the present time.

The Board reviewed the advisory and administrative fee rates (the "management fee rates") proposed to be paid by the Fund under the Management Agreement relative to comparable funds advised by the Adviser, when applicable, and compared to their peers as determined by the Adviser, and reviewed the anticipated total expense ratio of the Fund. The Board considered that the Fund requires the Adviser to develop processes, invest in additional resources and incur additional risks to successfully manage the Fund and concluded that the proposed management fee rate and anticipated total expense ratio would be competitive with its peer group averages.

Economies of Scale

The Board considered the growth prospects of the Fund and the structure of the proposed management fee schedule, which does include breakpoints. The Board considered that the Fund's potential growth was uncertain and concluded that it would be premature to consider economies of scale as a factor in approving the Management Agreement at the present time.

Profitability of the Adviser and Affiliates

Since the Fund had not begun operations and had not paid any fees to the Adviser, the Board concluded that this was not a factor that needed to be considered at the present time.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates to be derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. Since the Fund had not begun operations and had not paid any fees to the Adviser, the Board concluded that these benefits were not a factor that needed to be considered at the present time.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to enter into this relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its future shareholders to approve the Management Agreement, which will remain in effect for two years and thereafter must be approved annually by the Board of the Fund if it is to continue in effect. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

23

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

24

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

26

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

PERSAN
3182186 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Real Assets Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	8
Statement of Operations	9
Statements of Changes in Net Assets	10
Financial Highlights	11
Notes to Financial Statements	15
Investment Advisory Agreement Approval	23
Liquidity Risk Management Program	25
Privacy Notice	26
Director and Officer Information	28

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Real Assets Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

Real Assets Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Real Assets Portfolio Class I	$	1,000.00	$	891.30	$	1,021.13	$	3.53	$	3.77		0.75	%
Real Assets Portfolio Class A		1,000.00		889.10		1,019.19		5.35		5.72		1.14
Real Assets Portfolio Class C		1,000.00		885.30		1,015.47		8.86		9.47		1.89
Real Assets Portfolio Class IS		1,000.00		891.30		1,021.18		3.48		3.72		0.74

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

Real Assets Portfolio

	Shares		Value (000)
Common Stocks (70.5%)
Australia (2.2%)
APA Group		3,344	$	26
Atlas Arteria Ltd.		7,392		34
CSL Ltd.		135		27
Dexus REIT		1,800		11
GPT Group (The) REIT		4,328		13
Scentre Group REIT		13,169		20
Spark Infrastructure Group		26,772		40
Sydney Airport		3,821		15
Transurban Group		8,820		86
Wesfarmers Ltd.		1,373		43
				315
Canada (3.7%)
Canadian Tire Corp., Ltd., Class A		3		—	@
Enbridge, Inc.		2,892		88
Gibson Energy, Inc.		7,058		110
Manulife Financial Corp.		28		—	@
National Bank of Canada		537		24
Pembina Pipeline Corp.		1,868		47
RioCan Real Estate Investment Trust REIT		3,448		39
Royal Bank of Canada		377		26
Sun Life Financial, Inc.		777		29
TC Energy Corp.		3,402		145
TELUS Corp.		1,530		26
				534
China (1.4%)
China Everbright International Ltd. (a)		96,780		51
China Gas Holdings Ltd. (a)		23,918		74
China Overseas Land & Investment Ltd. (a)		1,896		6
China Resources Land Ltd. (a)		3,264		13
China Tower Corp. Ltd. H Shares (a)		129,919		23
ENN Energy Holdings Ltd. (a)		1,567		18
Jiangsu Expressway Co., Ltd. H Shares (a)		13,138		15
				200
Denmark (0.1%)
Orsted A/S		69		8
Finland (0.1%)
Citycon Oyj		1,283		9
France (3.5%)
Aeroports de Paris (ADP)		116		12
Air Liquide SA		261		38
Edenred		9		—	@
Gecina SA REIT		632		78
Getlink SE (b)		2,036		29
ICADE REIT		54		4
Klepierre SA REIT		5,062		101
L'Oreal SA (BSRM) (b)		102		33
LVMH Moet Hennessy Louis Vuitton SE		72		32
STMicroelectronics N.V.		1,116		30
Unibail-Rodamco-Westfield REIT		387		22
Vinci SA		1,441		134
				513

	Shares		Value (000)
Germany (1.4%)
ADO Properties SA (b)		182	$	5
BASF SE		735		41
Deutsche Wohnen SE		1,768		79
LANXESS AG		418		22
Siemens AG (Registered)		288		34
Volkswagen AG (Preference)		192		29
				210
Hong Kong (3.7%)
CK Asset Holdings Ltd.		1,848		11
Hong Kong & China Gas Co., Ltd.		18,392		29
Hongkong Land Holdings Ltd.		37,291		155
Hysan Development Co., Ltd.		10,036		32
Link REIT		4,141		34
New World Development Co. Ltd.		2,631		13
Sun Hung Kai Properties Ltd.		9,420		120
Swire Properties Ltd.		39,391		101
Wharf Real Estate Investment Co., Ltd.		7,694		37
				532
India (0.6%)
Azure Power Global Ltd. (b)		5,541		88
Ireland (0.1%)
Hibernia REIT PLC		13,288		17
Italy (0.9%)
Atlantia SpA (b)		1,697		27
Infrastrutture Wireless Italiane SpA		3,281		33
Snam SpA		1,752		9
Terna Rete Elettrica Nazionale SpA		8,465		58
				127
Japan (4.0%)
Dai-ichi Life Holdings, Inc.		2,382		29
Fast Retailing Co., Ltd.		43		25
GLP J-REIT		7		10
ITOCHU Corp.		1,399		30
Japan Airport Terminal Co., Ltd.		175		8
Japan Hotel REIT Investment Corp.		63		26
Mitsubishi Corp.		1,712		36
Mitsubishi Estate Co., Ltd.		6,998		104
Mitsui & Co., Ltd.		2,435		36
Mitsui Fudosan Co., Ltd.		4,190		74
Nippon Building Fund, Inc. REIT		8		46
Omron Corp.		417		28
Sumitomo Mitsui Financial Group, Inc.		1,394		39
Sumitomo Realty & Development Co., Ltd.		710		20
Tokyo Gas Co., Ltd.		1,727		41
Toyota Motor Corp.		569		36
				588
Mexico (0.4%)
Promotora y Operadora de Infraestructura SAB de CV (b)		8,930		64

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Real Assets Portfolio

	Shares		Value (000)
Netherlands (0.9%)
ASML Holding N.V.		103	$	38
Eurocommercial Properties N.V. CVA REIT		2,738		35
Koninklijke DSM N.V.		190		26
Randstad N.V.		725		33
				132
New Zealand (0.2%)
Auckland International Airport Ltd.		7,587		32
Norway (0.2%)
Telenor ASA		1,709		25
Singapore (0.4%)
DBS Group Holdings Ltd.		1,703		25
Keppel Corp., Ltd.		6,008		26
UOL Group Ltd.		960		5
				56
Spain (1.6%)
Aena SME SA (b)		252		34
Atlantica Yield PLC		1,378		40
Cellnex Telecom SA		756		46
Ferrovial SA		1,924		51
Inmobiliaria Colonial Socimi SA REIT		285		3
Merlin Properties Socimi SA REIT		4,652		39
Red Electrica Corp., SA		987		18
				231
Sweden (0.1%)
Hufvudstaden AB, Class A		1,316		16
Switzerland (1.1%)
Credit Suisse Group AG (Registered)		3,695		38
Flughafen Zurich AG (Registered) (b)		108		14
Nestle SA (Registered)		293		33
Novartis AG (Registered)		479		42
Roche Holding AG (Genusschein)		104		36
				163
United Kingdom (5.2%)
AVEVA Group PLC		462		23
Barclays PLC		18,647		26
BP PLC		5,868		22
British Land Co., PLC (The) REIT		17,676		85
Derwent London PLC REIT		1,352		46
Great Portland Estates PLC REIT		9,291		73
Hammerson PLC REIT		26,890		27
Land Securities Group PLC REIT		14,857		102
National Grid PLC		13,266		162
Pennon Group PLC		3,961		55
Rio Tinto PLC		493		28
Royal Dutch Shell PLC, Class B		1,454		22
Segro PLC REIT		2,457		27
Severn Trent PLC		1,154		35
United Utilities Group PLC		1,505		17
Urban & Civic PLC		927		3
				753

	Shares		Value (000)
United States (38.7%)
Abbott Laboratories		378	$	35
Accenture PLC, Class A		155		33
Adobe, Inc. (b)		99		43
Akamai Technologies, Inc. (b)		232		25
Alexandria Real Estate Equities, Inc. REIT		216		35
Alphabet, Inc., Class A (b)		54		77
Amazon.com, Inc. (b)		38		105
Ameren Corp.		849		60
American Campus Communities, Inc. REIT		572		20
American Electric Power Co., Inc.		214		17
American Express Co.		325		31
American Tower Corp. REIT		1,452		375
American Water Works Co., Inc.		889		114
Amgen, Inc.		141		33
Apple, Inc.		407		149
Archer-Daniels-Midland Co.		817		33
AT&T, Inc.		832		25
Atmos Energy Corp.		987		98
AvalonBay Communities, Inc. REIT		657		102
Bank of America Corp.		1,609		38
Boston Properties, Inc. REIT		1,851		167
Brixmor Property Group, Inc. REIT		493		6
Bunge Ltd.		648		27
Camden Property Trust REIT		532		49
CBRE Group, Inc., Class A (b)		556		25
Cheniere Energy, Inc. (b)		1,082		52
Cigna Corp. (b)		111		21
Cisco Systems, Inc.		588		27
Citigroup, Inc.		538		28
CMS Energy Corp.		475		28
Comcast Corp., Class A		586		23
Copart, Inc. (b)		245		20
Costco Wholesale Corp.		83		25
Crown Castle International Corp. REIT		1,251		209
CSX Corp.		425		30
CubeSmart REIT		399		11
Danaher Corp.		185		33
DiamondRock Hospitality Co. REIT		143		1
Dominion Energy, Inc.		433		35
Edison International		1,076		58
Eli Lilly & Co.		162		27
Equity Residential REIT		1,292		76
Essential Utilities, Inc.		1,431		60
Essex Property Trust, Inc. REIT		158		36
Evergy, Inc.		593		35
Eversource Energy		921		77
Facebook, Inc., Class A (b)		216		49
Federal Realty Investment Trust REIT		117		10
Fidelity National Information Services, Inc.		186		25
FirstEnergy Corp.		771		30
Goldman Sachs Group, Inc. (The)		175		35
Healthcare Realty Trust, Inc. REIT		537		16

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Real Assets Portfolio

	Shares		Value (000)
United States (cont'd)
Healthpeak Properties, Inc. REIT		1,109	$	31
Hilton Worldwide Holdings, Inc.		386		28
Home Depot, Inc. (The)		108		27
Host Hotels & Resorts, Inc. REIT		8,841		95
Hudson Pacific Properties, Inc. REIT		2,131		54
Intel Corp.		471		28
International Business Machines Corp.		201		24
Invitation Homes, Inc. REIT		800		22
JBG SMITH Properties REIT		610		18
Johnson & Johnson		289		41
JPMorgan Chase & Co.		550		52
Kinder Morgan, Inc.		6,090		92
Linde PLC		111		24
Mack-Cali Realty Corp. REIT		2,559		39
Marathon Oil Corp.		4,424		27
Mastercard, Inc., Class A		134		40
Merck & Co., Inc.		410		32
Micron Technology, Inc. (b)		549		28
Microsoft Corp.		651		133
Mid-America Apartment Communities, Inc. REIT		95		11
Netflix, Inc. (b)		59		27
NiSource, Inc.		2,469		56
Norfolk Southern Corp.		140		25
NRG Energy, Inc.		653		21
ONEOK, Inc.		1,186		39
Paramount Group, Inc. REIT		2,378		18
PepsiCo, Inc.		217		29
Pfizer, Inc.		986		32
Procter & Gamble Co. (The)		290		35
ProLogis, Inc. REIT		384		36
Public Storage REIT		145		28
QTS Realty Trust, Inc., Class A REIT		200		13
Regency Centers Corp. REIT		1,305		60
ResMed, Inc.		140		27
RLJ Lodging Trust REIT		2,643		25
salesforce.com, Inc. (b)		151		28
SBA Communications Corp. REIT		386		115
Sempra Energy		889		104
Simon Property Group, Inc. REIT		3,305		227
SL Green Realty Corp. REIT		4,169		206
Sunstone Hotel Investors, Inc. REIT		4,584		37
Targa Resources Corp.		811		16
Taubman Centers, Inc. REIT		434		16
Teledyne Technologies, Inc. (b)		109		34
Tesla, Inc. (b)		18		19
Thermo Fisher Scientific, Inc.		78		28
Tiffany & Co.		165		20
Union Pacific Corp.		172		29
UnitedHealth Group, Inc.		126		37
Ventas, Inc. REIT		2,048		75
Visa, Inc., Class A		223		43
Vornado Realty Trust REIT		3,223		123

	Shares		Value (000)
Voya Financial, Inc.		717	$	33
Walt Disney Co. (The)		357		40
Waste Management, Inc.		638		68
Weingarten Realty Investors REIT		3,031		57
Williams Cos., Inc. (The)		4,083		78
Xcel Energy, Inc.		918		57
				5,606
Total Common Stocks (Cost $10,410)				10,219
	Face Amount (000)
U.S. Treasury Securities (22.3%)
United States (22.3%)
U.S. Treasury Inflation Index Notes (TIPS),
0.13%, 7/15/22 - 7/15/24	$	693		716
0.38%, 7/15/23 - 1/15/27		594		628
0.50%, 1/15/28		255		279
0.75%, 2/15/42		42		50
0.88%, 1/15/29		238		271
1.00%, 2/15/46		167		216
2.00%, 1/15/26		23		27
2.13%, 2/15/40		97		144
3.88%, 4/15/29		89		126
U.S. Treasury Inflation Indexed Bonds,
0.13%, 1/15/30		74		80
0.25%, 1/15/25 - 2/15/50		342		361
0.38%, 7/15/25		191		204
1.00%, 2/15/48		94		124
Total U.S. Treasury Securities (Cost $3,006)				3,226
	Shares
Short-Term Investment (6.4%)
Investment Company (6.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $933)		932,572		933
Total Investments (99.2%) (Cost $14,349) (c)(d)				14,378
Other Assets in Excess of Liabilities (0.8%)				109
Net Assets (100.0%)			$	14,487

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Security trades on the Hong Kong exchange.

(b)  Non-income producing security.

(c)  The approximate fair value and percentage of net assets, $3,874,000 and 26.7%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

Real Assets Portfolio

(d)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $1,124,000 and the aggregate gross unrealized depreciation is approximately $1,095,000, resulting in net unrealized appreciation of approximately $29,000.

@  Value is less than $500.

CVA  Certificaten Van Aandelen.

REIT  Real Estate Investment Trust.

TIPS  Treasury Inflation Protected Security.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		37.5	%
Equity Real Estate Investment Trusts (REITs)		22.7
U.S. Treasury Securities		22.4
Short-Term Investments		6.5
Real Estate Management & Development		5.8
Oil, Gas & Consumable Fuels		5.1
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Real Assets Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $13,416)	$	13,445
Investment in Security of Affiliated Issuer, at Value (Cost $933)		933
Total Investments in Securities, at Value (Cost $14,349)		14,378
Foreign Currency, at Value (Cost $40)		40
Receivable for Investments Sold		87
Due from Adviser		42
Dividends Receivable		24
Interest Receivable		7
Tax Reclaim Receivable		4
Due from Broker		4
Receivable from Affiliate		—	@
Other Assets		59
Total Assets		14,645
Liabilities:
Payable for Investments Purchased		105
Payable for Professional Fees		32
Payable for Custodian Fees		10
Payable for Administration Fees		1
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Other Liabilities		10
Total Liabilities		158
Net Assets	$	14,487
Net Assets Consist of:
Paid-in-Capital	$	15,357
Total Accumulated Loss		(870	)
Net Assets	$	14,487
CLASS I:
Net Assets	$	14,258
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,530,342
Net Asset Value, Offering and Redemption Price Per Share	$	9.32
CLASS A:
Net Assets	$	25
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,695
Net Asset Value, Redemption Price Per Share	$	9.33
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.52
Maximum Offering Price Per Share	$	9.85
CLASS C:
Net Assets	$	194
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		20,939
Net Asset Value, Offering and Redemption Price Per Share	$	9.28
CLASS IS:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,026
Net Asset Value, Offering and Redemption Price Per Share	$	9.32

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Real Assets Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $8 of Foreign Taxes Withheld)	$	130
Interest from Securities of Unaffiliated Issuers		9
Dividends from Security of Affiliated Issuer (Note G)		2
Total Investment Income		141
Expenses:
Professional Fees		57
Advisory Fees (Note B)		37
Custodian Fees (Note F)		29
Registration Fees		17
Pricing Fees		9
Shareholder Reporting Fees		7
Administration Fees (Note C)		5
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		2
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		1
Sub Transfer Agency Fees — Class I		—	@
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class C		—	@
Other Expenses		8
Total Expenses		176
Expenses Reimbursed by Adviser (Note B)		(87	)
Waiver of Advisory Fees (Note B)		(37	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		48
Net Investment Income		93
Realized Gain (Loss):
Investments Sold		(791	)
Foreign Currency Translation		1
Futures Contracts		(15	)
Net Realized Loss		(805	)
Change in Unrealized Appreciation (Depreciation):
Investments		(716	)
Foreign Currency Translation		(—	@)
Futures Contracts		(2	)
Net Change in Unrealized Appreciation (Depreciation)		(718	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(1,523	)
Net Decrease in Net Assets Resulting from Operations	$	(1,430	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Real Assets Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	93		$	191
Net Realized Gain (Loss)		(805	)		5
Net Change in Unrealized Appreciation (Depreciation)		(718	)		1,488
Net Increase (Decrease) in Net Assets Resulting from Operations		(1,430	)		1,684
Dividends and Distributions to Shareholders:
Class I		(58	)		(201	)
Class A		(—	@)		(1	)
Class C		(—	@)		(1	)
Class IS		(—	@)		(—	@)
Paid-in-Capital:
Class I		—			(3	)
Class A		—			(—	@)
Class C		—			(—	@)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		(58	)		(206	)
Capital Share Transactions:(1)
Class I:
Subscribed		5,045			37
Distributions Reinvested		58			204
Redeemed		(111	)		(6	)
Class A:
Subscribed		8			130
Distributions Reinvested		—	@		1
Redeemed		(21	)		(105	)
Class C:
Subscribed		50			153
Distributions Reinvested		—	@		1
Redeemed		(7	)		—
Class IS:
Distributions Reinvested		—	@		—	@
Net Increase in Net Assets Resulting from Capital Share Transactions		5,022			415
Total Increase in Net Assets		3,534			1,893
Net Assets:
Beginning of Period		10,953			9,060
End of Period	$	14,487		$	10,953
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		514			4
Shares Issued on Distributions Reinvested		7			20
Shares Redeemed		(11	)		(1	)
Net Increase in Class I Shares Outstanding		510			23
Class A:
Shares Subscribed		1			13
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		(2	)		(10	)
Net Increase (Decrease) in Class A Shares Outstanding		(1	)		3
Class C:
Shares Subscribed		6			15
Shares Issued on Distributions Reinvested		—	@@		—	@@
Shares Redeemed		(1	)		—
Net Increase in Class C Shares Outstanding		5			15
Class IS:
Shares Issued on Distributions Reinvested		—	@@		—	@@

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Real Assets Portfolio

	Class I
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	10.51		$	9.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.07			0.19			0.13
Net Realized and Unrealized Gain (Loss)		(1.22	)		1.46			(0.79	)
Total from Investment Operations		(1.15	)		1.65			(0.66	)
Distributions from and/or in Excess of:
Net Investment Income		(0.04	)		(0.20	)		(0.22	)
Paid-in-Capital		—			(0.00	)(3)		(0.06	)
Total Distributions		(0.04	)		(0.20	)		(0.28	)
Net Asset Value, End of Period	$	9.32		$	10.51		$	9.06
Total Return(4)		(10.87	)%(6)		18.35	%		(6.70	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	14,258		$	10,728		$	9,033
Ratio of Expenses Before Expense Limitation		2.80	%(7)		3.82	%		4.76	%(7)
Ratio of Expenses After Expense Limitation		0.75	%(5)(7)		0.76	%(5)		0.76	%(5)(7)
Ratio of Net Investment Income		1.55	%(5)(7)		1.88	%(5)		2.52	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.01	%(7)
Portfolio Turnover Rate		48	%(6)		65	%		26	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Real Assets Portfolio

	Class A
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	10.53		$	9.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.05			0.15			0.11
Net Realized and Unrealized Gain (Loss)		(1.22	)		1.47			(0.79	)
Total from Investment Operations		(1.17	)		1.62			(0.68	)
Distributions from and/or in Excess of:
Net Investment Income		(0.03	)		(0.15	)		(0.20	)
Paid-in-Capital		—			(0.00	)(3)		(0.06	)
Total Distributions		(0.03	)		(0.15	)		(0.26	)
Net Asset Value, End of Period	$	9.33		$	10.53		$	9.06
Total Return(4)		(11.09	)%(6)		17.93	%		(6.90	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	25		$	42		$	9
Ratio of Expenses Before Expense Limitation		9.59	%(7)		7.63	%		22.79	%(7)
Ratio of Expenses After Expense Limitation		1.14	%(5)(7)		1.14	%(5)		1.14	%(5)(7)
Ratio of Net Investment Income		0.95	%(5)(7)		1.46	%(5)		2.18	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.01	%(7)
Portfolio Turnover Rate		48	%(6)		65	%		26	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Real Assets Portfolio

	Class C
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	10.50		$	9.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.02			0.07			0.07
Net Realized and Unrealized Gain (Loss)		(1.23	)		1.48			(0.79	)
Total from Investment Operations		(1.21	)		1.55			(0.72	)
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.11	)		(0.16	)
Paid-in-Capital		—			(0.00	)(3)		(0.06	)
Total Distributions		(0.01	)		(0.11	)		(0.22	)
Net Asset Value, End of Period	$	9.28		$	10.50		$	9.06
Total Return(4)		(11.47	)%(6)		17.12	%		(7.27	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	194		$	172		$	9
Ratio of Expenses Before Expense Limitation		4.97	%(7)		8.50	%		23.55	%(7)
Ratio of Expenses After Expense Limitation		1.89	%(5)(7)		1.89	%(5)		1.89	%(5)(7)
Ratio of Net Investment Income		0.37	%(5)(7)		0.68	%(5)		1.37	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.01	%(7)
Portfolio Turnover Rate		48	%(6)		65	%		26	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

Real Assets Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	10.51		$	9.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.07			0.19			0.13
Net Realized and Unrealized Gain (Loss)		(1.22	)		1.47			(0.79	)
Total from Investment Operations		(1.15	)		1.66			(0.66	)
Distributions from and/or in Excess of:
Net Investment Income		(0.04	)		(0.21	)		(0.22	)
Paid-in-Capital		—			(0.00	)(3)		(0.06	)
Total Distributions		(0.04	)		(0.21	)		(0.28	)
Net Asset Value, End of Period	$	9.32		$	10.51		$	9.06
Total Return(4)		(10.87	)%(6)		18.37	%		(6.69	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10		$	11		$	9
Ratio of Expenses Before Expense Limitation		21.16	%(7)		22.24	%		22.53	%(7)
Ratio of Expenses After Expense Limitation		0.74	%(5)(7)		0.74	%(5)		0.74	%(5)(7)
Ratio of Net Investment Income		1.49	%(5)(7)		1.90	%(5)		2.53	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.01	%(7)
Portfolio Turnover Rate		48	%(6)		65	%		26	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Real Assets Portfolio. The Fund seeks total return, targeted to be in excess of inflation, through capital appreciation and current income.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if

such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) futures are valued at the settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

pricing service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (5) when market quotations are not readily available, including circumstances under which the Adviser or Sub-Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services,

quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Fund invests a significant portion of its assets in securities of real estate investment trusts ("REITs"). The market's perception of prospective declines in private real estate values and other financial assets may result in increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Fund.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	34	$	—	$	—	$	34
Automobiles		19		65		—		84
Banks		168		90		—		258
Beverages		29		—		—		29
Biotechnology		33		27		—		60
Capital Markets		35		38		—		73
Chemicals		24		127		—		151
Commercial Services & Supplies		88		51		—		139
Communications Equipment		27		—		—		27
Construction & Engineering		—		185		—		185
Consumer Finance		31		—		—		31
Diversified Financial Services		33		—		—		33
Diversified Telecommunication Services		51		127		—		178
Electric Utilities		274		124		—		398
Electronic Equipment, Instruments & Components		—		28		—		28
Entertainment		67		—		—		67
Equity Real Estate Investment Trusts (REITs)		2,458		819		—		3,277
Food & Staples Retailing		25		—		—		25
Food Products		60		33		—		93
Gas Utilities		98		197		—		295
Health Care Equipment & Supplies		95		—		—		95
Health Care Providers & Services		58		—		—		58
Hotels, Restaurants & Leisure		28		—		—		28
Household Products		35		—		—		35
Independent Power & Renewable Electricity Producers		149		—		—		149
Industrial Conglomerates		—		60		—		60
Information Technology Services		165		—		—		165

Investment Type	Level 1 Unadjusted quoted prices (000)			Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Insurance	$	29		$	29	$	—	$	58
Interactive Media & Services		151			—		—		151
Internet & Direct Marketing Retail		105			—		—		105
Life Sciences Tools & Services		28			—		—		28
Media		23			—		—		23
Metals & Mining		—			28		—		28
Multi-Line Retail		—	†		43		—		43
Multi-Utilities		283			162		—		445
Oil, Gas & Consumable Fuels		694			44		—		738
Personal Products		—			33		—		33
Pharmaceuticals		132			78		—		210
Professional Services		—			33		—		33
Real Estate Management & Development		38			790		—		828
Road & Rail		84			—		—		84
Semiconductors & Semiconductor Equipment		56			68		—		124
Software		204			23		—		227
Specialty Retail		47			25		—		72
Tech Hardware, Storage & Peripherals		149			—		—		149
Textiles, Apparel & Luxury Goods		—			32		—		32
Trading Companies & Distributors		—			102		—		102
Transportation Infrastructure		64			306		—		370
Water Utilities		174			107		—		281
Total Common Stocks		6,345			3,874		—		10,219
U.S. Treasury Securities		—			3,226		—		3,226
Short-Term Investment
Investment Company		933			—		—		933
Total Assets	$	7,278		$	7,100	$	—	$	14,378

†  Includes one security which is valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be sub-

ject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Treasury Inflation-Protected Securities: The Fund may invest in Treasury Inflation-Protected Securities ("TIPS"), including structured bonds in which the principal amount is adjusted daily to keep pace with inflation, as measured by the U.S. Consumer Pricing Index for Urban Consumers. The adjustments to principal due to inflation/deflation are reflected as increases/decreases to interest income with a corresponding adjustment to cost. Such adjustments may have a significant impact on the Fund's distributions and may result in a return of capital to shareholders. The repayment of the original bond principal upon maturity is guaranteed by the full faith and credit of the U.S. Government.

5.  Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser and/or Sub-Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Futures: A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return and the potential loss from futures contracts can exceed the Fund's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Fund of margin deposits in the event of

bankruptcy of a broker with which the Fund has open positions in the futures contract.

As of June 30, 2020, the Fund did not have any open futures contracts.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815") is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Funds use derivative instruments, how these derivative instruments are accounted for and their effects on a Fund's financial position and results of operations.

The following tables set forth by primary risk exposure the Fund's realized gain(loss) and change in unrealized appreciation (depreciation) by type of derivative contract for the period ended June 30, 2020 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Interest Rate Risk	Futures Contracts	$	(15	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Interest Rate Risk	Futures Contracts	$	(2	)

For the period ended June 30, 2020, the approximate average monthly amount outstanding for each derivative type is as follows:

Futures Contracts:
Average monthly notional value	$	73,000

6.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid quarterly. Net realized capital gains, if any, are distributed at least annually.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Noncash dividends received in the form of stock, if any, are recognized on the ex-dividend date and recorded as noncash dividend income at fair value. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.60	%		0.55	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.80% for Class I shares, 1.15% for Class A shares, 1.90% for Class C shares and 0.75% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at

least one year from the date of the Fund's prospectus or until such time that the Directors act to discontinue all or a portion of such waivers or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $37,000 of advisory fees were waived and approximately $90,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley. The Sub-Adviser provides the Fund with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $8,310,000 and $4,208,000, respectively. For the six months ended June 30, 2020, purchases and sales of long-term U.S. Government securities were approximately $1,616,000 and $1,363,000, respectively.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	442	$	5,278	$	4,787	$	2

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	933

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the two-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Paid-in- Capital (000)		Ordinary Income (000)		Paid-in- Capital (000)
$	203	$	3	$	225	$	56

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to tax adjustments related to real estate investment trusts, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	21	$	(21	)

At December 31, 2019, the Fund had no distributable earnings on a tax basis.

At December 31, 2019, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $21,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distrib-

uted. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

During the year ended December 31, 2019, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $26,000.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2019, the Fund intends to defer to January 1, 2020 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	4	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 32.7%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-year period and the period since the middle of June 2018, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

25

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

26

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Adviser

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

28

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIRASAN
3184478 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

US Core Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	6
Statements of Changes in Net Assets	7
Financial Highlights	8
Notes to Financial Statements	12
Investment Advisory Agreement Approval	17
Liquidity Risk Management Program	19
Privacy Notice	20
Director and Officer Information	22

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in US Core Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

US Core Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
US Core Portfolio Class I	$	1,000.00	$	981.50	$	1,020.89	$	3.94	$	4.02		0.80	%
US Core Portfolio Class A		1,000.00		979.40		1,019.24		5.56		5.67		1.13
US Core Portfolio Class C		1,000.00		975.50		1,015.42		9.33		9.52		1.90
US Core Portfolio Class IS		1,000.00		981.50		1,021.13		3.70		3.77		0.75

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

US Core Portfolio

	Shares		Value (000)
Common Stocks (98.0%)
Banks (10.5%)
First Republic Bank		5,202	$	552
JPMorgan Chase & Co.		6,644		625
SVB Financial Group (a)		2,103		453
				1,630
Building Products (3.4%)
Fortune Brands Home & Security, Inc.		8,235		526
Capital Markets (5.5%)
Ameriprise Financial, Inc.		3,179		477
Charles Schwab Corp. (The)		7,591		256
S&P Global, Inc.		365		120
				853
Commercial Services & Supplies (0.9%)
Waste Management, Inc.		1,314		139
Electric Utilities (2.8%)
NextEra Energy, Inc.		1,778		427
Equity Real Estate Investment Trusts (REITs) (6.8%)
Essex Property Trust, Inc. REIT		2,174		498
STORE Capital Corp. REIT		13,203		314
Welltower, Inc. REIT		4,722		245
				1,057
Health Care Equipment & Supplies (6.5%)
Danaher Corp.		3,845		680
West Pharmaceutical Services, Inc.		1,429		325
				1,005
Health Care Providers & Services (3.6%)
Cigna Corp. (a)		2,945		553
Health Care Technology (2.3%)
Veeva Systems, Inc., Class A (a)		1,523		357
Hotels, Restaurants & Leisure (6.5%)
Domino's Pizza, Inc.		1,357		501
McDonald's Corp.		451		83
MGM Resorts International		4,962		83
Starbucks Corp.		4,518		333
				1,000
Household Durables (2.5%)
Lennar Corp., Class A		6,330		390
Information Technology Services (7.8%)
Euronet Worldwide, Inc. (a)		374		36
Mastercard, Inc., Class A		3,939		1,165
				1,201
Interactive Media & Services (2.7%)
Alphabet, Inc., Class A (a)		300		425
Oil, Gas & Consumable Fuels (1.2%)
Chevron Corp.		2,020		180
Personal Products (3.7%)
Estee Lauder Cos., Inc. (The), Class A		3,046		575

	Shares		Value (000)
Software (13.3%)
Adobe, Inc. (a)		424	$	184
Microsoft Corp.		9,197		1,872
				2,056
Specialty Retail (4.3%)
Home Depot, Inc. (The)		2,655		665
Tech Hardware, Storage & Peripherals (7.9%)
Apple, Inc.		3,366		1,228
Textiles, Apparel & Luxury Goods (3.8%)
Lululemon Athletica, Inc. (a)		1,896		592
Trading Companies & Distributors (2.0%)
United Rentals, Inc. (a)		2,071		309
Total Common Stocks (Cost $10,967)				15,168
Short-Term Investment (1.5%)
Investment Company (1.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $226)		226,251		226
Total Investments (99.5%) (Cost $11,193) (b)				15,394
Other Assets in Excess of Liabilities (0.5%)				70
Net Assets (100.0%)			$	15,464

(a)  Non-income producing security.

(b)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $4,589,000 and the aggregate gross unrealized depreciation is approximately $388,000, resulting in net unrealized appreciation of approximately $4,201,000.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		34.8	%
Software		13.4
Banks		10.6
Tech Hardware, Storage & Peripherals		8.0
Information Technology Services		7.8
Equity Real Estate Investment Trusts (REITs)		6.9
Health Care Equipment & Supplies		6.5
Hotels, Restaurants & Leisure		6.5
Capital Markets		5.5
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

US Core Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $10,967)	$	15,168
Investment in Security of Affiliated Issuer, at Value (Cost $226)		226
Total Investments in Securities, at Value (Cost $11,193)		15,394
Receivable for Investments Sold		47
Due from Adviser		32
Dividends Receivable		10
Receivable from Affiliate		—	@
Other Assets		68
Total Assets		15,551
Liabilities:
Payable for Investments Purchased		41
Payable for Professional Fees		38
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class C		2
Payable for Fund Shares Redeemed		2
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Custodian Fees		1
Payable for Administration Fees		1
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Other Liabilities		—	@
Total Liabilities		87
Net Assets	$	15,464
Net Assets Consist of:
Paid-in-Capital	$	11,739
Total Distributable Earnings		3,725
Net Assets	$	15,464
CLASS I:
Net Assets	$	9,605
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		669,992
Net Asset Value, Offering and Redemption Price Per Share	$	14.34
CLASS A:
Net Assets	$	3,673
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		257,267
Net Asset Value, Redemption Price Per Share	$	14.28
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.79
Maximum Offering Price Per Share	$	15.07
CLASS C:
Net Assets	$	2,171
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		155,621
Net Asset Value, Offering and Redemption Price Per Share	$	13.95
CLASS IS:
Net Assets	$	15
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,014
Net Asset Value, Offering and Redemption Price Per Share	$	14.34

@  Amount is less than $500

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

US Core Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers	$	124
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		125
Expenses:
Professional Fees		58
Advisory Fees (Note B)		49
Registration Fees		20
Shareholder Services Fees — Class A (Note D)		4
Distribution and Shareholder Services Fees — Class C (Note D)		11
Shareholder Reporting Fees		9
Administration Fees (Note C)		7
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Custodian Fees (Note F)		4
Directors' Fees and Expenses		3
Sub Transfer Agency Fees — Class I		2
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class C		1
Pricing Fees		1
Other Expenses		5
Total Expenses		179
Waiver of Advisory Fees (Note B)		(49	)
Expenses Reimbursed by Adviser (Note B)		(44	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		85
Net Investment Income		40
Realized Loss:
Investments Sold		(572	)
Change in Unrealized Appreciation (Depreciation):
Investments		(379	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(951	)
Net Decrease in Net Assets Resulting from Operations	$	(911	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

US Core Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	40		$	69
Net Realized Gain (Loss)		(572	)		263
Net Change in Unrealized Appreciation (Depreciation)		(379	)		3,862
Net Increase (Decrease) in Net Assets Resulting from Operations		(911	)		4,194
Dividends and Distributions to Shareholders:
Class I		—			(171	)
Class A		—			(30	)
Class C		—			(16	)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(217	)
Capital Share Transactions:(1)
Class I:
Subscribed		828			2,907
Distributions Reinvested		—			171
Redeemed		(3,607	)		(280	)
Class A:
Subscribed		1,158			1,732
Distributions Reinvested		—			30
Redeemed		(833	)		(872	)
Class C:
Subscribed		506			1,100
Distributions Reinvested		—			16
Redeemed		(661	)		(736	)
Class IS:
Subscribed		—			10
Distributions Reinvested		—			—	@
Redeemed		(10	)		—
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(2,619	)		4,078
Total Increase (Decrease) in Net Assets		(3,530	)		8,055
Net Assets:
Beginning of Period		18,994			10,939
End of Period	$	15,464		$	18,994
(1) Capital Share Transactions:
Class I:
Shares Subscribed		65			214
Shares Issued on Distributions Reinvested		—			12
Shares Redeemed		(290	)		(23	)
Net Increase (Decrease) in Class I Shares Outstanding		(225	)		203
Class A:
Shares Subscribed		84			132
Shares Issued on Distributions Reinvested		—			2
Shares Redeemed		(60	)		(70	)
Net Increase in Class A Shares Outstanding		24			64
Class C:
Shares Subscribed		37			84
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(55	)		(57	)
Net Increase (Decrease) in Class C Shares Outstanding		(18	)		28
Class IS:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(1	)		—
Net Increase (Decrease) in Class IS Shares Outstanding		(1	)		1

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

US Core Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	14.61		$	10.89		$	12.41		$	10.45		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.05			0.09			0.11			0.08			0.07
Net Realized and Unrealized Gain (Loss)		(0.32	)		3.82			(1.47	)		1.94			0.48
Total from Investment Operations		(0.27	)		3.91			(1.36	)		2.02			0.55
Distributions from and/or in Excess of:
Net Investment Income		—			(0.09	)		(0.05	)		(0.05	)		(0.10	)
Net Realized Gain		—			(0.10	)		(0.11	)		—			—
Paid-in-Capital		—			—			—			(0.01	)		—
Total Distributions		—			(0.19	)		(0.16	)		(0.06	)		(0.10	)
Net Asset Value, End of Period	$	14.34		$	14.61		$	10.89		$	12.41		$	10.45
Total Return(3)		(1.85	)%(6)		36.01	%		(11.00	)%		19.33	%		5.50	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9,605		$	13,086		$	7,532		$	8,965		$	7,314
Ratio of Expenses Before Expense Limitation		1.92	%(7)		2.09	%		2.31	%		2.78	%		3.62	%(7)
Ratio of Expenses After Expense Limitation		0.80	%(4)(7)		0.78	%(4)		0.80	%(4)		0.78	%(4)		0.77	%(4)(7)
Ratio of Net Investment Income		0.72	%(4)(7)		0.71	%(4)		0.86	%(4)		0.68	%(4)		1.12	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		23	%(6)		69	%		60	%		57	%		28	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

US Core Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	14.58		$	10.86		$	12.38		$	10.44		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.03			0.05			0.07			0.04			0.04
Net Realized and Unrealized Gain (Loss)		(0.33	)		3.82			(1.47	)		1.92			0.49
Total from Investment Operations		(0.30	)		3.87			(1.40	)		1.96			0.53
Distributions from and/or in Excess of:
Net Investment Income		—			(0.05	)		(0.01	)		(0.01	)		(0.09	)
Net Realized Gain		—			(0.10	)		(0.11	)		—			—
Paid-in-Capital		—			—			—			(0.01	)		—
Total Distributions		—			(0.15	)		(0.12	)		(0.02	)		(0.09	)
Net Asset Value, End of Period	$	14.28		$	14.58		$	10.86		$	12.38		$	10.44
Total Return(3)		(2.06	)%(6)		35.68	%		(11.35	)%		18.80	%		5.30	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,673		$	3,393		$	1,833		$	1,874		$	1,406
Ratio of Expenses Before Expense Limitation		2.29	%(7)		2.46	%		2.68	%		3.23	%		4.12	%(7)
Ratio of Expenses After Expense Limitation		1.13	%(4)(7)		1.15	%(4)		1.15	%(4)		1.15	%(4)		1.15	%(4)(7)
Ratio of Net Investment Income		0.39	%(4)(7)		0.34	%(4)		0.55	%(4)		0.31	%(4)		0.66	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		23	%(6)		69	%		60	%		57	%		28	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

US Core Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	14.30		$	10.70		$	12.28		$	10.41		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.02	)		(0.05	)		(0.03	)		(0.05	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		(0.33	)		3.75			(1.44	)		1.92			0.48
Total from Investment Operations		(0.35	)		3.70			(1.47	)		1.87			0.48
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.07	)
Net Realized Gain		—			(0.10	)		(0.11	)		—			—
Total Distributions		—			(0.10	)		(0.11	)		—			(0.07	)
Net Asset Value, End of Period	$	13.95		$	14.30		$	10.70		$	12.28		$	10.41
Total Return(4)		(2.45	)%(7)		34.50	%		(11.94	)%		17.96	%		4.79	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,171		$	2,489		$	1,563		$	1,831		$	1,377
Ratio of Expenses Before Expense Limitation		3.05	%(8)		3.23	%		3.44	%		3.94	%		4.99	%(8)
Ratio of Expenses After Expense Limitation		1.90	%(5)(8)		1.90	%(5)		1.90	%(5)		1.90	%(5)		1.90	%(5)(8)
Ratio of Net Investment Loss		(0.37	)%(5)(8)		(0.39	)%(5)		(0.22	)%(5)		(0.43	)%(5)		(0.05	)%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)(8)
Portfolio Turnover Rate		23	%(7)		69	%		60	%		57	%		28	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Loss reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

US Core Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,									Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	14.61		$	10.88		$	12.41		$	10.45		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.05			0.10			0.12			0.08			0.07
Net Realized and Unrealized Gain (Loss)		(0.32	)		3.83			(1.48	)		1.94			0.48
Total from Investment Operations		(0.27	)		3.93			(1.36	)		2.02			0.55
Distributions from and/or in Excess of:
Net Investment Income		—			(0.10	)		(0.06	)		(0.01	)		(0.10	)
Net Realized Gain		—			(0.10	)		(0.11	)		—			—
Paid-in-Capital		—			—			—			(0.05	)		—
Total Distributions		—			(0.20	)		(0.17	)		(0.06	)		(0.10	)
Net Asset Value, End of Period	$	14.34		$	14.61		$	10.88		$	12.41		$	10.45
Total Return(3)		(1.85	)%(6)		36.17	%		(11.04	)%		19.37	%		5.52	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	15		$	26		$	11		$	12		$	10
Ratio of Expenses Before Expense Limitation		12.69	%(7)		16.90	%		16.44	%		19.96	%		19.22	%(7)
Ratio of Expenses After Expense Limitation		0.75	%(4)(7)		0.75	%(4)		0.75	%(4)		0.75	%(4)		0.75	%(4)(7)
Ratio of Net Investment Income		0.79	%(4)(7)		0.74	%(4)		0.92	%(4)		0.71	%(4)		1.17	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		23	%(6)		69	%		60	%		57	%		28	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the US Core Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued

at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing

12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

service/vendor or exchange does not reflect the security's fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; and (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value

Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Banks	$	1,630	$	—	$	—	$	1,630
Building Products		526		—		—		526
Capital Markets		853		—		—		853
Commercial Services & Supplies		139		—		—		139
Electric Utilities		427		—		—		427
Equity Real Estate Investment Trusts (REITs)		1,057		—		—		1,057
Health Care Equipment & Supplies		1,005		—		—		1,005
Health Care Providers & Services		553		—		—		553
Health Care Technology		357		—		—		357
Hotels, Restaurants & Leisure		1,000		—		—		1,000
Household Durables		390		—		—		390
Information Technology Services		1,201		—		—		1,201
Interactive Media & Services		425		—		—		425
Oil, Gas & Consumable Fuels		180		—		—		180
Personal Products		575		—		—		575
Software		2,056		—		—		2,056
Specialty Retail		665		—		—		665
Tech Hardware, Storage & Peripherals		1,228		—		—		1,228
Textiles, Apparel & Luxury Goods		592		—		—		592
Trading Companies & Distributors		309		—		—		309
Total Common Stocks		15,168		—		—		15,168
Short-Term Investment
Investment Company		226		—		—		226
Total Assets	$	15,394	$	—	$	—	$	15,394

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

4.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment

income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

5.  Security Transactions, Income and Expenses:Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $750 million			Next $750 million			Over $1.5 billion
	0.60	%		0.55	%		0.50	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.80% for Class I shares, 1.15% for Class A shares, 1.90% for Class C shares and 0.75% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $49,000 of advisory fees were waived and

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

approximately $45,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $3,747,000 and $6,287,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	83	$	2,615	$	2,472	$	1

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	226

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	92	$	125	$	40	$	111

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	1	$	(1	)

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)			Undistributed Long-Term Capital Gain (000)
$	—	@	$	83

@ Amount is less than $500

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 51.9%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one year-ended period but below its peer group average for the three-year period and the period since the end of May 2016, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

19

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

20

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

22

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIUSCPSAN
3184443 EXP. 08.31.21

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

U.S. Real Estate Portfolio

Semi-Annual Report

June 30, 2020

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	17
Investment Advisory Agreement Approval	24
Liquidity Risk Management Program	26
Privacy Notice	27
Director and Officer Information	29

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are 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.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in U.S. Real Estate Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2020

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Expense Example (unaudited)

U.S. Real Estate Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services 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.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2020 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, 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 table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and 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 costs 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). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/20		Actual Ending Account Value 6/30/20		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
U.S. Real Estate Portfolio Class I	$	1,000.00	$	710.30	$	1,020.39	$	3.83	$	4.52		0.90	%
U.S. Real Estate Portfolio Class A		1,000.00		709.30		1,018.65		5.31		6.27		1.25
U.S. Real Estate Portfolio Class L		1,000.00		706.60		1,016.16		7.43		8.77		1.75
U.S. Real Estate Portfolio Class C		1,000.00		707.00		1,014.92		8.49		10.02		2.00
U.S. Real Estate Portfolio Class IS		1,000.00		710.50		1,020.74		3.53		4.17		0.83
U.S. Real Estate Portfolio Class IR		1,000.00		710.50		1,020.74		3.53		4.17		0.83

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 182/366 (to reflect the most recent one-half year period).

**  Annualized.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments

U.S. Real Estate Portfolio

	Shares		Value (000)
Common Stocks (99.5%)
Apartments (16.7%)
American Campus Communities, Inc. REIT		38,790	$	1,356
AvalonBay Communities, Inc. REIT		19,621		3,034
Camden Property Trust REIT		21,544		1,965
Equity Residential REIT		37,719		2,219
Essex Property Trust, Inc. REIT		5,189		1,189
Mid-America Apartment Communities, Inc. REIT		5,515		632
UDR, Inc. REIT		3,170		119
				10,514
Data Centers (4.4%)
Digital Realty Trust, Inc. REIT		16,160		2,296
QTS Realty Trust, Inc., Class A REIT		7,408		475
				2,771
Diversified (4.6%)
JBG SMITH Properties REIT		23,354		691
Mack-Cali Realty Corp. REIT		40,551		620
Vornado Realty Trust REIT		41,345		1,580
				2,891
Health Care (9.8%)
Five Star Senior Living, Inc. (a)		1,375		5
Healthcare Realty Trust, Inc. REIT		52,853		1,548
Healthcare Trust of America, Inc., Class A REIT		21,754		577
Healthpeak Properties, Inc. REIT		26,393		727
Ventas, Inc. REIT		68,973		2,526
Welltower, Inc. REIT		14,909		772
				6,155
Industrial (10.3%)
Duke Realty Corp. REIT		12,075		428
Exeter Industrial Value Fund, LP (a)(b)(c)		7,905,000		469
Lexington Realty Trust REIT		28,440		300
ProLogis, Inc. REIT		56,523		5,275
				6,472
Lodging/Resorts (7.2%)
DiamondRock Hospitality Co. REIT		49,364		273
Host Hotels & Resorts, Inc. REIT		251,432		2,713
RLJ Lodging Trust REIT		63,370		598
Sunstone Hotel Investors, Inc. REIT		117,798		960
				4,544
Manufactured Homes (0.2%)
Equity Lifestyle Properties, Inc. REIT		2,552		160
Office (22.6%)
Alexandria Real Estate Equities, Inc. REIT		6,029		978
Boston Properties, Inc. REIT		35,387		3,198
Cousins Properties, Inc. REIT		32,170		960
Highwoods Properties, Inc. REIT		6,620		247
Hudson Pacific Properties, Inc. REIT		76,504		1,925
Kilroy Realty Corp. REIT		18,835		1,106
Paramount Group, Inc. REIT		75,890		585
SL Green Realty Corp. REIT		105,886		5,219
				14,218

	Shares		Value (000)
Regional Malls (9.2%)
Macerich Co. (The) REIT		11,621	$	104
Simon Property Group, Inc. REIT		77,644		5,309
Taubman Centers, Inc. REIT		9,470		358
				5,771
Self Storage (5.8%)
CubeSmart REIT		40,001		1,080
Extra Space Storage, Inc. REIT		7,690		710
Life Storage, Inc. REIT		3,779		359
Public Storage REIT		7,959		1,527
				3,676
Shopping Centers (3.9%)
Brixmor Property Group, Inc. REIT		2,190		28
Regency Centers Corp. REIT		28,940		1,328
Weingarten Realty Investors REIT		59,960		1,135
				2,491
Single Family Homes (3.4%)
American Homes 4 Rent, Class A REIT		18,058		486
Invitation Homes, Inc. REIT		60,502		1,665
				2,151
Specialty (1.4%)
Gaming and Leisure Properties, Inc. REIT		25,052		867
Total Common Stocks (Cost $58,133)				62,681
Short-Term Investment (0.3%)
Investment Company (0.3%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $183)		183,490		183
Total Investments (99.8%) (Cost $58,316) (d)				62,864
Other Assets in Excess of Liabilities (0.2%)				95
Net Assets (100.0%)			$	62,959

(a)  Non-income producing security.

(b)  Restricted security valued at fair value and not registered under the Securities Act of 1933. Exeter Industrial Value Fund, LP was acquired between 11/07 - 4/11 and has a current cost basis of approximately $0. At June 30, 2020, this security had an aggregate market value of approximately $469,000, representing 0.7% of net assets.

(c)  At June 30, 2020, the Fund held a fair valued security valued at approximately $469,000, representing 0.7% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Company's (as defined herein) Directors.

(d)  At June 30, 2020, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $12,548,000 and the aggregate gross unrealized depreciation is approximately $8,000,000, resulting in net unrealized appreciation of approximately $4,548,000.

REIT  Real Estate Investment Trust.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

Portfolio of Investments (cont'd)

U.S. Real Estate Portfolio

Portfolio Composition

Classification	Percentage of Total Investments
Office		22.6	%
Other*		18.3
Apartments		16.7
Industrial		10.3
Health Care		9.8
Regional Malls		9.2
Lodging/Resorts		7.2
Self Storage		5.9
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

U.S. Real Estate Portfolio

Statement of Assets and Liabilities	June 30, 2020 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $58,133)	$	62,681
Investment in Security of Affiliated Issuer, at Value (Cost $183)		183
Total Investments in Securities, at Value (Cost $58,316)		62,864
Cash		14
Dividends Receivable		230
Receivable for Fund Shares Sold		11
Receivable from Affiliate		—	@
Other Assets		99
Total Assets		63,218
Liabilities:
Payable for Sub Transfer Agency Fees — Class I		63
Payable for Sub Transfer Agency Fees — Class A		8
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Advisory Fees		50
Payable for Professional Fees		40
Payable for Fund Shares Redeemed		29
Payable for Transfer Agency Fees — Class I		5
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		6
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Administration Fees		5
Payable for Shareholder Services Fees — Class A		4
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Custodian Fees		4
Other Liabilities		41
Total Liabilities		259
Net Assets	$	62,959
Net Assets Consist of:
Paid-in-Capital	$	72,684
Total Accumulated Loss		(9,725	)
Net Assets	$	62,959

The accompanying notes are an integral part of the financial statements.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

U.S. Real Estate Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2020 (000)
CLASS I:
Net Assets	$	50,100
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		6,448,292
Net Asset Value, Offering and Redemption Price Per Share	$	7.77
CLASS A:
Net Assets	$	10,003
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,351,911
Net Asset Value, Redemption Price Per Share	$	7.40
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.41
Maximum Offering Price Per Share	$	7.81
CLASS L:
Net Assets	$	1,512
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		204,689
Net Asset Value, Offering and Redemption Price Per Share	$	7.38
CLASS C:
Net Assets	$	178
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		24,227
Net Asset Value, Offering and Redemption Price Per Share	$	7.34
CLASS IS:
Net Assets	$	1,160
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		149,228
Net Asset Value, Offering and Redemption Price Per Share	$	7.77
CLASS IR:
Net Assets	$	6
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		795
Net Asset Value, Offering and Redemption Price Per Share	$	7.77

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020 (unaudited)

U.S. Real Estate Portfolio

Statement of Operations	Six Months Ended June 30, 2020 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers	$	1,974
Dividends from Security of Affiliated Issuer (Note G)		3
Total Investment Income		1,977
Expenses:
Advisory Fees (Note B)		419
Sub Transfer Agency Fees — Class I		76
Sub Transfer Agency Fees — Class A		19
Sub Transfer Agency Fees — Class L		1
Sub Transfer Agency Fees — Class C		—	@
Professional Fees		53
Administration Fees (Note C)		48
Shareholder Services Fees — Class A (Note D)		30
Distribution and Shareholder Services Fees — Class L (Note D)		6
Distribution and Shareholder Services Fees — Class C (Note D)		1
Registration Fees		35
Shareholder Reporting Fees		21
Transfer Agency Fees — Class I (Note E)		7
Transfer Agency Fees — Class A (Note E)		4
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		6
Transfer Agency Fees — Class IR (Note E)		1
Custodian Fees (Note F)		9
Pricing Fees		2
Directors' Fees and Expenses		—	@
Other Expenses		9
Total Expenses		750
Waiver of Advisory Fees (Note B)		(97	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(53	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(3	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(6	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		587
Net Investment Income		1,390
Realized Loss:
Investments Sold		(10,102	)
Change in Unrealized Appreciation (Depreciation):
Investments		(42,658	)
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		(52,760	)
Net Decrease in Net Assets Resulting from Operations	$	(51,370	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

U.S. Real Estate Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,390		$	4,955
Net Realized Gain (Loss)		(10,102	)		19,067
Net Change in Unrealized Appreciation (Depreciation)		(42,658	)		17,154
Net Increase (Decrease) in Net Assets Resulting from Operations		(51,370	)		41,176
Dividends and Distributions to Shareholders:
Class I		(828	)		(21,074	)
Class A		(217	)		(4,680	)
Class L		(12	)		(293	)
Class C		(1	)		(31	)
Class IS		(93	)		(1,835	)
Class IR		(—	@)		(1	)
Total Dividends and Distributions to Shareholders		(1,151	)		(27,914	)
Capital Share Transactions:(1)
Class I:
Subscribed		5,793			19,431
Distributions Reinvested		817			20,897
Redeemed		(53,274	)		(92,286	)
Class A:
Subscribed		1,608			5,250
Distributions Reinvested		216			4,645
Redeemed		(15,224	)		(13,017	)
Class L:
Exchanged		108			—
Distributions Reinvested		12			290
Redeemed		(150	)		(239	)
Class C:
Subscribed		31			56
Distributions Reinvested		1			31
Redeemed		(11	)		(205	)
Class IS:
Subscribed		453			1,331
Distributions Reinvested		93			1,835
Redeemed		(7,157	)		(23,192	)
Class IR:
Distributions Reinvested		—	@		1
Net Decrease in Net Assets Resulting from Capital Share Transactions		(66,684	)		(75,172	)
Total Decrease in Net Assets		(119,205	)		(61,910	)
Net Assets:
Beginning of Period		182,164			244,074
End of Period	$	62,959		$	182,164

The accompanying notes are an integral part of the financial statements.
9

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

U.S. Real Estate Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2020 (unaudited) (000)			Year Ended December 31, 2019 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		678			1,610
Shares Issued on Distributions Reinvested		127			1,882
Shares Redeemed		(6,528	)		(7,745	)
Net Decrease in Class I Shares Outstanding		(5,723	)		(4,253	)
Class A:
Shares Subscribed		196			454
Shares Issued on Distributions Reinvested		35			440
Shares Redeemed		(1,967	)		(1,127	)
Net Decrease in Class A Shares Outstanding		(1,736	)		(233	)
Class L:
Shares Exchanged		14			—
Shares Issued on Distributions Reinvested		2			28
Shares Redeemed		(16	)		(21	)
Net Increase (Decrease) in Class L Shares Outstanding		(—	@@)		7
Class C:
Shares Subscribed		3			4
Shares Issued on Distributions Reinvested		—	@@		3
Shares Redeemed		(1	)		(18	)
Net Increase (Decrease) in Class C Shares Outstanding		2			(11	)
Class IS:
Shares Subscribed		49			110
Shares Issued on Distributions Reinvested		15			164
Shares Redeemed		(1,025	)		(1,893	)
Net Decrease in Class IS Shares Outstanding		(961	)		(1,619	)
Class IR:
Shares Issued on Distributions Reinvested		—	@@		—	@@

@  Amount is less than $500.

@@  Amount is less than 500 shares.

The accompanying notes are an integral part of the financial statements.
10

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

U.S. Real Estate Portfolio

	Class I
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	11.08		$	10.82		$	15.24		$	17.21		$	17.86		$	20.48
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.11			0.26			0.34			0.37			0.31			0.32
Net Realized and Unrealized Gain (Loss)		(3.34	)		1.69			(1.33	)		0.16			0.91			0.10
Total from Investment Operations		(3.23	)		1.95			(0.99	)		0.53			1.22			0.42
Distributions from and/or in Excess of:
Net Investment Income		(0.08	)		(0.40	)		(0.34	)		(0.26	)		(0.38	)		(0.26	)
Net Realized Gain		—			(1.29	)		(3.09	)		(2.24	)		(1.49	)		(2.78	)
Total Distributions		(0.08	)		(1.69	)		(3.43	)		(2.50	)		(1.87	)		(3.04	)
Net Asset Value, End of Period	$	7.77		$	11.08		$	10.82		$	15.24		$	17.21		$	17.86
Total Return(3)		(28.97	)%(7)		18.40	%		(8.44	)%		3.31	%		6.79	%		2.27	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	50,100		$	134,856		$	177,690		$	331,637		$	494,967		$	625,999
Ratio of Expenses Before Expense Limitation		1.19	%(8)		1.02	%		1.02	%		1.02	%		1.02	%		N/A
Ratio of Expenses After Expense Limitation		0.90	%(4)(8)		0.90	%(4)		0.95	%(4)(5)		1.00	%(4)		1.00	%(4)		0.98	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			N/A			0.95	%(4)		1.00	%(4)		N/A			0.98	%(4)
Ratio of Net Investment Income		2.44	%(4)(8)		2.18	%(4)		2.44	%(4)		2.19	%(4)		1.73	%(4)		1.61	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		15	%(7)		21	%		39	%		43	%		24	%		24	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.90% for Class I shares. Prior to July 1, 2018, the maximum ratio was 1.00% for Class I shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
11

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

U.S. Real Estate Portfolio

	Class A
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	10.56		$	10.38		$	14.76		$	16.74		$	17.42		$	20.04
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.08			0.22			0.29			0.31			0.24			0.28
Net Realized and Unrealized Gain (Loss)		(3.17	)		1.61			(1.28	)		0.15			0.89			0.08
Total from Investment Operations		(3.09	)		1.83			(0.99	)		0.46			1.13			0.36
Distributions from and/or in Excess of:
Net Investment Income		(0.07	)		(0.36	)		(0.30	)		(0.20	)		(0.32	)		(0.20	)
Net Realized Gain		—			(1.29	)		(3.09	)		(2.24	)		(1.49	)		(2.78	)
Total Distributions		(0.07	)		(1.65	)		(3.39	)		(2.44	)		(1.81	)		(2.98	)
Net Asset Value, End of Period	$	7.40		$	10.56		$	10.38		$	14.76		$	16.74		$	17.42
Total Return(3)		(29.07	)%(7)		18.02	%		(8.71	)%		2.98	%		6.47	%		2.01	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10,003		$	32,596		$	34,459		$	55,640		$	76,082		$	87,462
Ratio of Expenses Before Expense Limitation		1.44	%(8)		1.31	%		1.30	%		N/A			1.30	%		N/A
Ratio of Expenses After Expense Limitation		1.25	%(4)(8)		1.22	%(4)		1.26	%(4)(5)		1.34	%(4)		1.29	%(4)		1.28	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			N/A			1.26	%(4)		1.34	%(4)		N/A			1.28	%(4)
Ratio of Net Investment Income		1.78	%(4)(8)		1.91	%(4)		2.14	%(4)		1.87	%(4)		1.37	%(4)		1.43	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		15	%(7)		21	%		39	%		43	%		24	%		24	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class A shares. Prior to July 1, 2018, the maximum ratio was 1.35% for Class A shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

U.S. Real Estate Portfolio

	Class L
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	10.55		$	10.37		$	14.74		$	16.73		$	17.41		$	20.03
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.06			0.16			0.23			0.22			0.15			0.21
Net Realized and Unrealized Gain (Loss)		(3.17	)		1.61			(1.28	)		0.15			0.89			0.04
Total from Investment Operations		(3.11	)		1.77			(1.05	)		0.37			1.04			0.25
Distributions from and/or in Excess of:
Net Investment Income		(0.06	)		(0.30	)		(0.23	)		(0.12	)		(0.23	)		(0.09	)
Net Realized Gain		—			(1.29	)		(3.09	)		(2.24	)		(1.49	)		(2.78	)
Total Distributions		(0.06	)		(1.59	)		(3.32	)		(2.36	)		(1.72	)		(2.87	)
Net Asset Value, End of Period	$	7.38		$	10.55		$	10.37		$	14.74		$	16.73		$	17.41
Total Return(3)		(29.34	)%(7)		17.43	%		(9.16	)%		2.37	%		5.91	%		1.44	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,512		$	2,164		$	2,057		$	2,787		$	3,471		$	3,993
Ratio of Expenses Before Expense Limitation		2.02	%(8)		1.88	%		1.84	%		1.89	%		1.84	%		N/A
Ratio of Expenses After Expense Limitation		1.75	%(4)(8)		1.75	%(4)		1.79	%(4)(5)		1.85	%(4)		1.84	%(4)		1.82	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			N/A			1.79	%(4)		1.85	%(4)		N/A			1.81	%(4)
Ratio of Net Investment Income		1.51	%(4)(8)		1.42	%(4)		1.71	%(4)		1.37	%(4)		0.84	%(4)		1.08	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		15	%(7)		21	%		39	%		43	%		24	%		24	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.75% for Class L shares. Prior to July 1, 2018, the maximum ratio was 1.85% for Class L shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

U.S. Real Estate Portfolio

	Class C
	Six Months Ended June 30, 2020			Year Ended December 31,												Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	10.48		$	10.31		$	14.68		$	16.67		$	17.36		$	19.73
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.05			0.14			0.19			0.20			0.13			0.18
Net Realized and Unrealized Gain (Loss)		(3.13	)		1.59			(1.29	)		0.13			0.87			0.31
Total from Investment Operations		(3.08	)		1.73			(1.10	)		0.33			1.00			0.49
Distributions from and/or in Excess of:
Net Investment Income		(0.06	)		(0.27	)		(0.18	)		(0.08	)		(0.20	)		(0.08	)
Net Realized Gain		—			(1.29	)		(3.09	)		(2.24	)		(1.49	)		(2.78	)
Total Distributions		(0.06	)		(1.56	)		(3.27	)		(2.32	)		(1.69	)		(2.86	)
Net Asset Value, End of Period	$	7.34		$	10.48		$	10.31		$	14.68		$	16.67		$	17.36
Total Return(4)		(29.30	)%(8)		17.07	%		(9.47	)%		2.14	%		5.72	%		2.70	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	178		$	232		$	338		$	486		$	427		$	91
Ratio of Expenses Before Expense Limitation		3.21	%(9)		2.92	%		2.75	%		2.46	%		3.13	%		5.89	%(9)
Ratio of Expenses After Expense Limitation		2.00	%(5)(9)		2.00	%(5)		2.05	%(5)(6)		2.10	%(5)		2.10	%(5)		2.10	%(5)(9)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			N/A			2.05	%(5)		2.10	%(5)		N/A			2.10	%(5)(9)
Ratio of Net Investment Income		1.28	%(5)(9)		1.18	%(5)		1.39	%(5)		1.21	%(5)		0.73	%(5)		1.44	%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		15	%(8)		21	%		39	%		43	%		24	%		24	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(6)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.00% for Class C shares. Prior to July 1, 2018, the maximum ratio was 2.10% for Class C shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

The accompanying notes are an integral part of the financial statements.
14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

U.S. Real Estate Portfolio

	Class IS
	Six Months Ended June 30, 2020			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2019			2018			2017			2016(1)			2015
Net Asset Value, Beginning of Period	$	11.08		$	10.82		$	15.24		$	17.22		$	17.86		$	20.48
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.13			0.25			0.28			0.39			0.33			0.36
Net Realized and Unrealized Gain (Loss)		(3.36	)		1.71			(1.26	)		0.14			0.92			0.08
Total from Investment Operations		(3.23	)		1.96			(0.98	)		0.53			1.25			0.44
Distributions from and/or in Excess of:
Net Investment Income		(0.08	)		(0.41	)		(0.35	)		(0.27	)		(0.40	)		(0.28	)
Net Realized Gain		—			(1.29	)		(3.09	)		(2.24	)		(1.49	)		(2.78	)
Total Distributions		(0.08	)		(1.70	)		(3.44	)		(2.51	)		(1.89	)		(3.06	)
Net Asset Value, End of Period	$	7.77		$	11.08		$	10.82		$	15.24		$	17.22		$	17.86
Total Return(3)		(28.95	)%(7)		18.48	%		(8.36	)%		3.32	%		6.96	%		2.36	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,160		$	12,307		$	29,523		$	196,536		$	195,490		$	141,670
Ratio of Expenses Before Expense Limitation		1.16	%(8)		1.04	%		0.97	%		N/A			0.90	%		0.90	%
Ratio of Expenses After Expense Limitation		0.83	%(4)(8)		0.83	%(4)		0.91	%(4)(5)		0.93	%(4)		0.89	%(4)		0.90	%(4)
Ratio of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			N/A			0.91	%(4)		0.93	%(4)		N/A			0.90	%(4)
Ratio of Net Investment Income		2.90	%(4)(8)		2.09	%(4)		1.98	%(4)		2.33	%(4)		1.79	%(4)		1.81	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		15	%(7)		21	%		39	%		43	%		24	%		24	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.83% for Class IS shares. Prior to July 1, 2018, the maximum ratio was 0.93% for Class IS shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Financial Highlights

U.S. Real Estate Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2020 (unaudited)			Year Ended December 31, 2019			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	11.08		$	10.82		$	14.74
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.11			0.33			0.43
Net Realized and Unrealized Gain (Loss)		(3.34	)		1.63			(0.98	)
Total from Investment Operations		(3.23	)		1.96			(0.55	)
Distributions from and/or in Excess of:
Net Investment Income		(0.08	)		(0.41	)		(0.28	)
Net Realized Gain		—			(1.29	)		(3.09	)
Total Distributions		(0.08	)		(1.70	)		(3.37	)
Net Asset Value, End of Period	$	7.77		$	11.08		$	10.82
Total Return(3)		(28.95	)%(7)		18.48	%		(5.73	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	6		$	9		$	7
Ratio of Expenses Before Expense Limitation		26.97	%(8)		23.80	%		19.12	%(8)
Ratio of Expenses After Expense Limitation		0.83	%(4)(8)		0.83	%(4)		0.84	%(4)(5)(8)
Ratios of Expenses After Expense Limitation Excluding Non-Operating Expenses		N/A			N/A			0.84	%(4)(8)
Ratio of Net Investment Income		2.42	%(4)(8)		2.70	%(4)		4.23	%(4)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)(8)
Portfolio Turnover Rate		15	%(7)		21	%		39	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratio of Expenses After Expense Limitation and Ratio of Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.83% for Class IR shares. Prior to July 1, 2018, the maximum ratio was 0.93% for Class IR shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the financial statements.
16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited)

Morgan Stanley Institutional Fund, Inc. (the "Company") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Company is comprised of thirty-four separate, active, diversified and non-diversified funds (individually referred to as a "Fund," collectively as the "Funds"). The Company applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the U.S. Real Estate Portfolio. The Fund seeks to provide above average current income and long-term capital appreciation by investing primarily in equity securities of companies in the U.S. real estate industry, including real estate investment trusts ("REITs"). The Fund has a capital subscription commitment to an investee company for this same purpose, the details of which are disclosed in the Unfunded Commitments note.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price

if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the "Adviser"), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security's

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of 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 Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("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 Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Fund invests a significant portion of its assets in securities of REITs. The market's perception of prospective declines in private real estate values and other financial assets may result in increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Fund.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

•  Level 1 – unadjusted 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 the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2020:

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Apartments	$	10,514	$	—	$	—	$	10,514
Data Centers		2,771		—		—		2,771
Diversified		2,891		—		—		2,891
Health Care		6,155		—		—		6,155
Industrial		6,003		—		469		6,472
Lodging/Resorts		4,544		—		—		4,544
Manufactured Homes		160		—		—		160
Office		14,218		—		—		14,218
Regional Malls		5,771		—		—		5,771
Self Storage		3,676		—		—		3,676
Shopping Centers		2,491		—		—		2,491
Single Family Homes		2,151		—		—		2,151
Specialty		867		—		—		867
Total Common Stocks		62,212		—		469		62,681
Short-Term Investment
Investment Company		183		—		—		183
Total Assets	$	62,395	$	—	$	469	$	62,864

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

	Common Stock (000)
Beginning Balance	$	546
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		(77	)
Realized gains (losses)		—
Ending Balance	$	469
Net change in unrealized depreciation from investments still held as of June 30, 2020	$	(77	)

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2020:

	Fair Value at June 30, 2020 (000)		Valuation Technique	Unobservable Input
CommonStock	$	469	Reported Capital balance, adjustments for NAV practical expedient; including adjustments for subsequent Capital Calls, Return of Capital and Significant Market Changes between last Capital Statement and Valuation Date	Adjusted Capital Balance

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

–  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

–  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

4.  Unfunded Commitments: Subject to the terms of a Subscription Agreement between the Fund and Exeter Industrial Value Fund LP, the Fund has made a subscription commitment of $8,500,000 for which it will receive 8,500,000 shares of common stock. As of June 30, 2020, Exeter Industrial Value Fund LP has drawn down approximately $7,905,000, which represents 93.0% of the commitment.

5.  Restricted Securities: The Fund invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale.

As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund can sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

6.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid quarterly. Net realized capital gains, if any, are distributed at least annually.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

The Fund owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.70	%		0.65	%		0.60	%

For the six months ended June 30, 2020, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.54% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual Fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.90% for Class I shares, 1.25% for Class A shares, 1.75% for Class L shares, 2.00% for Class C shares, 0.83% for Class IS shares and 0.83% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2020, approximately $97,000 of advisory fees were waived and approximately $65,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

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

D. Distribution and Shareholder Services Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser and an indirect subsidiary of Morgan Stanley, serves as the Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2020, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $17,599,000 and $82,398,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2020.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2020, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2020 is as follows:

Affiliated Investment Company	Value December 31, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	1,251	$	13,972	$	15,040	$	3

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2020 (000)
Liquidity Funds	$	—	$	—	$	183

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2020, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director 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 NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, "Income Taxes — Overall", 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. Management has concluded there are no significant uncertain tax positions that would require recognition in the 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. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2019 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2019 and 2018 was as follows:

2019 Distributions Paid From:				2018 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	6,211	$	21,703	$	9,631	$	63,103

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Notes to Financial Statements (unaudited) (cont'd)

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2019:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(4,546	)	$	4,546

At December 31, 2019, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	—	$	19

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2020, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2020, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 49.0%.

K. Subsequent Event: Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak could impact the operations and financial performance of certain of the Fund's investments. The extent of the impact to the financial performance of the Fund's Investments will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted. If the financial performance of the Fund's Investments is impacted because of these factors for an extended period, the Fund's investment results may be adversely affected.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the advisory and administrative services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2019, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was below its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and the total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and/or potential economies of scale of the Fund supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

As part of the Board's review, the Board received information from management on the impact of COVID-19 on the firm generally and the Adviser and the Fund in particular including, among other information, the pandemic's current and expected impact on the Fund's performance and operations.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Liquidity Risk Management Program (unaudited)

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), the Fund has adopted and implemented a liquidity risk management program (the "Program"), which is reasonably designed to assess and manage the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors' interests in the Fund (i.e., liquidity risk). The Fund's Board of Directors (the "Board") previously approved the designation of the Liquidity Risk Subcommittee (the "LRS") as Program administrator. The LRS is comprised of representatives from various divisions within Morgan Stanley Investment Management.

At a meeting held on April 22-23, 2020, the Board reviewed a written report prepared by the LRS that addressed the Program's operation and assessed its adequacy, and effectiveness of implementation for the period from December 1, 2018, through December 31, 2019, as required under the Liquidity Rule. The report concluded that the Program operated effectively and was adequately and effectively implemented in all material aspects, and that the relevant controls and safeguards were appropriately designed to enable the LRS to administer the Program in compliance with the Liquidity Rule.

In accordance with the Program, the LRS assessed each Fund's liquidity risk no less frequently than annually taking into consideration certain factors, as applicable, such as (i) investment strategy and liquidity of portfolio investments, (ii) short-term and long-term cash flow projections and (iii) holdings of cash and cash equivalents and borrowing arrangements and other funding sources. Certain factors are considered under both normal and reasonably foreseeable stressed conditions.

Each Fund portfolio investment is classified into one of four liquidity categories, which classification is assessed at least monthly by the LRS. The classification is based on a determination of the number of days it is reasonably expected to take to convert the investment into cash, or sell or dispose of the investment, in current market conditions without significantly changing the market value of the investment. Liquidity classification determinations take into account various market, trading and investment-specific considerations, as well as market depth, and in some cases utilize third-party vendor data.

The Liquidity Rule limits a fund's investments in illiquid investments to 15% of its net assets and requires funds that do not primarily hold assets that are highly liquid investments to determine and maintain a minimum percentage of the fund's net assets to be invested in highly liquid investments (highly liquid investment minimum or "HLIM"). The LRS believes that the Program includes provisions reasonably designed to review, monitor and comply with the 15% limit on illiquid investments and for determining, periodically reviewing and complying with the HLIM requirement, as applicable.

There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other risks to which it may be subject.

26

Privacy Notice (unaudited)  April 2019

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

27

Privacy Notice (unaudited) (cont'd)  April 2019

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. n Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. n MSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. n MSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2020

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
W. Allen Reed, Chair of the Board

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Perkins Coie LLP
1155 Avenue of the Americas,
22nd Floor
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and 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 Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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 website. However, the holdings for each money market fund are posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

29

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

© 2020 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIUSREASAN
3182157 EXP. 08.31.21

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.

(a) Refer to Item 1.

(b) Not applicable.

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

Not applicable.

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

Applicable only to annual 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

There have been no material changes to the procedures by which shareholders may recommend nominee to the Fund’s Board of Directors since the Fund last provided disclosure in response to this item.

Item 11. Controls and Procedures

(a)  The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the registrant 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 most recent fiscal half-year 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. Disclosure of Securities Lending Activities for Closed End Management Investment Companies.

Not Applicable.

Item 13. 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.

(c) Certification pursuant to Section 906 of the Sarbanes-Oxley Act.

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 Institutional Fund, Inc.

/s/ John H. Gernon

John H. Gernon

Principal Executive Officer

August 13, 2020

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/ John H. Gernon

John H. Gernon

Principal Executive Officer

August 13, 2020

/s/ Francis Smith

Francis Smith

Principal Financial Officer

August 13, 2020