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: 811-06515 Morgan Stanley Flexible Income Trust (Exact name of registrant as specified in charter) 1221 Avenue of the Americas, New York, New York 10020 (Address of principal executive offices) (Zip code) Ronald E. Robison 1221 Avenue of the Americas, New York, New York 10020 (Name and address of agent for service) Registrant's telephone number, including area code: 212-762-4000 Date of fiscal year end: October 31, 2005 Date of reporting period: April 30, 2005 Item 1 - Report to Shareholders
Welcome, Shareholder:
In this report, you'll learn about how your investment in Morgan Stanley Flexible Income Trust performed during the semiannual period. We will provide an overview of the market conditions, and discuss some of the factors that affected performance during the reporting period. In addition, this report includes the Fund's financial statements and a list of Fund investments.
![]() | This material must be preceded or accompanied by a prospectus for the fund being offered. |
![]() | Market forecasts provided in this report may not necessarily come to pass. There is no assurance that the Fund will achieve its investment objective. The Fund is subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks. |
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![]() | Fund Report |
![]() | For the six-month period ended April 30, 2005 |
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Total Return for the Six Months Ended April 30, 2005
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Class A | ![]() | ![]() | ![]() | Class B | ![]() | ![]() | ![]() | Class C | ![]() | ![]() | ![]() | Class D | ![]() | ![]() | ![]() | Lehman Brothers Intermediate U.S. Gov't./ Credit Index1 | ![]() | ![]() | ![]() | Lipper Multi-Sector Income Funds Index2 | ||||||||||||
1.39% | ![]() | ![]() | ![]() | 1.02 | % | ![]() | ![]() | ![]() | 1.02 | % | ![]() | ![]() | ![]() | 1.61 | % | ![]() | ![]() | ![]() | 0.03 | % | ![]() | ![]() | ![]() | 1.53 | % | |||||||
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The performance of the Fund's four share classes varies because each has different expenses. The Fund's total returns assume the reinvestment of all distributions but do not reflect the deduction of any applicable sales charges. Such costs would lower performance. See Performance Summary for standardized performance and benchmark information. |
Market Conditions
As the reporting period began, investor anxiety about economic softness was abating. In November, an increase in the federal funds rate (the fourth of 2004) and a surprisingly strong gain in non-farm payrolls combined with unexpectedly robust increases in producer and consumer price indices to push rates higher. Throughout the period, the Federal Open Market Committee (the Fed) continued to raise the federal funds rate, to 2.75 percent at the end of the reporting period. As the Fed indicated that the prevailing rate was still well below its equilibrium level, the market anticipated additional increases.
Against this backdrop, the yield curve continued to flatten, with much of the change occurring in the first three months of 2005. Short- and intermediate-term yields rose across the U.S. Treasury curve, while longer-term yields declined.
Performance among U.S. government and mortgage sectors varied during the period. Treasuries and agencies posted the least impressive performance among the major fixed-income sectors, due to their relative lack of yield and greater sensitivity to changes in interest rates. Higher coupon mortgage-backed securities, which tend to be less sensitive to rising interest rates, outperformed their lower-coupon peers during the period.
Generally, corporate issues performed well due to investors' desire for higher-yielding securities. Nevertheless, corporate yield spreads widened during the first four months of the year, most notably within the auto sector.
Continued positive fundamentals and low default rates helped high-yield bonds close 2004 on a positive note, with CCC-rated issues outperforming BB- and B-rated issues. In contrast to the first half of the period, the lower-rated segment of the high-yield market underperformed higher-rated securities.
Performance Analysis
Morgan Stanley Flexible Income Trust outperformed the Lehman Brothers Intermediate U.S. Government/Credit Index for the six months ended April 30, 2005, assuming no deduction of applicable sales charges. For the same period, the Fund's A, B and C shares underperformed the Lipper Multi-Sector Income Index while its D shares slightly outperformed the Lipper Index, again assuming no deduction of applicable sales charges.
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The Fund's mortgage position had a positive impact on performance relative to Lehman Brothers Intermediate U.S. Government/Credit Index. The Fund's emphasis on higher-coupon, slow-prepaying mortgage issues benefited the Fund as rates rose during the bulk of the period. Due in part to this focus, the Fund was less susceptible to market volatility as interest rates rose.
Within the corporate sector, the Fund benefited from its positions in insurance company debt, which outperformed during the period. Strong security selection in the paper and energy sectors also helped overall performance. During the later part of the period, a focus on medium-rated issues benefited performance as lower quality bonds underperformed. Additionally, a neutral weighting in the auto sector benefited relative performance as spreads within the sector widened.
The Fund's performance was hindered by its allocation to high-yield and emerging markets debt. These sectors underperformed other investment-grade credits during the latter part of the period.
We kept the Fund's overall interest-rate exposure well below that of its benchmark during the period. This positioning was advantageous as interest rates rose across the short- and intermediate-portions of the curve. However, we note that during period of rate declines, this strategy may hinder relative performance.
There is no guarantee that any sectors mentioned will continue to perform well or be held by the Fund in the future. |
Investment Strategy
The Fund will normally invest at least 80 percent of its assets in a portfolio of fixed-income securities. The Fund's "Investment Adviser," Morgan Stanley Investment Advisors Inc., will allocate the Fund's securities investments among the following asset classes or market segments: (1) investment grade global securities, (2) mortgage-backed securities and U.S. government securities, (3) high yield securities and (4) emerging market securities. The amount of the Fund's assets committed to any one asset class or market segment will fluctuate and there are no percentage limitations with respect to the amount of the Fund's assets that may be invested in any such asset class or market segment other than those relating to high yield and emerging market debt securities. The Investment Adviser has the flexibility to select any combination of the aforementioned groups depending upon market conditions and the current economic environment and, as a result, at any given time the Fund's assets may be invested in certain groups and not others.
For More Information About Portfolio Holdings
Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semiannual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semiannual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semiannual and annual reports to fund shareholders
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PORTFOLIO COMPOSITION | ![]() | |||||
Corporate Bonds | ![]() | 35.5 | % | |||
U.S. Government Agencies and Obligations | ![]() | 33.5 | ||||
Foreign Bonds | ![]() | 22.2 | ||||
Short-Term Investments | ![]() | 7.5 | ||||
Other Securities | ![]() | 1.3 | ||||
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LONG-TERM CREDIT ANALYSIS | ![]() | |||||
AAA | ![]() | 38.5 | % | |||
AA | ![]() | 4.3 | ||||
A | ![]() | 3.2 | ||||
BBB | ![]() | 12.5 | ||||
BB | ![]() | 15.9 | ||||
B | ![]() | 24.6 | ||||
NR | ![]() | 1.0 | ||||
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Data as of April 30, 2005. Subject to change daily. All percentages for portfolio composition are as a percentage of total investments. All percentages for long-term credit analysis are for total long-term investments. These data are provided for informational purposes only and should not be deemed a recommendation to buy or sell the securities mentioned. Morgan Stanley is a full-service securities firm engaged in securities trading and brokerage activities, investment banking, research and analysis, financing and financial advisory services. |
and makes these reports available on its public Web site, www.morganstanley.com. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public Web site. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's Web site, http://www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC at (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's e-mail address (publicinfo@sec.gov) or by writing the Public Reference section of the SEC, Washington, DC 20549-0102.
Proxy Voting Policies and Procedures
A description of (1) the Fund's policies and procedures with respect to the voting of proxies relating to the Fund's portfolio securities and (2) how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, 2004, is available without charge, by visiting the Mutual Fund Center on our Web site at www.morganstanley.com. This information is also available on the Securities and Exchange Commission's Web site at http://www.sec.gov.
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Householding Notice
To reduce printing and mailing costs, the Fund attempts to eliminate duplicate mailings to the same address. The Fund delivers a single copy of certain shareholder documents, including shareholder reports, prospectuses and proxy materials, to investors with the same last name who reside at the same address. Your participation in this program will continue for an unlimited period of time unless you instruct us otherwise. You can request multiple copies of these documents by calling (800) 350-6414, 8:00 A.M. to 8:00 P.M., ET. Once our Customer Service Center has received your instructions, we will begin sending individual copies for each account within 30 days.
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![]() | Performance Summary |
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Average Annual Total Returns — Period Ended April 30, 2005
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![]() | ![]() | ![]() | Class A Shares* (since 07/28/97) | ![]() | ![]() | ![]() | Class B Shares** (since 04/09/92) | ![]() | ![]() | ![]() | Class C Shares† (since 07/28/97) | ![]() | ![]() | ![]() | Class D Shares†† (since 07/28/97) | |||||||||||
Symbol | ![]() | ![]() | ![]() | DINAX | ![]() | ![]() | ![]() | DINBX | ![]() | ![]() | ![]() | DINCX | ![]() | ![]() | ![]() | DINDX | ||||||||||
1 Year | ![]() | ![]() | ![]() | 6.89% | 3 | ![]() | ![]() | ![]() | 6.18% | 3 | ![]() | ![]() | ![]() | 6.19% | 3 | ![]() | ![]() | ![]() | 7.24% | 3 | ||||||
![]() | ![]() | ![]() | 2.35 | 4 | ![]() | ![]() | ![]() | 1.21 | 4 | ![]() | ![]() | ![]() | 5.20 | 4 | ![]() | ![]() | ![]() | — | ||||||||
5 Years | ![]() | ![]() | ![]() | 3.23 | 3 | ![]() | ![]() | ![]() | 2.58 | 3 | ![]() | ![]() | ![]() | 2.59 | 3 | ![]() | ![]() | ![]() | 3.46 | 3 | ||||||
![]() | ![]() | ![]() | 2.34 | 4 | ![]() | ![]() | ![]() | 2.29 | 4 | ![]() | ![]() | ![]() | 2.59 | 4 | ![]() | ![]() | ![]() | — | ||||||||
10 Years | ![]() | ![]() | ![]() | — | ![]() | ![]() | ![]() | 3.21 | 3 | ![]() | ![]() | ![]() | — | ![]() | ![]() | ![]() | — | |||||||||
![]() | ![]() | ![]() | — | ![]() | ![]() | ![]() | 3.21 | 4 | ![]() | ![]() | ![]() | — | ![]() | ![]() | ![]() | — | ||||||||||
Since Inception | ![]() | ![]() | ![]() | 2.47 | 3 | ![]() | ![]() | ![]() | 3.86 | 3 | ![]() | ![]() | ![]() | 1.82 | 3 | ![]() | ![]() | ![]() | 2.72 | 3 | ||||||
![]() | ![]() | ![]() | 1.90 | 4 | ![]() | ![]() | ![]() | 3.86 | 4 | ![]() | ![]() | ![]() | 1.82 | 4 | ![]() | ![]() | ![]() | — | ||||||||
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![]() | Performance data quoted represents past performance, which is no guarantee of future results and current performance may be lower or higher than the figures shown. For the most recent month-end performance figures, please visit morganstanley.com or speak with your financial advisor. Investment returns and principal value will fluctuate and fund shares, when redeemed, may be worth more or less than their original cost. The table does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Performance for Class A, Class B, Class C, and Class D shares will vary due to differences in sales charges and expenses. |
![]() | * | The maximum front-end sales charge for Class A is 4.25%. |
![]() | ** | The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%. The CDSC declines to 0% after six years. |
![]() | † | The maximum contingent deferred sales charge for Class C is 1.0% for shares redeemed within one year of purchase. |
![]() | †† | Class D has no sales charge. |
![]() | (1) | The Lehman Brothers Intermediate U.S. Government/Credit Index tracks the performance of government and corporate obligations, including U.S. government agency and Treasury securities, and corporate and Yankee bonds with maturities of 1 to 10 years. Indexes are unmanaged and their returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index. |
![]() | (2) | The Lipper Multi-Sector Income Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Multi-Sector Income Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index. |
![]() | (3) | Figure shown assumes reinvestment of all distributions and does not reflect the deduction of any sales charges. |
![]() | (4) | Figure shown assumes reinvestment of all distributions and the deduction of the maximum applicable sales charge. See the Fund's current prospectus for complete details on fees and sales charges. |
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![]() | Expense Example |
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As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period 11/01/04 – 04/30/05.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing cost of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs, and will not help you determine the relative total cost of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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![]() | BEGINNING ACCOUNT VALUE | ![]() | ENDING ACCOUNT VALUE | ![]() | EXPENSES PAID DURING PERIOD* | |||||||||
![]() | 11/01/04 | ![]() | 04/30/05 | ![]() | 11/01/04- 04/30/05 | |||||||||
Class A | ![]() | ![]() | ![]() | |||||||||||
Actual (1.39% return) | ![]() | $ | 1,000.00 | ![]() | $ | 1,013.90 | ![]() | $ | 4.09 | |||||
Hypothetical (5% annual return before expenses) | ![]() | $ | 1,000.00 | ![]() | $ | 1,020.73 | ![]() | $ | 4.11 | |||||
Class B | ![]() | ![]() | ![]() | |||||||||||
Actual (1.02% return) | ![]() | $ | 1,000.00 | ![]() | $ | 1,010.20 | ![]() | $ | 7.63 | |||||
Hypothetical (5% annual return before expenses) | ![]() | $ | 1,000.00 | ![]() | $ | 1,017.21 | ![]() | $ | 7.65 | |||||
Class C | ![]() | ![]() | ![]() | |||||||||||
Actual (1.02% return) | ![]() | $ | 1,000.00 | ![]() | $ | 1,010.20 | ![]() | $ | 7.63 | |||||
Hypothetical (5% annual return before expenses) | ![]() | $ | 1,000.00 | ![]() | $ | 1,017.21 | ![]() | $ | 7.65 | |||||
Class D | ![]() | ![]() | ![]() | |||||||||||
Actual (1.61% return) | ![]() | $ | 1,000.00 | ![]() | $ | 1,016.10 | ![]() | $ | 3.40 | |||||
Hypothetical (5% annual return before expenses) | ![]() | $ | 1,000.00 | ![]() | $ | 1,021.42 | ![]() | $ | 3.41 | |||||
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![]() | * | Expenses are equal to the Fund's annualized expense ratio of 0.82%, 1.53%, 1.53% and 0.68% respectively, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
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![]() | Investment Advisory Agreement Approval |
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Nature, Extent and Quality of Services
The Board reviewed and considered the nature and extent of the investment advisory services provided by the Investment Adviser under the Advisory Agreement, including portfolio management, investment research and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Fund's Administrator under the Administration Agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Adviser's expense. (The Investment Adviser and the 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 compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper Inc. ("Lipper").
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 administrative and investment advisory 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. The Board also concluded that the overall quality of the advisory and administrative services was satisfactory.
Performance Relative to Comparable Funds Managed by Other Advisers
The Board reviewed the Fund's performance for one-, three- and five-year periods ended November 30, 2004, as shown in reports provided by Lipper (the "Lipper Reports"), compared to the performance of comparable funds selected by Lipper (the "performance peer group"), and noted that the Fund's performance was lower than its performance peer group average for all three periods. The Board discussed with the Adviser possible steps to improve performance. The Adviser informed the Board that the Fund's relative performance was hindered during a period of declining interest rates due to the defensive positioning of the Fund's portfolio and that the Fund's investment policy, which limits investments in high yield securities, hurt performance relative to the Fund's performance peer group as high yielding issues outperformed their investment grade counterparts. The Board concluded that the relative underperformance was understandable in view of the defensive positioning with its corresponding lower risk of the Fund's investments and the Adviser's adherence to the Fund's investment policy.
Fees Relative to Other Funds Managed by the Adviser with Comparable Investment Strategies
The Board reviewed the advisory and administrative fees (together, the "management fee") paid by the Fund under the Management Agreement. The Board noted that the rate was comparable to the management fee rates charged by the Adviser to any other funds it manages with investment strategies comparable to those of the Fund.
Fees and Expenses Relative to Comparable Funds Managed by Other Advisers
The Board reviewed the management fee rate and total expense ratio of the Fund. The Board noted that: (i) the Fund's management fee rate was lower than the average management fee rate for funds, selected by Lipper (the "expense peer group"), managed by other advisers with investment strategies comparable to those of the Fund,
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as shown in the Lipper Report for this Fund; and (ii) the Fund's total expense ratio was also lower than the average total expense ratio of the funds included in the Fund's expense peer group. The Board concluded that the management fee and total expenses were competitive with those of the Fund's expense peer group.
Breakpoints and Economies of Scale
The Board reviewed the structure of the Fund's management fee schedule under the Management Agreement and noted that it does not include any breakpoints. The Board also reviewed the level of the Fund's management fee and concluded that the fee, compared to the Fund's expense peer group, was sufficiently low that, in effect, economies of scale were built into the management fee structure.
Profitability of Adviser and Affiliates
The Board considered and reviewed information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last two years from its relationship with the Fund and the Morgan Stanley Fund Complex and reviewed with the Controller of the Adviser the cost allocation methodology used to determine the Adviser's profitability. Based on their review of the information they received, the Board concluded that the profits earned by the Adviser and its affiliates were not excessive in light of the advisory, administrative and other services provided to the Fund.
Fall-Out Benefits
The Board considered so-called "fall-out benefits" derived by the Adviser and its affiliates from their relationship with the Fund and the Fund Complex, such as "float" benefits derived from handling of checks for purchases and redemptions of Fund shares through a broker-dealer affiliate of the Adviser. The Board also considered that a broker-dealer affiliate of the Adviser receives from the Fund 12b-1 fees for distribution and shareholder services. The Board concluded that the float benefits were relatively small and that the 12b-1 fees were competitive with those of other broker-dealer affiliates of investment advisers of mutual funds.
Soft Dollar Benefits
The Board considered whether the Adviser realizes any benefits from commissions paid to brokers who execute securities transactions for the Fund ("soft dollars"). The Board noted that the Fund invests only in fixed income securities, which do not generate soft dollars.
Adviser Financially Sound and Financially Capable of Meeting the Fund's Needs
The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board noted that the Adviser's operations remain profitable, although increased expenses in recent years have reduced the Adviser's profitability. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement.
Historical Relationship Between the Fund and the Adviser
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 it is beneficial for the Fund to continue its relationship with the Adviser.
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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.
General Conclusion
After considering and weighing all of the above factors, the Board concluded it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year.
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Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited)
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PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Government & Corporate Bonds (94.0%) | |||||||||||||||||
![]() | Foreign (22.8%) | |||||||||||||||||
![]() | Argentina (0.5%) | |||||||||||||||||
![]() | Government Obligations | |||||||||||||||||
$ | 1,060 | ![]() | Republic of Argentina (c) | ![]() | 3.53 | % | ![]() | 04/10/50 | ![]() | $ | 312,700 | |||||||
994 | ![]() | Republic of Argentina (c) | ![]() | 6.00 | ![]() | 03/31/23 | ![]() | 581,459 | ||||||||||
90 | ![]() | Republic of Argentina (c) | ![]() | 11.375 | ![]() | 03/15/10 | ![]() | 26,550 | ||||||||||
135 | ![]() | Republic of Argentina (c) | ![]() | 11.375 | ![]() | 01/30/17 | ![]() | 39,825 | ||||||||||
70 | ![]() | Republic of Argentina (c) | ![]() | 11.75 | ![]() | 06/15/15 | ![]() | 20,300 | ||||||||||
2,250 | ![]() | Republic of Argentina (c) | ![]() | 11.75 | ![]() | 04/07/09 | ![]() | 663,750 | ||||||||||
320 | ![]() | Republic of Argentina (c) | ![]() | 12.125 | ![]() | 05/21/05 | ![]() | 94,402 | ||||||||||
![]() | Total Argentina | ![]() | ![]() | ![]() | 1,738,986 | |||||||||||||
![]() | Australia (0.1%) | |||||||||||||||||
![]() | Other Metals/Minerals (0.0%) | |||||||||||||||||
495 | ![]() | Murrin Holdings Property Ltd. (c ) (i) | ![]() | 9.375 | ![]() | 08/31/07 | ![]() | 49 | ||||||||||
![]() | Property – Casualty Insurers (0.1%) | |||||||||||||||||
430 | ![]() | Mantis Reef Ltd. – 144A* | ![]() | 4.692 | ![]() | 11/14/08 | ![]() | 429,317 | ||||||||||
![]() | Total Australia | ![]() | ![]() | ![]() | 429,366 | |||||||||||||
![]() | Belgium (0.4%) | |||||||||||||||||
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1,595 | ![]() | Telenet Group Holding NV - 144A* | ![]() | 11.50† | † | ![]() | 06/15/14 | ![]() | 1,204,225 | |||||||||
![]() | Brazil (2.4%) | |||||||||||||||||
![]() | Government Obligations | |||||||||||||||||
1,320 | ![]() | Federal Republic of Brazil | ![]() | 4.25* | ** | ![]() | 04/15/24 | ![]() | 1,223,133 | |||||||||
380 | ![]() | Federal Republic of Brazil | ![]() | 6.00 | ![]() | 04/15/24 | ![]() | 353,428 | ||||||||||
2,206 | ![]() | Federal Republic of Brazil | ![]() | 8.00 | ![]() | 04/15/14 | ![]() | 2,203,261 | ||||||||||
1,110 | ![]() | Federal Republic of Brazil | ![]() | 8.875 | ![]() | 04/15/24 | ![]() | 1,090,575 | ||||||||||
190 | ![]() | Federal Republic of Brazil | ![]() | 8.875 | ![]() | 10/14/19 | ![]() | 187,625 | ||||||||||
980 | ![]() | Federal Republic of Brazil | ![]() | 10.50 | ![]() | 07/14/14 | ![]() | 1,102,500 | ||||||||||
140 | ![]() | Federal Republic of Brazil | ![]() | 11.00 | ![]() | 08/17/40 | ![]() | 158,795 | ||||||||||
1,110 | ![]() | Federal Republic of Brazil | ![]() | 14.50 | ![]() | 10/15/09 | ![]() | 1,420,800 | ||||||||||
![]() | Total Brazil | ![]() | ![]() | ![]() | 7,740,117 | |||||||||||||
![]() | Bulgaria (0.3%) | |||||||||||||||||
![]() | Government Obligation | |||||||||||||||||
860 | ![]() | Federal Republic of Bulgaria | ![]() | 8.25 | ![]() | 01/15/15 | ![]() | 1,066,486 | ||||||||||
![]() | Canada (2.2%) | |||||||||||||||||
![]() | Aluminum (0.3%) | |||||||||||||||||
845 | ![]() | Novelis, Inc. – 144A* | ![]() | 7.25 | ![]() | 02/15/15 | ![]() | 821,762 | ||||||||||
![]() |
See Notes to Financial Statements
11
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Broadcasting (0.3%) | |||||||||||||||||
$ | 934 | ![]() | Canwest Media Inc. – 144A* | ![]() | 8.00 | % | ![]() | 09/15/12 | ![]() | $ | 960,105 | |||||||
![]() | Drugstore Chains (0.4%) | |||||||||||||||||
225 | ![]() | Jean Coutu Group (PJC) Inc. (The) | ![]() | 7.625 | ![]() | 08/01/12 | ![]() | 224,437 | ||||||||||
1,125 | ![]() | Jean Coutu Group (PJC) Inc. (The) | ![]() | 8.50 | ![]() | 08/01/14 | ![]() | 1,065,937 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,290,374 | ||||||||||||||
![]() | Forest Products (0.2%) | |||||||||||||||||
685 | ![]() | Tembec Industries Inc. | ![]() | 8.50 | ![]() | 02/01/11 | ![]() | 527,450 | ||||||||||
![]() | Other Transportation (0.3%) | |||||||||||||||||
690 | ![]() | CHC Helicopter Corp. | ![]() | 7.375 | ![]() | 05/01/14 | ![]() | 676,200 | ||||||||||
375 | ![]() | CHC Helicopter Corp. – 144A* | ![]() | 7.375 | ![]() | 05/01/14 | ![]() | 367,500 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,043,700 | ||||||||||||||
![]() | Pulp & Paper (0.3%) | |||||||||||||||||
800 | ![]() | Abitibi-Consolidated Inc. | ![]() | 8.85 | ![]() | 08/01/30 | ![]() | 684,000 | ||||||||||
300 | ![]() | Bowater Canada Finance | ![]() | 7.95 | ![]() | 11/15/11 | ![]() | 298,500 | ||||||||||
![]() | ![]() | ![]() | ![]() | 982,500 | ||||||||||||||
![]() | Telecommunication Equipment (0.2%) | |||||||||||||||||
660 | ![]() | Nortel Networks Ltd. | ![]() | 6.125 | ![]() | 02/15/06 | ![]() | 664,950 | ||||||||||
![]() | Wireless Telecommunications (0.2%) | |||||||||||||||||
330 | ![]() | Rogers Wireless Communications Inc. | ![]() | 7.50 | ![]() | 03/15/15 | ![]() | 340,312 | ||||||||||
250 | ![]() | Rogers Wireless Communications Inc. – 144A* | ![]() | 8.00 | ![]() | 12/15/12 | ![]() | 257,500 | ||||||||||
![]() | ![]() | ![]() | ![]() | 597,812 | ||||||||||||||
![]() | Total Canada | ![]() | ![]() | ![]() | 6,888,653 | |||||||||||||
![]() | Chile (0.2%) | |||||||||||||||||
![]() | Oil & Gas Production | |||||||||||||||||
670 | ![]() | Empresa Nacional de Petroleo | ![]() | 6.75 | ![]() | 11/15/12 | ![]() | 739,582 | ||||||||||
![]() | Colombia (0.4%) | |||||||||||||||||
![]() | Government Obligations | |||||||||||||||||
482 | ![]() | Republic of Columbia | ![]() | 9.75 | ![]() | 04/09/11 | ![]() | 536,839 | ||||||||||
470 | ![]() | Republic of Columbia | ![]() | 11.75 | ![]() | 02/25/20 | ![]() | 573,400 | ||||||||||
80 | ![]() | Republic of Columbia | ![]() | 10.375 | ![]() | 01/28/33 | ![]() | 86,600 | ||||||||||
![]() | Total Colombia | ![]() | ![]() | ![]() | 1,196,839 | |||||||||||||
![]() |
See Notes to Financial Statements
12
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Denmark (0.1%) | |||||||||||||||||
![]() | Finance/Rental/Leasing | |||||||||||||||||
DKK 951 | ![]() | Realkredit Denmark | ![]() | 6.00 | % | ![]() | 10/01/29 | ![]() | $ | 170,098 | ||||||||
1 | ![]() | Unikredit Realkredit | ![]() | 5.00 | ![]() | 07/01/29 | ![]() | 92 | ||||||||||
![]() | Total Denmark | ![]() | ![]() | ![]() | 170,190 | |||||||||||||
![]() | Ecuador (0.2%) | |||||||||||||||||
![]() | Government Obligation | |||||||||||||||||
$ | 910 | ![]() | Republic of Ecuador | ![]() | 8.00 | ![]() | 08/15/30 | ![]() | 732,550 | |||||||||
![]() | France (0.5%) | |||||||||||||||||
![]() | Chemicals: Specialty (0.2%) | |||||||||||||||||
795 | ![]() | Rhodia SA | ![]() | 8.875 | ![]() | 06/01/11 | ![]() | 747,300 | ||||||||||
![]() | Miscellaneous Manufacturing (0.1%) | |||||||||||||||||
125 | ![]() | CIE Generale de Geophysique SA – 144A* | ![]() | 7.50 | ![]() | 05/15/15 | ![]() | 125,937 | ||||||||||
![]() | Telecommunications (0.2%) | |||||||||||||||||
480 | ![]() | France Telecom SA | ![]() | 8.75 | ![]() | 03/01/31 | ![]() | 651,817 | ||||||||||
![]() | Total France | ![]() | ![]() | ![]() | 1,525,054 | |||||||||||||
![]() | Germany (0.6%) | |||||||||||||||||
![]() | Cable/Satellite TV (0.2%) | |||||||||||||||||
745 | ![]() | Kabel Deutschland – 144A* | ![]() | 10.625 | ![]() | 07/01/14 | ![]() | 789,700 | ||||||||||
![]() | Government Obligation (0.4%) | |||||||||||||||||
1,000 | ![]() | Aries Vermogensverwaltng | ![]() | 9.60 | ![]() | 10/25/14 | ![]() | 1,272,930 | ||||||||||
![]() | Total Germany | ![]() | ![]() | ![]() | 2,062,630 | |||||||||||||
![]() | Ireland (0.2%) | |||||||||||||||||
![]() | Investment Managers | |||||||||||||||||
780 | ![]() | JSG Funding PLC | ![]() | 9.625 | ![]() | 10/01/12 | ![]() | 776,100 | ||||||||||
![]() | Israel (0.3%) | |||||||||||||||||
![]() | Electrical Products | |||||||||||||||||
858 | ![]() | Ormat Funding Corp. | ![]() | 8.25 | ![]() | 12/30/20 | ![]() | 857,685 | ||||||||||
![]() | Ivory Coast (0.0%) | |||||||||||||||||
![]() | Government Obligation | |||||||||||||||||
560 | ![]() | Ivory Coast | ![]() | 2.00 | ![]() | 03/29/18 | ![]() | 100,800 | ||||||||||
![]() | Japan (4.2%) | |||||||||||||||||
![]() | Government Obligations | |||||||||||||||||
JPY 75,000 | ![]() | Japan (Government of) | ![]() | 0.10 | ![]() | 12/20/05 | ![]() | 715,018 | ||||||||||
357,000 | ![]() | Japan (Government of) | ![]() | 0.50 | ![]() | 06/20/06 | ![]() | 3,419,924 | ||||||||||
![]() |
See Notes to Financial Statements
13
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
JPY 775,000 | ![]() | Japan (Government of) | ![]() | 0.50 | % | ![]() | 09/20/06 | ![]() | $ | 7,431,279 | ||||||||
214,500 | ![]() | Japan (Government of) | ![]() | 0.80 | ![]() | 03/20/13 | ![]() | 2,022,211 | ||||||||||
![]() | Total Japan | ![]() | ![]() | ![]() | 13,588,432 | |||||||||||||
![]() | Luxembourg (0.2%) | |||||||||||||||||
![]() | Telecommunications | |||||||||||||||||
$ | 95 | ![]() | Telecom Italia Capital SpA | ![]() | 4.00 | ![]() | 11/15/08 | ![]() | 93,067 | |||||||||
575 | ![]() | Telecom Italia Capital SpA – 144A** | ![]() | 4.00 | ![]() | 01/15/10 | ![]() | 556,038 | ||||||||||
![]() | Total Luxembourg | ![]() | ![]() | ![]() | 649,105 | |||||||||||||
![]() | Malaysia (0.7%) | |||||||||||||||||
![]() | Government Obligations | |||||||||||||||||
330 | ![]() | Malaysia | ![]() | 7.50 | ![]() | 07/15/11 | ![]() | 379,223 | ||||||||||
1,620 | ![]() | Malaysia | ![]() | 8.75 | ![]() | 06/01/09 | ![]() | 1,873,911 | ||||||||||
![]() | Total Malaysia | ![]() | ![]() | ![]() | 2,253,134 | |||||||||||||
![]() | Mexico (2.5%) | |||||||||||||||||
![]() | Government Obligations (1.9%) | |||||||||||||||||
470 | ![]() | United Mexican States Corp. | ![]() | 8.30 | ![]() | 08/15/31 | ![]() | 551,662 | ||||||||||
1,040 | ![]() | United Mexican States Corp. | ![]() | 8.125 | ![]() | 12/30/19 | ![]() | 1,220,440 | ||||||||||
1,590 | ![]() | United Mexican States Corp. | ![]() | 8.375 | ![]() | 01/14/11 | ![]() | 1,823,730 | ||||||||||
720 | ![]() | United Mexican States Corp. | ![]() | 10.375 | ![]() | 02/17/09 | ![]() | 853,560 | ||||||||||
1,065 | ![]() | United Mexican States Corp. | ![]() | 11.50 | ![]() | 05/15/26 | ![]() | 1,632,112 | ||||||||||
![]() | ![]() | ![]() | ![]() | 6,081,504 | ||||||||||||||
![]() | Oil & Gas Production (0.3%) | |||||||||||||||||
550 | ![]() | Petroleos Mexicanos Ser P (Issued 09/15/99) | ![]() | 9.50 | ![]() | 09/15/27 | ![]() | 684,475 | ||||||||||
410 | ![]() | Petroleos Mexicanos | ![]() | 8.625 | ![]() | 12/01/23 | ![]() | 475,395 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,159,870 | ||||||||||||||
![]() | Specialty Telecommunications (0.1%) | |||||||||||||||||
403 | ![]() | Satelites Mexicanos SA | ![]() | 10.125 | ![]() | 11/01/04 | ![]() | 211,575 | ||||||||||
![]() | Telecommunications (0.2%) | |||||||||||||||||
500 | ![]() | Axtel SA (Mexico) | ![]() | 11.00 | ![]() | 12/15/13 | ![]() | 520,000 | ||||||||||
![]() | Total Mexico | ![]() | ![]() | ![]() | 7,972,949 | |||||||||||||
![]() | Netherlands (0.1%) | |||||||||||||||||
![]() | Telecommunications | |||||||||||||||||
170 | ![]() | Deutsche Telekom International Finance Corp. | ![]() | 8.75 | ![]() | 06/15/30 | ![]() | 228,483 | ||||||||||
![]() |
See Notes to Financial Statements
14
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Nigeria (0.3%) | |||||||||||||||||
![]() | Government Obligation | |||||||||||||||||
$ | 1,000 | ![]() | Central Bank of Nigeria | ![]() | 6.25 | % | ![]() | 11/15/20 | ![]() | $ | 957,500 | |||||||
![]() | Panama (0.7%) | |||||||||||||||||
![]() | Government Obligations | |||||||||||||||||
500 | ![]() | Republic of Panama | ![]() | 8.875 | ![]() | 09/30/27 | ![]() | 562,500 | ||||||||||
370 | ![]() | Republic of Panama | ![]() | 9.375 | ![]() | 04/01/29 | ![]() | 438,450 | ||||||||||
560 | ![]() | Republic of Panama | ![]() | 9.625 | ![]() | 02/08/11 | ![]() | 659,400 | ||||||||||
340 | ![]() | Republic of Panama | ![]() | 10.75 | ![]() | 05/15/20 | ![]() | 443,700 | ||||||||||
![]() | Total Panama | ![]() | ![]() | ![]() | 2,104,050 | |||||||||||||
![]() | Peru (0.4%) | |||||||||||||||||
![]() | Government Obligations | |||||||||||||||||
400 | ![]() | Republic of Peru | ![]() | 8.375 | ![]() | 05/03/16 | ![]() | 430,000 | ||||||||||
775 | ![]() | Republic of Peru | ![]() | 9.875 | ![]() | 02/06/15 | ![]() | 913,531 | ||||||||||
![]() | Total Peru | ![]() | ![]() | ![]() | 1,343,531 | |||||||||||||
![]() | Philippines (0.7%) | |||||||||||||||||
![]() | Government Obligations | |||||||||||||||||
1,670 | ![]() | Republic of Philippines | ![]() | 8.875 | ![]() | 03/17/15 | ![]() | 1,695,050 | ||||||||||
720 | ![]() | Republic of Philippines | ![]() | 9.50 | ![]() | 02/02/30 | ![]() | 707,400 | ||||||||||
![]() | Total Philippines | ![]() | ![]() | ![]() | 2,402,450 | |||||||||||||
![]() | Qatar (0.2%) | |||||||||||||||||
![]() | Government Obligation (0.1%) | |||||||||||||||||
300 | ![]() | State of Qatar | ![]() | 9.75 | ![]() | 06/15/30 | ![]() | 448,500 | ||||||||||
![]() | Gas Distributors (0.1%) | |||||||||||||||||
325 | ![]() | Ras Laffan Liquid Natural Gas Co. Ltd. – 144A* | ![]() | 8.294 | ![]() | 03/15/14 | ![]() | 380,317 | ||||||||||
![]() | Total Qatar | ![]() | ![]() | ![]() | 828,817 | |||||||||||||
![]() | Russia (2.2%) | |||||||||||||||||
![]() | Government Obligations | |||||||||||||||||
870 | ![]() | Federal Republic of Russia | ![]() | 8.25 | ![]() | 03/31/10 | ![]() | 953,781 | ||||||||||
870 | ![]() | Federal Republic of Russia | ![]() | 5.00 | ![]() | 03/31/30 | ![]() | 925,854 | ||||||||||
2,100 | ![]() | Federal Republic of Russia | ![]() | 12.75 | ![]() | 06/24/28 | ![]() | 3,598,090 | ||||||||||
1,256 | ![]() | Federal Republic of Russia | ![]() | 11.00 | ![]() | 07/24/18 | ![]() | 1,800,632 | ||||||||||
![]() | Total Russia | ![]() | ![]() | ![]() | 7,278,357 | |||||||||||||
![]() |
See Notes to Financial Statements
15
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Tunisia (0.1%) | |||||||||||||||||
![]() | Regional Banks | |||||||||||||||||
$ | 230 | ![]() | Banque Centrale de Tunisie | ![]() | 7.375 | % | ![]() | 04/25/12 | ![]() | $ | 261,625 | |||||||
![]() | Turkey (1.1%) | |||||||||||||||||
![]() | Government Obligations | |||||||||||||||||
500 | ![]() | Citigroup Inc. – 144A* +++ (Issued 09/17/04) | ![]() | 0.00 | ![]() | 02/23/06 | ![]() | 635,350 | ||||||||||
589 | ![]() | Citigroup Inc. – 144A* +++ (Issued 08/30/04) | ![]() | 0.00 | ![]() | 02/23/06 | ![]() | 765,582 | ||||||||||
350 | ![]() | Citigroup Inc. – 144A* +++ (Issued 09/27/04) | ![]() | 0.00 | ![]() | 02/23/06 | ![]() | 471,065 | ||||||||||
620 | ![]() | Republic of Turkey | ![]() | 11.00 | ![]() | 01/14/13 | ![]() | 745,550 | ||||||||||
735 | ![]() | Republic of Turkey | ![]() | 11.50 | ![]() | 01/23/12 | ![]() | 894,863 | ||||||||||
![]() | Total Turkey | ![]() | ![]() | ![]() | 3,512,410 | |||||||||||||
![]() | United Kingdom (0.1%) | |||||||||||||||||
![]() | Advertising/Marketing Services | |||||||||||||||||
360 | ![]() | WPP Finance Corp. | ![]() | 5.875 | ![]() | 06/15/14 | ![]() | 374,918 | ||||||||||
![]() | Uruguay (0.2%) | |||||||||||||||||
![]() | Government Obligation | |||||||||||||||||
670 | ![]() | Ukraine Government | ![]() | 6.365 | ![]() | 08/05/09 | ![]() | 719,413 | ||||||||||
![]() | Venezuela (0.7%) | |||||||||||||||||
![]() | Government Obligations | |||||||||||||||||
310 | ![]() | Republic of Venezuela | ![]() | 8.50 | ![]() | 10/08/14 | ![]() | 306,125 | ||||||||||
500 | ![]() | Republic of Venezuela | ![]() | 9.375 | ![]() | 01/13/34 | ![]() | 495,750 | ||||||||||
1,000 | ![]() | Republic of Venezuela | ![]() | 10.75 | ![]() | 09/19/13 | ![]() | 1,120,000 | ||||||||||
350 | ![]() | Republic of Venezuela | ![]() | 9.25 | ![]() | 09/15/27 | ![]() | 345,800 | ||||||||||
![]() | Total Venezuela | ![]() | ![]() | ![]() | 2,267,675 | |||||||||||||
![]() | Total Foreign (Cost $79,632,532) | ![]() | ![]() | ![]() | 73,972,112 | |||||||||||||
![]() | United States (71.2%) | |||||||||||||||||
![]() | Corporate Bonds (36.5%) | |||||||||||||||||
![]() | Advertising/Marketing Services (0.0%) | |||||||||||||||||
165 | ![]() | Interpublic Group of Companies, Inc. (The) | ![]() | 5.40 | ![]() | 11/15/09 | ![]() | 160,638 | ||||||||||
![]() | Aerospace & Defense (0.5%) | |||||||||||||||||
825 | ![]() | K&F Acquisition Inc. – 144A* | ![]() | 7.75 | ![]() | 11/15/14 | ![]() | 812,625 | ||||||||||
375 | ![]() | Northrop Grumman Corp. | ![]() | 4.079 | ![]() | 11/16/06 | ![]() | 374,998 | ||||||||||
70 | ![]() | Raytheon Co. | ![]() | 8.30 | ![]() | 03/01/10 | ![]() | 80,927 | ||||||||||
315 | ![]() | Systems 2001 Asset Trust LLC – 144A* | ![]() | 6.664 | ![]() | 09/15/13 | ![]() | 344,474 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,613,024 | ||||||||||||||
![]() |
See Notes to Financial Statements
16
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Air Freight/Couriers (0.1%) | |||||||||||||||||
$ | 95 | ![]() | Fedex Corp. | ![]() | 2.65 | % | ![]() | 04/01/07 | ![]() | $ | 92,370 | |||||||
185 | ![]() | Fedex Corp. | ![]() | 7.25 | ![]() | 02/15/11 | ![]() | 208,470 | ||||||||||
![]() | ![]() | ![]() | ![]() | 300,840 | ||||||||||||||
![]() | Airlines (0.2%) | |||||||||||||||||
117 | ![]() | America West Airlines, Inc. (Series 01-1) | ![]() | 7.10 | ![]() | 04/02/21 | ![]() | 127,194 | ||||||||||
398 | ![]() | Continental Airlines, Inc. | ![]() | 6.648 | ![]() | 09/15/17 | ![]() | 380,001 | ||||||||||
95 | ![]() | Southwest Airlines Co. (Series 01-1) | ![]() | 5.496 | ![]() | 11/01/06 | ![]() | 97,076 | ||||||||||
![]() | ![]() | ![]() | ![]() | 604,271 | ||||||||||||||
![]() | Apparel/Footwear (0.4%) | |||||||||||||||||
865 | ![]() | Levi Strauss & Co. – 144A* | ![]() | 7.73 | ![]() | 04/01/12 | ![]() | 800,125 | ||||||||||
335 | ![]() | Oxford Industries, Inc. | ![]() | 8.875 | ![]() | 06/01/11 | ![]() | 348,400 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,148,525 | ||||||||||||||
![]() | Apparel/Footwear Retail (0.1%) | |||||||||||||||||
425 | ![]() | Brown Shoe Co., Inc. – 144A* | ![]() | 8.75 | ![]() | 05/01/12 | ![]() | 432,437 | ||||||||||
![]() | Auto Parts: O.E.M. (0.4%) | |||||||||||||||||
460 | ![]() | Delphi Corp. | ![]() | 6.55 | ![]() | 06/15/06 | ![]() | 432,400 | ||||||||||
795 | ![]() | TRW Automotive, Inc. | ![]() | 9.375 | ![]() | 02/15/13 | ![]() | 826,800 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,259,200 | ||||||||||||||
![]() | Broadcasting (0.1%) | |||||||||||||||||
328 | ![]() | Salem Communications Holdings Corp. (Series B) | ![]() | 9.00 | ![]() | 07/01/11 | ![]() | 349,320 | ||||||||||
![]() | Building Products (0.7%) | |||||||||||||||||
175 | ![]() | Interface Inc. | ![]() | 7.30 | ![]() | 04/01/08 | ![]() | 173,250 | ||||||||||
910 | ![]() | Interface Inc. | ![]() | 9.50 | ![]() | 02/01/14 | ![]() | 914,550 | ||||||||||
875 | ![]() | Nortek Inc. | ![]() | 8.50 | ![]() | 09/01/14 | ![]() | 778,750 | ||||||||||
325 | ![]() | NTK Holdings Inc. – 144A* | ![]() | 10.75† | † | ![]() | 03/01/14 | ![]() | 164,125 | |||||||||
320 | ![]() | PLY Gem Industries, Inc. | ![]() | 9.00 | ![]() | 02/15/12 | ![]() | 278,400 | ||||||||||
![]() | ![]() | ![]() | ![]() | 2,309,075 | ||||||||||||||
![]() | Cable/Satellite TV (1.2%) | |||||||||||||||||
1,345 | ![]() | Charter Communications Holdings LLC | ![]() | 10.75 | ![]() | 10/01/09 | ![]() | 1,022,200 | ||||||||||
755 | ![]() | Comcast Cable Communications Inc. | ![]() | 6.75 | ![]() | 01/30/11 | ![]() | 829,685 | ||||||||||
145 | ![]() | Comcast Corp. | ![]() | 6.50 | ![]() | 01/15/15 | ![]() | 159,921 | ||||||||||
435 | ![]() | Cox Communications, Inc. – 144A* | ![]() | 4.625 | ![]() | 01/15/10 | ![]() | 429,004 | ||||||||||
730 | ![]() | Echostar DBS Corp. | ![]() | 6.375 | ![]() | 10/01/11 | ![]() | 724,525 | ||||||||||
400 | ![]() | Intelsat Bermuda Ltd. – 144A* | ![]() | 7.805 | ![]() | 01/15/12 | ![]() | 403,000 | ||||||||||
290 | ![]() | Renaissance Media Group LLC | ![]() | 10.00 | ![]() | 04/15/08 | ![]() | 294,712 | ||||||||||
![]() | ![]() | ![]() | ![]() | 3,863,047 | ||||||||||||||
![]() |
See Notes to Financial Statements
17
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Casino/Gaming (1.0%) | |||||||||||||||||
$ | 6,500 | ![]() | Aladdin Gaming Holdings/Capital Corp. LLC (Series B) (c) (i) | ![]() | 13.50 | % | ![]() | 03/01/10 | ![]() | $ | 0 | |||||||
915 | ![]() | Harrah's Operating Co., Inc. | ![]() | 7.875 | ![]() | 12/15/05 | ![]() | 937,875 | ||||||||||
765 | ![]() | Isle of Capri Casinos | ![]() | 7.00 | ![]() | 03/01/14 | ![]() | 745,875 | ||||||||||
1,630 | ![]() | MGM Mirage Inc. | ![]() | 6.00 | ![]() | 10/01/09 | ![]() | 1,615,737 | ||||||||||
3,904 | ![]() | Resort At Summerlin LP/Ras Co. (Series B) (a) (c) (i) | ![]() | 13.00 | ![]() | 12/15/07 | ![]() | 0 | ||||||||||
![]() | ![]() | ![]() | ![]() | 3,299,487 | ||||||||||||||
![]() | Chemicals: Agricultural (0.0%) | |||||||||||||||||
31 | ![]() | IMC Global Inc. (Series B) | ![]() | 10.875 | ![]() | 06/01/08 | ![]() | 35,495 | ||||||||||
![]() | Chemicals: Major Diversified (0.4%) | |||||||||||||||||
315 | ![]() | Huntsman Advanced Materials Corp. – 144A* | ![]() | 11.00 | ![]() | 07/15/10 | ![]() | 360,675 | ||||||||||
651 | ![]() | Huntsman ICI Chemicals | ![]() | 10.125 | ![]() | 07/01/09 | ![]() | 678,668 | ||||||||||
145 | ![]() | ICI Wilmington Inc. | ![]() | 4.375 | ![]() | 12/01/08 | ![]() | 143,483 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,182,826 | ||||||||||||||
![]() | Chemicals: Specialty (1.7%) | |||||||||||||||||
1,020 | ![]() | Equistar Chemical Funding | ![]() | 10.125 | ![]() | 09/01/08 | ![]() | 1,127,100 | ||||||||||
105 | ![]() | Equistar Chemical Funding | ![]() | 10.625 | ![]() | 05/01/11 | ![]() | 117,600 | ||||||||||
265 | ![]() | FMC Corp. | ![]() | 10.25 | ![]() | 11/01/09 | ![]() | 294,150 | ||||||||||
500 | ![]() | Innophos Inc. – 144A* | ![]() | 8.875 | ![]() | 08/15/14 | ![]() | 520,000 | ||||||||||
350 | ![]() | ISP Chemco | ![]() | 10.25 | ![]() | 07/01/11 | ![]() | 380,625 | ||||||||||
680 | ![]() | ISP Holdings Inc. (Series B) | ![]() | 10.625 | ![]() | 12/15/09 | ![]() | 734,400 | ||||||||||
225 | ![]() | Koppers Industry Inc. | ![]() | 9.875 | ![]() | 10/15/13 | ![]() | 241,875 | ||||||||||
195 | ![]() | Millennium America, Inc. | ![]() | 7.00 | ![]() | 11/15/06 | ![]() | 199,388 | ||||||||||
781 | ![]() | Millennium America, Inc. | ![]() | 9.25 | ![]() | 06/15/08 | ![]() | 835,670 | ||||||||||
530 | ![]() | Nalco Co. | ![]() | 7.75 | ![]() | 11/15/11 | ![]() | 543,250 | ||||||||||
600 | ![]() | Nalco Co. | ![]() | 8.875 | ![]() | 11/15/13 | ![]() | 618,000 | ||||||||||
![]() | ![]() | ![]() | ![]() | 5,612,058 | ||||||||||||||
![]() | Coal (0.1%) | |||||||||||||||||
175 | ![]() | Foundation PA Coal Co. | ![]() | 7.25 | ![]() | 08/01/14 | ![]() | 180,688 | ||||||||||
![]() | Construction Materials (0.2%) | |||||||||||||||||
625 | ![]() | RMCC Acquisition Co. – 144A* | ![]() | 9.50 | ![]() | 11/01/12 | ![]() | 603,125 | ||||||||||
![]() | Consumer Sundries (0.1%) | |||||||||||||||||
415 | ![]() | Amscan Holdings, Inc. | ![]() | 8.75 | ![]() | 05/01/14 | ![]() | 388,025 | ||||||||||
![]() | Containers/Packaging (1.4%) | |||||||||||||||||
300 | ![]() | Graham Packaging Company Inc. – 144A* | ![]() | 8.50 | ![]() | 10/15/12 | ![]() | 288,000 | ||||||||||
460 | ![]() | Graham Packaging Company Inc. – 144A* | ![]() | 9.875 | ![]() | 10/15/14 | ![]() | 441,600 | ||||||||||
![]() |
See Notes to Financial Statements
18
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
$ | 875 | ![]() | Graphic Packaging International Corp. | ![]() | 9.50 | % | ![]() | 08/15/13 | ![]() | $ | 875,000 | |||||||
1,775 | ![]() | Owens-Illinois Inc. | ![]() | 7.50 | ![]() | 05/15/10 | ![]() | 1,832,688 | ||||||||||
145 | ![]() | Pliant Corp. (Issued 04/10/02) | ![]() | 13.00 | ![]() | 06/01/10 | ![]() | 109,475 | ||||||||||
590 | ![]() | Pliant Corp. (Issued 08/29/00) | ![]() | 13.00 | ![]() | 06/01/10 | ![]() | 445,450 | ||||||||||
525 | ![]() | Sealed Air Corp. – 144A* | ![]() | 5.625 | ![]() | 07/15/13 | ![]() | 535,306 | ||||||||||
![]() | ![]() | ![]() | ![]() | 4,527,519 | ||||||||||||||
![]() | Drugstore Chains (0.2%) | |||||||||||||||||
49 | ![]() | CVS Corp. – 144A* | ![]() | 5.789 | ![]() | 01/10/26 | ![]() | 50,521 | ||||||||||
29 | ![]() | CVS Corp. – 144A* | ![]() | 6.204 | ![]() | 10/10/25 | ![]() | 31,314 | ||||||||||
460 | ![]() | Rite Aid Corp. | ![]() | 7.125 | ![]() | 01/15/07 | ![]() | 460,000 | ||||||||||
285 | ![]() | Rite Aid Corp. | ![]() | 8.125 | ![]() | 05/01/10 | ![]() | 279,300 | ||||||||||
![]() | ![]() | ![]() | ![]() | 821,135 | ||||||||||||||
![]() | Electric Utilities (3.4% ) | |||||||||||||||||
36 | ![]() | AES Corp. (The) | ![]() | 8.875 | ![]() | 02/15/11 | ![]() | 38,970 | ||||||||||
53 | ![]() | AES Corp. (The) | ![]() | 9.375 | ![]() | 09/15/10 | ![]() | 58,035 | ||||||||||
750 | ![]() | AES Corp. (The) – 144A* | ![]() | 9.00 | ![]() | 05/15/15 | ![]() | 821,250 | ||||||||||
280 | ![]() | Allegheny Energy, Inc. | ![]() | 7.75 | ![]() | 08/01/05 | ![]() | 282,870 | ||||||||||
545 | ![]() | Arizona Public Service Co. | ![]() | 5.80 | ![]() | 06/30/14 | ![]() | 577,580 | ||||||||||
100 | ![]() | CC Funding Trust I | ![]() | 6.90 | ![]() | 02/16/07 | ![]() | 104,452 | ||||||||||
245 | ![]() | Cincinnati Gas & Electric Co. | ![]() | 5.70 | ![]() | 09/15/12 | ![]() | 258,092 | ||||||||||
495 | ![]() | CMS Energy Corp. | ![]() | 7.50 | ![]() | 01/15/09 | ![]() | 509,850 | ||||||||||
295 | ![]() | CMS Energy Corp. | ![]() | 8.50 | ![]() | 04/15/11 | ![]() | 317,125 | ||||||||||
660 | ![]() | Consolidated Natural Gas Co. | ![]() | 5.00 | ![]() | 12/01/14 | ![]() | 658,583 | ||||||||||
25 | ![]() | Consolidated Natural Gas Co. (Series A) | ![]() | 5.00 | ![]() | 03/01/14 | ![]() | 25,002 | ||||||||||
125 | ![]() | Consolidated Natural Gas Co. (Series C) | ![]() | 6.25 | ![]() | 11/01/11 | ![]() | 135,528 | ||||||||||
30 | ![]() | Detroit Edison Co. (The) | ![]() | 6.125 | ![]() | 10/01/10 | ![]() | 32,210 | ||||||||||
490 | ![]() | Detroit Edison Co. (The) – 144A* | ![]() | 4.80 | ![]() | 02/15/15 | ![]() | 485,143 | ||||||||||
355 | ![]() | Entergy Gulf States, Inc. | ![]() | 3.31* | ** | ![]() | 12/01/09 | ![]() | 356,119 | |||||||||
185 | ![]() | Entergy Gulf States, Inc. | ![]() | 3.60 | ![]() | 06/01/08 | ![]() | 181,049 | ||||||||||
340 | ![]() | Exelon Corp. | ![]() | 6.75 | ![]() | 05/01/11 | ![]() | 373,649 | ||||||||||
100 | ![]() | IPALCO Enterprises, Inc. | ![]() | 8.625 | ![]() | 11/14/11 | ![]() | 114,500 | ||||||||||
825 | ![]() | Monongahela Power Co. | ![]() | 5.00 | ![]() | 10/01/06 | ![]() | 835,365 | ||||||||||
640 | ![]() | MSW Energy Holdings/Finance | ![]() | 7.375 | ![]() | 09/01/10 | ![]() | 640,000 | ||||||||||
140 | ![]() | MSW Energy Holdings/Finance | ![]() | 8.50 | ![]() | 09/01/10 | ![]() | 144,900 | ||||||||||
735 | ![]() | Nevada Power Co. | ![]() | 9.00 | ![]() | 08/15/13 | ![]() | 814,013 | ||||||||||
500 | ![]() | Ohio Edison Co. | ![]() | 5.45 | ![]() | 05/01/15 | ![]() | 509,721 | ||||||||||
105 | ![]() | Panhandle Eastern Pipe Line Co. (Series B) | ![]() | 2.75 | ![]() | 03/15/07 | ![]() | 102,069 | ||||||||||
![]() |
See Notes to Financial Statements
19
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
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PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
$ | 790 | ![]() | PSEG Energy Holdings Inc. | ![]() | 8.625 | % | ![]() | 02/15/08 | ![]() | $ | 833,450 | |||||||
1,095 | ![]() | Reliant Energy, Inc. | ![]() | 6.75 | ![]() | 12/15/14 | ![]() | 974,550 | ||||||||||
50 | ![]() | South Carolina Electric & Gas Co. | ![]() | 5.30 | ![]() | 05/15/33 | ![]() | 50,777 | ||||||||||
135 | ![]() | Southern California Edison Co. | ![]() | 5.00 | ![]() | 01/15/14 | ![]() | 136,911 | ||||||||||
55 | ![]() | Texas Eastern Transmission, LP | ![]() | 7.00 | ![]() | 07/15/32 | ![]() | 65,291 | ||||||||||
265 | ![]() | TNP Enterprises, Inc. (Series B) | ![]() | 10.25 | ![]() | 04/01/10 | ![]() | 280,238 | ||||||||||
195 | ![]() | Wisconsin Electric Power Co. | ![]() | 3.50 | ![]() | 12/01/07 | ![]() | 191,823 | ||||||||||
![]() | ![]() | ![]() | ![]() | 10,909,115 | ||||||||||||||
![]() | Electrical Products (0.1%) | |||||||||||||||||
105 | ![]() | Cooper Industries Inc. | ![]() | 5.25 | ![]() | 07/01/07 | ![]() | 107,220 | ||||||||||
175 | ![]() | Rayovac Corp. – 144A* | ![]() | 7.375 | ![]() | 02/01/15 | ![]() | 170,625 | ||||||||||
![]() | ![]() | ![]() | ![]() | 277,845 | ||||||||||||||
![]() | Electronic Components (0.1%) | |||||||||||||||||
300 | ![]() | Sanmina-SCI Corp. – 144A* | ![]() | 6.75 | ![]() | 03/01/13 | ![]() | 270,000 | ||||||||||
![]() | Electronic Equipment/Instruments (0.2%) | |||||||||||||||||
585 | ![]() | Xerox Corp. | ![]() | 7.125 | ![]() | 06/15/10 | ![]() | 615,713 | ||||||||||
![]() | Environmental Services (0.3%) | |||||||||||||||||
350 | ![]() | Allied Waste North America, Inc. | ![]() | 7.875 | ![]() | 04/15/13 | ![]() | 342,125 | ||||||||||
185 | ![]() | Allied Waste North America, Inc. | ![]() | 8.50 | ![]() | 12/01/08 | ![]() | 189,394 | ||||||||||
350 | ![]() | Allied Waste North America, Inc. (Series B) | ![]() | 8.875 | ![]() | 04/01/08 | ![]() | 361,375 | ||||||||||
![]() | ![]() | ![]() | ![]() | 892,894 | ||||||||||||||
![]() | Finance/Rental/Leasing (0.5%) | |||||||||||||||||
405 | ![]() | Ford Motor Credit Co. | ![]() | 7.25 | ![]() | 10/25/11 | ![]() | 374,809 | ||||||||||
540 | ![]() | Ford Motor Credit Co. | ![]() | 7.375 | ![]() | 10/28/09 | ![]() | 519,960 | ||||||||||
615 | ![]() | United Rentals NA, Inc. | ![]() | 6.50 | ![]() | 02/15/12 | ![]() | 588,863 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,483,632 | ||||||||||||||
![]() | Financial Conglomerates (0.4%) | |||||||||||||||||
30 | ![]() | Chase Manhattan Corp. | ![]() | 7.00 | ![]() | 11/15/09 | ![]() | 32,907 | ||||||||||
80 | ![]() | General Motors Acceptance Corp. | ![]() | 4.50 | ![]() | 07/15/06 | ![]() | 78,266 | ||||||||||
1,492 | ![]() | General Motors Acceptance Corp. | ![]() | 6.875 | ![]() | 09/15/11 | ![]() | 1,308,784 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,419,957 | ||||||||||||||
![]() | Food Retail (0.5%) | |||||||||||||||||
235 | ![]() | Albertson's Inc. | ![]() | 7.45 | ![]() | 08/01/29 | ![]() | 258,504 | ||||||||||
265 | ![]() | CA FM Lease Trust – 144A* | ![]() | 8.50 | ![]() | 07/15/17 | ![]() | 302,358 | ||||||||||
720 | ![]() | Delhaize America, Inc. | ![]() | 8.125 | ![]() | 04/15/11 | ![]() | 797,336 | ||||||||||
290 | ![]() | Safeway Inc. | ![]() | 7.25 | ![]() | 02/01/31 | ![]() | 321,061 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,679,259 | ||||||||||||||
![]() |
See Notes to Financial Statements
20
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Food: Major Diversified (0.2%) | |||||||||||||||||
$ | 5 | ![]() | Dole Food Company, Inc. | ![]() | 8.875 | % | ![]() | 03/15/11 | ![]() | $ | 5,325 | |||||||
65 | ![]() | Kraft Foods Inc. | ![]() | 5.25 | ![]() | 06/01/07 | ![]() | 66,278 | ||||||||||
505 | ![]() | Kraft Foods Inc. | ![]() | 5.625 | ![]() | 11/01/11 | ![]() | 530,427 | ||||||||||
![]() | ![]() | ![]() | ![]() | 602,030 | ||||||||||||||
![]() | Food: Meat/Fish/Dairy (1.0%) | |||||||||||||||||
420 | ![]() | Michael Foods Inc. (Series B) | ![]() | 8.00 | ![]() | 11/15/13 | ![]() | 432,600 | ||||||||||
920 | ![]() | Pilgrim's Pride Corp. | ![]() | 9.625 | ![]() | 09/15/11 | ![]() | 1,009,700 | ||||||||||
345 | ![]() | PPC Escrow Corp. | ![]() | 9.25 | ![]() | 11/15/13 | ![]() | 386,400 | ||||||||||
700 | ![]() | Smithfield Foods Inc. | ![]() | 7.00 | ![]() | 08/01/11 | ![]() | 719,250 | ||||||||||
715 | ![]() | Smithfield Foods Inc. | ![]() | 7.625 | ![]() | 02/15/08 | ![]() | 745,388 | ||||||||||
100 | ![]() | Smithfield Foods Inc. (Series B) | ![]() | 8.00 | ![]() | 10/15/09 | ![]() | 107,500 | ||||||||||
![]() | ![]() | ![]() | ![]() | 3,400,838 | ||||||||||||||
![]() | Forest Products (0.0%) | |||||||||||||||||
10 | ![]() | Weyerhaeuser Co. | ![]() | 6.00 | ![]() | 08/01/06 | ![]() | 10,263 | ||||||||||
28 | ![]() | Weyerhaeuser Co. | ![]() | 6.125 | ![]() | 03/15/07 | ![]() | 28,960 | ||||||||||
![]() | ![]() | ![]() | ![]() | 39,223 | ||||||||||||||
![]() | Gas Distributors (0.6%) | |||||||||||||||||
900 | ![]() | Dynegy Holdings, Inc. | ![]() | 6.875 | ![]() | 04/01/11 | ![]() | 749,250 | ||||||||||
595 | ![]() | Dynegy Holdings, Inc. – 144A* | ![]() | 9.875 | ![]() | 07/15/10 | ![]() | 603,925 | ||||||||||
425 | ![]() | Nisource Finance Corp. | ![]() | 3.43* | ** | ![]() | 11/23/09 | ![]() | 427,969 | |||||||||
210 | ![]() | Sempra Energy | ![]() | 4.621 | ![]() | 05/17/07 | ![]() | 211,008 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,992,152 | ||||||||||||||
![]() | Home Building (0.4%) | |||||||||||||||||
440 | ![]() | Tech Olympic USA, Inc. | ![]() | 10.375 | ![]() | 07/01/12 | ![]() | 464,200 | ||||||||||
530 | ![]() | Tech Olympic USA, Inc. (Issued 02/03/03) | ![]() | 9.00 | ![]() | 07/01/10 | ![]() | 548,550 | ||||||||||
225 | ![]() | Tech Olympic USA, Inc. (Issued 11/27/02) | ![]() | 9.00 | ![]() | 07/01/10 | ![]() | 232,875 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,245,625 | ||||||||||||||
![]() | Home Furnishings (0.2%) | |||||||||||||||||
235 | ![]() | Mohawk Industries, Inc. (Series D) | ![]() | 7.20 | ![]() | 04/15/12 | ![]() | 266,601 | ||||||||||
245 | ![]() | Tempur-Pedic Inc. | ![]() | 10.25 | ![]() | 08/15/10 | ![]() | 274,400 | ||||||||||
![]() | ![]() | ![]() | ![]() | 541,001 | ||||||||||||||
![]() | Hospital/Nursing Management (0.9%) | |||||||||||||||||
805 | ![]() | Columbia/HCA Healthcare Corp. | ![]() | 7.19 | ![]() | 11/15/15 | ![]() | 844,455 | ||||||||||
425 | ![]() | Community Health System Inc. | ![]() | 6.50 | ![]() | 12/15/12 | ![]() | 418,625 | ||||||||||
![]() |
See Notes to Financial Statements
21
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
$ | 125 | ![]() | HCA, Inc. | ![]() | 7.58 | % | ![]() | 09/15/25 | ![]() | $ | 127,310 | |||||||
550 | ![]() | Medcath Holdings Corp. | ![]() | 9.875 | ![]() | 07/15/12 | ![]() | 602,250 | ||||||||||
630 | ![]() | Tenet Healthcare Corp. | ![]() | 7.375 | ![]() | 02/01/13 | ![]() | 593,775 | ||||||||||
265 | ![]() | Tenet Healthcare Corp. | ![]() | 9.875 | ![]() | 07/01/14 | ![]() | 273,613 | ||||||||||
![]() | ![]() | ![]() | ![]() | 2,860,028 | ||||||||||||||
![]() | Hotels/Resorts/Cruiselines (0.2%) | |||||||||||||||||
380 | ![]() | Hyatt Equities LLC – 144A* | ![]() | 6.875 | ![]() | 06/15/07 | ![]() | 393,403 | ||||||||||
200 | ![]() | Marriott International, Inc. (Series E) | ![]() | 7.00 | ![]() | 01/15/08 | ![]() | 213,196 | ||||||||||
![]() | ![]() | ![]() | ![]() | 606,599 | ||||||||||||||
![]() | Household/Personal Care (0.2%) | |||||||||||||||||
290 | ![]() | Clorox Co. (The) – 144A* | ![]() | 3.125 | *** | ![]() | 12/14/07 | ![]() | 290,557 | |||||||||
255 | ![]() | Del Laboratories, Inc. – 144A* | ![]() | 8.00 | ![]() | 02/01/12 | ![]() | 242,250 | ||||||||||
![]() | ![]() | ![]() | ![]() | 532,807 | ||||||||||||||
![]() | Industrial Machinery (0.3%) | |||||||||||||||||
110 | ![]() | Flowserve Corp. | ![]() | 12.25 | ![]() | 08/15/10 | ![]() | 119,350 | ||||||||||
225 | ![]() | Goodman Global Holding Company, Inc. – 144A* | ![]() | 5.76 | ![]() | 06/15/12 | ![]() | 216,000 | ||||||||||
725 | ![]() | Goodman Global Holding Company, Inc. – 144A* | ![]() | 7.875 | ![]() | 12/15/12 | ![]() | 641,625 | ||||||||||
![]() | ![]() | ![]() | ![]() | 976,975 | ||||||||||||||
![]() | Industrial Specialties (0.8%) | |||||||||||||||||
1,180 | ![]() | Johnsondiversy, Inc. | ![]() | 9.625 | ![]() | 05/15/12 | ![]() | 1,203,600 | ||||||||||
775 | ![]() | Rayovac Corp. | ![]() | 8.50 | ![]() | 10/01/13 | ![]() | 800,188 | ||||||||||
430 | ![]() | UCAR Finance, Inc. | ![]() | 10.25 | ![]() | 02/15/12 | ![]() | 451,500 | ||||||||||
![]() | ![]() | ![]() | ![]() | 2,455,288 | ||||||||||||||
![]() | Insurance Brokers/Services (0.6%) | |||||||||||||||||
195 | ![]() | Farmers Exchange Capital – 144A* | ![]() | 7.05 | ![]() | 07/15/28 | ![]() | 206,621 | ||||||||||
780 | ![]() | Farmers Exchange Capital – 144A* | ![]() | 8.625 | ![]() | 05/01/24 | ![]() | 964,831 | ||||||||||
935 | ![]() | Marsh & McLennan Companies, Inc. | ![]() | 5.875 | ![]() | 08/01/33 | ![]() | 885,702 | ||||||||||
![]() | ![]() | ![]() | ![]() | 2,057,154 | ||||||||||||||
![]() | Investment Banks/Brokers (0.3%) | |||||||||||||||||
950 | ![]() | Refco Finance Holdings – 144A* | ![]() | 9.00 | ![]() | 08/01/12 | ![]() | 1,030,750 | ||||||||||
![]() | Managed Health Care (0.4%) | |||||||||||||||||
910 | ![]() | Aetna, Inc. | ![]() | 7.875 | ![]() | 03/01/11 | ![]() | 1,050,448 | ||||||||||
60 | ![]() | Health Net, Inc. | ![]() | 9.875 | ![]() | 04/15/11 | ![]() | 72,405 | ||||||||||
100 | ![]() | WellPoint Health Networks Inc. | ![]() | 6.375 | ![]() | 06/15/06 | ![]() | 102,522 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,225,375 | ||||||||||||||
![]() |
See Notes to Financial Statements
22
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Media Conglomerates (0.4%) | |||||||||||||||||
$ | 390 | ![]() | News America Holdings Inc. | ![]() | 7.30 | % | ![]() | 04/30/28 | ![]() | $ | 448,771 | |||||||
80 | ![]() | News America Holdings, Inc. | ![]() | 7.75 | ![]() | 02/01/24 | ![]() | 95,041 | ||||||||||
280 | ![]() | News America Holdings, Inc. | ![]() | 8.875 | ![]() | 04/26/23 | ![]() | 365,389 | ||||||||||
75 | ![]() | News America Inc. | ![]() | 7.125 | ![]() | 04/08/28 | ![]() | 83,885 | ||||||||||
150 | ![]() | Time Warner, Inc. | ![]() | 6.625 | ![]() | 05/15/29 | ![]() | 163,585 | ||||||||||
260 | ![]() | Time Warner, Inc. | ![]() | 7.625 | ![]() | 04/15/31 | ![]() | 317,830 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,474,501 | ||||||||||||||
![]() | Medical Distributors (0.2%) | |||||||||||||||||
500 | ![]() | AmerisourceBergen Corp. | ![]() | 8.125 | ![]() | 09/01/08 | ![]() | 543,125 | ||||||||||
![]() | Medical/Nursing Services (0.6%) | |||||||||||||||||
300 | ![]() | DaVita Inc. – 144A* | ![]() | 6.625 | ![]() | 03/15/13 | ![]() | 298,500 | ||||||||||
125 | ![]() | DaVita Inc. – 144A* | ![]() | 7.25 | ![]() | 03/15/15 | ![]() | 122,188 | ||||||||||
1,020 | ![]() | Fresenius Medical Care Capital Trust | ![]() | 7.875 | ![]() | 06/15/11 | ![]() | 1,088,850 | ||||||||||
150 | ![]() | Fresenius Medical Care Capital Trust II (Units)‡ | ![]() | 7.875 | ![]() | 02/01/08 | ![]() | 156,375 | ||||||||||
135 | ![]() | National Nephrology Assoc. Inc. – 144A* | ![]() | 9.00 | ![]() | 11/01/11 | ![]() | 150,188 | ||||||||||
195 | ![]() | Team Health Inc. | ![]() | 9.00 | ![]() | 04/01/12 | ![]() | 195,000 | ||||||||||
![]() | ![]() | ![]() | ![]() | 2,011,101 | ||||||||||||||
![]() | Metal Fabrications (0.5%) | |||||||||||||||||
335 | ![]() | General Cable Corp. | ![]() | 9.50 | ![]() | 11/15/10 | ![]() | 356,775 | ||||||||||
410 | ![]() | Hexcel Corp. – 144A* | ![]() | 6.75 | ![]() | 02/01/15 | ![]() | 395,650 | ||||||||||
820 | ![]() | Trimas Corp. | ![]() | 9.875 | ![]() | 06/15/12 | ![]() | 811,800 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,564,225 | ||||||||||||||
![]() | Miscellaneous Commercial Services (0.9%) | |||||||||||||||||
1,182 | ![]() | Advanstar Communications, Inc. | ![]() | 10.294 | *** | ![]() | 08/15/08 | ![]() | 1,244,055 | |||||||||
500 | ![]() | Iron Mountain Inc. | ![]() | 7.75 | ![]() | 01/15/15 | ![]() | 480,000 | ||||||||||
815 | ![]() | Iron Mountain Inc. | ![]() | 8.625 | ![]() | 04/01/13 | ![]() | 821,113 | ||||||||||
165 | ![]() | Muzak LLC/Muzak Finance Corp. | ![]() | 10.00 | ![]() | 02/15/09 | ![]() | 139,425 | ||||||||||
455 | ![]() | Vertis Inc. – 144A* | ![]() | 13.50 | ![]() | 12/07/09 | ![]() | 298,025 | ||||||||||
![]() | ![]() | ![]() | ![]() | 2,982,618 | ||||||||||||||
![]() | Miscellaneous Manufacturing (0.4%) | |||||||||||||||||
1,590 | ![]() | Associated Materials Inc. | ![]() | 11.25† | † | ![]() | 03/01/14 | ![]() | 1,081,200 | |||||||||
375 | ![]() | Propex Fabrics Inc. | ![]() | 10.00 | ![]() | 12/01/12 | ![]() | 358,125 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,439,325 | ||||||||||||||
![]() |
See Notes to Financial Statements
23
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Motor Vehicles (0.6%) | |||||||||||||||||
$ | 325 | ![]() | DaimlerChrysler North American Holdings Co. | ![]() | 7.30 | % | ![]() | 01/15/12 | ![]() | $ | 348,576 | |||||||
1,945 | ![]() | General Motors Corp. | ![]() | 8.375 | ![]() | 07/15/33 | ![]() | 1,483,767 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,832,343 | ||||||||||||||
![]() | Movies/Entertainment (0.1%) | |||||||||||||||||
350 | ![]() | Marquee Inc. – 144A* | ![]() | 7.044 | *** | ![]() | 08/15/10 | ![]() | 366,625 | |||||||||
![]() | Oil & Gas Pipelines (0.9%) | |||||||||||||||||
1,065 | ![]() | El Paso Production Holdings | ![]() | 7.75 | ![]() | 06/01/13 | ![]() | 1,078,313 | ||||||||||
480 | ![]() | Pacific Energy Partners/Finance | ![]() | 7.125 | ![]() | 06/15/14 | ![]() | 502,800 | ||||||||||
140 | ![]() | Southern Natural Gas | ![]() | 8.875 | ![]() | 03/15/10 | ![]() | 152,866 | ||||||||||
1,025 | ![]() | Williams Companies, Inc. (The) | ![]() | 7.875 | ![]() | 09/01/21 | ![]() | 1,107,000 | ||||||||||
![]() | ![]() | ![]() | ![]() | 2,840,979 | ||||||||||||||
![]() | Oil & Gas Production (2.0%) | |||||||||||||||||
910 | ![]() | Chesapeake Energy Corp. | ![]() | 7.50 | ![]() | 09/15/13 | ![]() | 964,600 | ||||||||||
870 | ![]() | Hilcorp Energy/Finance – 144A* | ![]() | 10.50 | ![]() | 09/01/10 | ![]() | 965,700 | ||||||||||
150 | ![]() | Kerr-McGee Corp. | ![]() | 7.875 | ![]() | 09/15/31 | ![]() | 151,159 | ||||||||||
162 | ![]() | Magnum Hunter Resources, Inc. | ![]() | 9.60 | ![]() | 03/15/12 | ![]() | 180,630 | ||||||||||
1,100 | ![]() | Pemex Project Funding Master Trust | ![]() | 9.125 | ![]() | 10/13/10 | ![]() | 1,278,750 | ||||||||||
570 | ![]() | Pemex Project Funding Master Trust | ![]() | 9.50 | ![]() | 09/15/27 | ![]() | 710,790 | ||||||||||
870 | ![]() | Pemex Project Funding Master Trust – 144A* | ![]() | 3.79 | ![]() | 06/15/10 | ![]() | 897,405 | ||||||||||
300 | ![]() | Plains E & P Corp. | ![]() | 7.125 | ![]() | 06/15/14 | ![]() | 313,500 | ||||||||||
1,000 | ![]() | Vintage Petroleum, Inc. | ![]() | 7.875 | ![]() | 05/15/11 | ![]() | 1,045,000 | ||||||||||
![]() | ![]() | ![]() | ![]() | 6,507,534 | ||||||||||||||
![]() | Oil Refining/Marketing (0.7%) | |||||||||||||||||
375 | ![]() | CITGO Petroleum Corp. | ![]() | 6.00 | ![]() | 10/15/11 | ![]() | 366,563 | ||||||||||
1,050 | ![]() | Husky Oil Ltd. | ![]() | 8.90 | ![]() | 08/15/28 | ![]() | 1,176,763 | ||||||||||
565 | ![]() | Tesoro Petroleum Corp. | ![]() | 9.625 | ![]() | 04/01/12 | ![]() | 627,150 | ||||||||||
![]() | ![]() | ![]() | ![]() | 2,170,476 | ||||||||||||||
![]() | Oilfield Services/Equipment (0.4%) | |||||||||||||||||
140 | ![]() | Hanover Compressor Co. | ![]() | 8.625 | ![]() | 12/15/10 | ![]() | 144,200 | ||||||||||
190 | ![]() | Hanover Compressor Co. | ![]() | 9.00 | ![]() | 06/01/14 | ![]() | 200,925 | ||||||||||
190 | ![]() | Hanover Equipment Trust 2001 A (Series A) | ![]() | 8.50 | ![]() | 09/01/08 | ![]() | 198,550 | ||||||||||
675 | ![]() | Hanover Equipment Trust 2001 B (Series B) | ![]() | 8.75 | ![]() | 09/01/11 | ![]() | 711,281 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,254,956 | ||||||||||||||
![]() |
See Notes to Financial Statements
24
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Other Transportation (0.3%) | |||||||||||||||||
$ | 880 | ![]() | Laidlaw International Inc. | ![]() | 10.75 | % | ![]() | 06/15/11 | ![]() | $ | 1,007,600 | |||||||
![]() | Pharmaceuticals: Major (0.3%) | |||||||||||||||||
295 | ![]() | VWR International Inc. | ![]() | 6.875 | ![]() | 04/15/12 | ![]() | 283,200 | ||||||||||
365 | ![]() | VWR International Inc. | ![]() | 8.00 | ![]() | 04/15/14 | ![]() | 341,275 | ||||||||||
450 | ![]() | Warner Chilcott Corp. – 144A* | ![]() | 8.75 | ![]() | 02/01/15 | ![]() | 443,250 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,067,725 | ||||||||||||||
![]() | Publishing: Books/Magazines (0.9%) | |||||||||||||||||
374 | ![]() | Dex Media East/Finance | ![]() | 12.125 | ![]() | 11/15/12 | ![]() | 441,788 | ||||||||||
543 | ![]() | Dex Media West/Finance | ![]() | 9.875 | ![]() | 08/15/13 | ![]() | 605,445 | ||||||||||
200 | ![]() | Houghton Mifflin Co. | ![]() | 11.50† | † | ![]() | 10/15/13 | ![]() | 134,000 | |||||||||
775 | ![]() | Houghton Mifflin Co. | ![]() | 9.875 | ![]() | 02/01/13 | ![]() | 786,625 | ||||||||||
985 | ![]() | PRIMEDIA, Inc. | ![]() | 8.875 | ![]() | 05/15/11 | ![]() | 1,024,400 | ||||||||||
![]() | ![]() | ![]() | ![]() | 2,992,258 | ||||||||||||||
![]() | Pulp & Paper (0.8%) | |||||||||||||||||
595 | ![]() | Georgia-Pacific Corp. | ![]() | 8.875 | ![]() | 02/01/10 | ![]() | 663,425 | ||||||||||
500 | ![]() | Newpage Corp. PLC – 144A* | ![]() | 10.00 | ![]() | 05/01/12 | ![]() | 490,000 | ||||||||||
3,500 | ![]() | TJIWI Kimia FN Mauritius (c) | ![]() | 10.00 | ![]() | 08/01/04 | ![]() | 1,452,500 | ||||||||||
![]() | ![]() | ![]() | ![]() | 2,605,925 | ||||||||||||||
![]() | Railroads (0.4%) | |||||||||||||||||
100 | ![]() | Burlington North Santa Fe Railway Co. | ![]() | 4.575 | ![]() | 01/15/21 | ![]() | 98,980 | ||||||||||
240 | ![]() | CSX Corp. | ![]() | 2.75 | ![]() | 02/15/06 | ![]() | 237,755 | ||||||||||
240 | ![]() | CSX Corp. | ![]() | 9.00 | ![]() | 08/15/06 | ![]() | 254,113 | ||||||||||
160 | ![]() | Norfolk Southern Corp. | ![]() | 7.35 | ![]() | 05/15/07 | ![]() | 169,748 | ||||||||||
65 | ![]() | Union Pacific Corp. | ![]() | 6.625 | ![]() | 02/01/08 | ![]() | 68,718 | ||||||||||
100 | ![]() | Union Pacific Corp. | ![]() | 6.65 | ![]() | 01/15/11 | ![]() | 109,680 | ||||||||||
145 | ![]() | Union Pacific Corp. – 144A* | ![]() | 5.214 | ![]() | 09/30/14 | ![]() | 147,027 | ||||||||||
160 | ![]() | Union Pacific Corp. (Series MTNE) | ![]() | 6.79 | ![]() | 11/09/07 | ![]() | 170,091 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,256,112 | ||||||||||||||
![]() | Real Estate Investment Trusts (0.1%) | |||||||||||||||||
28 | ![]() | HMH Properties, Inc. (Series B) | ![]() | 7.875 | ![]() | 08/01/08 | ![]() | 28,700 | ||||||||||
480 | ![]() | Host Marriott LP | ![]() | 7.125 | ![]() | 11/01/13 | ![]() | 488,400 | ||||||||||
![]() | ![]() | ![]() | ![]() | 517,100 | ||||||||||||||
![]() | Regional Banks (0.2%) | |||||||||||||||||
AUD 1,000 | ![]() | KFW International Inc. | ![]() | 6.25 | ![]() | 07/15/05 | ![]() | 780,921 | ||||||||||
![]() |
See Notes to Financial Statements
25
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Specialty Stores (0.9%) | |||||||||||||||||
$ | 715 | ![]() | Autonation, Inc. | ![]() | 9.00 | % | ![]() | 08/01/08 | ![]() | $ | 781,138 | |||||||
560 | ![]() | General Nutrition Centers Inc. | ![]() | 8.50 | ![]() | 12/01/10 | ![]() | 431,200 | ||||||||||
750 | ![]() | Petro Stopping Centers LP/Petro Financial Corp. | ![]() | 9.00 | ![]() | 02/15/12 | ![]() | 750,000 | ||||||||||
1,060 | ![]() | Sonic Automotive, Inc. | ![]() | 8.625 | ![]() | 08/15/13 | ![]() | 1,054,700 | ||||||||||
![]() | ![]() | ![]() | ![]() | 3,017,038 | ||||||||||||||
![]() | Specialty Telecommunications (1.1%) | |||||||||||||||||
400 | ![]() | American Tower Corp. | ![]() | 7.125 | ![]() | 10/15/12 | ![]() | 399,000 | ||||||||||
470 | ![]() | American Tower Corp. | ![]() | 7.50 | ![]() | 05/01/12 | ![]() | 479,400 | ||||||||||
118 | ![]() | Panamsat Corp. | ![]() | 9.00 | ![]() | 08/15/14 | ![]() | 123,310 | ||||||||||
950 | ![]() | Panamsat Holding Corp. – 144A* | ![]() | 10.375 | †† | ![]() | 11/01/14 | ![]() | 612,750 | |||||||||
660 | ![]() | Qwest Communications International – 144A* | ![]() | 6.294 | *** | ![]() | 02/15/09 | ![]() | 658,350 | |||||||||
975 | ![]() | Qwest Services Corp. – 144A* | ![]() | 13.50 | ![]() | 12/15/07 | ![]() | 1,070,063 | ||||||||||
145 | ![]() | U.S. West Communications Corp. | ![]() | 5.625 | ![]() | 11/15/08 | ![]() | 142,463 | ||||||||||
![]() | ![]() | ![]() | ![]() | 3,485,336 | ||||||||||||||
![]() | Steel (0.5%) | |||||||||||||||||
665 | ![]() | Amsted Industries Inc. – 144A* | ![]() | 10.25 | ![]() | 10/15/11 | ![]() | 714,875 | ||||||||||
750 | ![]() | United States Steel Corp. | ![]() | 9.75 | ![]() | 05/15/10 | ![]() | 828,750 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,543,625 | ||||||||||||||
![]() | Telecommunications (0.5%) | |||||||||||||||||
180 | ![]() | AT&T Corp. | ![]() | 9.75 | ![]() | 11/15/31 | ![]() | 225,000 | ||||||||||
665 | ![]() | Exodus Communications, Inc. (a) (c ) (i) | ![]() | 11.625 | ![]() | 07/15/10 | ![]() | 0 | ||||||||||
955 | ![]() | Primus Telecommunication Group, Inc. | ![]() | 8.00 | ![]() | 01/15/14 | ![]() | 568,225 | ||||||||||
4,679 | ![]() | Rhythms Netconnections, Inc. (a) (c ) (i) | ![]() | 12.75 | ![]() | 04/15/09 | ![]() | 0 | ||||||||||
480 | ![]() | Sprint Capital Corp. | ![]() | 8.75 | ![]() | 03/15/32 | ![]() | 647,434 | ||||||||||
180 | ![]() | Valor Telecom Enterprise LLC – 144A* | ![]() | 7.75 | ![]() | 02/15/15 | ![]() | 173,250 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,613,909 | ||||||||||||||
![]() | Tobacco (0.2%) | |||||||||||||||||
85 | ![]() | Altria Group, Inc. | ![]() | 7.00 | ![]() | 11/04/13 | ![]() | 94,019 | ||||||||||
405 | ![]() | Altria Group, Inc. | ![]() | 7.75 | ![]() | 01/15/27 | ![]() | 476,764 | ||||||||||
![]() | ![]() | ![]() | ![]() | 570,783 | ||||||||||||||
![]() | Trucks/Construction/Farm Machinery (0.5%) | |||||||||||||||||
690 | ![]() | Caterpillar Financial Services Corp. | ![]() | 2.92* | ** | ![]() | 08/20/07 | ![]() | 691,185 | |||||||||
621 | ![]() | Manitowoc Inc. (The) | ![]() | 10.50 | ![]() | 08/01/12 | ![]() | 693,968 | ||||||||||
230 | ![]() | NMHG Holding Co. | ![]() | 10.00 | ![]() | 05/15/09 | ![]() | 248,975 | ||||||||||
![]() | ![]() | ![]() | ![]() | 1,634,128 | ||||||||||||||
![]() |
See Notes to Financial Statements
26
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | Wholesale Distributors (0.7%) | |||||||||||||||||
$ | 775 | ![]() | Buhrmann US, Inc. | ![]() | 8.25 | % | ![]() | 07/01/14 | ![]() | $ | 778,875 | |||||||
625 | ![]() | Nebraska Book Company, Inc. | ![]() | 8.625 | ![]() | 03/15/12 | ![]() | 596,875 | ||||||||||
825 | ![]() | Rockwood Specialties, Inc. | ![]() | 10.625 | ![]() | 05/15/11 | ![]() | 908,531 | ||||||||||
![]() | ![]() | ![]() | ![]() | 2,284,281 | ||||||||||||||
![]() | Wireless Telecommunications (1.0%) | |||||||||||||||||
260 | ![]() | AT&T Wireless Services, Inc. | ![]() | 8.75 | ![]() | 03/01/31 | ![]() | 355,659 | ||||||||||
765 | ![]() | MetroPCS, Inc. | ![]() | 10.75 | ![]() | 10/01/11 | ![]() | 895,050 | ||||||||||
385 | ![]() | Rural Cellular Corp. | ![]() | 7.51* | ** | ![]() | 03/15/10 | ![]() | 390,775 | |||||||||
610 | ![]() | SBA Communications Corp. | ![]() | 9.75† | † | ![]() | 12/15/11 | ![]() | 533,750 | |||||||||
550 | ![]() | SBA Communications Corp. – 144A* | ![]() | 8.50 | ![]() | 12/01/12 | ![]() | 576,125 | ||||||||||
575 | ![]() | Ubiquitel Operating Co. – 144A* | ![]() | 9.875 | ![]() | 03/01/11 | ![]() | 625,313 | ||||||||||
![]() | ![]() | ![]() | ![]() | 3,376,672 | ||||||||||||||
![]() | Total Corporate Bonds (Cost $125,695,835) | ![]() | 118,546,216 | |||||||||||||||
![]() | U.S. Government Agencies – Mortgage-Backed Securities (22.4%) | |||||||||||||||||
![]() | Federal Home Loan Mortgage Corp. (6.7%) | |||||||||||||||||
10,600 | ![]() | ![]() | 6.00 | ![]() | ** | ![]() | 10,881,563 | |||||||||||
48 | ![]() | ![]() | 6.50 | ![]() | 02/01/29– 09/01/33 | ![]() | 49,631 | |||||||||||
7,162 | ![]() | ![]() | 7.50 | ![]() | 08/01/17– 05/01/33 | ![]() | 7,695,678 | |||||||||||
1,501 | ![]() | ![]() | 8.00 | ![]() | 09/01/24– 08/01/32 | ![]() | 1,638,103 | |||||||||||
1,089 | ![]() | ![]() | 8.50 | ![]() | 11/01/15– 07/01/31 | ![]() | 1,187,824 | |||||||||||
357 | ![]() | ![]() | 9.00 | ![]() | 06/01/30– 01/01/31 | ![]() | 396,364 | |||||||||||
1 | ![]() | ![]() | 9.50 | ![]() | 07/01/20 | ![]() | 1,680 | |||||||||||
![]() | ![]() | ![]() | ![]() | 21,850,843 | ||||||||||||||
![]() | Federal National Mortgage Assoc. (14.9%) | |||||||||||||||||
4,671 | ![]() | ![]() | 6.00 | ![]() | 04/01/13 01/01/19 | ![]() | 4,844,378 | |||||||||||
8,055 | ![]() | ![]() | 6.50 | ![]() | 05/01/28– 01/01/34 | ![]() | 8,391,190 | |||||||||||
4,116 | ![]() | ![]() | 7.00 | ![]() | 08/01/08– 01/01/34 | ![]() | 4,350,334 | |||||||||||
![]() |
See Notes to Financial Statements
27
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
$ | 16,643 | ![]() | ![]() | 7.50 | % | ![]() | 08/01/24– 08/01/34 | ![]() | $ | 17,849,676 | ||||||||
2,871 | ![]() | ![]() | 8.00 | ![]() | 06/01/22– 08/01/31 | ![]() | 3,135,156 | |||||||||||
8,772 | ![]() | ![]() | 8.50 | ![]() | 10/01/09– 10/01/32 | ![]() | 9,572,709 | |||||||||||
139 | ![]() | ![]() | 9.00 | ![]() | 09/01/21– 03/01/31 | ![]() | 154,205 | |||||||||||
![]() | ![]() | ![]() | ![]() | 48,297,648 | ||||||||||||||
![]() | Government National Mortgage Assoc. (0.7%) | |||||||||||||||||
1,526 | ![]() | ![]() | 7.50 | ![]() | 05/15/17– 11/15/26 | ![]() | 1,644,810 | |||||||||||
595 | ![]() | ![]() | 8.00 | ![]() | 01/15/22– 05/15/30 | ![]() | 645,387 | |||||||||||
138 | ![]() | ![]() | 8.50 | ![]() | 08/15/22– 12/15/24 | ![]() | 152,581 | |||||||||||
![]() | ![]() | ![]() | ![]() | 2,442,778 | ||||||||||||||
![]() | Government National Mortgage Assoc. II (0.1%) | |||||||||||||||||
192 | ![]() | ![]() | 7.50 | ![]() | 07/20/25 | ![]() | 205,615 | |||||||||||
![]() | Total U.S. Government Agencies – Mortgage-Backed Securities (Cost $72,255,962) | ![]() | 72,796,884 | |||||||||||||||
![]() | U.S. Government Agency & Obligations (5.4%) | |||||||||||||||||
595 | ![]() | Federal Home Loan Mortgage Corp. (0.2%) | ![]() | 5.125 | ![]() | 11/07/13 | ![]() | 596,980 | ||||||||||
![]() | U. S. Treasury Bonds (1.0%) | |||||||||||||||||
505 | ![]() | ![]() | 6.375 | ![]() | 08/15/27 | ![]() | 627,897 | |||||||||||
2,000 | ![]() | ![]() | 8.125 | ![]() | 08/15/21 | ![]() | 2,817,110 | |||||||||||
![]() | ![]() | ![]() | ![]() | 3,445,007 | ||||||||||||||
2,000 | ![]() | U. S. Treasury Note (0.6%) | ![]() | 4.25 | ![]() | 08/15/13 | ![]() | 2,016,720 | ||||||||||
![]() | U. S. Treasury Strips (3.6%) | |||||||||||||||||
9,750 | ![]() | ![]() | 0.00 | ![]() | 02/15/25 | ![]() | 3,843,879 | |||||||||||
11,000 | ![]() | ![]() | 0.00 | ![]() | 05/15/25 | ![]() | 4,269,232 | |||||||||||
9,750 | ![]() | ![]() | 0.00 | ![]() | 02/15/27 | ![]() | 3,513,637 | |||||||||||
![]() | ![]() | ![]() | ![]() | 11,626,748 | ||||||||||||||
![]() | Total U.S. Government Agency & Obligations (Cost $17,146,318) | ![]() | 17,685,455 | |||||||||||||||
![]() |
See Notes to Financial Statements
28
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | ![]() | VALUE | |||||||||||
![]() | U.S. Government Agencies – Collateralized Mortgage Obligations (6.5%) | ![]() | ||||||||||||||||
![]() | Federal Home Loan Mortgage Corp. (5.0%) | |||||||||||||||||
$ | 3,734 | ![]() | ![]() | 3.35 | % | ![]() | 06/15/29 | ![]() | $ | 3,743,289 | ||||||||
5,913 | ![]() | ![]() | 3.45 | ![]() | 08/15/28– 07/15/31 | ![]() | 5,945,056 | |||||||||||
2,122 | ![]() | ![]() | 3.60 | ![]() | 06/15/23 | ![]() | 2,126,969 | |||||||||||
2,919 | ![]() | ![]() | 5.50 | ![]() | 06/15/16 | ![]() | 2,930,326 | |||||||||||
1,489 | ![]() | ![]() | 6.00 | ![]() | 07/15/30 | ![]() | 1,511,001 | |||||||||||
![]() | ![]() | ![]() | ![]() | 16,256,641 | ||||||||||||||
4,884 | ![]() | Federal National Mortgage Assoc. (1.5%) | ![]() | 3.20 | ![]() | 03/25/17 | ![]() | 4,898,902 | ||||||||||
![]() | Total U.S. Government Agencies – Collateralized Mortgage Obligations (Cost $21,193,052) | ![]() | 21,155,543 | |||||||||||||||
![]() | Asset Backed Securities (0.4%) | |||||||||||||||||
![]() | Finance/Rental/Leasing | |||||||||||||||||
1,270 | ![]() | Targeted Return 144A* (Cost $1,299,781) | ![]() | 8.22 | ![]() | 08/01/15 | ![]() | 1,292,479 | ||||||||||
![]() | Total United States (Cost $237,590,948) | ![]() | 231,476,577 | |||||||||||||||
![]() | Total Government & Corporate Bonds (Cost $317,223,480) | ![]() | 305,448,689 | |||||||||||||||
![]() | Convertible Bond (0.2%) | |||||||||||||||||
![]() | Telecommunication Equipment | |||||||||||||||||
675 | ![]() | Nortel Networks Corp. (Canada) (Cost $647,276) | ![]() | 4.25 | ![]() | 09/01/08 | ![]() | 613,406 | ||||||||||
![]() |
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||
NUMBER OF SHARES | ![]() | ![]() | ||||||||||||||||
![]() | Common Stocks (e) (0.3%) | |||||||||||||||||
![]() | Aerospace & Defense (0.0%) | ![]() | ![]() | ![]() | ||||||||||||||
3,598 | ![]() | Orbital Sciences Corp. (d) | ![]() | 33,533 | ||||||||||||||
![]() | Apparel/Footwear Retail (0.0%) | |||||||||||||||||
1,310,596 | ![]() | County Seat Stores Corp. (d) (i) | ![]() | 0 | ||||||||||||||
![]() | Casino/Gaming (0.0%) | |||||||||||||||||
10,773 | ![]() | Fitzgeralds Gaming Corp.+ (i) | ![]() | 0 | ||||||||||||||
![]() | Food: Specialty/Candy (0.0%) | |||||||||||||||||
2,423 | ![]() | SFAC New Holdings Inc. (d)++ (i) | ![]() | 0 | ||||||||||||||
445 | ![]() | SFAC New Holdings Inc. (d) (i) | ![]() | 0 | ||||||||||||||
198,750 | ![]() | Specialty Foods Acquisition Corp. – 144A* (i) | ![]() | 0 | ||||||||||||||
![]() | ![]() | 0 | ||||||||||||||||
![]() | Medical/Nursing Services (0.0%) | |||||||||||||||||
512,862 | ![]() | Raintree Healthcare Corp. (d) (i) | ![]() | 0 | ||||||||||||||
![]() |
See Notes to Financial Statements
29
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||
NUMBER OF SHARES | ![]() | ![]() | VALUE | |||||||||||||||
![]() | Restaurants (0.1%) | |||||||||||||||||
37,319 | ![]() | American Restaurant Group Holdings, Inc. (d) (i) | ![]() | $ | 0 | |||||||||||||
4,383 | ![]() | American Restaurant Group Holdings, Inc. (d) (i) | ![]() | 0 | ||||||||||||||
6,000 | ![]() | American Restaurant Group Holdings, Inc. – 144A* (i) | ![]() | 0 | ||||||||||||||
95,844 | ![]() | Catalina Restaurant Group (d) (i) | ![]() | 191,688 | ||||||||||||||
![]() | ![]() | 191,688 | ||||||||||||||||
![]() | Specialty Telecommunications (0.0%) | |||||||||||||||||
12,688 | ![]() | Birch Telecom Inc. (d) (i) | ![]() | 127 | ||||||||||||||
133,935 | ![]() | PFB Telecom NV (Series B) (d) (i) | ![]() | 0 | ||||||||||||||
2,702 | ![]() | Viatel Holdings Bermuda Ltd. (d) (i) | ![]() | 541 | ||||||||||||||
![]() | ![]() | 668 | ||||||||||||||||
![]() | Textiles (0.0%) | |||||||||||||||||
298,462 | ![]() | U.S. Leather, Inc. (d) (i) | ![]() | 0 | ||||||||||||||
![]() | Wireless Telecommunications (0.2%) | |||||||||||||||||
15,266 | ![]() | NII Holdings, Inc. (Class B) (d) | ![]() | 764,369 | ||||||||||||||
677 | ![]() | USA Mobility, Inc. (d) | ![]() | 20,269 | ||||||||||||||
43,277 | ![]() | Vast Solutions, Inc. (Class B1) (d) (i) | ![]() | 0 | ||||||||||||||
43,277 | ![]() | Vast Solutions, Inc. (Class B2) (d) (i) | ![]() | 0 | ||||||||||||||
43,277 | ![]() | Vast Solutions, Inc. (Class B3) (d) (i) | ![]() | 0 | ||||||||||||||
![]() | ![]() | 784,638 | ||||||||||||||||
![]() | Total Common Stocks (Cost $60,699,207) | ![]() | 1,010,527 | |||||||||||||||
![]() | Convertible Preferred Stocks (e) (0.0%) | ![]() | ![]() | ![]() | ||||||||||||||
![]() | Oil & Gas Production (0.0%) | ![]() | ![]() | ![]() | ||||||||||||||
5,000 | ![]() | XCL Ltd. (Units) ‡ – 144A*† (i) | ![]() | 0 | ||||||||||||||
989 | ![]() | XLC Ltd. – 144A*† (i) | ![]() | 0 | ||||||||||||||
![]() | ![]() | 0 | ||||||||||||||||
![]() | Total Convertible Preferred Stocks ( Cost $1,000,778) | ![]() | 0 | |||||||||||||||
![]() | Non-Convertible Preferred Stocks (0.4%) | |||||||||||||||||
![]() | Broadcasting (0.0%) | ![]() | ![]() | ![]() | ||||||||||||||
17 | ![]() | Paxson Communications Corp.† | ![]() | 125,694 | ||||||||||||||
![]() | Electric Utilities (0.3%) | |||||||||||||||||
929 | ![]() | TNP Enterprises, Inc. (Series D)† | ![]() | 1,028,868 | ||||||||||||||
![]() | Restaurants (0.1%) | |||||||||||||||||
193 | ![]() | Catalina Restaurant Group (Units)‡ (i) | ![]() | 174,338 | ||||||||||||||
![]() | Non-Convertible Preferred Stocks (Cost $1,339,821) | ![]() | 1,328,900 | |||||||||||||||
![]() |
See Notes to Financial Statements
30
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
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![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
NUMBER OF WARRANTS | ![]() | ![]() | EXPIRATION DATE | ![]() | VALUE | |||||||||
![]() | Warrants (e) (0.0%) | |||||||||||||
![]() | Casino/Gaming (0.0%) | |||||||||||||
68,000 | ![]() | Aladdin Gaming Enterprises, Inc. – 144A* (i) | ![]() | 03/01/10 | ![]() | $ | 0 | |||||||
3,250 | ![]() | Resort At Summerlin LP – 144A* (i) | ![]() | 12/15/07 | ![]() | 0 | ||||||||
![]() | ![]() | ![]() | 0 | |||||||||||
![]() | Electric Utilities (0.0%) | |||||||||||||
965 | ![]() | TNP Enterprises, Inc. – 144A* | ![]() | 04/01/11 | ![]() | 29,915 | ||||||||
![]() | Restaurants (0.0%) | |||||||||||||
1,500 | ![]() | American Restaurant Group Holdings, Inc. – 144A* (i) | ![]() | 08/15/08 | ![]() | 0 | ||||||||
40,750 | ![]() | Catalina Restaurant Group (d) (i) | ![]() | 07/10/12 | ![]() | 0 | ||||||||
![]() | ![]() | ![]() | 0 | |||||||||||
![]() | Total Warrants (Cost $29,677) | ![]() | 29,915 | |||||||||||
![]() |
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
PRINCIPAL AMOUNT IN THOUSANDS | ![]() | ![]() | COUPON RATE | ![]() | MATURITY DATE | |||||||||||||
![]() | Short-Term Investments (7.8%) | ![]() | ![]() | ![]() | ||||||||||||||
![]() | U.S. Government Obligation (f) (0.1%) | ![]() | ![]() | ![]() | ||||||||||||||
$ | 350 | ![]() | U.S. Treasury Bills (b) (Cost $347,938) | ![]() | 2.828 | % | ![]() | 07/14/05 | ![]() | 347,998 | ||||||||
![]() | Repurchase Agreements (7.7%) | ![]() | ![]() | ![]() | ||||||||||||||
24,040 | ![]() | Joint repurchase agreement account (dated 04/29/05; proceeds $24,041,967) (g) | ![]() | 2.945 | ![]() | 05/02/05 | ![]() | 24,040,000 | ||||||||||
817 | ![]() | The Bank of New York (dated 04/29/05; proceeds $816,647) (h) | ![]() | 2.813 | ![]() | 05/02/05 | ![]() | 816,583 | ||||||||||
![]() | Total Repurchase Agreements (Cost $24,856,583) | ![]() | 24,856,583 | |||||||||||||||
![]() | Total Short-Term Investments (Cost $25,204,521) | ![]() | 25,204,581 | |||||||||||||||
![]() | Total Investments (Cost $406,144,760) (j) (k) | ![]() | 102.7 | % | ![]() | 333,636,018 | ||||||||||||
![]() | ![]() | ![]() | ![]() | |||||||||||||||
![]() | Liabilities in Excess of Other Assets | ![]() | (2.7 | ) | ![]() | (8,726,748 | ) | |||||||||||
![]() | ![]() | ![]() | ![]() | |||||||||||||||
![]() | Net Assets | ![]() | 100.0 | % | ![]() | $ | 324,909,270 | |||||||||||
![]() | ![]() | ![]() | ![]() | |||||||||||||||
![]() |
See Notes to Financial Statements
31
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
![]() |
![]() | * | Resale is restricted to qualified institutional investors. |
![]() | ** | Securities purchased on a forward commitment basis with an approximate principal amount and no definite maturity date; the actual principal amount and the maturity date will be determined upon settlement. |
![]() | *** | Floating rate security. Rate shown is the rate in effect at April 30, 2005. |
![]() | ‡ | Consists of one or more class of securities traded together as a unit; bonds or preferred stock with attached warrants. |
![]() | † | Payment-in-kind security. |
![]() | †† | Currently a zero coupon bond and will pay interest at the rate shown at a future date. |
![]() | + | Resale is restricted; acquired (12/22/98) at a cost basis of $48,586. |
![]() | ++ | Resale is restricted; acquired (06/10/99) at a cost basis of $24. |
![]() | +++ | Turkish currency index credit linked unsecure note. |
![]() | (a) | Issuer in bankruptcy. |
![]() | (b) | All or a portion of these securities have been physically segregated in connection with open futures contracts in the amount of $264,250. |
![]() | (c) | Non-income producing security; bond in default. |
![]() | (d) | Acquired through exchange offer. |
![]() | (e) | Non-income producing securities. |
![]() | (f) | Purchased on a discount basis. The interest rate shown has been adjusted to reflect a money market equivalent yield. |
![]() | (g) | Collateralized by federal agency and U.S. Treasury obligations. |
![]() | (h) | Collateralized by Federal National Mortgage Association 6.00% due 10/01/34 valued at $832,915. |
![]() | (i) | Securities with a total market value equal to $366,743 have been valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Trustees. |
![]() | (j) | Securities have been designated as collateral in an amount equal to $117,455,010 in connection with securities purchased on a forward commitment basis, forward foreign currency contracts and open futures contracts. |
![]() | (k) | The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $8,854,719 and the aggregate gross unrealized depreciation is $81,363,461, resulting in net unrealized depreciation of $72,508,742. |
See Notes to Financial Statements
32
Morgan Stanley Flexible Income Trust
Portfolio of Investments April 30, 2005 (unaudited) continued
Futures Contracts Open at April 30, 2005:
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
NUMBER OF CONTRACTS | ![]() | LONG/SHORT | ![]() | DESCRIPTION, DELIVERY MONTH AND YEAR | ![]() | UNDERLYING FACE AMOUNT AT VALUE | ![]() | ![]() | UNREALIZED APPRECIATION (DEPRECIATION) | |||||||||||||
135 | ![]() | Short | ![]() | US Treasury Note 2 Year, June 2005 | ![]() | $ | 28,039,921 | ![]() | ![]() | $ | 30,708 | |||||||||||
570 | ![]() | Short | ![]() | US Treasury Note 5 Year, June 2005 | ![]() | 61,818,284 | ![]() | ![]() | (173,567 | ) | ||||||||||||
100 | ![]() | Short | ![]() | US Treasury Note 10 Year, June 2005 | ![]() | 11,142,188 | ![]() | ![]() | 98,313 | |||||||||||||
50 | ![]() | Short | ![]() | US Treasury Note 20 Year, June 2005 | ![]() | 5,742,188 | ![]() | ![]() | 131,113 | |||||||||||||
![]() | Net unrealized appreciation | ![]() | ![]() | $ | 86,567 | |||||||||||||||||
![]() |
Forward Foreign Currency Contracts Open at April 30, 2005:
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
CONTRACTS TO DELIVER | ![]() | IN EXCHANGE FOR | ![]() | DELIVERY DATE | ![]() | UNREALIZED APPRECIATION | ||||||||||||
AUD | ![]() | 1,050,000 | ![]() | $ | 817,677 | ![]() | 05/23/05 | ![]() | $ | 2,898 | ||||||||
DKK | ![]() | 1,000,000 | ![]() | $ | 172,937 | ![]() | 06/21/05 | ![]() | 6,919 | |||||||||
Total unrealized appreciation | ![]() | $ | 9,817 | |||||||||||||||
![]() |
Currency Abbreviations |
![]() | |
![]() ![]() | ![]() |
![]() |
![]() |
![]() | AUD | Australian Dollar. |
![]() | DKK | Danish Krone. |
![]() | JPY | Japanese Yen. |
See Notes to Financial Statements
33
Morgan Stanley Flexible Income Trust
Financial Statments
Statement of Assets and Liabilities
April 30, 2005 (unaudited)
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
Assets: | ![]() | |||||
Investments in securities, at value (cost $406,144,760) | ![]() | $ | 333,636,018 | |||
Unrealized appreciation on open forward foreign currency contracts | ![]() | 9,817 | ||||
Cash | ![]() | 102,125 | ||||
Receivable for: | ![]() | |||||
Interest | ![]() | 3,952,661 | ||||
Investments sold | ![]() | 1,862,339 | ||||
Shares of beneficial interest sold | ![]() | 204,030 | ||||
Variation margin receivable | ![]() | 141,875 | ||||
Compensated forward foreign currency contracts | ![]() | 33,161 | ||||
Prepaid expenses and other assets | ![]() | 97,455 | ||||
Total Assets | ![]() | 340,039,481 | ||||
Liabilities: | ![]() | |||||
Payable for: | ![]() | |||||
Investments purchased | ![]() | 14,262,990 | ||||
Shares of beneficial interest redeemed | ![]() | 364,958 | ||||
Distribution fee | ![]() | 192,885 | ||||
Investment advisory fee | ![]() | 86,405 | ||||
Administration fee | ![]() | 21,601 | ||||
Accrued expenses and other payables | ![]() | 201,372 | ||||
Total Liabilities | ![]() | 15,130,211 | ||||
Net Assets | ![]() | $ | 324,909,270 | |||
Composition of Net Assets: | ![]() | |||||
Paid-in-capital | ![]() | $ | 655,708,111 | |||
Net unrealized depreciation | ![]() | (72,412,218 | ) | |||
Dividends in excess of net investment income | ![]() | (1,284,671 | ) | |||
Accumulated net realized loss | ![]() | (257,101,952 | ) | |||
Net Assets | ![]() | $ | 324,909,270 | |||
Class A Shares: | ![]() | |||||
Net Assets | ![]() | $ | 121,904,293 | |||
Shares Outstanding (unlimited authorized, $.01 par value) | ![]() | 19,740,596 | ||||
Net Asset Value Per Share | ![]() | $ | 6.18 | |||
Maximum Offering Price Per Share, (net asset value plus 4.44% of net asset value) | ![]() | $ | 6.45 | |||
Class B Shares: | ![]() | |||||
Net Assets | ![]() | $ | 171,697,359 | |||
Shares Outstanding (unlimited authorized, $.01 par value) | ![]() | 27,763,798 | ||||
Net Asset Value Per Share | ![]() | $ | 6.18 | |||
Class C Shares: | ![]() | |||||
Net Assets | ![]() | $ | 16,022,051 | |||
Shares Outstanding (unlimited authorized, $.01 par value) | ![]() | 2,594,929 | ||||
Net Asset Value Per Share | ![]() | $ | 6.17 | |||
Class D Shares: | ![]() | |||||
Net Assets | ![]() | $ | 15,285,567 | |||
Shares Outstanding (unlimited authorized, $.01 par value) | ![]() | 2,466,181 | ||||
Net Asset Value Per Share | ![]() | $ | 6.20 | |||
![]() |
See Notes to Financial Statements
34
Morgan Stanley Flexible Income Trust
Financial Statments continued
Statement of Operations
For the six months ended April 30, 2005 (unaudited)
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
Net Investment Income: | ![]() | |||||
Income | ![]() | |||||
Interest | ![]() | $ | 11,544,369 | |||
Dividends | ![]() | 147,909 | ||||
Total Income | ![]() | 11,692,278 | ||||
Expenses | ![]() | |||||
Distribution fee (Class A shares) | ![]() | 23,180 | ||||
Distribution fee (Class B shares) | ![]() | 1,186,698 | ||||
Distribution fee (Class C shares) | ![]() | 72,367 | ||||
Investment advisory fee | ![]() | 552,858 | ||||
Transfer agent fees and expenses | ![]() | 233,737 | ||||
Administration fee | ![]() | 138,214 | ||||
Professional fees | ![]() | 72,128 | ||||
Shareholder reports and notices | ![]() | 54,323 | ||||
Custodian fees | ![]() | 43,634 | ||||
Registration fees | ![]() | 27,312 | ||||
Trustees' fees and expenses | ![]() | 8,220 | ||||
Other | ![]() | 36,051 | ||||
Total Expenses | ![]() | 2,448,722 | ||||
Net Investment Income | ![]() | 9,243,556 | ||||
Net Realized and Unrealized Gain (Loss): | ![]() | |||||
Net Realized Gain/Loss on: | ![]() | |||||
Investments | ![]() | 1,508,157 | ||||
Futures contracts | ![]() | (5,822 | ) | |||
Foreign exchange transactions | ![]() | 4,911,230 | ||||
Net Realized Gain | ![]() | 6,413,565 | ||||
Net Change in Unrealized Appreciation/Depreciation on: | ![]() | |||||
Investments | ![]() | (12,485,839 | ) | |||
Futures contracts | ![]() | 1,044,992 | ||||
Translation of forward foreign currency contracts, other assets and liabilities denominated in foreign currencies | ![]() | 164,635 | ||||
Net Depreciation | ![]() | (11,276,212 | ) | |||
Net Loss | ![]() | (4,862,647 | ) | |||
Net Increase | ![]() | $ | 4,380,909 | |||
![]() |
See Notes to Financial Statements
35
Morgan Stanley Flexible Income Trust
Financial Statments continued
Statement of Changes in Net Assets
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() |
![]() | FOR THE SIX MONTHS ENDED APRIL 30, 2005 | ![]() | FOR THE YEAR ENDED OCTOBER 31, 2004 | |||||||
![]() | (unaudited) | ![]() | ||||||||
Increase (Decrease) in Net Assets: | ![]() | ![]() | ||||||||
Operations: | ![]() | ![]() | ||||||||
Net investment income | ![]() | $ | 9,243,556 | ![]() | $ | 16,345,724 | ||||
Net realized gain (loss) | ![]() | 6,413,565 | ![]() | (16,672,899 | ) | |||||
Net change in unrealized depreciation | ![]() | (11,276,212 | ) | ![]() | 30,142,126 | |||||
Net Increase | ![]() | 4,380,909 | ![]() | 29,814,951 | ||||||
Dividends to Shareholders from Net Investment Income: | ![]() | ![]() | ||||||||
Class A shares | ![]() | (1,276,524 | ) | ![]() | (2,668,181 | ) | ||||
Class B shares | ![]() | (11,596,945 | ) | ![]() | (26,206,205 | ) | ||||
Class C shares | ![]() | (695,037 | ) | ![]() | (1,336,679 | ) | ||||
Class D shares | ![]() | (735,450 | ) | ![]() | (1,767,190 | ) | ||||
Total Dividends | ![]() | (14,303,956 | ) | ![]() | (31,978,255 | ) | ||||
Net decrease from transactions in shares of beneficial interest | ![]() | (28,439,944 | ) | ![]() | (53,158,050 | ) | ||||
Net Decrease | ![]() | (38,362,991 | ) | ![]() | (55,321,354 | ) | ||||
Net Assets: | ![]() | ![]() | ||||||||
Beginning of period | ![]() | 363,272,261 | ![]() | 418,593,615 | ||||||
End of Period (Including accumulated net investment loss of $1,284,671 and accumulated undistributed net investment income of $3,775,729, respectively) | ![]() | $ | 324,909,270 | ![]() | $ | 363,272,261 | ||||
![]() |
See Notes to Financial Statements
36
Morgan Stanley Flexible Income Trust
Notes to Financial Statements April 30, 2005 (unaudited)
1. Organization and Accounting Policies
Morgan Stanley Flexible Income Trust (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as a diversified, open-end management investment company. The Fund's primary investment objective is to provide a high level of current income and, as a secondary objective, seeks to maximize total return, but only when consistent with its primary objective. The Fund was organized as a Massachusetts business trust on December 20, 1991 and commenced operations on April 9, 1992. On July 28, 1997, the Fund converted to a multiple class share structure.
The Fund offers Class A shares, Class B shares, Class C shares and Class D shares. The four classes are substantially the same except that most Class A shares are subject to a sales charge imposed at the time of purchase and some Class A shares, and most Class B shares and Class C shares are subject to a contingent deferred sales charge imposed on shares redeemed within one year, six years and one year, respectively. Class D shares are not subject to a sales charge. Additionally, Class A shares, Class B shares and Class C shares incur distribution expenses.
The following is a summary of significant accounting policies:
A. Valuation of Investments — (1) an equity portfolio security listed or traded on the New York Stock Exchange ("NYSE") or American Stock Exchange or other exchange is valued at its latest sale price prior to the time when assets are valued; if there were no sales that day, the security is valued at the mean between the last reported bid and asked price; (2) an equity portfolio security listed or traded on the Nasdaq is valued at the Nasdaq Official Closing Price; if there were no sales that day, the security is valued at the mean between the last reported bid and asked price; (3) all other portfolio securities for which over-the-counter market quotations are readily available are valued at the mean between the last reported bid and asked price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (4) for equity securities traded on foreign exchanges, the last reported sale price or the latest bid price may be used if there were no sales on a particular day; (5) futures are valued at the latest price published by the commodities exchange on which they trade; (6) when market quotations are not readily available or Morgan Stanley Investment Advisors Inc. (the "Investment Adviser") determines that the latest sale price, the bid price or the mean between the last reported bid and asked price do not reflect a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Trustees. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business on the NYSE. If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Fund's Trustees or by the Investment Adviser using a pricing service and/or procedures approved by the Trustees of the Fund;
37
Morgan Stanley Flexible Income Trust
Notes to Financial Statements April 30, 2005 (unaudited) continued
(7) certain portfolio securities may be valued by an outside pricing service approved by the Fund's Trustees; and (8) short-term debt securities having a maturity date of more than sixty days at time of purchase are valued on a mark-to-market basis until sixty days prior to maturity and thereafter at amortized cost based on their value on the 61st day. Short-term debt securities having a maturity date of sixty days or less at the time of purchase are valued at amortized cost.
B. Accounting for Investments — Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on security transactions are determined by the identified cost method. Dividend income and other distributions are recorded on the ex-dividend date. Discounts are accreted and premiums are amortized over the life of the respective securities. Interest income is accrued daily except where collection is not expected.
C. Repurchase Agreements — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated entities managed by the Investment Adviser, may transfer uninvested cash balances into one or more joint repurchase agreement accounts. These balances are invested in one or more repurchase agreements and are collateralized by cash, U.S. Treasury or federal agency obligations. The Fund may also invest directly with institutions in repurchase agreements. The Fund's custodian receives the collateral, which is marked-to-market daily to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest.
D. Multiple Class Allocations — Investment income, expenses (other than distribution fees), and realized and unrealized gains and losses are allocated to each class of shares based upon the relative net asset value on the date such items are recognized. Distribution fees are charged directly to the respective class.
E. Futures Contracts — A futures contract is an agreement between two parties to buy and sell financial instruments or contracts based on financial indices at a set price on a future date. Upon entering into such a contract, the Fund is required to pledge to the broker cash, U.S. Government securities or other liquid portfolio securities equal to the minimum initial margin requirements of the applicable futures exchange. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments known as variation margin are recorded by the Fund as unrealized gains and losses. Upon closing of the contract, the Fund realizes a gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
F. Foreign Currency Translation and Forward Foreign Currency Contracts — The books and records of the Fund are maintained in U.S. dollars as follows: (1) the foreign currency market value of investment securities, other assets and liabilities and forward foreign currency contracts ("forward contracts") are translated at the exchange rates prevailing at the end of the period; and (2) purchases, sales, income and expenses are translated at the exchange rates prevailing on the respective dates of such transactions. The resultant exchange gains and losses are recorded as realized and unrealized gain/loss on foreign exchange
38
Morgan Stanley Flexible Income Trust
Notes to Financial Statements April 30, 2005 (unaudited) continued
transactions. Pursuant to U.S. federal income tax regulations, certain foreign exchange gains/losses included in realized and unrealized gain/loss are included in or are a reduction of ordinary income for federal income tax purposes. 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 changes in the market prices of the securities. Forward contracts are valued daily at the appropriate exchange rates. The resultant unrealized exchange gains and losses are recorded as unrealized foreign currency gain or loss. The Fund records realized gains or losses on delivery of the currency or at the time the forward contract is extinguished (compensated) by entering into a closing transaction prior to delivery.
G. Federal Income Tax Policy — It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Accordingly, no federal income tax provision is required.
H. Dividends and Distributions to Shareholders — Dividends and distributions to shareholders are recorded on the ex-dividend date.
I. Use of Estimates — The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.
2. Investment Advisory/Administration Agreements
Pursuant to an Investment Advisory Agreement, the Fund pays the Investment Adviser an advisory fee, accrued daily and payable monthly, by applying the annual rate of 0.32% to the net assets of the Fund determined as of the close of each business day.
Pursuant to an Administration Agreement with Morgan Stanley Services Company Inc. (the "Administrator"), an affiliate of the Investment Adviser, the Fund pays an administration fee, accrued daily and payable monthly, by applying the annual rate of 0.08% to the Fund's daily net assets.
3. Plan of Distribution
Shares of the Fund are distributed by Morgan Stanley Distributors Inc. (the "Distributor"), an affiliate of the Investment Adviser and Administrator. The Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan provides that the Fund will pay the Distributor a fee which is accrued daily and paid monthly at the following annual rates: (i) Class A – up to 0.25% of the average daily net assets of Class A; (ii) Class B – up to 0.85% of the lesser of: (a) the average daily aggregate gross sales of the Class B shares since the inception of the Fund (not including reinvestment of dividend or capital gain distributions) less the average daily aggregate net asset value of the Class B shares redeemed since the Fund's inception upon which a contingent deferred sales charge has been imposed or waived; or (b) the average daily net assets of Class B; and (iii) Class C – up to 0.85% of the average daily net assets of Class C.
39
Morgan Stanley Flexible Income Trust
Notes to Financial Statements April 30, 2005 (unaudited) continued
In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by the Distributor but not yet recovered may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares. Although there is no legal obligation for the Fund to pay expenses incurred in excess of payments made to the Distributor under the Plan and the proceeds of contingent deferred sales charges paid by investors upon redemption of shares, if for any reason the Plan is terminated, the Trustees will consider at that time the manner in which to treat such expenses. The Distributor has advised the Fund that such excess amounts totaled $14,802,204 at April 30, 2005.
In the case of Class A shares and Class C shares, expenses incurred pursuant to the Plan in any calendar year in excess of 0.25% or 0.85% of the average daily net assets of Class A or Class C, respectively, will not be reimbursed by the Fund through payments in any subsequent year, except that expenses representing a gross sales credit to Morgan Stanley Financial Advisors or other selected broker-dealer representatives may be reimbursed in the subsequent calendar year. For the six months ended April 30, 2005, the distribution fee was accrued for Class A shares and Class C shares at the annual rate of 0.14% and 0.85%, respectively.
The Distributor has informed the Fund that for the six months ended April 30, 2005, it received contingent deferred sales charges from certain redemptions of the Fund's Class B shares and Class C shares of $179,594 and $1,916, respectively and received $26,670 in front-end sales charges from sales of the Fund's Class A shares. The respective shareholders pay such charges which are not an expense of the Fund.
4. Security Transactions and Transactions with Affiliates
The cost of purchases and proceeds from sales of portfolio securities, excluding short-term investments, for the six months ended April 30, 2005 aggregated $289,630,828 and $350,666,826, respectively. Included in the aforementioned are purchases and sales of U.S. Government securities of $232,245,630 and $219,119,886, respectively. Included in the aforementioned are purchases of $2,562,155 with other Morgan Stanley funds.
Morgan Stanley Trust, an affiliate of the Investment Adviser, Administrator and Distributor, is the Fund's transfer agent. At April 30, 2005, the Fund had transfer agent fees and expenses payable of $10,000.
The Fund has an unfunded noncontributory defined benefit pension plan covering certain independent Trustees of the Fund who will have served as independent Trustees for at least five years at the time of retirement. Benefits under this plan are based on factors which include years of service and compensation. Aggregate pension costs for the six months ended April 30, 2005 included in Trustees' fees and expenses in the Statement of Operations amounted to $5,969. At April 30, 2005, the Fund had an accrued pension liability of $94,038 which is included in accrued expenses in the Statement of Assets and Liabilities. On December 2, 2003, the Trustees voted to close the plan to new participants and eliminate the future benefits growth due to increases to compensation after July 31, 2003.
40
Morgan Stanley Flexible Income Trust
Notes to Financial Statements April 30, 2005 (unaudited) continued
The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan") which allows each independent Trustee to defer payment of all, or a portion, of the fees he receives for serving on the Board of Trustees. Each eligible Trustee generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the net asset value of the Fund.
5. Purpose of and Risks Relating to Certain Financial Instruments
The Fund may enter into forward contracts to facilitate settlement of foreign currency denominated portfolio transactions or to manage its foreign currency exposure or to sell, for a fixed amount of U.S. dollars or other currency, the amount of foreign currency approximating the value of some or all of its holdings denominated in such foreign currency or an amount of foreign currency other than the currency in which the securities to be hedged are denominated approximating the value of some or all of its holdings to be hedged. Additionally, when the Investment Manager anticipates purchasing securities at some time in the future, the Fund may enter into a forward contract to purchase an amount of currency equal to some or all the value of the anticipated purchase for a fixed amount of U.S. dollars or other currency.
To hedge against adverse interest rate, foreign currency and market risks, the Fund may enter into interest rate futures contracts ("futures contracts").
Forward contracts and futures contracts involve elements of market risk in excess of the amount reflected in the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the value of the underlying securities or in the foreign exchange rates underlying the forward contracts. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.
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Morgan Stanley Flexible Income Trust
Notes to Financial Statements April 30, 2005 (unaudited) continued
6. Shares of Beneficial Interest
Transactions in shares of beneficial interest were as follows:
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![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |
![]() | FOR THE SIX MONTHS ENDED APRIL 30, 2005 | ![]() | FOR THE YEAR ENDED OCTOBER 31, 2004 | ![]() | |||||||||||||||
![]() | (unaudited) | ![]() | ![]() | ||||||||||||||||
![]() | SHARES | ![]() | AMOUNT | ![]() | SHARES | ![]() | AMOUNT | ||||||||||||
CLASS A SHARES | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Sold | ![]() | 346,539 | ![]() | $ | 2,020,474 | ![]() | 1,866,841 | ![]() | $ | 11,782,516 | |||||||||
Conversion from Class B | ![]() | 15,399,449 | ![]() | 95,476,586 | ![]() | — | ![]() | — | |||||||||||
Reinvestment of dividends | ![]() | 76,077 | ![]() | 479,484 | ![]() | 156,527 | ![]() | 984,922 | |||||||||||
Redeemed | ![]() | (1,173,036 | ) | ![]() | (7,421,325 | ) | ![]() | (1,972,835 | ) | ![]() | (12,453,828 | ) | |||||||
Net increase – Class A | ![]() | 14,649,029 | ![]() | 90,555,219 | ![]() | 50,533 | ![]() | 313,610 | |||||||||||
CLASS B SHARES | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Sold | ![]() | 1,788,532 | ![]() | 11,339,755 | ![]() | 5,180,244 | ![]() | 32,798,359 | |||||||||||
Conversion to Class A | ![]() | (15,399,449 | ) | ![]() | (95,476,586 | ) | ![]() | — | ![]() | — | |||||||||
Reinvestment of dividends | ![]() | 814,795 | ![]() | 5,146,960 | ![]() | 1,817,409 | ![]() | 11,449,205 | |||||||||||
Redeemed | ![]() | (6,026,602 | ) | ![]() | (38,119,741 | ) | ![]() | (15,107,105 | ) | ![]() | (95,084,168 | ) | |||||||
Net decrease – Class B | ![]() | (18,822,724 | ) | ![]() | (117,109,612 | ) | ![]() | (8,109,452 | ) | ![]() | (50,836,604 | ) | |||||||
CLASS C SHARES | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Sold | ![]() | 211,318 | ![]() | 1,340,567 | ![]() | 692,323 | ![]() | 4,394,647 | |||||||||||
Reinvestment of dividends | ![]() | 60,277 | ![]() | 380,092 | ![]() | 113,279 | ![]() | 712,166 | |||||||||||
Redeemed | ![]() | (366,556 | ) | ![]() | (2,301,198 | ) | ![]() | (669,830 | ) | ![]() | (4,220,025 | ) | |||||||
Net increase (decrease) – Class C | ![]() | (94,961 | ) | ![]() | (580,539 | ) | ![]() | 135,772 | ![]() | 886,788 | |||||||||
CLASS D SHARES | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Sold | ![]() | 101,207 | ![]() | 644,252 | ![]() | 596,704 | ![]() | 3,829,246 | |||||||||||
Reinvestment of dividends | ![]() | 88,244 | ![]() | 558,331 | ![]() | 203,878 | ![]() | 1,286,543 | |||||||||||
Redeemed | ![]() | (395,055 | ) | ![]() | (2,507,595 | ) | ![]() | (1,369,623 | ) | ![]() | (8,637,633 | ) | |||||||
Net decrease – Class D | ![]() | (205,604 | ) | ![]() | (1,305,012 | ) | ![]() | (569,041 | ) | ![]() | (3,521,844 | ) | |||||||
Net decrease in Fund | ![]() | (4,474,260 | ) | ![]() | $ | (28,439,944 | ) | ![]() | (8,492,188 | ) | ![]() | $ | (53,158,050 | ) | |||||
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7. Federal Income Tax Status
The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. Dividends and distributions which exceed net investment income and net realized capital gains for tax purposes are reported as distributions of paid-in-capital.
42
Morgan Stanley Flexible Income Trust
Notes to Financial Statements April 30, 2005 (unaudited) continued
As of October 31, 2004, the Fund had a net capital loss carryforward of $264,098,672 of which $7,130,711 will expire on October 31, 2005, $7,532,322 will expire on October 31, 2006, $10,929,321 will expire on October 31, 2007, $18,698,270 will expire on October 31, 2008, $39,097,864 will expire on October 31, 2009, $58,593,426 will expire on October 31, 2010, $96,230,817 will expire on October 31, 2011 and $25,885,941 will expire on October 31, 2012 to offset future capital gains to the extent provided by regulations.
As of October 31, 2004, the Fund had temporary book/tax differences primarily attributable to book amortization of premiums on debt securities, mark-to-market of open futures and forward foreign currency exchange contracts, interest on bonds in default and capital loss deferrals on straddles.
8. Legal Matters
The Investment Adviser, certain affiliates of the Investment Adviser, certain officers of such affiliates and certain investment companies advised by the Investment Adviser or its affiliates, including the Fund, are named as defendants in a consolidated class action. This consolidated action also names as defendants certain individual Trustees and Directors of the Morgan Stanley funds. The consolidated amended complaint generally alleges that defendants, including the Fund, violated their statutory disclosure obligations and fiduciary duties by failing properly to disclose (i) that the Investment Adviser and certain affiliates of the Investment Adviser allegedly offered economic incentives to brokers and others to recommend the funds advised by the Investment Adviser or its affiliates to investors rather than funds managed by other companies, and (ii) that the funds advised by the Investment Adviser or its affiliates, including the Fund, allegedly paid excessive commissions to brokers in return for their efforts to recommend these funds to investors. The complaint seeks, among other things, unspecified compensatory damages, rescissionary damages, fees and costs. The defendants have moved to dismiss the action and intend to otherwise vigorously defend it. On March 10, 2005, Plaintiffs sought leave to supplement their complaint to assert claims on behalf of other investors. While the Fund and Adviser believe that each has meritorious defenses, the ultimate outcome of this matter is not presently determinable at this early stage of the litigation, and no provision has been made in the Fund's financial statements for the effect, if any, of this matter.
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Morgan Stanley Flexible Income Trust
Financial Highlights
Selected ratios and per share data for a share of beneficial interest outstanding throughout each period:
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![]() | FOR THE SIX MONTHS ENDED APRIL 30, 2005 | ![]() | FOR THE YEAR ENDED OCTOBER 31, | ![]() | |||||||||||||||||||||||
![]() | 2004 | ![]() | 2003 | ![]() | 2002 | ![]() | 2001 | ![]() | 2000 | ||||||||||||||||||
![]() | (unaudited | ) | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||
Class A Shares | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Selected Per Share Data: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net asset value, beginning of period | ![]() | $ | 6.36 | ![]() | $ | 6.38 | ![]() | $ | 5.95 | ![]() | $ | 6.10 | ![]() | $ | 6.97 | ![]() | $ | 8.16 | |||||||||
Income (loss) from investment operations: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net investment income‡ | ![]() | 0.19 | ![]() | 0.30 | ![]() | 0.23 | ![]() | 0.42 | ![]() | 0.56 | ![]() | 0.72 | |||||||||||||||
Net realized and unrealized gain (loss) | ![]() | (0.18 | ) | ![]() | 0.23 | ![]() | 0.56 | ![]() | (0.18 | ) | ![]() | (0.88 | ) | ![]() | (1.23 | ) | |||||||||||
Total income (loss) from investment operations | ![]() | 0.01 | ![]() | 0.53 | ![]() | 0.79 | ![]() | 0.24 | ![]() | (0.32 | ) | ![]() | (0.51 | ) | |||||||||||||
Less dividends and distributions from: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net investment income | ![]() | (0.19 | ) | ![]() | (0.55 | ) | ![]() | (0.36 | ) | ![]() | (0.38 | ) | ![]() | (0.32 | ) | ![]() | (0.62 | ) | |||||||||
Paid-in-capital | ![]() | — | ![]() | — | ![]() | — | ![]() | (0.01 | ) | ![]() | (0.23 | ) | ![]() | (0.06 | ) | ||||||||||||
Total dividends and distributions | ![]() | (0.19 | ) | ![]() | (0.55 | ) | ![]() | (0.36 | ) | ![]() | (0.39 | ) | ![]() | (0.55 | ) | ![]() | (0.68 | ) | |||||||||
Net asset value, end of period | ![]() | $ | 6.18 | ![]() | $ | 6.36 | ![]() | $ | 6.38 | ![]() | $ | 5.95 | ![]() | $ | 6.10 | ![]() | $ | 6.97 | |||||||||
Total Return† | ![]() | 1.39 | % (1) | ![]() | 8.64 | % | ![]() | 13.65 | % | ![]() | 4.25 | % | ![]() | (4.62 | )% | ![]() | (6.66 | )% | |||||||||
Ratios to Average Net Assets(3): | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Expenses | ![]() | 0.82 | % (2) | ![]() | 0.84 | % | ![]() | 0.84 | % | ![]() | 0.81 | % | ![]() | 0.76 | %(4) | ![]() | 0.73 | % | |||||||||
Net investment income | ![]() | 5.95 | % (2) | ![]() | 4.76 | % | ![]() | 3.71 | % | ![]() | 7.13 | % | ![]() | 8.78 | %(4) | ![]() | 9.28 | % | |||||||||
Supplemental Data: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net assets, end of period, in thousands | ![]() | $121,904 | ![]() | $32,383 | ![]() | $32,166 | ![]() | $29,701 | ![]() | $29,769 | ![]() | $13,318 | |||||||||||||||
Portfolio turnover rate | ![]() | 85 | % (1) | ![]() | 282 | % | ![]() | 309 | % | ![]() | 82 | % | ![]() | 110 | % | ![]() | 40 | % | |||||||||
![]() |
![]() |
![]() | ‡ | The per share amounts were computed using an average number of shares outstanding during the period. |
![]() | † | Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period. |
![]() | (1) | Not annualized. |
![]() | (2) | Annualized. |
![]() | (3) | Reflects overall Fund ratios for investment income and non-class specific expenses. |
![]() | (4) | If the Fund had borne all expenses that were waived by the Investment Adviser, the expense and net investment income ratios would have been 0.78% and 8.76%, respectively. |
See Notes to Financial Statements
44
Morgan Stanley Flexible Income Trust
Financial Highlights continued
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![]() | FOR THE SIX MONTHS ENDED APRIL 30, 2005 | ![]() | FOR THE YEAR ENDED OCTOBER 31, | ![]() | |||||||||||||||||||||||
![]() | 2004 | ![]() | 2003 | ![]() | 2002 | ![]() | 2001 | ![]() | 2000 | ||||||||||||||||||
![]() | (unaudited | ) | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||
Class B Shares | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Selected Per Share Data: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net asset value, beginning of period | ![]() | $ | 6.37 | ![]() | $ | 6.39 | ![]() | $ | 5.96 | ![]() | $ | 6.10 | ![]() | $ | 6.98 | ![]() | $ | 8.16 | |||||||||
Income (loss) from investment operations: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net investment income‡ | ![]() | 0.16 | ![]() | 0.26 | ![]() | 0.19 | ![]() | 0.38 | ![]() | 0.53 | ![]() | 0.67 | |||||||||||||||
Net realized and unrealized gain (loss) | ![]() | (0.18 | ) | ![]() | 0.22 | ![]() | 0.56 | ![]() | (0.17 | ) | ![]() | (0.90 | ) | ![]() | (1.22 | ) | |||||||||||
Total income (loss) from investment operations | ![]() | (0.02 | ) | ![]() | 0.48 | ![]() | 0.75 | ![]() | 0.21 | ![]() | (0.37 | ) | ![]() | (0.55 | ) | ||||||||||||
Less dividends and distributions from: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net investment income | ![]() | (0.17 | ) | ![]() | (0.50 | ) | ![]() | (0.32 | ) | ![]() | (0.34 | ) | ![]() | (0.30 | ) | ![]() | (0.58 | ) | |||||||||
Paid-in-capital | ![]() | — | ![]() | — | ![]() | — | ![]() | (0.01 | ) | ![]() | (0.21 | ) | ![]() | (0.05 | ) | ||||||||||||
Total dividends and distributions | ![]() | (0.17 | ) | ![]() | (0.50 | ) | ![]() | (0.32 | ) | ![]() | (0.35 | ) | ![]() | (0.51 | ) | ![]() | (0.63 | ) | |||||||||
Net asset value, end of period | ![]() | $ | 6.18 | ![]() | $ | 6.37 | ![]() | $ | 6.39 | ![]() | $ | 5.96 | ![]() | $ | 6.10 | ![]() | $ | 6.98 | |||||||||
Total Return† | ![]() | 1.02 | % (1) | ![]() | 7.91 | % | ![]() | 12.89 | % | ![]() | 3.73 | % | ![]() | (5.37 | )% | ![]() | (7.24 | )% | |||||||||
Ratios to Average Net Assets(3): | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Expenses | ![]() | 1.53 | % (2) | ![]() | 1.51 | % | ![]() | 1.50 | % | ![]() | 1.47 | % | ![]() | 1.41 | %(4) | ![]() | 1.38 | % | |||||||||
Net investment income | ![]() | 5.24 | % (2) | ![]() | 4.09 | % | ![]() | 3.06 | % | ![]() | 6.47 | % | ![]() | 8.13 | %(4) | ![]() | 8.63 | % | |||||||||
Supplemental Data: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net assets, end of period, in thousands | ![]() | $171,697 | ![]() | $296,729 | ![]() | $349,392 | ![]() | $355,329 | ![]() | $454,883 | ![]() | $565,493 | |||||||||||||||
Portfolio turnover rate | ![]() | 85 | % (1) | ![]() | 282 | % | ![]() | 309 | % | ![]() | 82 | % | ![]() | 110 | % | ![]() | 40 | % | |||||||||
![]() |
![]() |
![]() | ‡ | The per share amounts were computed using an average number of shares outstanding during the period. |
![]() | † | Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period. |
![]() | (1) | Not annualized. |
![]() | (2) | Annualized. |
![]() | (3) | Reflects overall Fund ratios for investment income and non-class specific expenses. |
![]() | (4) | If the Fund had borne all expenses that were waived by the Investment Adviser, the expense and net investment income ratios would have been 1.43% and 8.11%, respectively. |
See Notes to Financial Statements
45
Morgan Stanley Flexible Income Trust
Financial Highlights continued
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |
![]() | FOR THE SIX MONTHS ENDED APRIL 30, 2005 | ![]() | FOR THE YEAR ENDED OCTOBER 31, | ![]() | |||||||||||||||||||||||
![]() | 2004 | ![]() | 2003 | ![]() | 2002 | ![]() | 2001 | ![]() | 2000 | ||||||||||||||||||
![]() | (unaudited | ) | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||
Class C Shares | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Selected Per Share Data: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net asset value, beginning of period | ![]() | $ | 6.36 | ![]() | $ | 6.38 | ![]() | $ | 5.95 | ![]() | $ | 6.09 | ![]() | $ | 6.97 | ![]() | $ | 8.15 | |||||||||
Income (loss) from investment operations: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net investment income‡ | ![]() | 0.16 | ![]() | 0.26 | ![]() | 0.19 | ![]() | 0.38 | ![]() | 0.53 | ![]() | 0.67 | |||||||||||||||
Net realized and unrealized gain (loss) | ![]() | (0.18 | ) | ![]() | 0.22 | ![]() | 0.56 | ![]() | (0.17 | ) | ![]() | (0.90 | ) | ![]() | (1.22 | ) | |||||||||||
Total income (loss) from investment operations | ![]() | (0.02 | ) | ![]() | 0.48 | ![]() | 0.75 | ![]() | 0.21 | ![]() | (0.37 | ) | ![]() | (0.55 | ) | ||||||||||||
Less dividends and distributions from: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net investment income | ![]() | (0.17 | ) | ![]() | (0.50 | ) | ![]() | (0.32 | ) | ![]() | (0.34 | ) | ![]() | (0.30 | ) | ![]() | (0.58 | ) | |||||||||
Paid-in-capital | ![]() | — | ![]() | — | ![]() | — | ![]() | (0.01 | ) | ![]() | (0.21 | ) | ![]() | (0.05 | ) | ||||||||||||
Total dividends and distributions | ![]() | (0.17 | ) | ![]() | (0.50 | ) | ![]() | (0.32 | ) | ![]() | (0.35 | ) | ![]() | (0.51 | ) | ![]() | (0.63 | ) | |||||||||
Net asset value, end of period | ![]() | $ | 6.17 | ![]() | $ | 6.36 | ![]() | $ | 6.38 | ![]() | $ | 5.95 | ![]() | $ | 6.09 | ![]() | $ | 6.97 | |||||||||
Total Return† | ![]() | 1.02 | % (1) | ![]() | 7.93 | % | ![]() | 12.92 | % | ![]() | 3.74 | % | ![]() | (5.38 | )% | ![]() | (7.12 | )% | |||||||||
Ratios to Average Net Assets(3): | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Expenses | ![]() | 1.53 | % (2) | ![]() | 1.51 | % | ![]() | 1.50 | % | ![]() | 1.47 | % | ![]() | 1.35 | %(4) | ![]() | 1.38 | % | |||||||||
Net investment income | ![]() | 5.24 | % (2) | ![]() | 4.09 | % | ![]() | 3.06 | % | ![]() | 6.47 | % | ![]() | 8.19 | %(4) | ![]() | 8.63 | % | |||||||||
Supplemental Data: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net assets, end of period, in thousands | ![]() | $16,022 | ![]() | $17,106 | ![]() | $16,293 | ![]() | $12,524 | ![]() | $12,754 | ![]() | $14,313 | |||||||||||||||
Portfolio turnover rate | ![]() | 85 | % (1) | ![]() | 282 | % | ![]() | 309 | % | ![]() | 82 | % | ![]() | 110 | % | ![]() | 40 | % | |||||||||
![]() |
![]() |
![]() | ‡ | The per share amounts were computed using an average number of shares outstanding during the period. |
![]() | † | Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period. |
![]() | (1) | Not annualized. |
![]() | (2) | Annualized. |
![]() | (3) | Reflects overall Fund ratios for investment income and non-class specific expenses. |
![]() | (4) | If the Fund had borne all expenses that were waived by the Investment Adviser, the expense and net investment income ratios would have been 1.37% and 8.17%, respectively. |
See Notes to Financial Statements
46
Morgan Stanley Flexible Income Trust
Financial Highlights continued
![](https://capedge.com/proxy/N-CSR/0000950136-05-003967/spacer.gif)
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |
![]() | FOR THE SIX MONTHS ENDED APRIL 30, 2005 | ![]() | FOR THE YEAR ENDED OCTOBER 31, | ![]() | |||||||||||||||||||||||
![]() | 2004 | ![]() | 2003 | ![]() | 2002 | ![]() | 2001 | ![]() | 2000 | ||||||||||||||||||
![]() | (unaudited | ) | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||
Class D Shares | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Selected Per Share Data: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net asset value, beginning of period | ![]() | $ | 6.38 | ![]() | $ | 6.40 | ![]() | $ | 5.97 | ![]() | $ | 6.11 | ![]() | $ | 6.99 | ![]() | $ | 8.15 | |||||||||
Income (loss) from investment operations: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net investment income‡ | ![]() | 0.19 | ![]() | 0.31 | ![]() | 0.24 | ![]() | 0.41 | ![]() | 0.56 | ![]() | 0.72 | |||||||||||||||
Net realized and unrealized gain (loss) | ![]() | (0.18 | ) | ![]() | 0.23 | ![]() | 0.56 | ![]() | (0.15 | ) | ![]() | (0.87 | ) | ![]() | (1.19 | ) | |||||||||||
Total income (loss) from investment operations | ![]() | 0.01 | ![]() | 0.54 | ![]() | 0.80 | ![]() | 0.26 | ![]() | (0.31 | ) | ![]() | (0.47 | ) | |||||||||||||
Less dividends and distributions from: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net investment income | ![]() | (0.19 | ) | ![]() | (0.56 | ) | ![]() | (0.37 | ) | ![]() | (0.39 | ) | ![]() | (0.33 | ) | ![]() | (0.63 | ) | |||||||||
Paid-in-capital | ![]() | — | ![]() | — | ![]() | — | ![]() | (0.01 | ) | ![]() | (0.24 | ) | ![]() | (0.06 | ) | ||||||||||||
Total dividends and distributions | ![]() | (0.19 | ) | ![]() | (0.56 | ) | ![]() | (0.37 | ) | ![]() | (0.40 | ) | ![]() | (0.57 | ) | ![]() | (0.69 | ) | |||||||||
Net asset value, end of period | ![]() | $ | 6.20 | ![]() | $ | 6.38 | ![]() | $ | 6.40 | ![]() | $ | 5.97 | ![]() | $ | 6.11 | ![]() | $ | 6.99 | |||||||||
Total Return† | ![]() | 1.61 | % (1) | ![]() | 8.81 | % | ![]() | 13.82 | % | ![]() | 4.61 | % | ![]() | (4.56 | )% | ![]() | (6.20 | )% | |||||||||
Ratios to Average Net Assets(3): | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Expenses | ![]() | 0.68 | % (2) | ![]() | 0.66 | % | ![]() | 0.65 | % | ![]() | 0.62 | % | ![]() | 0.56 | %(4) | ![]() | 0.53 | % | |||||||||
Net investment income | ![]() | 6.09 | % (2) | ![]() | 4.94 | % | ![]() | 3.91 | % | ![]() | 7.32 | % | ![]() | 8.98 | %(4) | ![]() | 9.48 | % | |||||||||
Supplemental Data: | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Net assets, end of period, in thousands | ![]() | $15,286 | ![]() | $17,054 | ![]() | $20,743 | ![]() | $15,474 | ![]() | $7,049 | ![]() | $1,493 | |||||||||||||||
Portfolio turnover rate | ![]() | 85 | % (1) | ![]() | 282 | % | ![]() | 309 | % | ![]() | 82 | % | ![]() | 110 | % | ![]() | 40 | % | |||||||||
![]() |
![]() |
![]() | ‡ | The per share amounts were computed using an average number of shares outstanding during the period. |
![]() | † | Calculated based on the net asset value as of the last business day of the period. |
![]() | (1) | Not annualized. |
![]() | (2) | Annualized. |
![]() | (3) | Reflects overall Fund ratios for investment income and non-class specific expenses. |
![]() | (4) | If the Fund had borne all expenses that were waived by the Investment Adviser, the expense and net investment income ratios would have been 0.58% and 8.96%, respectively. |
See Notes to Financial Statements
47
![]() | ![]() | ![]() |
Trustees Michael Bozic Officers Charles A. Fiumefreddo Mitchell M. Merin Ronald E. Robison Joseph J. McAlinden Barry Fink Amy R. Doberman Carsten Otto Stefanie V. Chang Francis J. Smith Thomas F. Caloia Mary E. Mullin Transfer Agent Morgan Stanley Trust Independent Registered Public Accounting Firm Deloitte & Touche LLP Investment Adviser Morgan Stanley Investment Advisors Inc. The financial statements included herein have been taken from the records of the Fund without examination by the independent auditors and accordingly they do not express an opinion thereon. This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Fund, including its trustees. It is available, without charge, by calling (800) 869-NEWS. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing. Investments and services offered through Morgan Stanley DW Inc., member SIPC. Morgan Stanley Distributors Inc., member NASD. © 2005 Morgan Stanley ![]() 37937RPT-RA05-00453P-Y04/05 | ![]() | MORGAN STANLEY FUNDS |
Morgan Stanley Flexible Income Trust Semiannual Report April 30, 2005 | ||
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Item 2. Code of Ethics. Not applicable for semiannual reports. Item 3. Audit Committee Financial Expert. Not applicable for semiannual reports. Item 4. Principal Accountant Fees and Services Not applicable for semiannual reports. Item 5. Audit Committee of Listed Registrants. Not applicable for semiannual reports. Item 6. Refer to Item 1. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable for semiannual reports. Item 8. Portfolio Managers of Closed-End Management Investment Companies Applicable only to reports filed by closed-end funds. Item 9. Closed-End Fund Repurchases Applicable to reports filed by closed-end funds. Item 10. Submission of Matters to a Vote of Security Holders Not applicable. Item 11. Controls and Procedures (a) The Fund's principal executive officer and principal financial officer have concluded that the Fund's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. Exhibits (a) Code of Ethics - Not applicable for semiannual reports. (b) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto as part of EX-99.CERT. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Morgan Stanley Flexible Income Trust /s/ Ronald E. Robison Ronald E. Robison Principal Executive Officer June 16, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ Ronald E. Robison Ronald E. Robison Principal Executive Officer June 16, 2005 /s/ Francis Smith Francis Smith Principal Financial Officer June 16, 2005 3 EXHIBIT 12 B1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER CERTIFICATIONS -------------- I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-CSR of Morgan Stanley Flexible Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): 4 a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: June 16, 2005 /s/ Ronald E. Robison Ronald E. Robison Principal Executive Officer 5 EXHIBIT 12 B2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER CERTIFICATIONS -------------- I, Francis Smith, certify that: 1. I have reviewed this report on Form N-CSR of Morgan Stanley Flexible Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): 6 a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: June 16, 2005 /s/ Francis Smith Francis Smith Principal Financial Officer 7 SECTION 906 CERTIFICATION Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Morgan Stanley Flexible Income Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended April 30, 2005 that is accompanied by this certification, the undersigned hereby certifies that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: June 16, 2005 /s/ Ronald E. Robison --------------------------- Ronald E. Robison Principal Executive Officer A signed original of this written statement required by Section 906 has been provided to Morgan Stanley Flexible Income Trust and will be retained by Morgan Stanley Flexible Income Trust and furnished to the Securities and Exchange Commission or its staff upon request. 8 SECTION 906 CERTIFICATION Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Morgan Stanley Flexible Income Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended April 30, 2005 that is accompanied by this certification, the undersigned hereby certifies that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: June 16, 2005 /s/ Francis Smith ---------------------- Francis Smith Principal Financial Officer A signed original of this written statement required by Section 906 has been provided to Morgan Stanley Flexible Income Trust and will be retained by Morgan Stanley Flexible Income Trust and furnished to the Securities and Exchange Commission or its staff upon request. 9