Schedule 14A Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities and Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Preliminary Additional Materials
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6
(e) (2) )
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.149-11 (c) or Section 240.14

Morgan Stanley Municipal Income Opportunities Trust II
Morgan Stanley Insured Municipal Securities
Morgan Stanley Insured California Municipal Securities

------------------------------------------------
(Name of Registrant as Specified in its Charter)

LouAnne D. McInnis
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(j) (4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:

Set forth the amount on which the filing fee is calculated and state how it
was determined.

4) Proposed maximum aggregate value of transaction:

5) Fee previously paid:

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the datez of its filing.

1) Amount Previously paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

MORGAN STANLEY MUNICIPAL INCOME OPPORTUNITIES TRUST II
MORGAN STANLEY INSURED MUNICIPAL SECURITIES
MORGAN STANLEY INSURED CALIFORNIA MUNICIPAL SECURITIES

NOTICE OF ANNUAL MEETINGS OF SHAREHOLDERS

TO BE HELD JUNE 22, 2004

Annual Meetings of Shareholders ("Meeting(s)") of MORGAN STANLEY MUNICIPAL
INCOME OPPORTUNITIES TRUST II, MORGAN STANLEY INSURED MUNICIPAL SECURITIES and
MORGAN STANLEY INSURED CALIFORNIA MUNICIPAL SECURITIES (individually, a "Fund"
and, collectively, the "Funds"), unincorporated business trusts organized under
the laws of the Commonwealth of Massachusetts, will be held jointly in the
North Conference Room, 5th Floor, at 1221 Avenue of the Americas, New York, New
York 10020, on June 22, 2004 at 11:00 a.m., New York City time, for the
following purposes:

1. For MORGAN STANLEY MUNICIPAL INCOME OPPORTUNITIES TRUST II, to elect
four Trustees to serve until the year 2007 Annual Meeting of the Fund; or
until their successors shall have been elected and qualified; and for
MORGAN STANLEY INSURED MUNICIPAL SECURITIES and MORGAN STANLEY INSURED
CALIFORNIA MUNICIPAL SECURITIES, to elect two Trustees to serve until the
year 2006 Annual Meeting of each Fund and to elect two Trustees to serve
until the year 2007 Annual Meeting of each Fund; or in each case, until
their successors shall have been elected and qualified; and

2. To transact such other business as may properly come before the
Meetings or any adjournments thereof.

Shareholders of record of each Fund as of the close of business on April
22, 2004 are entitled to notice of and to vote at the Meeting. If you cannot be
present in person, your management would greatly appreciate your filling in,
signing and returning the enclosed proxy promptly in the envelope provided for
that purpose. Alternatively, if you are eligible to vote telephonically by
touchtone telephone or electronically on the Internet (as discussed in the
enclosed Proxy Statement) you may do so in lieu of attending the Meeting in
person.

In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Meeting of
any Fund, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies. Any such adjournment
will require the affirmative vote of the holders of a majority of the
applicable Fund's shares present in person or by proxy at the Meeting. The
persons named as proxies will vote in favor of such adjournment those proxies
which have been received by the date of the Meeting.

MARY E. MULLIN
Secretary

May 12, 2004
New York, New York

- --------------------------------------------------------------------------------
IMPORTANT
YOU CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP LETTERS TO
ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU ARE UNABLE TO
BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE ENCLOSED PROXY IN
ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING. THE
ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. CERTAIN
SHAREHOLDERS WILL BE ABLE TO VOTE TELEPHONICALLY BY TOUCHTONE TELEPHONE OR
ELECTRONICALLY ON THE INTERNET BY FOLLOWING INSTRUCTIONS CONTAINED ON THEIR
PROXY CARDS OR ON THE ENCLOSED VOTING INFORMATION CARD.
- --------------------------------------------------------------------------------

MORGAN STANLEY MUNICIPAL INCOME OPPORTUNITIES TRUST II
MORGAN STANLEY INSURED MUNICIPAL SECURITIES
MORGAN STANLEY INSURED CALIFORNIA MUNICIPAL SECURITIES

1221 AVENUE OF THE AMERICAS,
NEW YORK, NEW YORK 10020

--------------------

JOINT PROXY STATEMENT

--------------------

ANNUAL MEETINGS OF SHAREHOLDERS

JUNE 22, 2004

This statement is furnished in connection with the solicitation of proxies
by the Boards of Trustees (the "Board(s)") of MORGAN STANLEY MUNICIPAL INCOME
OPPORTUNITIES TRUST II ("OIB"), MORGAN STANLEY INSURED MUNICIPAL SECURITIES
("IMS") and MORGAN STANLEY INSURED CALIFORNIA MUNICIPAL SECURITIES ("ICS")
(individually, a "Fund" and, collectively, the "Funds") for use at the Annual
Meetings of Shareholders of the Funds to be held jointly on June 22, 2004 (the
"Meeting(s)"), and at any adjournments thereof. The first mailing of this Proxy
Statement is expected to be made on or about May 14, 2004.

If the enclosed form of proxy is properly executed and returned in time to
be voted at the Meetings, the proxies named therein will vote the shares
("Shares") represented by the proxy in accordance with the instructions marked
thereon. Unmarked proxies submitted by shareholders of a Fund ("Shareholders")
will be voted for each of the nominees for election as Trustee to be elected by
Shareholders of that Fund, with respect to that Fund set forth in the attached
Notice of Annual Meetings of Shareholders. A proxy may be revoked at any time
prior to its exercise by any of the following: written notice of revocation to
the Secretary of the Funds, execution and delivery of a later dated proxy to
the Secretary of the Funds (whether by mail or, as discussed below, by
touchtone telephone or the Internet) (if returned and received in time to be
voted), or attendance and voting at the Meetings. Attendance at the Meetings
will not in and of itself revoke a proxy.

Shareholders of record ("Shareholders") of each Fund as of the close of
business on April 22, 2004, the record date for the determination of
Shareholders entitled to notice of and to vote at the Meetings (the "Record
Date"), are entitled to one vote for each share held and a fractional vote for
a fractional share. On the Record Date, there were 17,375,149 shares of
beneficial interest of OIB, 7,439,920 shares of beneficial interest of IMS and
3,757,214 shares of beneficial interest of ICS outstanding, all with $0.01 par
value. No person was known to own as much as 5% of the outstanding shares of
any of the Funds on that date. The percentage ownership of shares of each Fund
changes from time to time depending on purchases and sales by Shareholders and
the total number of shares outstanding.

The cost of soliciting proxies for the Meeting of each Fund, consisting
principally of printing and mailing expenses, will be borne by each respective
Fund. The solicitation of proxies will be by mail, which may be supplemented by
solicitation by mail, telephone or otherwise through Trustees, officers of the
Funds, or officers and regular employees of Morgan Stanley Investment Advisors
Inc. ("Morgan Stanley Investment Advisors", the "Investment Manager" or the
"Investment Advisor"), Morgan Stanley Trust (or the "Transfer Agent"), Morgan
Stanley Services Company Inc. ("Morgan Stanley Services") and/or Morgan Stanley
DW Inc. ("Morgan Stanley DW"), without special compensation therefor. In
addition, each Fund may employ Alamo

Direct Mail Services Inc. ("Alamo") to make telephone calls to Shareholders to
remind them to vote. In addition, each Fund may employ Alamo or D.F. King &
Co., Inc. ("D.F. King") as proxy solicitor if it appears that the required
number of votes to achieve a quorum will not be received. In the event of a
solicitation by Alamo or D.F. King, each Fund would pay the solicitor a project
management fee not to exceed $3,000 and the expenses outlined below.

Shareholders will be able to vote their shares by touchtone telephone or
by Internet by following the instructions on the proxy card or on the Voting
Information Card accompanying this Proxy Statement. To vote by Internet or
telephone, Shareholders can access the website or call the toll-free number
listed on the proxy card or noted in the enclosed voting instructions. To vote
by Internet or telephone, Shareholders will need the "control number" that
appears on the proxy card.

In certain instances, Morgan Stanley Trust, Alamo and/or D.F. King may
call Shareholders to ask if they would be willing to have their votes recorded
by telephone. The telephone voting procedure is designed to authenticate
Shareholders' identities, to allow Shareholders to authorize the voting of
their shares in accordance with their instructions and to confirm that their
instructions have been recorded properly. No recommendation will be made as to
how a Shareholder should vote on any proposal other than to refer to the
recommendations of the Board. The Funds have been advised by counsel that these
procedures are consistent with the requirements of applicable law. Shareholders
voting by telephone in this manner will be asked for their social security
number or other identifying information and will be given an opportunity to
authorize proxies to vote their shares in accordance with their instructions.
To ensure that the Shareholders' instructions have been recorded correctly they
will receive a confirmation of their instructions in the mail. A special
toll-free number set forth in the confirmation will be available in case the
information contained in the confirmation is incorrect. Although a
Shareholder's vote may be taken by telephone, each Shareholder will receive a
copy of this Proxy Statement and may vote by mail using the enclosed proxy card
or by touchtone telephone or the Internet as set forth above. The last proxy
vote received in time to be voted, whether by proxy card, touchtone telephone
or Internet, will be the vote that is counted and will revoke all previous
votes by the Shareholder. With respect to reminder calls by Alamo, expenses
would be approximately $1.00 per outbound telephone contact.With respect to the
solicitation of a telephonic vote by Alamo or D.F. King, approximate additional
expenses range between $3.75 and $6.00 per telephone vote transacted, $2.75 and
$3.25 per outbound or inbound telephone contact and costs relating to obtaining
Shareholders' telephone numbers, and providing additional materials upon
Shareholder request, which would be borne by each respective Fund.

(1) ELECTION OF TRUSTEES FOR EACH FUND

The number of Trustees of each Fund has been fixed by the Trustees,
pursuant to each Fund's Declaration of Trust, at nine. There are presently nine
Trustees for each Fund. At the Meetings, the following nominees are to be
elected to each Fund's Board of Trustees to serve for the following terms, in
accordance with each Fund's Declaration of Trust, as set forth below:

OIB -- IMS, ICS --
Until the year 2007 Annual Meeting Until the year 2006 Annual Meeting
- ------------------------------------ -----------------------------------

Wayne E. Hedien Joseph J. Kearns
Manuel H. Johnson Fergus Reid
Joseph J. Kearns
Fergus Reid Until the year 2007 Annual Meeting
----------------------------------
Edwin J. Garn
Michael E. Nugent

Seven of the current nine Trustees (Michael Bozic, Edwin J. Garn, Wayne E.
Hedien, Manuel H. Johnson, Joseph J. Kearns, Michael E. Nugent and Fergus Reid)
are "Independent Trustees," that is, Trustees who are not "interested persons"
of the Funds, as that term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act"). The other two current Trustees, Charles A.
Fiumefreddo and James F. Higgins, are "interested trustees," that is, Trustees
who are "interested persons" (as that term is defined in the 1940 Act) of the
Funds and Morgan Stanley Investment Advisors and thus, are not Independent
Trustees. The nominees for election as Trustee have been proposed by the
Trustees now serving, or, in the case of the nominees for positions as
Independent Trustees, by the Independent Trustees now serving. All of the
members of the Boards, except for Messrs. Kearns and Reid, have been elected
previously by the Shareholders of the Funds.

The nominees of the Board for election as Trustee of each Fund are listed
below. It is the intention of the persons named in the enclosed form of proxy,
unless instructed by proxy to withhold authority to vote for the nominees, to
vote all validly executed proxies for the election of these nominees: for OIB--
Wayne E. Hedien, Manuel H. Johnson, Joseph J. Kearns and Fergus Reid; for IMS
and ICS-- Edwin J. Garn, Joseph J. Kearns, Michael E. Nugent and Fergus Reid.
Should any of the nominees become unable or unwilling to accept nomination or
election, the persons named in the proxy will exercise their voting power in
favor of such person as the Boards may recommend or, in the case of an
Independent Trustee nominee, as the Independent Trustees of each Fund may
recommend. All of the nominees have consented to being named in this Proxy
Statement and to serve if elected. The Funds know of no reason why any of the
said nominees would be unable or unwilling to accept nomination or election.
With respect to each Fund, the election of each Trustee requires the approval
of a majority of the shares of the Fund represented and entitled to vote at the
Meeting.

Pursuant to the provisions of the Declaration of Trust of each Fund, in
certain cases as amended, the Trustees are divided into three separate classes,
each class having a term of three years. The term of office of one of each of
the three classes will expire each year.

The Board of each Fund previously determined that any nominee for election
as Trustee for each Fund will stand for election as Trustee and serve as
Trustee in one of the three classes of Trustees as follows: Class I--Messrs.
Bozic, Fiumefreddo and Higgins; Class II--Messrs. Hedien, Johnson, Kearns and
Reid; and Class III--Messrs. Garn and Nugent. Each nominee will, if elected,
serve a term of up to approximately three years running for the period assigned
to that class and terminating at the date of the Annual Meeting of Shareholders
so designated by the Boards, or any adjournments thereof. As a consequence of
this method of election, the replacement of a majority of each of the Boards
could be delayed for up to two years. In accordance with the above, the
Trustees in Class II for OIB and the Trustees in Class III for IMS and ICS are
standing for election and will, if elected, serve until the year 2007 Annual
Meeting of each Fund as set forth above, or until their successors shall have
been elected and qualified. In addition, two Trustees in Class II for IMS and
ICS are standing for election and will, if elected, serve until the year 2006
Annual Meeting of each Fund as set forth above, or until their successors shall
have been elected and qualified.

The Board of each Fund consists of nine trustees. These same individuals
also serve as trustees for all of the funds advised by the Investment Manager
(the "Retail Funds") and certain of the funds advised by Morgan Stanley
Investment Management Inc. and Morgan Stanley AIP GP LP (the "Institutional
Funds"). The table below sets forth the following information as of December
31, 2003, regarding the nominees for election as Trustee, and each of the other
Trustees (both the Independent Trustees and the Interested Trustees), as well
as the executive officers of the Funds, their age, address, term of office and
length of time served, their principal business occupations during the past
five years, the number of portfolios in the Fund Complex (defined below)
overseen by each Trustee or nominee Trustee, and other directorships, if any,
held by the Trustees. The Fund Complex includes all open-end and closed-end
funds (including all of their portfolios) advised by the Investment Advisor and
any funds that have an investment advisor that is an affiliated person of the
Investment Advisor (including, but not limited to, Morgan Stanley Investment
Management Inc.).

INDEPENDENT TRUSTEES

POSITION(S) LENGTH OF
NAME, AGE AND ADDRESS OF HELD WITH TIME
INDEPENDENT TRUSTEE THE FUNDS SERVED
- -------------------------- ------------- --------------

Michael Bozic (63) Trustee Since
c/o Kramer Levin April 1994
Naftalis & Frankel LLP
Counsel to the
Independent Trustees
919 Third Avenue
New York, NY

Edwin J. Garn (71) Trustee Since
c/o Summit Ventures LLC January 1993
1 Utah Center (OIB); Since
201 S. Main Street Inception
Salt Lake City, UT (IMS and
ICS)

Wayne E. Hedien (70) Trustee Since
c/o Kramer Levin September
Naftalis & Frankel LLP 1997
Counsel to the
Independent Trustees
919 Third Avenue
New York, NY

NUMBER OF
PORTFOLIOS IN
FUND
COMPLEX
NAME, AGE AND ADDRESS OF PRINCIPAL OCCUPATION(S) DURING OVERSEEN OTHER DIRECTORSHIPS HELD
INDEPENDENT TRUSTEE PAST 5 YEARS* BY TRUSTEE BY TRUSTEE
- -------------------------- ---------------------------------------- -------------- ---------------------------

Michael Bozic (63) Private Investor; Director or Trustee 208 Director of Weirton Steel
c/o Kramer Levin of the Retail Funds (since April 1994) Corporation.
Naftalis & Frankel LLP and the Institutional Funds (since
Counsel to the July 2003); formerly Vice Chairman of
Independent Trustees Kmart Corporation
919 Third Avenue (December 1998-October 2000),
New York, NY Chairman and Chief Executive Officer
of Levitz Furniture Corporation
(November 1995-November 1998) and
President and Chief Executive Officer
of Hills Department Stores
(May 1991-July 1995); formerly
variously Chairman, Chief Executive
Officer, President and Chief Operating
Officer (1987-1991) of the Sears
Merchandise Group of Sears,
Roebuck & Co.

Edwin J. Garn (71) Director or Trustee of the Retail 208 Director of Franklin
c/o Summit Ventures LLC Funds (since January 1993) and the Covey (time management
1 Utah Center Institutional Funds (since July 2003); systems), BMW Bank of
201 S. Main Street member of the Utah Regional North America, Inc.
Salt Lake City, UT Advisory Board of Pacific Corp., (industrial loan
formerly United States Senator corporation), United
(R-Utah) (1974-1992) and Chairman, Space Alliance (joint
Senate Banking Committee venture between Lockheed
(1980-1986), Mayor of Salt Lake City, Martin and the Boeing
Utah (1971-1974), Astronaut, Space Company) and Nuskin
Shuttle Discovery (April 12-19, 1985), Asia Pacific (multilevel
and Vice Chairman, Huntsman marketing); member of the
Corporation (chemical company). board of various civic and
charitable organizations.

Wayne E. Hedien (70) Retired; Director or Trustee of the 208 Director of The PMI
c/o Kramer Levin Retail Funds (since September 1997) Group Inc. (private
Naftalis & Frankel LLP and the Institutional Funds (since mortgage insurance);
Counsel to the July 2003); formerly associated with Trustee and Vice
Independent Trustees the Allstate Companies (1966-1994), Chairman of The Field
919 Third Avenue most recently as Chairman of Museum of Natural
New York, NY The Allstate Corporation History; director of
(March 1993-December 1994) and various other business and
Chairman and Chief Executive Officer charitable organizations.
of its wholly-owned subsidiary,
Allstate Insurance Company
(July 1989-December 1994).

- ----------
* The dates referenced below indicating commencement of service as
Trustee/Director for the Retail and Institutional Funds reflect the
earliest date the Trustee/Director began serving the Retail or
Institutional Funds as applicable.

POSITION(S) LENGTH OF
NAME, AGE AND ADDRESS OF HELD WITH TIME
MANAGEMENT TRUSTEE THE FUNDS SERVED
- ---------------------------- ------------- --------------

Dr. Manuel H. Johnson (55) Trustee Since July
c/o Johnson Smick 1991 (OIB);
International, Inc. Since
2099 Pennsylvania Avenue Inception of
N.W. the Fund
Suite 950 (IMS and
Washington, D.C. ICS)

Joseph J. Kearns (61) Trustee Since July
PMB754 2003
23852 Pacific Coast
Highway
Malibu, CA

Michael E. Nugent (68) Trustee Since July
c/o Triumph Capital, L.P. 1991 (OIB);
445 Park Avenue Since
New York, NY Inception of
the Fund
(IMS and
ICS)

Fergus Reid (71) Trustee Since
c/o Lumelite Plastics July 2003
Corporation
85 Charles Colman Blvd.
Pawling, NY

NUMBER OF
PORTFOLIOS IN
FUND
COMPLEX
NAME, AGE AND ADDRESS OF PRINCIPAL OCCUPATION(S) DURING OVERSEEN OTHER DIRECTORSHIPS HELD
MANAGEMENT TRUSTEE PAST 5 YEARS* BY TRUSTEE BY TRUSTEE
- ---------------------------- ----------------------------------------- -------------- ----------------------------

Dr. Manuel H. Johnson (55) Senior Partner, Johnson Smick 208 Director of NVR, Inc.
c/o Johnson Smick International, Inc., a consulting firm; (home construction);
International, Inc. Chairman of the Audit Committee Chairman and Trustee of
2099 Pennsylvania Avenue and Director or Trustee of the Retail the Financial Accounting
N.W. Funds (since July 1991) and the Foundation (oversight
Suite 950 Institutional Funds (since July 2003); organization of the
Washington, D.C. Co-Chairman and a founder of the Financial Accounting
Group of Seven Council (G7C), an Standards Board);
international economic commission; Director of RBS
formerly Vice Chairman of the Board Greenwich Capital
of Governors of the Federal Reserve Holdings (financial holding
System and Assistant Secretary of the company).
U.S. Treasury.

Joseph J. Kearns (61) President, Kearns & Associates LLC 209 Director of Electro Rent
PMB754 (investment consulting); Deputy Corporation (equipment
23852 Pacific Coast Chairman of the Audit Committee leasing), The Ford Family
Highway and Director or Trustee of the Retail Foundation, and the
Malibu, CA Funds (since July 2003) and the UCLA Foundation.
Institutional Funds (since August
1994); previously Chairman of the
Audit Committee of the Institutional
Funds (October 2001-July 2003);
formerly CFO of the J. Paul Getty
Trust.

Michael E. Nugent (68) General Partner of Triumph Capital, 208 Director of various
c/o Triumph Capital, L.P. L.P., a private investment partnership; business organizations.
445 Park Avenue Chairman of the Insurance Committee
New York, NY and Director or Trustee of the Retail
Funds (since July 1991) and the
Institutional Funds (since July 2001);
formerly Vice President, Bankers
Trust Company and BT Capital
Corporation (1984-1988).

Fergus Reid (71) Chairman of Lumelite Plastics 209 Trustee and Director of
c/o Lumelite Plastics Corporation; Chairman of the certain investment
Corporation Governance Committee and Director companies in the
85 Charles Colman Blvd. or Trustee of the Retail Funds (since JPMorgan Funds complex
Pawling, NY July 2003) and the Institutional Funds managed by J.P. Morgan
(since June 1992). Investment Management
Inc.

INTERESTED TRUSTEES

POSITION(S) LENGTH OF
NAME, AGE AND ADDRESS OF HELD WITH TIME
MANAGEMENT TRUSTEE THE FUNDS SERVED
- ------------------------------ ------------- -------------

Charles A. Fiumefreddo (71) Chairman of Since July
c/o Morgan Stanley Trust the Board 1991 (OIB);
Harborside Financial Center, and Trustee Since
Plaza Two, Inception
Jersey City, NJ (IMS and
ICS)

James F. Higgins (56) Trustee Since June
c/o Morgan Stanley Trust 2000
Harborside Financial Center,
Plaza Two,
Jersey City, NJ

NUMBER OF
PORTFOLIOS IN
FUND
COMPLEX
NAME, AGE AND ADDRESS OF PRINCIPAL OCCUPATION(S) DURING OVERSEEN OTHER DIRECTORSHIPS HELD
MANAGEMENT TRUSTEE PAST 5 YEARS* BY TRUSTEE BY TRUSTEE
- ------------------------------ ---------------------------------------- -------------- -----------------------------

Charles A. Fiumefreddo (71) Chairman and Director or Trustee of 208 None.
c/o Morgan Stanley Trust the Retail Funds (since July 1991) and
Harborside Financial Center, the Institutional Funds (since
Plaza Two, July 2003); formerly Chief Executive
Jersey City, NJ Officer of the Retail Funds (until
September 2002).

James F. Higgins (56) Director or Trustee of the Retail 208 Director of AXA
c/o Morgan Stanley Trust Funds (since June 2000) and the Financial, Inc. and The
Harborside Financial Center, Institutional Funds (since July 2003); Equitable Life Assurance
Plaza Two, Senior Advisor of Morgan Stanley Society of the United
Jersey City, NJ (since August 2000); Director of the States (financial services).
Distributor and Dean Witter Realty
Inc.; previously President and Chief
Operating Officer of the Private
Client Group of Morgan Stanley
(May 1999-August 2000), and
President and Chief Operating Officer
of Individual Securities of Morgan
Stanley (February 1997-May 1999).

OFFICERS OF THE FUNDS

POSITION(S)
NAME, AGE AND ADDRESS OF HELD WITH LENGTH OF
EXECUTIVE OFFICER THE FUNDS TIME SERVED
- ----------------------------- --------------------- ---------------------

Mitchell M. Merin (50) President Since May 1999
1221 Avenue of the Americas
New York, NY

Barry Fink (49) Vice President Since February 1997
1221 Avenue of the Americas
New York, NY

Ronald E. Robison (65) Executive Vice Since April 2003
1221 Avenue of the Americas President and
New York, NY Principal Executive
Officer

Joseph J. McAlinden (61) Vice President Since July 1995
1221 Avenue of the Americas
New York, NY

NAME, AGE AND ADDRESS OF
EXECUTIVE OFFICER PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS*
- ----------------------------- ---------------------------------------------------------------

Mitchell M. Merin (50) President and Chief Operating Officer of Morgan Stanley
1221 Avenue of the Americas Investment Management Inc.; President, Director and Chief
New York, NY Executive Officer of the Investment Manager and Morgan
Stanley Services; Chairman, Chief Executive Officer and
Director of the Distributor; Chairman and Director of the
Transfer Agent; Director of various Morgan Stanley
subsidiaries; President of Morgan Stanley Investments LP
(since February 2003); President of the Institutional Funds
(since July 2003) and President of the Retail Funds (since
May 1999); Trustee (since July 2003) and President (since
December 2002) of the Van Kampen Closed-End Funds;
Trustee (since May 1999) and President (since October 2002)
of the Van Kampen Open-End Funds.

Barry Fink (49) General Counsel (since May 2000) and Managing Director
1221 Avenue of the Americas (since December 2000) of Morgan Stanley Investment
New York, NY Management; Managing Director (since December 2000),
Secretary (since February 1997) and Director (since
July 1998) of the Investment Manager and Morgan Stanley
Services; Assistant Secretary of Morgan Stanley DW; Vice
President of the Institutional Funds (since July 2003); Vice
President of the Retail Funds; Vice President and Secretary
of the Distributor; previously Secretary (February 1997-
July 2003) and General Counsel (February 1997-April 2004)
of the Retail Funds; Vice President and Assistant General
Counsel of the Investment Manager and Morgan Stanley
Services (February 1997-December 2001).

Ronald E. Robison (65) Principal Executive Officer -- Office of the Funds (since
1221 Avenue of the Americas November 2003); Managing Director of Morgan Stanley &
New York, NY Co. Incorporated; Managing Director of Morgan Stanley;
Managing Director, Chief Administrative Officer and
Director of the Investment Manager and Morgan Stanley
Services; Chief Executive Officer and Director of the
Transfer Agent; Executive Vice President and Principal
Executive Officer of the Institutional Funds (since July 2003)
and the Retail Funds (since July 2003); Director of
Morgan Stanley SICAV (since May 2004); previously
President (March 2001-July 2003) and Director of
the Institutional Funds (March 2001-July 2003) and
Chief Global Operations Officer and Managing
Director of Morgan Stanley Investment Management
Inc.

Joseph J. McAlinden (61) Managing Director and Chief Investment Officer of the
1221 Avenue of the Americas Investment Manager and Morgan Stanley Investment
New York, NY Management Inc. Director of the Transfer Agent, Chief
Investment Officer of the Van Kampen Funds; Vice President
of the Institutional Funds (since July 2003) and the Retail
Funds (since July 1995).

- ----------
* The dates referenced below indicating commencement of service as an
Officer for the Retail and Institutional Funds reflect the earliest date
the Officer began serving the Retail or Institutional Funds as
applicable.

POSITION(S)
NAME, AGE AND ADDRESS OF HELD WITH LENGTH OF
EXECUTIVE OFFICER THE FUNDS TIME SERVED
- ------------------------------ ----------------- -------------------------

Stefanie V. Chang (37) Vice President Since July 2003
1221 Avenue of the Americas
New York, NY

Francis J. Smith (38) Treasurer and Treasurer since
c/o Morgan Stanley Trust Chief Financial July 2003 and Chief
Harborside Financial Center, Officer Financial Officer since
Plaza Two, September 2002
Jersey City, NJ

Thomas F. Caloia (58) Vice President Since July 2003
c/o Morgan Stanley Trust
Harborside Financial Center,
Plaza Two,
Jersey City, NJ

Mary E. Mullin (37) Secretary Since July 2003
1221 Avenue of the Americas
New York, NY

NAME, AGE AND ADDRESS OF
EXECUTIVE OFFICER PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS*
- ------------------------------ -------------------------------------------------------------

Stefanie V. Chang (37) Executive Director of Morgan Stanley & Co., Morgan
1221 Avenue of the Americas Stanley Investment Management Inc., the Investment
New York, NY Manager and Vice President of the Institutional Funds (since
December 1997) and the Retail Funds (since July 2003);
formerly practiced law with the
New York law firm of Rogers & Wells (now Clifford
Chance US LLP).

Francis J. Smith (38) Executive Director of the Investment Manager and Morgan
c/o Morgan Stanley Trust Stanley Services (since December 2001); previously Vice
Harborside Financial Center, President of the Retail Funds (September 2002-
Plaza Two, July 2003); previously Vice President of the Investment
Jersey City, NJ Manager and Morgan Stanley Services (August 2000-
November 2001) and Senior Manager at
PricewaterhouseCoopers LLP (January 1998-August 2000).

Thomas F. Caloia (58) Executive Director (since December 2002) and Assistant
c/o Morgan Stanley Trust Treasurer of the Investment Manager, the Distributor and
Harborside Financial Center, Morgan Stanley Services; previously Treasurer of the Retail
Plaza Two, Funds (April 1989-July 2003); formerly First Vice President
Jersey City, NJ of the Investment Manager, the Distributor and Morgan
Stanley Services.

Mary E. Mullin (37) Executive Director of Morgan Stanley & Co. Incorporated,
1221 Avenue of the Americas Morgan Stanley Investment Management Inc. and the
New York, NY Investment Manager; Secretary of the Institutional Funds
(since June 1999) and the Retail Funds (since July 2003);
formerly practiced law with the New York law firms of
McDermott, Will & Emery and Skadden, Arps, Slate,
Meagher & Flom LLP.

For each Trustee, the dollar range of equity securities beneficially owned
by the Trustee in the Funds and in the Family of Investment Companies (Family
of Investment Companies includes all of the registered investment companies
advised by the Investment Manager, Morgan Stanley Investment Management Inc.
and Morgan Stanley AIP GP LP) for the calendar year ended December 31, 2003 is
shown below. Messrs. Kearns and Reid began serving as Trustees of the Funds on
July 31, 2003.

AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN
ALL REGISTERED INVESTMENT COMPANIES OVERSEEN
DOLLAR RANGE OF EQUITY SECURITIES IN THE FUNDS BY TRUSTEE IN FAMILY OF INVESTMENT
NAME OF TRUSTEE (AS OF DECEMBER 31, 2003) COMPANIES (AS OF DECEMBER 31, 2003)
- ------------------------ ------------------------------------------------ -----------------------------------------------

INDEPENDENT:
Michael Bozic None over $100,000
Edwin J. Garn None over $100,000
Wayne E. Hedien None over $100,000
Dr. Manuel H. Johnson None over $100,000
Joseph J. Kearns(1) None over $100,000
Michael E. Nugent None over $100,000
Fergus Reid(1) None over $100,000
INTERESTED:
Charles A. Fiumefreddo None over $100,000
James F. Higgins None over $100,000

- ----------
(1) Includes the total amount of compensation deferred by the Trustee at his
election pursuant to a deferred compensation plan. Such deferred
compensation is placed in a deferral account and deemed to be invested in
one or more of the Retail Funds or Institutional Funds (or portfolio
thereof) that are offered as investment options under the plan. As of
December 31, 2003, Messrs. Kearns and Reid had deferred a total of
$430,361 and $600,512, respectively, pursuant to the deferred
compensation plan.

As to each Independent Trustee and his immediate family members, no person
owned beneficially or of record securities in an investment advisor or
principal underwriter of the Funds, or a person (other than a registered
investment company) directly or indirectly controlling, controlled by or under
common control with an investment advisor or principal underwriter of the
Funds.

THE INDEPENDENT TRUSTEES AND THE COMMITTEES

Law and regulation establish both general guidelines and specific duties
for the Independent Trustees. Seven Trustees have no affiliation or business
connection with Morgan Stanley Investment Advisors Inc. or any of its
affiliated persons and do not own stock or other securities issued by Morgan
Stanley Investment Advisors' parent company, Morgan Stanley. These are the
"disinterested" or "independent" Trustees. The Retail Funds seek as Independent
Trustees individuals of distinction and experience in business and finance,
government service or academia; these are people whose advice and counsel are
in demand by others and for whom there is often competition. To accept a
position on the Retail Funds' Boards, such individuals may reject other
attractive assignments because the Retail Funds make substantial demands on
their time. All of the Independent Trustees serve as members of the Audit
Committee. In addition, three Trustees, including two Independent Trustees,
serve as members of the Insurance Committee, and three Independent Trustees
serve as members of the Governance Committee.

The Independent Trustees are charged with recommending to the full Board
approval of management, advisory and administration contracts, and distribution
and underwriting agreements; continually reviewing Fund performance; checking
on the pricing of portfolio securities, brokerage commissions, transfer agent
costs and performance, and trading among funds in the same complex; and
approving fidelity bond and related insurance coverage and allocations, as well
as other matters that arise from time to time.

The Board of Trustees of each Fund has a separately-designated standing
Audit Committee established in accordance with section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended. The Audit Committee is charged
with recommending to the full Board the engagement or discharge of the Funds'
independent auditors; directing investigations into matters within the scope of
the independent auditors' duties, including the power to retain outside
specialists; reviewing with the independent auditors the audit plan and

results of the auditing engagement; approving professional services provided by
the independent auditors and other accounting firms prior to the performance of
such services; reviewing the independence of the independent auditors;
considering the range of audit and non-audit fees; reviewing the adequacy of
each Fund's system of internal controls; and preparing and submitting Committee
meeting minutes to the full Board. Each Fund has adopted a formal, written
Audit Committee Charter.

The members of the Audit Committee of each Fund are currently Michael
Bozic, Edwin J. Garn, Wayne E. Hedien, Dr. Manuel H. Johnson, Joseph J. Kearns,
Michael Nugent and Fergus Reid. None of the members of the Funds' Audit
Committees is an "interested person," as defined under the 1940 Act, of any of
the Funds (with such disinterested Trustees being "Independent Trustees" or
individually, "Independent Trustee"). Each Independent Trustee is also
"independent" from each Fund under the listing standards of the New York Stock
Exchange, Inc. (NYSE). The current Chairman of the Audit Committee of all of
the Funds is Dr. Manuel H. Johnson.

The Board of Trustees of each Fund also has a Governance Committee. The
Governance Committee identifies individuals qualified to serve as Independent
Trustees on each Fund's Board and on committees of such Board and recommends
such qualified individuals for nomination by the Fund's Independent Trustees as
candidates for election as Independent Trustees, advises each Fund's Board with
respect to Board composition, procedures and committees, develops and
recommends to each Fund's Board a set of corporate governance principles
applicable to the Funds, monitors and makes recommendations on corporate
governance matters and policies and procedures of the Fund's Board of Trustees
and any Board committees and oversees periodic evaluations of the Fund's Board
and its committees. The members of the Governance Committee of each Fund are
currently Michael Bozic, Edwin J. Garn and Fergus Reid, each of whom is an
Independent Trustee. The current Chairman of each Governance Committee is
Fergus Reid.

None of the Funds has a separate nominating committee. While each Fund's
Governance Committee recommends qualified candidates for nominations as
Independent Trustees, the Board of Trustees of each Fund believes that the task
of nominating prospective Independent Trustees is important enough to require
the participation of all current Independent Trustees, rather than a separate
committee consisting of only certain Independent Trustees. Accordingly, each
current Independent Trustee (Michael Bozic, Edwin J. Garn, Wayne E. Hedien, Dr.
Manuel H. Johnson, Joseph J. Kearns, Michael Nugent and Fergus Reid, for all
Funds) participates in the election and nomination of candidates for election
as Independent Trustees for the respective Funds for which the Independent
Trustee serves. Persons recommended by each Fund's Governance Committee as
candidates for nomination as Independent Trustees shall possess such knowledge,
experience, skills, expertise and diversity so as to enhance the Board's
ability to manage and direct the affairs and business of the Fund, including,
when applicable, to enhance the ability of committees of the Board to fulfill
their duties and/or to satisfy any independence requirements imposed by law,
regulation or any listing requirements of the NYSE. While the Independent
Trustees of each of the Funds expect to be able to continue to identify from
their own resources an ample number of qualified candidates for each Fund's
Board as they deem appropriate, they will consider nominations from
shareholders to the Board. Nominations from shareholders should be in writing
and sent to the Independent Trustees as described below.

Finally, the Board have formed an Insurance Committee to review and
monitor the insurance coverage maintained by the Funds. The Insurance Committee
currently consists of Messrs. Nugent, Fiumefreddo and Hedien. The Derivative
Committee was eliminated as of July 31, 2003. The Derivative Committee held one
meeting (OIB) and two meetings (IMS and ICS), during each Fund's last fiscal
year.

The following chart sets forth the number of meetings of the Board, the
Independent Trustees, the Audit Committee, the Insurance Committee and the
Governance Committee of each Fund during its most recent

fiscal year. For the 2003 fiscal year, each Trustee attended at least
seventy-five percent of the aggregate number of meetings of the Board and any
committee on which he served held during the time such Trustee was a member of
the Board.

NUMBER OF BOARD AND COMMITTEE MEETINGS HELD DURING LAST FISCAL YEAR

BOARD OF INDEPENDENT AUDIT INSURANCE GOVERNANCE
FISCAL TRUSTEES TRUSTEES COMMITTEE COMMITTEE COMMITTEE
NAME OF FUND YEAR-END MEETINGS MEETINGS MEETINGS MEETINGS MEETINGS
- -------------- ---------- ---------- ------------- ----------- ----------- -----------

OIB .......... 02/29/04 12 2 7 4 0
IMS .......... 10/31/03 10 4 8 2 0
ICS .......... 10/31/03 10 4 8 2 0

AUDIT COMMITTEE REPORT

The Board of Trustees of each Fund has adopted a formal written charter
for the Audit Committee which sets forth the Audit Committee's
responsibilities. A copy of the Audit Committee charter is attached to this
Proxy Statement as Appendix A.

The Audit Committee of each Fund has reviewed and discussed the financial
statements of each Fund with management as well as with Deloitte & Touche LLP,
the independent auditors for each Fund. In the course of its discussions, the
Audit Committee also discussed with Deloitte & Touche LLP any relevant matters
required to be discussed under the Statement on Auditing Standards No. 61.
Based on this review, the Audit Committee recommended to the Board of Trustees
of each Fund that each Fund's audited financial statements be included in each
Fund's Annual Report to Shareholders for the most recent fiscal year for filing
with the Securities and Exchange Commission. The Audit Committee has received
the written disclosures and the letter from Deloitte & Touche LLP required
under Independence Standards Board No. 1 and has discussed with the independent
auditors their independence.

The Audit Committee

Manuel H. Johnson (Chairman)
Joseph J. Kearns (Deputy Chairman)
Michael Bozic
Edwin J. Garn
Wayne E. Hedien
Michael E. Nugent
Fergus Reid

ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR THE RETAIL
FUNDS AND INSTITUTIONAL FUNDS

The Independent Trustees and the funds' management believe that having the
same Independent Trustees for each of the Retail Funds and Institutional Funds
avoids the duplication of effort that would arise from having different groups
of individuals serving as Independent Trustees for each of the funds or even of
sub-groups of funds. They believe that having the same individuals serve as
Independent Trustees of all the Retail Funds and Institutional Funds tends to
increase their knowledge and expertise regarding matters which affect the Fund
Complex generally and enhances their ability to negotiate on behalf of each
fund with the fund's service providers. This arrangement also precludes the
possibility of separate groups of Independent Trustees arriving at conflicting
decisions regarding operations and management of the funds and avoids the cost
and

confusion that would likely ensue. Finally, having the same Independent
Trustees serve on all fund boards enhances the ability of each fund to obtain,
at modest cost to each separate fund, the services of Independent Trustees of
the caliber, experience and business acumen of the individuals who serve as
Independent Trustees of the Retail Funds and Institutional Funds.

SHAREHOLDER COMMUNICATIONS. Shareholders may send communications to each
Fund's Board of Trustees. Shareholders should send communications intended for
each Fund's Board by addressing the communications directly to that Board (or
individual Board members) and/or otherwise clearly indicating in the salutation
that the communication is for the Board (or individual Board members) and by
sending the communication to either the Fund's office or directly to such Board
member(s) at the address specified for each trustee previously noted. Other
shareholder communications received by the Funds not directly addressed and
sent to the Boards will be reviewed and generally responded to by management,
and will be forwarded to the Board only at management's discretion based on the
matters contained therein.

SHARE OWNERSHIP BY TRUSTEES

The Trustees have adopted a policy pursuant to which each Trustee and/or
his or her spouse is required to invest at least $100,000 in any of the Funds
in the Morgan Stanley Retail and Institutional Funds on whose boards the
Trustee serves. In addition, the policy contemplates that the Trustees will,
over time, increase their aggregate investment in the funds above the $100,000
minimum requirement. The Trustees may allocate their investments among specific
funds in any manner they determine is appropriate based on their individual
investment objectives. Any new Trustee will be given a one year period
following his or her election within which to comply with the foregoing. As of
the date of this Proxy Statement, each Trustee is in compliance with the
policy. As of March 31, 2004, the total value of the investments by the
Trustees and/or their spouses in shares of the Morgan Stanley Retail Funds and
Institutional Funds was approximately $31.5 million. This amount includes
compensation deferred by the Trustee at his election pursuant to a deferred
compensation plan. Such deferred compensation is placed in a deferral account
and deemed to be invested in one or more of the Retail Funds or Institutional
Funds (or portfolio thereof) that are offered as investment options under the
plan.

As of the Record Date for these Meetings, the aggregate number of shares
of each Fund owned by the respective Fund's officers and Trustees as a group
was less than one percent of each Fund's outstanding shares.

COMPENSATION OF INDEPENDENT TRUSTEES

Effective August 1, 2003, each Independent Trustee receives an annual
retainer fee of $168,000 for serving the Retail Funds and Institutional Funds.
In addition, each Independent Trustee receives $2,000 for attending each of the
four quarterly board meetings and two performance meetings that occur each
year, so that an Independent Trustee who attended all six meetings would
receive total compensation of $180,000 for serving the Funds. The Chairman of
the Audit Committee receives an additional annual retainer fee of $60,000.
Other Committee Chairmen and the Deputy Chairman of the Audit Committee receive
an additional annual retainer fee of $30,000. The aggregate compensation paid
to each Independent Trustee is paid by the Retail Funds and Institutional
Funds, and is allocated on a pro rata basis among each of the operational
funds/portfolios of the Retail Funds and Institutional Funds based on the
relative net assets of each of the funds/portfolios. Mr. Fiumefreddo receives
an annual fee for his services as Chairman of the Boards of the Retail Funds
and the Institutional Funds and for administrative services provided to each
Board.

The Funds also reimburse such Trustees for travel and other out-of-pocket
expenses incurred by them in connection with attending such meetings. Trustees
and officers of the Funds who are or have been employed by the Investment
Manager or an affiliated company receive no compensation or expense
reimbursement from the Funds for their services as Trustee.

Prior to August 1, 2003, the Funds paid each Independent Trustee an annual
fee of $800 plus a per meeting fee of $50 for meetings of the Board of
Trustees, the Independent Trustees or Committees of the Board of Trustees
attended by the Trustee (the Funds paid the Chairman of the Audit Committee an
additional annual fee of $750, and the Chairmen of the Derivatives and
Insurance Committees additional annual fees of $500). With the exception of an
Audit Committee meeting, if a Board meeting and a meeting of the Independent
Trustees and/or more than one Committee meeting took place on a single day, the
Trustees were paid a single meeting fee by the Funds.

Effective April 1, 2004, the Funds began an unfunded Deferred Compensation
Plan (the "Plan"), which allows each Independent Trustee to defer payment of
all, or a portion, of the fees he or she receives for serving on the Board of
Trustees throughout the year. 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 Retail Funds or Institutional Funds (or portfolios thereof) that
are offered as investment options under the Plan. At the Trustee's election,
distributions are either in one lump sum payment, or in the form of equal
annual installments over a period of five years. The Funds intend that the
Deferred Compensation Plan shall be maintained at all times on an unfunded
basis for federal income tax purposes under the Internal Revenue Code of 1986,
as amended. The rights of an eligible Trustee and the beneficiaries to the
amounts held under the Deferred Compensation Plan are unsecured and such
amounts are subject to the claims of the creditors of the Funds.

Prior to April 1, 2004, the Institutional Funds maintained a similar
unfunded Deferred Compensation Plan (the "Prior Plan") which also allowed each
Independent Trustee to defer payment of all, or a portion, of the fees he or
she received for serving on the Board of Trustees throughout the year. The Plan
amends and supersedes the Prior Plan and all amounts payable under the Prior
Plan are now subject to the terms of the Plan (except for amounts due to be
paid during the calendar year 2004 which will remain subject to the terms of
the Prior Plan).

The following tables illustrate the compensation that the Funds paid to
its Trustees for the fiscal year ended February 29, 2004 (OIB) and October 31,
2003 (IMS and ICS). Messrs. Kearns and Reid began serving as Trustees of the
Funds on July 31, 2003.

FUND COMPENSATION

NAME OF TRUSTEE OIB IMS ICS
- --------------- -------- --------- ---------

Michael Bozic(1)(3) ................. $ 637 $1,126 $1,096
Charles A. Fiumefreddo*(2) .......... 2,203 3,754 3,716
Edwin J. Garn(1)(3) ................. 637 1,126 1,096
Wayne E. Hedien(1)(2) ............... 637 1,076 1,046
James F. Higgins* ................... 0 0 0
Dr. Manuel H. Johnson(1) ............ 929 1,535 1,494
Joseph J. Kearns(1) ................. 141 70 35
Michael E. Nugent(1)(2) ............. 825 1,378 1,343
Fergus Reid(1)(3) ................... 141 70 35

- ----------
(*) Messrs. Fiumefreddo and Higgins are deemed to be "interested persons" of
the Fund as that term is defined in the 1940 Act.

(1) Member of the Audit Committee. Dr. Johnson is the Chairman of the Audit
Committee and Mr. Kearns is the Deputy Chairman of the Audit Committee.

(2) Member of the Insurance Committee. Mr. Nugent is the Chairman of the
Insurance Committee.

(3) Member of the Governance Committee. Mr. Reid is the Chairman of the
Governance Committee.

The following table shows aggregate compensation paid to each of the
Funds' Trustees by the Fund Complex (which includes all of the Retail and
Institutional Funds) for the calendar year ended December 31, 2003. Because the
funds in the Fund Complex have different fiscal year ends, the amounts shown in
this table are presented on a calendar-year basis. Messrs. Bozic, Fiumefreddo,
Garn, Hedien, Johnson and Higgins began serving as Trustees of the
Institutional Funds on July 31, 2003, and served as Trustees of the Retail
Funds during the calendar year ended December 31, 2003. Messrs. Kearns and Reid
began serving as Trustees of the Retail Funds on July 31, 2003, and served as
Trustees of the Institutional Funds during the calendar year ended December 31,
2003. Mr. Nugent served as Trustee of both the Institutional Funds and the
Retail Funds during the calendar year ended December 31, 2003.

CASH COMPENSATION FROM FUND COMPLEX

NUMBER OF PORTFOLIOS TOTAL COMPENSATION
IN THE FUND COMPLEX FROM THE FUND
FROM WHICH THE TRUSTEE COMPLEX PAYABLE
NAME OF TRUSTEE RECEIVED COMPENSATION TO TRUSTEES
- --------------- ------------------------ -------------------

Michael Bozic .................. 208 $164,400
Charles A. Fiumefreddo ......... 208 360,000
Edwin J. Garn .................. 208 164,400
Wayne E. Hedien ................ 208 164,300
James F. Higgins ............... 208 0
Dr. Manuel H. Johnson .......... 208 228,213
Joseph J. Kearns(1) ............ 209 166,710
Michael E. Nugent .............. 208 277,441
Fergus Reid(1) ................. 209 149,299

- ----------
(1) Includes amounts deferred at the election of the Trustees under the Prior
Plan. The total amounts of deferred compensation (including interest)
payable or accrued by Messrs. Kearns and Reid are $430,361 and $600,512,
respectively.

Prior to December 31, 2003, 49 of the Retail Funds (the "Adopting Funds"),
including OIB and IMS, had adopted a retirement program under which an
Independent Trustee who retired after serving for at least five years as an
Independent Trustee of any such fund (an "Eligible Trustee") would have been
entitled to retirement payments based on factors such as length of service,
upon reaching the eligible retirement age. On December 31, 2003, the amount of
accrued retirement benefits for each Eligible Director was frozen, and will be
payable, together with a return of 8% per annum, at or following each such
Eligible Trustee's retirement as shown in the table below.

The following table illustrates the retirement benefits accrued to the
Funds' Independent Trustees, by OIB and IMS for their last fiscal year and the
49 Retail Funds for the calendar year ended December 31, 2003, and the
estimated retirement benefits for the Independent Trustees, from OIB and IMS
for their last fiscal year and from the 49 Retail Funds for each calendar year
following retirement. Messrs. Kearns and Reid did not participate in the
retirement program.

RETIREMENT BENEFITS ACCRUED AS FUND
EXPENSES
------------------------------------
BY BY BY ALL
NAME OF INDEPENDENT TRUSTEE OIB IMS ADOPTING FUNDS
- --------------------------- ------- -------- ---------------

Michael Bozic ................. $422 $ 490 $19,842
Edwin J. Garn ................. 711 1,158 35,306
Wayne E. Hedien ............... 827 798 38,649
Dr. Manuel H. Johnson ......... 410 473 20,125
Michael E. Nugent ............. 739 987 36,265

ESTIMATED ANNUAL BENEFITS UPON
RETIREMENT(1)
-------------------------------------
FROM FROM FROM ALL
NAME OF INDEPENDENT TRUSTEE OIB IMS ADOPTING FUNDS
- --------------------------- -------- -------- ---------------

Michael Bozic ................. $ 997 $ 997 $47,838
Edwin J. Garn ................. 984 990 47,877
Wayne E. Hedien ............... 849 843 40,839
Dr. Manuel H. Johnson ......... 1,451 1,451 70,050
Michael E. Nugent ............. 1,299 1,299 62,646

- ----------
(1) Total compensation accrued under the retirement plan, together with a
return of 8% per annum, will be paid annually commencing upon retirement
and continuing for the remainder of the Trustee's life.

THE BOARD OF TRUSTEES OF EACH FUND UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE ELECTION OF EACH OF THE TRUSTEES NOMINATED FOR
ELECTION.

THE INVESTMENT MANAGER OR INVESTMENT ADVISOR

Morgan Stanley Investment Advisors Inc. currently serves as each Fund's
investment manager or investment advisor pursuant to an investment management
agreement or investment advisory agreement. Morgan Stanley Investment Advisors
maintains its offices at 1221 Avenue of the Americas, New York, New York 10020.
Morgan Stanley Investment Advisors, formerly known as Morgan Stanley Dean
Witter Advisors Inc., adopted its current name on June 18, 2001. Morgan Stanley
Investment Advisors is a wholly-owned subsidiary of Morgan Stanley, a
preeminent global securities firm that maintains leading market positions in
each of its three primary businesses--securities, asset management and credit
services.

The Principal Executive Officer and Directors of Morgan Stanley Investment
Advisors are Mitchell M. Merin, President and Chief Executive Officer, Ronald
E. Robison, Managing Director and Chief Administrative Officer, and Barry Fink,
Managing Director and Secretary. The principal occupations of Messrs. Merin,
Robison and Fink are described under the section "Election of Trustees." The
business address of the Executive Officer and other Directors is 1221 Avenue of
the Americas, New York, New York 10020.

Morgan Stanley has its offices at 1585 Broadway, New York, New York 10036.
Morgan Stanley is a full service securities firm engaged in securities trading
and brokerage activities, as well as providing investment banking, research and
analysis, financing and financial advisory services. There are various lawsuits
pending against Morgan Stanley involving material amounts which, in the opinion
of its management, will be resolved with no material effect on the consolidated
financial position of the company.

Morgan Stanley Investment Advisors and its wholly-owned subsidiary, Morgan
Stanley Services, serve in various investment management, advisory, management
and administrative capacities to investment companies

and pension plans and other institutional and individual investors. Morgan
Stanley Services, pursuant to an Administration Agreement with OIB, serves as
the Administrator of OIB. The address of Morgan Stanley Services is that of
Morgan Stanley Investment Advisors set forth above.

FEES PAID TO INDEPENDENT

AUDIT FEES PAID BY THE FUNDS

The fees for professional services rendered by Deloitte & Touche LLP in
connection with the annual audit for their respective fiscal years ended
October 31, 2002 and October 31, 2003 (February 29, 2004 and February 28, 2003
for OIB) were $29,000, and $28,000 for OIB, $28,000 and $27,000 for IMS, and
$28,000 and $27,000 for ICS, respectively.

AUDIT-RELATED FEES

There were no audit-related fees billed by Deloitte & Touche LLP related
to the annual audit of OIB's financial statements for the fiscal years ended
February 29, 2004 and February 28, 2003 or of IMS's or ICS's financial
statements for their respective fiscal years ended October 31, 2003 and 2002.

TAX FEES

The aggregate fees billed by Deloitte & Touche LLP in connection with tax
compliance, tax advice and tax planning for each Fund for the fiscal years
ended October 31, 2003 and 2002 (February 29, 2004 and February 28, 2003 for
OIB) are set forth below, which represent fees paid for the review of the
Federal, state and local tax returns for each Fund.

2004 2003 2002
--------- --------- ---------

OIB .......... $4,000 $4,000 --
IMS .......... -- $4,000 $4,000
ICS .......... -- $4,000 $4,000

ALL OTHER FEES

There were no fees billed by Deloitte & Touche LLP for any other products
and services not set forth above for each Fund for the respective fiscal years
ended October 31, 2003 and 2002 (February 29, 2004 and February 28, 2003 for
OIB).

AUDIT COMMITTEE PRE-APPROVAL

Each Fund's Audit Committee's policy is to review and pre-approve all
auditing and non-auditing services to be provided to the Fund by the Fund's
independent auditors. The Audit Committee Audit and Non-Audit Pre-Approval
Policy and Procedures requires each Fund's Audit Committee to either generally
pre-approve certain services without consideration of specific case-by-case
services, or requires the specific pre-approval of services by the Audit
Committee or its delegate. Under the Policy, unless a type of service has
received general pre-approval, it will require specific pre-approval by the
Audit Committee if it is to be provided by the independent auditors. Any
services that are generally pre-approved may require specific pre-approval by
the Audit Committee if the services exceed pre-approved cost levels or budgeted
amounts. All of the audit and the tax services described above for which
Deloitte & Touche LLP billed each of the Funds' fees for the fiscal year ended
October 31, 2003 for IMS and ICS and for the fiscal year ended February 29,
2004 for OIB were pre-approved by the Audit Committee.

AGGREGATE NON-AUDIT FEES PAID BY THE INVESTMENT MANAGER/ADVISOR AND AFFILIATED
ENTITIES

The aggregate fees billed for professional services rendered by Deloitte &
Touche LLP for all other services provided to the Investment Manager/Advisor
and to any entities controlling, controlled by or under common control with the
Investment Manager/Advisor for the fiscal years ended October 31, 2003 and 2002
(February 29, 2004 and February 28, 2003 for OIB) amounted to approximately $4
million and $3.3 million, respectively. Such services for the 2003 and 2002
fiscal years included: (i) audit-related fees of approximately $3.3 million and
$2.3 million, respectively, for the issuance of a report under Statement on
Accounting Standards No. 70 titled "Reports on the Processing of Transactions
by Service Organizations" and (ii) all other fees of approximately $650,000 and
$1 million, respectively, related to services such as performance attestation,
operational control reviews and the provision of educational seminars.

The Audit Committee of each Fund has considered whether the provision of
non-audit services and the provision of services to affiliates of the
Investment Manager/Advisor is compatible with maintaining the independence of
Deloitte & Touche LLP.

ADDITIONAL INFORMATION

In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal for any Fund is not obtained at the
Meeting of any Fund, the persons named as proxies may propose one or more
adjournments of the Meeting of the applicable Fund to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of the holders of a majority of the applicable Fund's shares present in person
or by proxy at the Meeting. The persons named as proxies will vote in favor of
such adjournment those proxies which have been received by the date of the
Meeting. Abstentions and broker "non-voters" will not count in favor of or
against any such vote for adjournment.

Abstentions and, if applicable, broker "non-votes" will not count as votes
in favor of any proposal, and broker "non-votes" will not be deemed to be
present at the Meeting of any Fund for purposes of determining whether a
particular proposal to be voted upon has been approved. Broker "non-votes" are
shares held in street name for which the broker indicates that instructions
have not been received from the beneficial owners or other persons entitled to
vote and for which the broker does not have discretionary voting authority.

SHAREHOLDER PROPOSALS

Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders of each respective Fund must be received by no later
than January 17, 2005 for each Fund for inclusion in the proxy statement and
proxy for that meeting. The mere submission of a proposal does not guarantee
its inclusion in the proxy materials or its presentation at the meeting.
Certain rules under the federal securities laws must be met.

REPORTS TO SHAREHOLDERS

EACH FUND'S MOST RECENT ANNUAL REPORT HAS BEEN SENT PREVIOUSLY TO
SHAREHOLDERS AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST FROM NINA WESSEL AT
MORGAN STANLEY TRUST, HARBORSIDE FINANCIAL CENTER, PLAZA TWO, 2ND FLOOR, JERSEY
CITY, NEW JERSEY 07311 (TELEPHONE 1-800-869-NEWS) (TOLL-FREE).

INTEREST OF CERTAIN PERSONS

Morgan Stanley, Morgan Stanley Investment Advisors, Morgan Stanley DW,
Morgan Stanley Services and certain of their respective Directors, Officers,
and employees, including persons who are Trustees or Officers of the Funds, may
be deemed to have an interest in certain of the proposals described in this
Proxy Statement to the extent that certain of such companies and their
affiliates have contractual and other arrangements, described elsewhere in this
Proxy Statement, pursuant to which they are paid fees by the Funds, and certain
of those individuals are compensated for performing services relating to the
Funds and may also own shares of Morgan Stanley. Such companies and persons may
thus be deemed to derive benefits from the approvals by Shareholders of such
proposals.

OTHER BUSINESS

The management of the Funds knows of no other matters which may be
presented at the Meetings. However, if any matters not now known properly come
before the Meetings, it is intended that the persons named in the enclosed form
of proxy, or their substitutes, will vote all shares that they are entitled to
vote on or any such matter utilizing such proxy in accordance with their best
judgment on such matters.

By Order of the Board of Trustees

MARY E. MULLIN
Secretary

APPENDIX A

CHARTER OF THE
AUDIT COMMITTEE
OF THE
MORGAN STANLEY FUNDS

The Board of Directors/Trustees (the "Board") of each fund advised or
managed by Morgan Stanley Investment Advisors Inc. or Morgan Stanley Services
Company Inc. (each, a "Fund," collectively, the "Funds") has adopted and
approved this charter for the audit committee of each Fund (the "Audit
Committee").

1. Structure and Membership Requirements:

1.01 The Audit Committee shall consist of at least three "independent"
directors/trustees. "Independent" shall have the meaning ascribed to it
in New York Stock Exchange Listed Company Standard 303.01(2) and (3).

1.02 Each member of the Audit Committee shall not be an "interested person"
of the Funds, as that term is defined in Section 2(a)(19) of the
Investment Company Act of 1940.

1.03 Each member of the Audit Committee shall be "financially literate," as
such term is interpreted by the Fund's Board in its business judgment,
or must become financially literate within a reasonable period of time
after his or her appointment to the Audit Committee.

1.04 At least one member of the Audit Committee must have accounting or
related financial management expertise, as such qualification is
interpreted by the Fund's Board in its business judgment.

2. Meetings:

2.01 The Audit Committee shall meet at least twice each calendar year.

3. Duties and Powers:

3.01 Each Fund's outside auditor is ultimately accountable to the Audit
Committee and to the Board. The Audit Committee, subject to the Board's
approval and oversight, has the authority and responsibility, to
select, evaluate and, where appropriate, replace the outside auditor.
To the extent required by law, this includes nominating the selected
outside auditor to be considered for approval or ratification by
shareholders at their next annual meeting.

3.02 The Audit Committee shall approve the scope of professional services
to be provided to the Funds by the outside auditor.

3.03 The Audit Committee shall review with the outside auditor the audit
plan and results of the auditing engagement.

3.04 The Audit Committee shall review the independence of the outside
auditor, including:

(a) ensuring that the outside auditor submits to the Audit Committee,
at least annually, a letter delineating all relationships between the
auditor and the Funds;

(b) engaging in a dialogue with the outside auditor with respect to any
disclosed relationships or services that may impact the objectivity and
independence of the outside auditor; and

A-1

(c) recommending the Board take action in response to the outside
auditor's report of any of the relationships discussed in (b) above, to
the extent necessary and appropriate for the Audit Committee to satisfy
itself of the outside auditor's independence.

3.05 The Audit Committee shall oversee any other aspects of the Funds'
audit process as it deems necessary and appropriate.

3.06 The Audit Committee is empowered to review the Funds' system of
internal controls.

3.07 The Audit Committee shall have the resources and authority as it deems
appropriate to discharge its responsibilities, including the authority
to retain special counsel and other experts or consultants at the
expense of the appropriate Fund(s).

4. Review of Charter:

4.01 The Audit Committee shall review and assess the adequacy of this
charter annually.

4.02 Any changes to the charter must be recommended by the Audit Committee
and approved by the Board.

A-2

APPENDIX B

JOINT GOVERNANCE COMMITTEE CHARTER

OF THE

MORGAN STANLEY RETAIL AND INSTITUTIONAL FUNDS

AS ADOPTED ON JULY 31, 2003
AND AS AMENDED ON
APRIL 22, 2004

B-1

1. MISSION STATEMENT

The Governance Committee (the "Governance Committee") is a committee of
the Board of Trustees/Directors (referred to herein as the "Trustees" and
collectively as the "Board") of each Fund listed in the attached Exhibit A(1).
The purpose of the Governance Committee is to: (1) evaluate the suitability of
potential candidates for election to the Board and recommend candidates for
nomination by the Independent Trustees (as defined below); (2) develop and
recommend to the Board a set of corporate governance principles applicable to
the Fund, monitor corporate governance matters and make recommendations to the
Board and act as the administrative committee with respect to Board policies
and procedures, and committee policies and procedures; and (3) oversee periodic
evaluations of the Board and any committees of the Board.

2. COMPOSITION

The Governance Committee shall be comprised of three or more Trustees of
the Board. Governance Committee members shall be designated by the full Board,
and the manner of selection of the Governance Committee chair shall also be
designated by the full Board.

Each member of the Governance Committee shall be an independent director
or trustee. A person shall be considered to be independent if he or she: (a) is
independent as defined in New York Stock Exchange Listed Company Standard
303.01 (2) and (3); (b) is a "disinterested person" as defined in Section
2(a)(19) of the Investment Company Act of 1940, as amended; and (c) does not
accept, directly or indirectly, any consulting, advisory or other compensatory
fee from any of the Funds or their investment advisor or any affiliated person
of the advisor, other than fees from the Funds for serving as a member of the
Funds' Boards or Committees of the Boards. Such independent directors or
trustees are referred to herein as the "Independent Trustees."

3. MEETING OF THE GOVERNANCE COMMITTEE

The Governance Committee shall fix its own rules of procedure, which shall
be consistent with the Fund's organizational documents and this Governance
Committee Charter. The Governance Committee shall meet at such times as may be
determined as appropriate by the Committee. The Governance Committee, in its
discretion, may ask Trustees, members of management or others, whose advice and
counsel are sought by the Governance Committee, to attend its meetings (or
portions thereof) and to provide such pertinent information as the Governance
Committee requests.

The Governance Committee shall cause to be maintained minutes of all
meetings and records to those meetings and provide copies of such minutes to
the Board and the Fund.

4. AUTHORITY

The Governance Committee shall have the authority to carry out its duties
and responsibilities as set forth in this Governance Committee Charter.

- ----------
(1) This Joint Governance Committee Charter has been adopted by each Fund.
Solely for the sake of clarity and simplicity, this Joint Governance
Committee Charter has been drafted as if there is a single Fund, a single
Governance Committee and a single Board. The terms "Governance Committee,"
"Trustees" and "Board" mean the Governance Committee, Trustees and the
Board of each Fund, respectively, unless the context otherwise requires.
The Governance Committee, Trustees and the Board of each Fund, however,
shall act separately and in the best interests of its respective Fund.

B-2

5. GOALS, DUTIES AND RESPONSIBILITIES OF THE GOVERNANCE COMMITTEE

In carrying out its duties and responsibilities, the Governance
Committee's policies and procedures will remain flexible, so that it may be in
a position to react or respond to changing circumstances or conditions. The
following are the duties and responsibilities of the Governance Committee:

a. Board Candidates and Nominees

The Governance Committee shall have the following goals and
responsibilities with respect to Board candidates and nominees:

i. evaluate the suitability of potential trustee/director candidates
proposed by Trustees, shareholders or others;

ii. recommend, for nomination by the Independent Trustees, candidates for
election as an Independent Trustee by the shareholders or appointment by
the Board, as the case may be, pursuant to the Fund's organizational
documents. Persons recommended by the Governance Committee shall possess
such knowledge, experience, skills, expertise and diversity so as to
enhance the Board's ability to manage and direct the affairs and business
of the Fund, including, when applicable, to enhance the ability of
committees of the Board to fulfill their duties and/or to satisfy any
independence requirements imposed by law, regulation or any listing
requirements of the New York Stock Exchange ("NYSE") as applicable to the
Fund; and

iii. review the suitability for continued service as a trustee/director
of each Independent Trustee when his or her term expires and at such
other times as the Governance Committee deems necessary or appropriate,
and to recommend whether or not the Independent Trustee should be
re-nominated by the Independent Trustees.

b. Corporate Governance

The Governance Committee shall have the following goals and principles
with respect to Board corporate governance:

i. monitor corporate governance principles for the Fund, which shall be
consistent with any applicable laws, regulations and listing
standards, considering, but not limited to, the following:

(1) trustee/director qualification standards to reflect the
independence requirements of the Sarbanes-Oxley Act of 2002, as
amended ("SOX") and the rules thereunder, the Investment Company
Act of 1940, as amended ("the 1940 Act"), and the NYSE;

(2) trustee/director duties and responsibilities;

(3) trustee/director access to management, and, as necessary and
appropriate, independent advisers; and

(4) trustee/director orientation and continuing education;

ii. review periodically the corporate governance principles adopted by
the Board to assure that they are appropriate for the Fund and comply
with the requirements of SOX, the 1940 Act and the NYSE, and to recommend
any desirable changes to the Board;

B-3

iii. consider other corporate governance issues that arise from time to
time, and to develop appropriate recommendations for the Board; and

c. Periodic Evaluations

The Governance Committee shall be responsible for overseeing the
evaluation of the Board as a whole and each Committee. The Governance
Committee shall establish procedures to allow it to exercise this
oversight function.

In conducting this review, the Governance Committee shall evaluate
whether the Board appropriately addresses the matters that are or should
be within its scope pursuant to the set of corporate governance
principles adopted by the Governance Committee. The Governance Committee
shall address matters that the Governance Committee considers relevant to
the Board's performance, including at least the following: the adequacy,
appropriateness and quality of the information and recommendations
presented by management of the Fund to the Board, and whether the number
and length of meetings of the Board were adequate for the Board to
complete its work in a thorough and thoughtful manner.

The Governance Committee shall report to the Board on the results of its
evaluation, including any recommended changes to the principles of
corporate governance, and any recommended changes to the Fund's or the
Board's or a Committee's policies or procedures. This report may be
written or oral.

6. EVACUATION OF THE GOVERNANCE COMMITTEE

The Governance Committee shall, on an annual basis, evaluate its
performance under this Joint Governance Committee Charter. In conducting this
review, the Governance Committee shall evaluate whether this Joint Governance
Committee Charter appropriately addresses the matters that are or should be
within its scope. The Governance Committee shall address matters that the
Governance Committee considers relevant to its performance, including at least
the following: the adequacy, appropriateness and quality of the information and
recommendations presented by the Governance Committee to the Board, and whether
the number and length of meetings of the Governance Committee were adequate for
the Governance Committee to complete its work in a thorough and thoughtful
manner.

The Governance Committee shall report to the Board on the results of its
evaluation, including any recommended amendments to this Joint Governance
Committee Charter, and any recommended changes to the Fund's or the Board's
policies or procedures. This report may be written or oral.

7. INVESTIGATIONS AND STUDIES; OUTSIDE ADVISERS

The Governance Committee may conduct or authorize investigations into or
studies of matters within the Governance Committee's scope of responsibilities,
and may retain, at the Fund's expense, such independent counsel or other
advisers as it deems necessary.

B-4

EXHIBIT A

FUND LIST

MORGAN STANLEY
RETAIL AND INSTITUTIONAL FUNDS
AT
JULY 31, 2003

RETAIL FUNDS

OPEN-END RETAIL FUNDS

TAXABLE MONEY MARKET FUNDS

1. Active Assets Government Securities Trust ("AA Government")
2. Active Assets Institutional Government Securities Trust ("AA Institutional
Government")
3. Active Assets Institutional Money Trust ("AA Institutional Money")
4. Active Assets Money Trust ("AA Money")
5. Morgan Stanley Liquid Asset Fund Inc. ("Liquid Asset")
6. Morgan Stanley U.S. Government Money Market Trust ("Government Money")

TAX-EXEMPT MONEY MARKET FUNDS

7. Active Assets California Tax-Free Trust ("AA California")
8. Active Assets Tax-Free Trust ("AA Tax-Free")
9. Morgan Stanley California Tax-Free Daily Income Trust ("California Tax-Free
Daily")
10. Morgan Stanley New York Municipal Money Market Trust ("New York Money")
11. Morgan Stanley Tax-Free Daily Income Trust ("Tax-Free Daily")

EQUITY FUNDS

12. Morgan Stanley 21st Century Trend Fund ("21st Century Trend")*
13. Morgan Stanley Aggressive Equity Fund ("Aggressive Equity")*
14. Morgan Stanley Allocator Fund ("Allocator Fund")*
15. Morgan Stanley All Star Growth Fund ("All Star Growth")*
16. Morgan Stanley American Opportunities Fund ("American Opportunities")*
17. Morgan Stanley Biotechnology Fund ("Biotechnology Fund")*
18. Morgan Stanley Capital Opportunities Trust ("Capital Opportunities")*
19. Morgan Stanley Developing Growth Securities Trust ("Developing Growth")*
20. Morgan Stanley Dividend Growth Securities Inc. ("Dividend Growth")*
21. Morgan Stanley Equity Fund ("Equity Fund")*
22. Morgan Stanley European Growth Fund Inc. ("European Growth")*
23. Morgan Stanley Financial Services Trust ("Financial Services")*
24. Morgan Stanley Fund of Funds ("Fund of Funds")*
o Domestic Portfolio
o International Portfolio

25. Morgan Stanley Fundamental Value Fund ("Fundamental Value")*
26. Morgan Stanley Global Advantage Fund ("Global Advantage")*

B-5

27. Morgan Stanley Global Dividend Growth Securities ("Global Dividend
Growth")*
28. Morgan Stanley Global Utilities Fund ("Global Utilities")*
29. Morgan Stanley Growth Fund ("Growth Fund")*
30. Morgan Stanley Health Sciences Trust ("Health Sciences")*
31. Morgan Stanley Income Builder Fund ("Income Builder")*
32. Morgan Stanley Information Fund ("Information Fund")*
33. Morgan Stanley International Fund ("International Fund")*
34. Morgan Stanley International SmallCap Fund ("International SmallCap")*
35. Morgan Stanley International Value Equity Fund ("International Value")*
36. Morgan Stanley Japan Fund ("Japan Fund")*
37. Morgan Stanley KLD Social Index Fund ("KLD Social Index")*
38. Morgan Stanley Latin American Growth Fund ("Latin American")*
39. Morgan Stanley Market Leader Trust ("Market Leader")*
40. Morgan Stanley Mid-Cap Value Fund ("Mid-Cap Value")*
41. Morgan Stanley Nasdaq-100 Index Fund ("Nasdaq-100")*
42. Morgan Stanley Natural Resource Development Securities Inc. ("Natural
Resource")*
43. Morgan Stanley New Discoveries Fund ("New Discoveries")*
44. Morgan Stanley Next Generation Trust ("Next Generation")*
45. Morgan Stanley Pacific Growth Fund Inc. ("Pacific Growth")*
46. Morgan Stanley Real Estate Fund ("Real Estate")*
47. Morgan Stanley Small-Mid Special Value Fund ("Small-Mid Special Value")*
48. Morgan Stanley S&P 500 Index Fund ("S&P 500 Index")*
49. Morgan Stanley Special Growth Fund ("Small Cap Growth")*
50. Morgan Stanley Special Value Fund ("Special Value")*
51. Morgan Stanley Tax-Managed Growth Fund ("Tax-Managed Growth")*
52. Morgan Stanley Technology Fund ("Technology Fund")*
53. Morgan Stanley Total Market Index Fund ("Total Market Index")*
54. Morgan Stanley Total Return Trust ("Total Return")*
55. Morgan Stanley Utilities Fund ("Utilities Fund")*
56. Morgan Stanley Value-Added Market Series ("Value Added")*
57. Morgan Stanley Value Fund ("Value Fund")*

BALANCED FUNDS

58. Morgan Stanley Balanced Growth Fund ("Balanced Growth")
59. Morgan Stanley Balanced Income Fund ("Balanced Income")

ASSET ALLOCATION FUND

60. Morgan Stanley Strategist Fund ("Strategist Fund")

TAXABLE FIXED-INCOME FUNDS

61. Morgan Stanley Convertible Securities Trust ("Convertible Securities")*
62. Morgan Stanley Diversified Income Trust ("Diversified Income")*
63. Morgan Stanley Federal Securities Trust ("Federal Securities")*
64. Morgan Stanley High Yield Securities Inc ("High Yield Securities")
65. Morgan Stanley Intermediate Income Securities ("Intermediate Income")*

B-6

66. Morgan Stanley Limited Duration Fund ("Limited Duration Fund")
67. Morgan Stanley Limited Duration U.S. Treasury Trust ("Limited Duration
Treasury")
68. Morgan Stanley Total Return Income Securities Fund ("Total Return Income")*

69. Morgan Stanley U.S. Government Securities Trust ("Government Securities")*

TAX-EXEMPT FIXED-INCOME FUNDS

70. Morgan Stanley California Tax-Free Income Fund ("California Tax-Free")*
7l. Morgan Stanley Hawaii Municipal Trust ("Hawaii Municipal")
72. Morgan Stanley Limited Term Municipal Trust ("Limited Term Municipal")
73. Morgan Stanley Multi-State Municipal Series Trust ("Multi-State Series")
o Arizona Series
o Florida Series
o New Jersey Series
o Pennsylvania Series

74. Morgan Stanley New York Tax-Free Income Fund ("New York Tax-Free")*
75. Morgan Stanley Tax-Exempt Securities Trust ("Tax-Exempt Securities")*

SPECIAL PURPOSE FUNDS

76. Morgan Stanley Select Dimensions Investment Series ("Select Dimensions")
o American Opportunities Portfolio
o Balanced Growth Portfolio
o Capital Opportunities Portfolio
o Developing Growth Portfolio
o Dividend Growth Portfolio
o Flexible Income Portfolio
o Global Equity Portfolio
o Growth Portfolio
o Money Market Portfolio
o Utilities Portfolio
o Value-Added Portfolio

77. Morgan Stanley Variable Investment Series ("Variable Investment")
o Aggressive Equity Portfolio
o Dividend Growth Portfolio
o Equity Portfolio
o European Growth Portfolio
o Global Advantage Portfolio
o Global Dividend Growth Portfolio
o High Yield Portfolio
o Income Builder Portfolio
o Information Portfolio
o Limited Duration Portfolio
o Money Market Portfolio
o Pacific Growth Portfolio
o Quality Income Plus Portfolio
o S&P 500 Index Portfolio
o Strategist Portfolio
o Utilities Portfolio

B-7

CLOSED-END RETAIL FUNDS

TAXABLE FIXED-INCOME CLOSED-END FUNDS

78. Morgan Stanley Government Income Trust ("Government Income")
79. Morgan Stanley Income Securities Inc. ("Income Securities")
80. Morgan Stanley Prime Income Trust ("Prime Income")

TAX-EXEMPT FIXED-INCOME CLOSED-END FUNDS

81. Morgan Stanley California Insured Municipal Income Trust ("California
Insured Municipal")
82. Morgan Stanley California Quality Municipal Securities ("California Quality
Municipal")
83. Morgan Stanley Insured California Municipal Securities ("Insured California
Securities")
84. Morgan Stanley Insured Municipal Bond Trust ("Insured Municipal Bond")
85. Morgan Stanley Insured Municipal Income Trust ("Insured Municipal Income")
86. Morgan Stanley Insured Municipal Securities ("Insured Municipal
Securities")
87. Morgan Stanley Insured Municipal Trust ("Insured Municipal Trust")
88. Morgan Stanley Municipal Income Opportunities Trust ("Municipal
Opportunities")
89. Morgan Stanley Municipal Income Opportunities Trust II ("Municipal
Opportunities II")
90. Morgan Stanley Municipal Income Opportunities Trust III ("Municipal
Opportunities III")
91. Morgan Stanley Municipal Premium Income Trust ("Municipal Premium")
92. Morgan Stanley New York Quality Municipal Securities ("New York Quality
Municipal")
93. Morgan Stanley Quality Municipal Income Trust ("Quality Municipal Income")
94. Morgan Stanley Quality Municipal Investment Trust ("Quality Municipal
Investment")
95. Morgan Stanley Quality Municipal Securities ("Quality Municipal
Securities")

*- Denotes Retail Multi-Class Fund

TERM TRUST

1. TCW/DW Term Trust 2003 ("Term Trust 2003")

INSTITUTIONAL FUNDS

OPEN-END INSTITUTIONAL FUNDS

1. Morgan Stanley Institutional Fund, Inc. ("Institutional Fund Inc.")

Active Portfolios:

o Active International Allocation Portfolio
o Asian Equity Portfolio
o Asian Real Estate Portfolio
o Emerging Markets Portfolio
o Emerging Markets Debt Portfolio
o Equity Growth Portfolio
o European Value Equity Portfolio
o European Real Estate Portfolio
o Focus Equity Portfolio
o Global Franchise Portfolio
o Global Value Equity Portfolio

B-8

o International Equity Portfolio
o International Magnum Portfolio
o International Small Cap Portfolio
o Japanese Value Equity Portfolio
o Latin American Portfolio
o Money Market Portfolio
o Municipal Money Market Portfolio
o Small Company Growth Portfolio
o Technology Portfolio
o U.S. Real Estate Portfolio
o Value Equity Portfolio

Inactive Portfolios:

o China Growth Portfolio
o Gold Portfolio
o Micro-Cap Portfolio
o Mortgage Backed Securities Portfolio
o U.S. Equity Portfolio
o Municipal Bond Portfolio

2. Morgan Stanley Institutional Fund Trust ("Institutional Fund Trust")

Active Portfolios:

o Advisory Foreign Fixed Income Portfolio
o Advisory Foreign Fixed Income II Portfolio
o Advisory Mortgage Portfolio
o Balanced Portfolio
o Cash Reserves Portfolio
o U.S. Core Fixed Income Portfolio
o Equity Portfolio
o Core Plus Fixed Income Portfolio
o Investment Grade Fixed Income Portfolio
o High Yield Portfolio
o Intermediate Duration Portfolio
o International Fixed Income Portfolio
o Limited Duration Portfolio
o Mid-Cap Growth Portfolio
o Multi-Asset Class Portfolio
o Municipal Portfolio
o Small-Cap Growth Portfolio
o Strategic Small Value Portfolio
o U.S. Small-Cap Growth Portfolio
o U.S. Mid-Cap Core Portfolio
o Value Portfolio

Inactive Portfolios:

o Balanced Plus Portfolio
o Growth Portfolio

B-9

o New York Municipal Portfolio
o Targeted Duration Portfolio
o Value II Portfolio

3. The Universal Institutional Funds, Inc. ("Universal Funds")

Active Portfolios:
o Active International Allocation Portfolio
o Core Plus Fixed Income Portfolio
o Emerging Markets Debt Portfolio
o Emerging Markets Equity Portfolio
o Equity and Income Portfolio
o Equity Growth Portfolio
o Global Franchise Portfolio
o Global Value Equity Portfolio
o High Yield Portfolio
o International Magnum Portfolio
o Mid-Cap Growth Portfolio
o Money Market Portfolio
o Small Company Growth Portfolio
o Technology Portfolio
o U.S. Mid-Cap Core Portfolio
o U.S. Real Estate Portfolio
o Value Portfolio

Inactive Portfolios:

o Asian Equity Portfolio
o Balanced Portfolio
o Capital Preservation Portfolio
o Core Equity Portfolio
o International Fixed Income Portfolio
o Investment Grade Fixed Income Portfolio
o Latin American Portfolio
o Multi-Asset Class Portfolio
o Targeted Duration Portfolio

4. Morgan Stanley Institutional Liquidity Funds ("Liquidity Funds")

CLOSED-END INSTITUTIONAL FUNDS

5. Morgan Stanley Asia-Pacific Fund, Inc. ("Asia-Pacific Fund")
6. Morgan Stanley Eastern Europe Fund, Inc. ("Eastern Europe")
7. Morgan Stanley Emerging Markets Debt Fund, Inc. ("Emerging Markets Debt")
8. Morgan Stanley Emerging Markets Fund, Inc. ("Emerging Markets Fund")
9. Morgan Stanley Global Opportunity Bond Fund, Inc. ("Global Opportunity")
10. Morgan Stanley High Yield Fund, Inc. ("High Yield Fund")
11. The Latin American Discovery Fund, Inc. ("Latin American Discovery")
12 The Malaysia Fund, Inc. ("Malaysia Fund")

B-10

13. The Thai Fund, Inc. ("Thai Fund")
14. The Turkish Investment Fund, Inc. ("Turkish Investment")

CLOSED-END HEDGE FUND

15. Morgan Stanley Institutional Fund of Hedge Funds ("Fund of Hedge Funds")

B-11

EVERY SHAREHOLDER'S VOTE IS IMPORTANT

YOUR PROXY VOTE IS IMPORTANT!

AND NOW YOU CAN VOTE YOUR PROXY ON THE
PHONE OR THE INTERNET.

IT SAVES MONEY! TELEPHONE AND INTERNET
VOTING SAVES POSTAGE COSTS. SAVINGS WHICH
CAN HELP MINIMIZE FUND EXPENSES.

IT SAVES TIME! TELEPHONE AND INTERNET
VOTING IS INSTANTANEOUS - 24 HOURS A DAY.

IT'S EASY! JUST FOLLOW THESE SIMPLE
STEPS:

1. READ YOUR PROXY STATEMENT AND HAVE IT
AT HAND.

2. CALL TOLL-FREE 1-866-241-6192 TO
WEBSITE: HTTPS://VOTE.PROXY-DIRECT.COM

3. FOLLOW THE RECORDED OR ON-SCREEN
DIRECTIONS.

4. DO NOT MAIL YOUR PROXY CARD WHEN YOU
VOTE BY PHONE OR INTERNET.

Please detach at perforation before mailing.

PROXY MORGAN STANLEY MUNICIPAL INCOME OPPORTUNITIES TRUST II PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 22, 2004

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned hereby appoints Stephanie V. Chang Yu, Barry Fink, and Joseph J.
McAlinden, or any of them, proxies, each with the power of substitution, to vote
on behalf of the undersigned at the Annual Meeting of Shareholders of the above
mentioned fund to be held in the North Conference Room, 5th floor, 1221 Avenue
of the Americas, New York, NY 10020 on June 22, 2004 at 11:00 a.m., New York
City time, and at any adjournment thereof, on the proposal set forth in the
Notice of Annual Meeting dated May 12, 2004 as follows:

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE TRUSTEES SET FORTH ON THE REVERSE HEREOF AND AS RECOMMENDED BY THE
BOARD OF TRUSTEES.

VOTE VIA THE INTERNET: HTTPS://VOTE.PROXY-DIRECT.COM
VOTE VIA THE TELEPHONE: 1-866-241-6192
----------------------------------------------------
999 99999 999 999
----------------------------------------------------

NOTE: Please sign exactly as your name appears on
this proxy card. All joint owners should sign. When
signing as executor, administrator, attorney,
trustee or guardian or as custodian for a minor,
please give full title as such. If a corporation,
please sign in full corporate name and indicate the
signer's office. If a partner, sign in the
partnership name.

----------------------------------------------------
Signature

----------------------------------------------------
Signature (if held jointly)

----------------------------------------------------
Date 14202_MCJ_A

(Please see reverse side)

EVERY SHAREHOLDER'S VOTE IS IMPORTANT

PLEASE SIGN, DATE AND RETURN YOUR
PROXY TODAY

Please detach at perforation before mailing.

TO VOTE BY MAIL, PLEASE COMPLETE AND RETURN THIS CARD.

YOU ALSO MAY VOTE A PROXY BY TOUCH-TONE PHONE OR BY INTERNET (SEE ENCLOSED
VOTING INFORMATION CARD FOR FURTHER INSTRUCTIONS).

PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
FOR WITHHOLD FOR ALL
EXCEPT

1. Election of four Trustees:

01. Wayne E. Hedien 02. Manuel H. Johnson [ ] [ ] [ ]
03. Joseph J. Kearns 04. Fergus Reid

To withhold authority to vote for any nominee(s) mark "For All Except" and write
the nominee number(s) on the line provided:

- ---------------------------------------------------------

14202_MCJ_A

YOUR VOTE IS IMPORTANT! PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD TODAY

EVERY SHAREHOLDER'S VOTE IS IMPORTANT

YOUR PROXY VOTE IS IMPORTANT!

AND NOW YOU CAN VOTE YOUR PROXY ON THE
PHONE OR THE INTERNET.

IT SAVES MONEY! TELEPHONE AND INTERNET
VOTING SAVES POSTAGE COSTS. SAVINGS WHICH
CAN HELP MINIMIZE FUND EXPENSES.

IT SAVES TIME! TELEPHONE AND INTERNET
VOTING IS INSTANTANEOUS - 24 HOURS A DAY.

IT'S EASY! JUST FOLLOW THESE SIMPLE
STEPS:

1. READ YOUR PROXY STATEMENT AND HAVE IT
AT HAND.

2. CALL TOLL-FREE 1-866-241-6192 TO
WEBSITE: HTTPS://VOTE.PROXY-DIRECT.COM

3. FOLLOW THE RECORDED OR ON-SCREEN
DIRECTIONS.

4. DO NOT MAIL YOUR PROXY CARD WHEN YOU
VOTE BY PHONE OR INTERNET.

Please detach at perforation before mailing.

PROXY MORGAN STANLEY INSURED MUNICIPAL SECURITIES PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 22, 2004

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

----------------------------------------------------
Signature

----------------------------------------------------
Signature (if held jointly)

----------------------------------------------------
Date 14202_MCJ_B

(Please see reverse side)

EVERY SHAREHOLDER'S VOTE IS IMPORTANT

YOUR PROXY VOTE IS IMPORTANT!

AND NOW YOU CAN VOTE YOUR PROXY ON THE
PHONE OR THE INTERNET.

IT SAVES MONEY! TELEPHONE AND INTERNET
VOTING SAVES POSTAGE COSTS. SAVINGS WHICH
CAN HELP MINIMIZE FUND EXPENSES.

IT SAVES TIME! TELEPHONE AND INTERNET
VOTING IS INSTANTANEOUS - 24 HOURS A DAY.

IT'S EASY! JUST FOLLOW THESE SIMPLE
STEPS:

1. READ YOUR PROXY STATEMENT AND HAVE IT
AT HAND.

2. CALL TOLL-FREE 1-866-241-6192 TO
WEBSITE: HTTPS://VOTE.PROXY-DIRECT.COM

3. FOLLOW THE RECORDED OR ON-SCREEN
DIRECTIONS.

4. DO NOT MAIL YOUR PROXY CARD WHEN YOU
VOTE BY PHONE OR INTERNET.

Please detach at perforation before mailing.

PROXY MORGAN STANLEY INSURED CALIFORNIA MUNICIPAL SECURITIES PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 22, 2004

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

----------------------------------------------------
Signature

----------------------------------------------------
Signature (if held jointly)

----------------------------------------------------
Date 14202_MCJ_C

(Please see reverse side)

EVERY SHAREHOLDER'S VOTE IS IMPORTANT

PLEASE SIGN, DATE AND RETURN YOUR
PROXY TODAY

Please detach at perforation before mailing.

TO VOTE BY MAIL, PLEASE COMPLETE AND RETURN THIS CARD.

YOU ALSO MAY VOTE A PROXY BY TOUCH-TONE PHONE OR BY INTERNET (SEE ENCLOSED
VOTING INFORMATION CARD FOR FURTHER INSTRUCTIONS).

PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
FOR WITHHOLD FOR ALL
EXCEPT

1. Election of four Trustees:

01. Edwin J. Garn 02. Joseph J. Kearns [ ] [ ] [ ]
03. Michael E. Nugent 04. Fergus Reid

To withhold authority to vote for any nominee(s) mark "For All Except" and write
the nominee number(s) on the line provided:

- ---------------------------------------------------------

14202_MCJ_C

YOUR VOTE IS IMPORTANT! PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD TODAY