<Page>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-06608
Morgan Stanley Latin American Growth Fund
(Exact name of registrant as specified in charter)
1221 Avenue of the Americas, New York, New York 10020
(Address of principal executive offices) (Zip code)
Ronald E. Robison
1221 Avenue of the Americas, New York, New York 10020
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-762-4000
Date of fiscal year end: January 31, 2004
Date of reporting period: July 31, 2003
Item 1 - Report to Shareholders
<Page>
WELCOME, SHAREHOLDER:
IN THIS REPORT, YOU'LL LEARN ABOUT HOW YOUR INVESTMENT IN
MORGAN STANLEY LATIN AMERICAN GROWTH FUND PERFORMED DURING THE SEMIANNUAL
PERIOD. THE PORTFOLIO MANAGEMENT TEAM WILL PROVIDE AN OVERVIEW OF THE MARKET
CLIMATE AND DISCUSS SOME OF THE FACTORS THAT HELPED OR HINDERED PERFORMANCE
DURING THE REPORTING PERIOD. IN ADDITION, THIS REPORT INCLUDES THE FUND'S
FINANCIAL STATEMENTS AND A LIST OF FUND INVESTMENTS, AS WELL AS OTHER
INFORMATION.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS FOR THE FUND BEING
OFFERED. MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO
PASS. THERE IS NO ASSURANCE THAT THE FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE.
THE FUND IS SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY THAT THE MARKET
VALUES OF SECURITIES OWNED BY THE FUND WILL DECLINE AND, THEREFORE, THE VALUE OF
THE FUND SHARES MAY BE LESS THAN WHAT YOU PAID FOR THEM. ACCORDINGLY, YOU CAN
LOSE MONEY INVESTING IN THIS FUND.
<Page>
Fund Report
TOTAL RETURN FOR THE SIX-MONTH PERIOD ENDED JULY 31, 2003
<Table>
<Caption>
MSCI
EMERGING LIPPER
MARKETS LATIN
FREE LATIN AMERICAN
AMERICA FUNDS
CLASS A CLASS B CLASS C CLASS D INDEX(1) AVERAGE(2)
28.92% 28.35% 28.49% 28.99% 35.15% 30.05%
</Table>
THE PERFORMANCE OF THE FUND'S FOUR SHARE CLASSES VARIES BECAUSE EACH HAS
DIFFERENT EXPENSES. THE FUND'S TOTAL RETURN FIGURES ASSUME THE REINVESTMENT OF
ALL DISTRIBUTIONS BUT DO NOT REFLECT THE DEDUCTION OF ANY APPLICABLE SALES
CHARGES. SUCH COSTS WOULD LOWER PERFORMANCE. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS. SEE PERFORMANCE SUMMARY FOR STANDARDIZED PERFORMANCE
INFORMATION.
MARKET CONDITIONS
The six-month period ended July 31, 2003, was a volatile yet cautiously
optimistic environment for Latin American growth investors. Concerns over oil
prices and the prospect of military conflict in the Middle East dominated the
first quarter of 2003. Latin American markets surged during the following
quarter, buoyed by greater stability in oil prices, strong currency
performances, lower interest rates and improved investor sentiment.
Brazil, which weathered investor skittishness prior to its October 2002
presidential election, has since benefited from newly elected President Da
Lula's reform agenda as well as from supportive trade and economic data.
Venezuela was by far the best-performing market in the world, gaining 113.3
percent when domestic investors fled toward local stocks as an inflation hedge.
Local shares significantly outperformed ADR equivalents, reflecting the
distorting effects of capital controls and exchange restrictions. Argentina
continued to fare well, benefiting from stability in oil prices. Chile was
buoyed by falling interest rates, increased foreign direct investment and an
improving outlook for GDP growth. Mexican equities, which benefited from
consolidation in the beverage sector and low interest rates, lagged other Latin
American markets with domestic activity data there remaining lackluster.
PERFORMANCE ANALYSIS
The Fund's underperformance of its benchmark, the MSCI Emerging Markets Free
Latin America Index, resulted from stock selection and country allocation.
Although the Fund's underweighted stances in Chile and Venezuela detracted from
performance, its underweightings in Peru and Argentina turned out to be
beneficial.
The Fund was negatively affected by the capital controls in Venezuela that have
created an artificial exchange rate there. Performance was further hampered by
the Fund's cautious stance earlier in the period in Brazil's regulated sectors
(primarily telecommunications and utilities), as we were initially wary of newly
elected President Da Lula's stance on tariffs, given his previously populist
platforms.
2
<Page>
TOP 10 HOLDINGS
<Table>
Telefonos de Mexico SA-ADR 12.2%
America Movil SA-Series L-ADR 10.7
Petroleo Brasileiro SA-ADR 7.6
Companhia de Bebidas-ADR PREF 7.2
Petroleo Brasileiro SA-ADR PREF 5.1
Grupo Financiero BBVA Bancomer SA 4.9
Wal-Mart de Mexico SA-SER C 4.7
Companhia Vale do Rio Doce-ADR PREF 4.3
Banco Itau Holding Fin SA-ADR PREF 3.1
Companhia Vale do Rio Doce-ADR 2.8
</Table>
COUNTRY ALLOCATION
<Table>
Brazil 44.3%
Mexico 41.3
Chile 5.9
Luxembourg 2.2
Venezuela 1.5
</Table>
SUBJECT TO CHANGE DAILY. ALL PERCENTAGES ARE AS A PERCENTAGE OF NET ASSETS.
PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE DEEMED AS A
RECOMMENDATION TO BUY THE SECURITIES MENTIONED. MORGAN STANLEY IS A FULL-SERVICE
SECURITIES FIRM ENGAGED IN SECURITIES TRADING AND BROKERAGE ACTIVITIES,
INVESTMENT BANKING, RESEARCH AND ANALYSIS, FINANCING AND FINANCIAL ADVISORY
SERVICES.
INVESTMENT STRATEGY
- - THE FUND INVESTS AT LEAST 80 PERCENT IN COMMON STOCKS AND OTHER EQUITY
SECURITIES OF LATIN AMERICAN COUNTRIES.
- - THE PORTFOLIO MANAGERS USE A "TOP DOWN" COUNTRY ALLOCATION APPROACH TOGETHER
WITH "BOTTOM UP" STOCK SELECTION. FIRST THEY PERFORM A COUNTRY ANALYSIS,
FOLLOWED BY A FUNDAMENTAL ANALYSIS OF SPECIFIC SECURITIES, INDUSTRIES AND
COMPANIES.
PROXY VOTING POLICIES AND PROCEDURES
A DESCRIPTION OF THE FUND'S POLICIES AND PROCEDURES WITH RESPECT TO THE VOTING
OF PROXIES RELATING TO THE FUND'S PORTFOLIO SECURITIES IS AVAILABLE WITHOUT
CHARGE, UPON REQUEST, BY CALLING (800) 869-NEWS. THIS INFORMATION IS ALSO
AVAILABLE ON THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT
http://www.sec.gov.
3
<Page>
Performance Summary
AVERAGE ANNUAL TOTAL RETURNS--PERIOD ENDED JULY 31, 2003
<Table>
<Caption>
CLASS A SHARES* CLASS B SHARES** CLASS C SHARES+ CLASS D SHARES++
07/28/97 12/30/92 07/28/97 07/28/97
SYMBOL LATAX LATBX LATCX LATDX
1 YEAR 29.78%(3) 28.89%(3) 29.03%(3) 30.20%(3)
22.97(4) 23.89(4) 28.03(4)
5 YEARS (3.33)(3) (4.10)(3) (4.04)(3) (3.16)(3)
(4.37)(4) (4.49)(4) (4.04)(4)
10 YEARS (0.53)(3)
(0.53)(4)
SINCE INCEPTION (7.12)(3) (0.31)(3) (7.80)(3) (6.94)(3)
(7.95)(4) (0.31)(4) (7.80)(4)
</Table>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE. WHEN YOU SELL FUND SHARES, THEY MAY BE WORTH
LESS THAN THEIR ORIGINAL COST. THE TABLE DOES NOT REFLECT THE DEDUCTION OF TAXES
THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND
SHARES. PERFORMANCE FOR CLASS A, CLASS B, CLASS C, AND CLASS D SHARES WILL VARY
DUE TO DIFFERENCES IN SALES CHARGES AND EXPENSES.
- ----------
Notes on Performance
(1) THE MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS FREE LATIN
AMERICA INDEX (MSCI EMF LA INDEX) IS A MARKET CAPITALIZATION WEIGHTED INDEX
THAT INCLUDES SELECT SECURITIES FROM ARGENTINA, BRAZIL, CHILE, COLOMBIA,
MEXICO, PERU, AND VENEZUELA. FOR THE PERIOD FROM THE FUND'S INCEPTION
THROUGH DECEMBER 31, 2000, THE INDEX'S RETURNS INCLUDE THOSE OF THE MSCI
EMF LA'S "GROSS" INDEX WHICH ASSUMES DIVIDENDS GROSS OF WITHHOLDING TAXES
BUT NET OF DOMESTIC TAX CREDITS. FOR THE PERIOD FROM JANUARY 1, 2001 AND
BEYOND, THE INDEX'S RETURNS REFLECT THOSE OF THE "NET" INDEX WHICH REFLECTS
A REDUCTION IN DIVIDENDS AFTER TAKING INTO ACCOUNT WITHHOLDING OF TAXES BY
CERTAIN FOREIGN COUNTRIES REPRESENTED IN THE INDEX. THE INDEX DOES NOT
INCLUDE ANY EXPENSES, FEES OR CHARGES. SUCH COSTS WOULD LOWER PERFORMANCE.
IT IS NOT POSSIBLE TO INVEST DIRECTLY IN AN INDEX.
(2) THE LIPPER LATIN AMERICAN FUNDS AVERAGE TRACKS THE PERFORMANCE OF ALL FUNDS
IN THE LIPPER LATIN AMERICAN FUNDS CLASSIFICATION. THE AVERAGE, WHICH IS
ADJUSTED FOR CAPITAL GAINS DISTRIBUTIONS AND INCOME DIVIDENDS, IS UNMANAGED
AND SHOULD NOT BE CONSIDERED AN INVESTMENT.
(3) FIGURE SHOWN ASSUMES REINVESTMENT OF ALL DISTRIBUTIONS AND DOES NOT REFLECT
THE DEDUCTION OF ANY SALES CHARGES.
(4) FIGURE SHOWN ASSUMES REINVESTMENT OF ALL DISTRIBUTIONS AND THE DEDUCTION OF
THE MAXIMUM APPLICABLE SALES CHARGE. SEE THE FUND'S CURRENT PROSPECTUS FOR
COMPLETE DETAILS ON FEES AND SALES CHARGES.
* THE MAXIMUM FRONT-END SALES CHARGE FOR CLASS A IS 5.25%.
** THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE (CDSC) FOR CLASS B IS 5.0%.
THE CDSC DECLINES TO 0% AFTER SIX YEARS.
+ THE MAXIMUM CDSC FOR CLASS C IS 1% FOR SHARES REDEEMED WITHIN ONE YEAR OF
PURCHASE.
++ CLASS D HAS NO SALES CHARGE.
4
<Page>
MORGAN STANLEY LATIN AMERICAN GROWTH FUND
PORTFOLIO OF INVESTMENTS - JULY 31, 2003 (UNAUDITED)
<Table>
<Caption>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON AND PREFERRED STOCKS (96.1%)
BRAZIL (44.3%)
BEVERAGES: ALCOHOLIC
145,310 Companhia de Bebidas das
Americas (ADR) (Pref.) $ 2,884,403
------------
ELECTRIC UTILITIES
51,172 Companhia Energetica de Minas
Gerais (ADR) (Pref.) 460,036
7,292,000 Companhia Energetica de Minas
Gerais (Pref.) 66,536
------------
526,572
------------
FOOD RETAIL
10,300 Companhia Brasileira de
Distribuicao Grupo Pao de
Acucar (ADR) (Pref.) 192,095
------------
INTEGRATED OIL
150,733 Petroleo Brasileiro S.A. (ADR) 3,058,373
107,850 Petroleo Brasileiro S.A.
(ADR) (Pref.) 2,048,072
1,676 Petroleo Brasileiro S.A. (Pref.) 31,884
------------
5,138,329
------------
MAJOR TELECOMMUNICATIONS
15,378 Brasil Telecom Participacoes
S.A. (ADR) (Pref.) 506,705
2,691,000 Brasil Telecom Participacoes
S.A. (Pref.) 17,849
------------
524,554
------------
OTHER METALS/MINERALS
32,000 Companhia Vale do Rio Doce
(ADR) 1,114,560
54,602 Companhia Vale do Rio Doce
(Class A) (ADR) (Pref.) 1,737,436
266,358 Companhia Vale do Rio Doce
S.A. (Debentures)* 0
------------
2,851,996
------------
PULP & PAPER
17,300 Aracruz Celulose S.A. (Class B)
(ADR) (Pref.) 433,192
81,000 Klabin S.A. (Pref.)* 78,000
13,562 Votorantim Celulose e Papel
S.A. (ADR) (Pref.) $ 313,825
2,104,000 Votorantim Celulose e Papel
S.A. (Pref.) 97,053
------------
922,070
------------
REGIONAL BANKS
39,882 Banco Bradesco S.A. (ADR)
(Pref.) 803,622
35,043 Banco Itau Holding Financeira
S.A. (ADR) (Pref.) 1,253,839
2,789,000 Banco Itau Holding Financeira
S.A. (Pref.) 200,019
14,600 Unibanco-Uniao de Bancos
Brasileiros S.A. (ADR) (Units)++ 253,018
------------
2,510,498
------------
SPECIALTY TELECOMMUNICATIONS
50,700 Tele Norte Leste Participacoes
S.A. (ADR) (Pref.) 558,714
6,775,000 Tele Norte Leste Participacoes
S.A. (Pref.) 74,822
------------
633,536
------------
STEEL
30,375 Companhia Siderurgica Nacional
S.A. (ADR) 827,415
53,691 Gerdau S.A. (ADR) (Pref.) 619,057
37,064 Usinas Siderurgicas de Minas
Gerais S.A. (Class A) (Pref.) 190,561
------------
1,637,033
------------
TOTAL BRAZIL 17,821,086
------------
CHILE (5.9%)
BEVERAGES: ALCOHOLIC
23,600 Compania Cervecerias Unidas
S.A. (ADR) 437,780
------------
FOOD RETAIL
17,991 Distribucion y Servicio D&S
S.A. (ADR) 243,418
------------
MAJOR TELECOMMUNICATIONS
44,500 Cia de Telecomunicaciones de
Chile S.A. (Series A) (ADR) 587,845
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
5
<Page>
<Table>
<Caption>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------------------------------
REGIONAL BANKS
19,721 Banco de Chile (ADR) $ 403,295
30,775 Banco Santander Chile S.A.
(ADR) 697,054
------------
1,100,349
------------
TOTAL CHILE 2,369,392
------------
LUXEMBOURG (2.2%)
OILFIELD SERVICES/EQUIPMENT
34,585 Tenaris S.A. (ADR) 876,038
------------
MEXICO (41.3%)
BEVERAGES: NON-ALCOHOLIC
15,600 Coca-Cola Femsa S.A. de C.V.
(Series L) (ADR) 343,200
15,870 Fomento Economico Mexicano,
S.A. de C.V. (ADR) (Units)++ 609,567
172,800 Fomento Economico Mexicano,
S.A. de C.V. (Units)++ 660,569
------------
1,613,336
------------
CONSTRUCTION MATERIALS
2,536 Cemex S.A. de C.V. - CPO 11,971
41,655 Cemex S.A. de C.V. - CPO
(ADR) 983,058
------------
995,029
------------
DISCOUNT STORES
707,609 Wal-Mart de Mexico S.A. de
C.V. (Series C) 1,890,163
3,879 Wal-Mart de Mexico S.A. de C.V.
(Series V) 11,504
------------
1,901,667
------------
INDUSTRIAL CONGLOMERATES
78,000 Alfa, S.A. (Class A) 159,026
------------
MAJOR TELECOMMUNICATIONS
96,600 Carso Global Telecom
(Series A1)* $ 115,342
158,491 Telefonos de Mexico S.A. de
C.V. (Series L) (ADR) 4,891,032
------------
5,006,374
------------
OTHER TRANSPORTATION
33,400 Grupo Aeroportuario del Sureste
S.A. de C.V. (Series B) (ADR) 502,336
------------
REGIONAL BANKS
58,400 Grupo Financiero Banorte S.A.
de C.V. (O shares)* 154,344
2,346,743 Grupo Financiero BBVA
Bancomer, S.A. de C.V.
(Series B)* 1,960,326
------------
2,114,670
------------
WIRELESS TELECOMMUNICATIONS
192,453 America Movil S.A. de C.V.
(Series L) (ADR) 4,299,400
------------
TOTAL MEXICO 16,591,838
------------
PERU (0.9%)
PRECIOUS METALS
10,600 Compania de Minas
Buenaventura S.A. (ADR) 352,450
------------
VENEZUELA (1.5%)
MAJOR TELECOMMUNICATIONS
46,600 Compania Anonima Nacional
Telefonos de Venezuela
(Class D) (ADR) 607,198
------------
TOTAL COMMON AND
PREFERRED STOCKS
(COST $38,499,569) 38,618,002
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
6
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (0.4%)
REPURCHASE AGREEMENT
$ 175 Joint repurchase agreement
account 1.11% due 08/01/03
(dated 07/31/03; proceeds
$175,005) (a)
(COST $175,000) $ 175,000
------------
TOTAL INVESTMENTS
(COST $38,674,569) (b) 96.5% 38,793,002
OTHER ASSETS IN EXCESS OF
LIABILITIES 3.5 1,412,077
----- ------------
NET ASSETS 100.0% $ 40,205,079
===== ============
</Table>
- ----------
ADR AMERICAN DEPOSITORY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
++ CONSISTS OF ONE OR MORE CLASS OF SECURITIES TRADED TOGETHER AS A UNIT;
STOCKS WITH ATTACHED WARRANTS.
(a) COLLATERALIZED BY FEDERAL AGENCY AND U.S. TREASURY OBLIGATIONS.
(b) THE AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES APPROXIMATES THE
AGGREGATE COST FOR BOOK PURPOSES. THE AGGREGATE GROSS UNREALIZED
APPRECIATION IS $3,125,334 AND THE AGGREGATE GROSS UNREALIZED
DEPRECIATION IS $3,006,901, RESULTING IN NET UNREALIZED APPRECIATION
OF $118,433.
SEE NOTES TO FINANCIAL STATEMENTS
7
<Page>
SUMMARY OF INVESTMENTS - JULY 31, 2003 (UNAUDITED)
<Table>
<Caption>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- --------------------------------------------------------------------------------
Beverages: Alcoholic $ 3,322,183 8.3%
Beverages: Non-Alcoholic 1,613,336 4.0
Construction Materials 995,029 2.5
Discount Stores 1,901,667 4.7
Electric Utilities 526,572 1.3
Food Retail 435,513 1.1
Industrial Conglomerates 159,026 0.4
Integrated Oil 5,138,329 12.8
Major Telecommunications 6,725,971 16.7
Oilfield Services/Equipment 876,038 2.2
Other Metals/Minerals 2,851,996 7.1
Other Transportation 502,336 1.2
Precious Metals 352,450 0.9
Pulp & Paper 922,070 2.3
Regional Banks $ 5,725,517 14.2%
Repurchase Agreement 175,000 0.4
Specialty Telecommunications 633,536 1.6
Steel 1,637,033 4.1
Wireless Telecommunications 4,299,400 10.7
------------ ----
$ 38,793,002 96.5%
============ ====
<Caption>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
- --------------------------------------------------------------------------------
Common Stocks $ 26,050,282 64.8%
Preferred Stocks 12,567,720 31.3
Short-Term Investment 175,000 0.4
------------ ----
$ 38,793,002 96.5%
============ ====
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
8
<Page>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2003 (UNAUDITED)
<Table>
ASSETS:
Investments in securities, at value (cost $38,674,569) $ 38,793,002
Receivable for:
Investments sold 1,381,819
Dividends 98,186
Shares of beneficial interest sold 12,500
Prepaid expenses and other assets 92,985
-------------
TOTAL ASSETS 40,378,492
-------------
LIABILITIES:
Payable for:
Investment management fee 42,399
Shares of beneficial interest redeemed 35,893
Distribution fee 32,397
Accrued expenses and other payables 62,724
-------------
TOTAL LIABILITIES 173,413
-------------
NET ASSETS $ 40,205,079
=============
COMPOSITION OF NET ASSETS:
Paid-in-capital 129,458,616
Net unrealized appreciation 105,794
Accumulated undistributed net investment income 112,299
Accumulated net realized loss (89,471,630)
-------------
NET ASSETS $ 40,205,079
=============
CLASS A SHARES:
Net Assets $ 309,401
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE) 32,130
NET ASSET VALUE PER SHARE $ 9.63
=============
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE) $ 10.16
=============
CLASS B SHARES:
Net Assets $ 37,810,469
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE) 4,074,878
NET ASSET VALUE PER SHARE $ 9.28
=============
CLASS C SHARES:
Net Assets $ 352,423
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE) 37,949
NET ASSET VALUE PER SHARE $ 9.29
=============
CLASS D SHARES:
Net Assets $ 1,732,786
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE) 178,607
NET ASSET VALUE PER SHARE $ 9.70
=============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
9
<Page>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JULY 31, 2003 (UNAUDITED)
<Table>
NET INVESTMENT INCOME:
DIVIDEND INCOME (net of $86,928 foreign withholding tax) $ 785,505
-------------
EXPENSES
Investment management fee 229,265
Distribution fee (Class A shares) 358
Distribution fee (Class B shares) 175,253
Distribution fee (Class C shares) 1,659
Transfer agent fees and expenses 84,790
Shareholder reports and notices 42,345
Professional fees 32,537
Registration fees 22,040
Custodian fees 13,747
Trustees' fees and expenses 9,780
Other 2,163
-------------
TOTAL EXPENSES 613,937
-------------
NET INVESTMENT INCOME 171,568
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
NET REALIZED LOSS ON:
Investments (158,504)
Foreign exchange transactions (5,061)
-------------
NET REALIZED LOSS (163,565)
-------------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments 9,232,050
Translation of other assets and liabilities denominated in foreign currencies (11,590)
-------------
NET APPRECIATION 9,220,460
-------------
NET GAIN 9,056,895
-------------
NET INCREASE $ 9,228,463
=============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
10
<Page>
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JULY 31, 2003 JANUARY 31, 2003
------------- ----------------
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 171,568 $ 109,281
Net realized loss (163,565) (5,548,408)
Net change in unrealized depreciation 9,220,460 (8,339,982)
------------- ----------------
NET INCREASE (DECREASE) 9,228,463 (13,779,109)
------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A shares -- (5,559)
Class B shares -- (153,752)
Class C shares -- (2,362)
Class D shares -- (40,073)
------------- ----------------
TOTAL DIVIDENDS -- (201,746)
------------- ----------------
Decrease from transactions in shares of beneficial interest (3,555,918) (18,151,319)
------------- ----------------
NET INCREASE (DECREASE) 5,672,545 (32,132,174)
NET ASSETS:
Beginning of period 34,532,534 66,664,708
------------- ----------------
END OF PERIOD
(Including accumulated undistributed net investment income of $112,299
and dividends in excess of net investment income of $59,269,
respectively) $ 40,205,079 $ 34,532,534
============= ================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
11
<Page>
NOTES TO FINANCIAL STATEMENTS JULY 31, 2003 (UNAUDITED)
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Latin American Growth Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified,
open-end management investment company. The Fund's investment objective is
long-term capital appreciation. The Fund seeks to achieve its objective by
investing primarily in equity securities of Latin American issuers. The Fund was
organized as a Massachusetts business trust on February 25, 1992 and commenced
operations on December 30, 1992. On July 28, 1997, the Fund converted to a
multiple class share structure.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity portfolio security listed or traded
on the New York or American Stock Exchange or other exchange is valued at its
latest sale price prior to the time when assets are valued; if there were no
sales that day, the security is valued at the mean between the last reported bid
and asked price; (2) an equity portfolio security listed or traded on the Nasdaq
is valued at the Nasdaq Official Closing Price; if there were no sales that day,
the security is valued at the mean between the last reported bid and asked
price; (3) all other equity portfolio securities for which over-the-counter
market quotations are readily available are valued at the mean between the last
reported bid and asked price. In cases where a security is traded on more than
one exchange, the security is valued on the exchange designated as the primary
market; (4) for equity securities traded on foreign exchanges, the last reported
sale price or the latest bid price may be used if there were no sales on a
particular day; (5) when market quotations are not readily available or Morgan
Stanley Investment Advisors Inc. (the "Investment Manager") determines that the
latest sale price, the bid price or the mean between the last reported bid and
asked price do not reflect a security's market value, portfolio securities are
valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Fund's Trustees; (6)
certain portfolio securities may be valued by an outside pricing service
approved by the Fund's Trustees; and (7) short-term debt securities having a
maturity date of more than sixty days at time of purchase are valued on a
mark-to-market basis until sixty days prior to maturity and thereafter at
amortized cost based on their value on the 61st day. Short-term debt securities
having a maturity date of sixty days or less at the time of purchase are valued
at amortized cost.
12
<Page>
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date
except for certain dividends on foreign securities which are recorded as soon as
the Fund is informed after the ex-dividend date. Discounts are accreted and
premiums are amortized over the life of the respective securities. Interest
income is accrued daily.
C. REPURCHASE AGREEMENTS -- Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated
entities managed by the Investment Manager, may transfer uninvested cash
balances into one or more joint repurchase agreement accounts. These balances
are invested in one or more repurchase agreements and are collateralized by
cash, U.S. Treasury or federal agency obligations. The Fund may also invest
directly with institutions in repurchase agreements. The Fund's custodian
receives the collateral, which is marked-to-market daily to determine that the
value of the collateral does not decrease below the repurchase price plus
accrued interest.
D. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
E. FOREIGN CURRENCY TRANSLATION AND FORWARD FOREIGN CURRENCY CONTRACTS -- The
books and records of the Fund are maintained in U.S. dollars as follows: (1) the
foreign currency market value of investment securities, other assets and
liabilities and forward foreign currency contracts ("forward contracts") are
translated at the exchange rates prevailing at the end of the period; and (2)
purchases, sales, income and expenses are translated at the exchange rates
prevailing on the respective dates of such transactions. The resultant exchange
gains and losses are recorded as realized and unrealized gain/loss on foreign
exchange transactions. Pursuant to U.S. Federal income tax regulations, certain
foreign exchange gains/losses included in realized and unrealized gain/loss are
included in or are a reduction of ordinary income for federal income tax
purposes. The Fund does not isolate that portion of the results of operations
arising as a result of changes in the foreign exchange rates from the changes in
the market prices of the securities. Forward contracts are valued daily at the
appropriate exchange rates. The resultant unrealized exchange gains and losses
are recorded as unrealized foreign currency gain or loss. The Fund records
realized gains or losses on delivery of the currency or at the time the forward
contract is extinguished (compensated) by entering into a closing transaction
prior to delivery.
F. FEDERAL INCOME TAX POLICY -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Accordingly, no federal income tax provision is required.
13
<Page>
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and distributions to
shareholders are recorded on the ex-dividend date.
H. USE OF ESTIMATES -- The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures.
Actual results could differ from those estimates.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day: 1.25% to the portion of daily net assets not exceeding
$500 million and 1.20% to the portion of the daily net assets exceeding $500
million.
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan
provides that the Fund will pay the Distributor a fee which is accrued daily and
paid monthly at the following annual rates: (i) Class A -- up to 0.25% of the
average daily net assets of Class A; (ii) Class B -- 1.0% of the lesser of: (a)
the average daily aggregate gross sales of the Class B shares since the
inception of the Fund (not including reinvestment of dividend or capital gain
distributions) less the average daily aggregate net asset value of the Class B
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or waived; or (b) the average daily net assets of
Class B; and (iii) Class C -- up to 1.0% of the average daily net assets of
Class C.
In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts totaled
$22,171,924 at July 31, 2003.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Financial Advisors or other selected
broker-dealer
14
<Page>
representatives may be reimbursed in the subsequent calendar year. For the six
months ended July 31, 2003, the distribution fee was accrued for Class A shares
and Class C shares at the annual rate of 0.25% and 1.0%, respectively.
The Distributor has informed the Fund that for the six months ended July 31,
2003, it received contingent deferred sales charges from certain redemptions of
the Fund's Class B shares and Class C shares of $6,280 and $46, respectively and
received $349 in front-end sales charges from sales of the Fund's Class A
shares. The respective shareholders pay such charges which are not an expense of
the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended July 31, 2003 aggregated
$10,766,631 and $14,932,634, respectively.
At July 31, 2003, Morgan Stanley Fund of Funds -- International Portfolio, an
affiliate of the Investment Manager and Distributor, held 159,663 Class D shares
of beneficial interest of the Fund.
Morgan Stanley Trust, an affiliate of the Investment Manager and Distributor, is
the Fund's transfer agent.
5. FEDERAL INCOME TAX STATUS
The amount of dividends and distributions from net investment income and net
realized gains are determined in accordance with federal income tax regulations
which may differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for tax purposes are reported as distributions of paid-in-capital.
At January 31, 2003, the Fund had a net capital loss carryforward of $86,880,785
to offset future capital gains to the extent provided by regulations, available
through January 31 of the following years:
<Table>
<Caption>
FOR THE YEAR ENDED JANUARY 31,
------------------------------------------------------------------------
2004 2005 2007 2008 2011
------------ ------------ ------------ ------------ ------------
$ 57,625,819 $ 19,838,661 $ 3,057,904 $ 2,899,656 $ 3,458,745
============ ============ ============ ============ ============
</Table>
As of January 31, 2003, the Fund had temporary book/tax differences primarily
attributable to post-October losses (capital and foreign currency losses
incurred after October 31 within the taxable year
15
<Page>
which are deemed to arise on the first business day of the Fund's next taxable
year) and capital loss deferrals on wash sales.
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<Table>
<Caption>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JULY 31, 2003 JANUARY 31, 2003
------------------------ ---------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
-------- ------------ ---------- -------------
CLASS A SHARES
Sold 4,000 $ 36,669 11,758 $ 117,308
Reinvestment of dividends -- -- 647 5,385
Redeemed (11,919) (99,761) (26,931) (255,052)
-------- ------------ ---------- -------------
Net decrease -- Class A (7,919) (63,092) (14,526) (132,359)
-------- ------------ ---------- -------------
CLASS B SHARES
Sold 98,586 776,287 226,513 2,125,386
Reinvestment of dividends -- -- 17,246 139,347
Redeemed (641,172) (5,153,040) (1,850,942) (15,722,837)
-------- ------------ ---------- -------------
Net decrease -- Class B (542,586) (4,376,753) (1,607,183) (13,458,104)
-------- ------------ ---------- -------------
CLASS C SHARES
Sold 4,198 32,997 4,480 44,946
Reinvestment of dividends -- -- 283 2,288
Redeemed (8,226) (69,927) (14,795) (125,864)
-------- ------------ ---------- -------------
Net decrease -- Class C (4,028) (36,930) (10,032) (78,630)
-------- ------------ ---------- -------------
CLASS D SHARES
Sold 139,517 1,221,360 238,833 1,879,342
Reinvestment of dividends -- -- 156 1,305
Redeemed (35,120) (300,503) (704,359) (6,362,873)
-------- ------------ ---------- -------------
Net increase (decrease) -- Class D 104,397 920,857 (465,370) (4,482,226)
-------- ------------ ---------- -------------
Net decrease in Fund (450,136) $ (3,555,918) (2,097,111) $ (18,151,319)
======== ============ ========== =============
</Table>
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward contracts to facilitate settlement of foreign
currency denominated portfolio transactions or to manage foreign currency
exposure associated with foreign currency denominated securities.
Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange
16
<Page>
rates underlying the forward contracts. Risks may also arise upon entering into
these contracts from the potential inability of the counterparties to meet the
terms of their contracts.
At July 31, 2003, there were no outstanding forward contracts.
At July 31, 2003, investments in securities of issuers in Brazil and Mexico
represented 44.3% and 41.3% of net assets, respectively. These investments, as
well as other non-U.S. investments which involve risks and considerations not
present with respect to U.S. securities, may be affected by economic or
political developments in these regions.
17
<Page>
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<Table>
<Caption>
FOR THE SIX FOR THE YEAR ENDED JANUARY 31,
MONTHS ENDED ------------------------------------------------------------
JULY 31, 2003 2003 2002 2001 2000 1999
------------- -------- -------- -------- -------- --------
(UNAUDITED)
CLASS A SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period $ 7.47 $ 10.02 $ 11.90 $ 12.26 $ 7.33 $ 12.14
------------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss)++ 0.07 0.08 0.14 0.00 (0.01) 0.15
Net realized and unrealized gain (loss) 2.09 (2.51) (2.02) (0.36) 4.94 (4.96)
------------- -------- -------- -------- -------- --------
Total income (loss) from investment operations 2.16 (2.43) (1.88) (0.36) 4.93 (4.81)
------------- -------- -------- -------- -------- --------
Less dividends from net investment income - (0.12) - - - -
------------- -------- -------- -------- -------- --------
Net asset value, end of period $ 9.63 $ 7.47 $ 10.02 $ 11.90 $ 12.26 $ 7.33
============= ======== ======== ======== ======== ========
TOTAL RETURN+ 28.92%(1) (24.40)% (15.80)% (2.62)% 66.71% (39.62)%
RATIOS TO AVERAGE NET ASSETS(3):
Expenses 2.63%(2) 2.52% 2.20% 1.96% 2.28% 2.21%
Net investment income 1.65%(2) 0.91% 1.15% 0.05% 0.16% 1.26%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $ 309 $ 299 $ 547 $ 936 $ 751 $ 58
Portfolio turnover rate 30%(1) 57% 73% 44% 59% 27%
</Table>
- ----------
++ THE PER SHARE AMOUNTS WERE COMPUTED USING AN AVERAGE NUMBER OF SHARES
OUTSTANDING DURING THE PERIOD.
+ DOES NOT REFLECT THE DEDUCTION OF SALES CHARGE. CALCULATED BASED ON THE NET
ASSET VALUE AS OF THE LAST BUSINESS DAY OF THE PERIOD.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
(3) REFLECTS OVERALL FUND RATIOS FOR INVESTMENT INCOME AND NON-CLASS SPECIFIC
EXPENSES.
SEE NOTES TO FINANCIAL STATEMENTS
18
<Page>
<Table>
<Caption>
FOR THE SIX FOR THE YEAR ENDED JANUARY 31,
MONTHS ENDED ------------------------------------------------------------
JULY 31, 2003 2003 2002 2001 2000 1999
------------- -------- -------- -------- --------- ---------
(UNAUDITED)
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period $ 7.23 $ 9.66 $ 11.55 $ 11.99 $ 7.24 $ 12.09
------------- -------- -------- -------- --------- ---------
Income (loss) from investment operations:
Net investment income (loss)++ 0.04 0.01 0.04 (0.09) (0.06) 0.05
Net realized and unrealized gain (loss) 2.01 (2.41) (1.93) (0.35) 4.81 (4.90)
------------- -------- -------- -------- --------- ---------
Total income (loss) from
investment operations 2.05 (2.40) (1.89) (0.44) 4.75 (4.85)
------------- -------- -------- -------- --------- ---------
Less dividends from net
investment income - (0.03) - - - -
------------- -------- -------- -------- --------- ---------
Net asset value, end of period $ 9.28 $ 7.23 $ 9.66 $ 11.55 $ 11.99 $ 7.24
============= ======== ======== ======== ========= =========
TOTAL RETURN+ 28.35%(1) (24.90)% (16.36)% (3.43)% 65.19 % (40.12)%
RATIOS TO AVERAGE NET ASSETS(3):
Expenses 3.38%(2) 3.27% 2.96% 2.77% 3.06% 2.98%
Net investment income (loss) 0.90%(2) 0.16% 0.39% (0.76)% (0.62)% 0.49%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $ 37,810 $ 33,372 $ 60,159 $ 99,431 $ 136,699 $ 105,678
Portfolio turnover rate 30%(1) 57% 73% 44% 59% 27%
</Table>
- ----------
++ THE PER SHARE AMOUNTS WERE COMPUTED USING AN AVERAGE NUMBER OF SHARES
OUTSTANDING DURING THE PERIOD.
+ DOES NOT REFLECT THE DEDUCTION OF SALES CHARGE. CALCULATED BASED ON THE NET
ASSET VALUE AS OF THE LAST BUSINESS DAY OF THE PERIOD.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
(3) REFLECTS OVERALL FUND RATIOS FOR INVESTMENT INCOME AND NON-CLASS SPECIFIC
EXPENSES.
SEE NOTES TO FINANCIAL STATEMENTS
19
<Page>
<Table>
<Caption>
FOR THE SIX FOR THE YEAR ENDED JANUARY 31,
MONTHS ENDED ------------------------------------------------------------
JULY 31, 2003 2003 2002 2001 2000 1999
------------- -------- -------- -------- -------- --------
(UNAUDITED)
CLASS C SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period $ 7.23 $ 9.69 $ 11.57 $ 12.02 $ 7.24 $ 12.10
------------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss)++ 0.04 0.01 0.04 (0.09) (0.06) 0.06
Net realized and unrealized gain (loss) 2.02 (2.42) (1.92) (0.36) 4.84 (4.92)
------------- -------- -------- -------- -------- --------
Total income (loss) from investment operations 2.06 (2.41) (1.88) (0.45) 4.78 (4.86)
------------- -------- -------- -------- -------- --------
Less dividends from net investment income - (0.05) - - - -
------------- -------- -------- -------- -------- --------
Net asset value, end of period $ 9.29 $ 7.23 $ 9.69 $ 11.57 $ 12.02 $ 7.24
============= ======== ======== ======== ======== ========
TOTAL RETURN+ 28.49%(1) (24.88)% (16.34)% (3.42)% 65.47% (40.17)%
RATIOS TO AVERAGE NET ASSETS(3):
Expenses 3.38%(2) 3.27% 2.88% 2.77% 2.95% 2.98%
Net investment income (loss) 0.90%(2) 0.16% 0.47% (0.76)% (0.51)% 0.49%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $ 352 $ 304 $ 504 $ 887 $ 776 $ 369
Portfolio turnover rate 30%(1) 57% 73% 44% 59% 27%
</Table>
- ----------
++ THE PER SHARE AMOUNTS WERE COMPUTED USING AN AVERAGE NUMBER OF SHARES
OUTSTANDING DURING THE PERIOD.
+ DOES NOT REFLECT THE DEDUCTION OF SALES CHARGE. CALCULATED BASED ON THE NET
ASSET VALUE AS OF THE LAST BUSINESS DAY OF THE PERIOD.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
(3) REFLECTS OVERALL FUND RATIOS FOR INVESTMENT INCOME AND NON-CLASS SPECIFIC
EXPENSES.
SEE NOTES TO FINANCIAL STATEMENTS
20
<Page>
<Table>
<Caption>
FOR THE SIX FOR THE YEAR ENDED JANUARY 31,
MONTHS ENDED ------------------------------------------------------------
JULY 31, 2003 2003 2002 2001 2000 1999
------------- -------- -------- -------- -------- --------
(UNAUDITED)
CLASS D SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period $ 7.52 $ 10.11 $ 11.97 $ 12.30 $ 7.35 $ 12.16
------------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income (loss)++ 0.07 0.15 0.14 0.00 (0.02) 0.16
Net realized and unrealized gain (loss) 2.11 (2.59) (2.00) (0.33) 4.97 (4.97)
------------- -------- -------- -------- -------- --------
Total income (loss) from investment operations 2.18 (2.44) (1.86) (0.33) 4.95 (4.81)
------------- -------- -------- -------- -------- --------
Less dividends from net investment income - (0.15) - - - -
------------- -------- -------- -------- -------- --------
Net asset value, end of period $ 9.70 $ 7.52 $ 10.11 $ 11.97 $ 12.30 $ 7.35
============= ======== ======== ======== ======== ========
TOTAL RETURN+ 28.99%(1) (24.24)% (15.54)% (2.37)% 66.80% (39.56)%
RATIOS TO AVERAGE NET ASSETS(3):
Expenses 2.38%(2) 2.27% 1.96% 1.77% 2.06% 1.98%
Net investment income 1.90%(2) 1.16% 1.39% 0.24% 0.38% 1.49%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $ 1,733 $ 558 $ 5,455 $ 9,262 $ 588 $ 5
Portfolio turnover rate 30%(1) 57% 73% 44% 59% 27%
</Table>
- ----------
++ THE PER SHARE AMOUNTS WERE COMPUTED USING AN AVERAGE NUMBER OF SHARES
OUTSTANDING DURING THE PERIOD.
+ CALCULATED BASED ON THE NET ASSET VALUE AS OF THE LAST BUSINESS DAY OF THE
PERIOD.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
(3) REFLECTS OVERALL FUND RATIOS FOR INVESTMENT INCOME AND NON-CLASS SPECIFIC
EXPENSES.
SEE NOTES TO FINANCIAL STATEMENTS
21
<Page>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
James F. Higgins
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael E. Nugent
Philip J. Purcell
Fergus Reid
OFFICERS
Charles A. Fiumefreddo
CHAIRMAN OF THE BOARD
Mitchell M. Merin
PRESIDENT
Ronald E. Robison
EXECUTIVE VICE PRESIDENT and PRINCIPAL EXECUTIVE OFFICER
Barry Fink
VICE PRESIDENT and GENERAL COUNSEL
Joseph J. McAlinden
VICE PRESIDENT
Stefanie V. Chang
VICE PRESIDENT
Francis Smith
TREASURER and CHIEF FINANCIAL OFFICER
Thomas F. Caloia
VICE PRESIDENT
Mary E. Mullin
SECRETARY
TRANSFER AGENT
Morgan Stanley Trust
Harborside Financial Center, Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
INVESTMENT MANAGER
Morgan Stanley Investment Advisors Inc.
1221 Avenue of the Americas
New York, New York 10020
The financial statements included herein have been taken from the records of the
Fund without examination by the independent auditors and accordingly they do not
express an opinion thereon.
This report is submitted for the general information of the shareholders of the
Fund. For more detailed information about the Fund, its fees and expenses and
other pertinent information, please read its Prospectus. The Fund's Statement of
Additional Information contains additional information about the Fund, including
its trustees. It is available, without charge, by calling (800) 869-NEWS.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective Prospectus. Read the
Prospectus carefully before investing.
Investments and services offered through Morgan Stanley DW Inc., member SIPC.
Morgan Stanley Distributors Inc., member NASD.
(C) 2003 Morgan Stanley
[MORGAN STANLEY LOGO]
[GRAPHIC]
MORGAN STANLEY
LATIN AMERICAN
GROWTH FUND
SEMIANNUAL REPORT
JULY 31, 2003
[MORGAN STANLEY LOGO]
37939RPT-12088H03-OP-8/03
<Page>
Item 2. Code of Ethics.
(a) The Fund has adopted a code of ethics (the "Code of Ethics") that applies to
its principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the Fund or a third
party.
(b) No information need be disclosed pursuant to this paragraph.
(c) The Fund has amended its Code of Ethics during the period covered by the
shareholder report presented in Item 1 hereto
(d) The Fund has granted a waiver or an implicit waiver from a provision of its
Code of Ethics.
(e) Not applicable.
(f)
(1) The Fund's Code of Ethics is attached hereto as Exhibit A.
(2) Not applicable.
(3) Not applicable.
Item 3. Audit Committee Financial Expert.
The Fund's Board of Trustees has determined that it has two "audit committee
financial experts" serving on its audit committee, each of whom are
"independent" Trustees: Dr. Manuel H. Johnson and Joseph J. Kearns. Under
applicable securities laws, a person who is determined to be an audit committee
financial expert will not be deemed an "expert" for any purpose, including
without limitation for the purposes of Section 11 of the Securities Act of 1933,
as a result of being designated or identified as an audit committee financial
expert. The designation or identification of a person as an audit committee
financial expert does not impose on such person any duties, obligations, or
liabilities that are greater than the duties, obligations, and liabilities
imposed on such person as a member of the audit committee and Board of Trustees
in the absence of such designation or identification.
<Page>
Item 9 - Controls and Procedures
(a) The Fund's principal executive officer and principal financial officer
have concluded that the Fund's disclosure controls and procedures are
sufficient to ensure that information required to be disclosed by the Fund
in this Form N-CSR was recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission's rules and
forms, based upon such officers' evaluation of these controls and procedures as
of a date within 90 days of the filing date of the report.
There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Fund's internal
controls or in other factors that could significantly affect the Fund's
internal controls subsequent to the date of their evaluation.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
<Page>
Item 10 Exhibits
(a) The Code of Ethics for Principal Executive and Senior Financial Officers is
attached hereto.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant are attached hereto as part of EX-99.CERT.
Items 4 - 8 are not applicable
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Morgan Stanley Latin American Growth Fund
Ronald E. Robison
Principal Executive Officer
September 22, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
Ronald E. Robison
Principal Executive Officer
September 22, 2003
Francis Smith
Principal Financial Officer
September 22, 2003