<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: 811-07119
Morgan Stanley Global Utilities 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: February 28, 2005
Date of reporting period: February 28, 2005
Item 1 - Report to Shareholders
<Page>
WELCOME, SHAREHOLDER:
IN THIS REPORT, YOU'LL LEARN ABOUT HOW YOUR INVESTMENT IN MORGAN STANLEY GLOBAL
UTILITIES FUND PERFORMED DURING THE ANNUAL PERIOD. WE WILL PROVIDE AN OVERVIEW
OF THE MARKET CONDITIONS, AND DISCUSS SOME OF THE FACTORS THAT AFFECTED
PERFORMANCE DURING THE REPORTING PERIOD. IN ADDITION, THIS REPORT INCLUDES THE
FUND'S FINANCIAL STATEMENTS AND A LIST OF FUND INVESTMENTS.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS FOR THE FUND BEING
OFFERED.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO PASS. THERE
IS NO ASSURANCE THAT THE FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE. THE FUND IS
SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY THAT MARKET VALUES OF
SECURITIES OWNED BY THE FUND WILL DECLINE AND, THEREFORE, THE VALUE OF THE
FUND'S SHARES MAY BE LESS THAN WHAT YOU PAID FOR THEM. ACCORDINGLY, YOU CAN LOSE
MONEY INVESTING IN THIS FUND. PLEASE SEE THE PROSPECTUS FOR MORE COMPLETE
INFORMATION ON INVESTMENT RISKS.
<Page>
FUND REPORT
FOR THE YEAR ENDED FEBRUARY 28, 2005
TOTAL RETURN FOR THE 12 MONTHS ENDED FEBRUARY 28, 2005
<Table>
<Caption>
MORGAN STANLEY
CAPITAL LIPPER
INTERNATIONAL UTILITY
(MSCI) FUNDS
CLASS A CLASS B CLASS C CLASS D WORLD INDEX(1) INDEX(2)
22.68% 21.74% 21.71% 22.94% 11.99% 21.87%
</Table>
PERFORMANCE DATA QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. FOR THE MOST RECENT MONTH-END PERFORMANCE FIGURES, PLEASE VISIT
morganstanley.com, OR SPEAK WITH YOUR FINANCIAL ADVISOR. INVESTMENT RETURNS AND
PRINCIPAL VALUE WILL FLUCTUATE AND FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST.
THE PERFORMANCE OF THE FUND'S FOUR SHARE CLASSES VARIES BECAUSE EACH HAS
DIFFERENT EXPENSES. THE FUND'S TOTAL RETURNS ASSUME THE REINVESTMENT OF ALL
DISTRIBUTIONS BUT DO NOT REFLECT THE DEDUCTION OF ANY APPLICABLE SALES CHARGES.
SUCH COSTS WOULD LOWER PERFORMANCE. SEE PERFORMANCE SUMMARY FOR STANDARDIZED
PERFORMANCE AND BENCHMARK INFORMATION.
MARKET CONDITIONS
The equity markets exhibited generally solid performance for the 12 months ended
February 28, 2005, although gains were not consistently strong over the period.
While the Federal Open Market Committee raised the federal funds target-rate
numerous times over the 12 months, rate changes had been largely anticipated by
the market, and any serious disruption was avoided. Rising oil prices caused
apprehension among investors for much of the period, and uncertainty concerning
the outcome of the U.S. presidential election weighed on the market. However,
oil prices eventually fell from their high in October, and the resolute
conclusion of the presidential election provided further support for an equity
rally in November. As any uncertainty dissipated and the economy continued to
improve, the markets saw generally strengthening performance late in the period,
although stocks faltered in January. The period ended on a more positive note as
a number of encouraging economic indicators supported market gains in February,
despite some concerns over inflation.
The global utilities sector performed solidly for the period and significantly
outperformed the overall market. In the United States, the electric and natural
gas sectors were standouts among utilities, making particularly strong gains for
the period. Performance was more mixed within the telecommunications sector, as
wireless companies benefited from continuing global growth while regional Bell
companies were constrained by competition and new forms of technology.
PERFORMANCE ANALYSIS
Morgan Stanley Global Utilities Fund outperformed the MSCI World Index for the
12 months ended February 28, 2005, assuming no deduction of applicable sales
charges. For the same period, the Fund's A and D shares outperformed the Lipper
Utility Funds Index while its B and C shares slightly underperformed the Index.
The Fund's performance was supported by its exposure to the outperforming
electric and natural gas sectors, which made up the bulk of the portfolio.
Electric and natural gas stocks were helped by a combination of improving
financial conditions, less earnings volatility, relatively low interest rates
and aggressive dividend growth. In different ways, high commodity prices
provided the basis for the market gains for both sectors. Electric companies
with relatively inexpensive nuclear-based generation benefited from the high
cost of natural gas fired electric power by competitively selling into this
high-priced market. Meanwhile, natural gas companies with exploration and
production (E&P) exposure gained incremental earnings power from the
historically high price level of the commodity. A weakening U.S. dollar was also
a contributing factor to the strong performance of the Fund.
Other positions were less positive for the Fund's performance over the 12
months. The Fund's gains in the electric and natural gas sectors were partially
offset by the comparatively mixed performances in the telecommunications sector.
Although wireless companies, particularly "tower" companies and small-cap
wireless companies, benefited from improving demand for wireless products and
services, regional Bell companies were hurt by increasing competition and the
introduction of new technology during the period.
THERE IS NO GUARANTEE THAT ANY SECTORS MENTIONED WILL CONTINUE TO PERFORM WELL
OR BE HELD BY THE FUND IN THE FUTURE.
2
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TOP 10 HOLDINGS
<Table>
Telus Corp. (Non-Voting) 5.0%
FPL Group, Inc. 4.5
Exelon Corp. 4.1
Entergy Corp. 4.0
TXU Corp. 3.9
Dominion Resources Inc. 3.7
Ameren Corp. 3.6
Constellation Energy Group, Inc. 3.6
PPL Corp. 3.4
SCANA Corp. 3.2
</Table>
COUNTRY ALLOCATION
<Table>
U.S.A. 83.2%
Canada 6.0
Spain 5.3
United Kingdom 3.6
</Table>
DATA AS OF FEBRUARY 28, 2005. SUBJECT TO CHANGE DAILY. ALL PERCENTAGES FOR TOP
10 HOLDINGS AND COUNTRY ALLOCATION ARE AS A PERCENTAGE OF NET ASSETS. THESE DATA
ARE PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE DEEMED A
RECOMMENDATION TO BUY OR SELL THE SECURITIES MENTIONED. MORGAN STANLEY IS A
FULL-SERVICE SECURITIES FIRM ENGAGED IN SECURITIES TRADING AND BROKERAGE
ACTIVITIES, INVESTMENT BANKING, RESEARCH AND ANALYSIS, FINANCING AND FINANCIAL
ADVISORY SERVICES.
INVESTMENT STRATEGY
THE FUND WILL NORMALLY INVEST AT LEAST 80 PERCENT OF ITS ASSETS IN SECURITIES OF
COMPANIES FROM AROUND THE WORLD THAT ARE PRIMARILY ENGAGED IN THE UTILITIES
INDUSTRY. THESE SECURITIES CAN INCLUDE COMMON STOCK AND OTHER EQUITY SECURITIES
(INCLUDING PREFERRED STOCK, CONVERTIBLE SECURITIES AND DEPOSITARY RECEIPTS) AS
WELL AS INVESTMENT GRADE FIXED-INCOME SECURITIES (INCLUDING ZERO COUPON
SECURITIES). A COMPANY WILL BE CONSIDERED TO BE PRIMARILY ENGAGED IN THE
UTILITIES INDUSTRY IF IT DERIVES AT LEAST 50 PERCENT OF ITS REVENUES OR EARNINGS
FROM THE UTILITIES INDUSTRY OR DEVOTES AT LEAST 50 PERCENT OF ITS ASSETS TO
ACTIVITIES IN THE INDUSTRY. THESE MAY INCLUDE COMPANIES INVOLVED IN, AMONG OTHER
AREAS: TELECOMMUNICATIONS, COMPUTERS AND OTHER NEW OR EMERGING TECHNOLOGY
COMPANIES, GAS AND ELECTRIC ENERGY, WATER DISTRIBUTION, THE INTERNET AND
INTERNET RELATED SERVICES. THE COMPANIES MAY BE TRADITIONALLY REGULATED PUBLIC
UTILITIES AS WELL AS FULLY OR PARTIALLY DEREGULATED AND UNREGULATED UTILITY
COMPANIES. THE FUND'S "INVESTMENT ADVISER," MORGAN STANLEY INVESTMENT ADVISORS
INC., WILL SHIFT THE FUND'S ASSETS BETWEEN DIFFERENT TYPES OF UTILITIES, AMONG
COMPANIES OF DIFFERENT COUNTRIES, AND BETWEEN EQUITY AND FIXED-INCOME
SECURITIES, BASED ON PREVAILING MARKET, ECONOMIC AND FINANCIAL CONDITIONS. THE
FUND WILL BE INVESTED IN AT LEAST THREE COUNTRIES (INCLUDING THE UNITED STATES).
IF THE FUND HOLDS ANY FIXED-INCOME SECURITIES, THE AVERAGE WEIGHTED MATURITY OF
THESE INVESTMENTS IS NORMALLY EXPECTED TO BE GREATER THAN SEVEN YEARS.
FOR MORE INFORMATION ABOUT PORTFOLIO HOLDINGS
EACH MORGAN STANLEY FUND PROVIDES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS IN
ITS SEMIANNUAL AND ANNUAL REPORTS WITHIN 60 DAYS OF THE END OF THE FUND'S SECOND
AND FOURTH FISCAL QUARTERS BY FILING THE SCHEDULE ELECTRONICALLY WITH THE
SECURITIES AND EXCHANGE
3
<Page>
COMMISSION (SEC). THE SEMIANNUAL REPORTS ARE FILED ON FORM N-CSRS AND THE ANNUAL
REPORTS ARE FILED ON FORM N-CSR. MORGAN STANLEY ALSO DELIVERS THE SEMIANNUAL AND
ANNUAL REPORTS TO FUND SHAREHOLDERS AND MAKES THESE REPORTS AVAILABLE ON ITS
PUBLIC WEB SITE, www.morganstanley.com. EACH MORGAN STANLEY FUND ALSO FILES A
COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE FUND'S FIRST AND
THIRD FISCAL QUARTERS ON FORM N-Q. MORGAN STANLEY DOES NOT DELIVER THE REPORTS
FOR THE FIRST AND THIRD FISCAL QUARTERS TO SHAREHOLDERS, NOR ARE THE REPORTS
POSTED TO THE MORGAN STANLEY PUBLIC WEB SITE. YOU MAY, HOWEVER, OBTAIN THE FORM
N-Q FILINGS (AS WELL AS THE FORM N-CSR AND N-CSRS FILINGS) BY ACCESSING THE
SEC'S WEB SITE, http://www.sec.gov. YOU MAY ALSO REVIEW AND COPY THEM AT THE
SEC'S PUBLIC REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF
THE SEC'S PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING THE SEC AT (800)
SEC-0330. YOU CAN ALSO REQUEST COPIES OF THESE MATERIALS, UPON PAYMENT OF A
DUPLICATING FEE, BY ELECTRONIC REQUEST AT THE SEC'S E-MAIL ADDRESS
(publicinfo@sec.gov) OR BY WRITING THE PUBLIC REFERENCE SECTION OF THE SEC,
WASHINGTON, DC 20549-0102. YOU MAY OBTAIN COPIES OF A FUND'S FISCAL QUARTER
FILINGS BY CONTACTING MORGAN STANLEY CLIENT RELATIONS AT (800) 869-NEWS.
PROXY VOTING POLICIES AND PROCEDURES
A DESCRIPTION OF (1) THE FUND'S POLICIES AND PROCEDURES WITH RESPECT TO THE
VOTING OF PROXIES RELATING TO THE FUND'S PORTFOLIO SECURITIES AND (2) HOW THE
FUND VOTED PROXIES RELATING TO PORTFOLIO SECURITIES DURING THE MOST RECENT
12-MONTH PERIOD ENDED JUNE 30, 2004, IS AVAILABLE WITHOUT CHARGE, UPON REQUEST,
BY CALLING (800) 869-NEWS OR BY VISITING THE MUTUAL FUND CENTER ON OUR WEB SITE
AT www.morganstanley.com. THIS INFORMATION IS ALSO AVAILABLE ON THE SECURITIES
AND EXCHANGE COMMISSION'S WEB SITE AT http://www.sec.gov.
HOUSEHOLDING NOTICE
TO REDUCE PRINTING AND MAILING COSTS, THE FUND ATTEMPTS TO ELIMINATE DUPLICATE
MAILINGS TO THE SAME ADDRESS. THE FUND DELIVERS A SINGLE COPY OF CERTAIN
SHAREHOLDER DOCUMENTS, INCLUDING SHAREHOLDER REPORTS, PROSPECTUSES AND PROXY
MATERIALS, TO INVESTORS WITH THE SAME LAST NAME WHO RESIDE AT THE SAME ADDRESS.
YOUR PARTICIPATION IN THIS PROGRAM WILL CONTINUE FOR AN UNLIMITED PERIOD OF TIME
UNLESS YOU INSTRUCT US OTHERWISE. YOU CAN REQUEST MULTIPLE COPIES OF THESE
DOCUMENTS BY CALLING (800) 350-6414, 8:00 A.M. TO 8:00 P.M., ET. ONCE OUR
CUSTOMER SERVICE CENTER HAS RECEIVED YOUR INSTRUCTIONS, WE WILL BEGIN SENDING
INDIVIDUAL COPIES FOR EACH ACCOUNT WITHIN 30 DAYS.
4
<Page>
(This page has been left blank intentionally.)
5
<Page>
PERFORMANCE SUMMARY
[CHART]
PERFORMANCE OF A $10,000 INVESTMENT -- CLASS B
($ IN THOUSANDS)
<Table>
<Caption>
CLASS B++ MSCI WORLD(1) LIPPER(2)
Feb 28, 95 $ 10,000 $ 10,000 $ 10,000
Feb 29, 96 $ 11,876 $ 12,374 $ 12,171
Feb 28, 97 $ 13,409 $ 14,034 $ 13,570
Feb 28, 98 $ 16,904 $ 17,417 $ 17,112
Feb 28, 99 $ 21,569 $ 19,631 $ 19,066
Feb 29, 2000 $ 27,999 $ 23,308 $ 23,142
Feb 28, 2001 $ 26,387 $ 19,978 $ 23,478
Feb 28, 2002 $ 20,385 $ 17,117 $ 17,807
Feb 28, 2003 $ 16,220 $ 13,592 $ 14,020
Feb 29, 2004 $ 20,697 $ 19,620 $ 18,956
Feb 28, 2005 $ 25,197 $ 21,972 $ 23,101
</Table>
6
<Page>
AVERAGE ANNUAL TOTAL RETURNS--PERIOD ENDED FEBRUARY 28, 2005
<Table>
<Caption>
CLASS A SHARES* CLASS B SHARES** CLASS C SHARES+ CLASS D SHARES++
(SINCE 07/28/97) (SINCE 05/31/94) (SINCE 07/28/97) (SINCE 07/28/97)
SYMBOL GUTAX GUTBX GUTCX GUTDX
1 YEAR 22.68%(3) 21.74%(3) 21.71%(3) 22.94%(3)
16.24(4) 16.74(4) 20.71(4) --
5 YEARS (1.35)(3) (2.09)(3) (2.05)(3) (1.10)(3)
(2.41)(4) (2.40)(4) (2.05)(4) --
10 YEARS -- 9.68(3) -- --
-- 9.68(4) -- --
SINCE INCEPTION 7.92(3) 8.89(3) 7.13(3) 8.20(3)
7.15(4) 8.89(4) 7.13(4) --
</Table>
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. FOR THE MOST RECENT MONTH-END PERFORMANCE FIGURES, PLEASE VISIT
morganstanley.com OR SPEAK WITH YOUR FINANCIAL ADVISOR. INVESTMENT RETURNS AND
PRINCIPAL VALUE WILL FLUCTUATE AND FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE GRAPH AND TABLE DO NOT REFLECT THE
DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE
REDEMPTION OF FUND SHARES. PERFORMANCE FOR CLASS A, CLASS B, CLASS C, AND CLASS
D SHARES WILL VARY DUE TO DIFFERENCES IN SALES CHARGES AND EXPENSES.
* THE MAXIMUM FRONT-END SALES CHARGE FOR CLASS A IS 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 CONTINGENT DEFERRED SALES CHARGE FOR CLASS C IS 1% FOR SHARES
REDEEMED WITHIN ONE YEAR OF PURCHASE.
++ CLASS D HAS NO SALES CHARGE.
(1) THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) WORLD INDEX MEASURES
PERFORMANCE FROM A DIVERSE RANGE OF GLOBAL STOCK MARKETS INCLUDING
SECURITIES REPRESENTATIVE OF THE MARKET STRUCTURE OF 22 DEVELOPED MARKET
COUNTRIES IN NORTH AMERICA, EUROPE, AND THE ASIA/PACIFIC REGION. THE
PERFORMANCE OF THE INDEX IS LISTED IN U.S. DOLLARS AND ASSUMES REINVESTMENT
OF NET DIVIDENDS. "NET DIVIDENDS" REFLECTS A REDUCTION IN DIVIDENDS AFTER
TAKING INTO ACCOUNT WITHHOLDING OF TAXES BY CERTAIN FOREIGN COUNTRIES
REPRESENTED IN THE INDEX. INDEXES ARE UNMANAGED AND THEIR RETURNS DO NOT
INCLUDE ANY SALES CHARGES OR FEES. SUCH COSTS WOULD LOWER PERFORMANCE. IT
IS NOT POSSIBLE TO INVEST DIRECTLY IN AN INDEX.
(2) THE LIPPER UTILITY FUNDS INDEX IS AN EQUALLY WEIGHTED PERFORMANCE INDEX OF
THE LARGEST QUALIFYING FUNDS (BASED ON NET ASSETS) IN THE LIPPER UTILITY
FUNDS CLASSIFICATION. THE INDEX, WHICH IS ADJUSTED FOR CAPITAL GAINS
DISTRIBUTIONS AND INCOME DIVIDENDS, IS UNMANAGED AND SHOULD NOT BE
CONSIDERED AN INVESTMENT. THERE ARE CURRENTLY 10 FUNDS REPRESENTED IN THIS
INDEX.
(3) FIGURE SHOWN ASSUMES REINVESTMENT OF ALL DISTRIBUTIONS AND DOES NOT REFLECT
THE DEDUCTION OF ANY SALES CHARGES.
(4) FIGURE SHOWN ASSUMES REINVESTMENT OF ALL DISTRIBUTIONS AND THE DEDUCTION OF
THE MAXIMUM APPLICABLE SALES CHARGE. SEE THE FUND'S CURRENT PROSPECTUS FOR
COMPLETE DETAILS ON FEES AND SALES CHARGES.
^ ENDING VALUE ASSUMING A COMPLETE REDEMPTION ON FEBRUARY 28, 2005.
7
<Page>
EXPENSE EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments and redemption fees;
and (2) ongoing costs, including management fees; distribution and service
(12b-1) fees; and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period 09/01/04 - 02/28/05.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
expenses based on the Fund's actual expense ratio and an assumed rate of return
of 5% per year before expenses, which is not the Fund's actual return. The
hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period. You may use this
information to compare the ongoing cost of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) and redemption fees. Therefore, the second line of the table is
useful in comparing ongoing costs, and will not help you determine the relative
total cost of owning different funds. In addition, if these transactional costs
were included, your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD *
------------- ------------- ---------------
09/01/04 -
09/01/04 02/28/05 02/28/05
-------- -------- --------
CLASS A
Actual (19.28% return) $ 1,000.00 $ 1,192.80 $ 6.14
Hypothetical (5% annual return before expenses) $ 1,000.00 $ 1,019.19 $ 5.66
CLASS B
Actual (18.87% return) $ 1,000.00 $ 1,188.70 $ 10.26
Hypothetical (5% annual return before expenses) $ 1,000.00 $ 1,015.42 $ 9.44
CLASS C
Actual (18.79% return) $ 1,000.00 $ 1,187.90 $ 9.93
Hypothetical (5% annual return before expenses) $ 1,000.00 $ 1,015.72 $ 9.15
CLASS D
Actual (19.43% return) $ 1,000.00 $ 1,194.30 $ 4.84
Hypothetical (5% annual return before expenses) $ 1,000.00 $ 1,020.38 $ 4.46
</Table>
- ----------
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.13%, 1.89%,
1.83% AND 0.89% RESPECTIVELY, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER
THE PERIOD, MULTIPLIED BY 181/365 (TO REFLECT THE ONE-HALF YEAR PERIOD).
8
<Page>
MORGAN STANLEY GLOBAL UTILITIES FUND
PORTFOLIO OF INVESTMENTS - FEBRUARY 28, 2005
<Table>
<Caption>
NUMBER OF
SHARES VALUE
- -------------------------------------------------------------------------------
COMMON STOCKS (98.1%)
CANADA (6.0%)
TELECOMMUNICATIONS
120,000 BCE Inc. $ 2,812,800
483,000 Telus Corp. (Non-Voting) 14,426,968
------------
TOTAL CANADA 17,239,768
------------
SPAIN (5.3%)
ELECTRIC UTILITIES
307,400 Iberdrola S.A. (b) 8,094,285
------------
TELECOMMUNICATIONS
393,400 Telefonica S.A. (b) 7,220,283
------------
TOTAL SPAIN 15,314,568
------------
UNITED KINGDOM (3.6%)
ENERGY
606,250 Centrica PLC (b) 2,757,158
------------
TELECOMMUNICATIONS
296,100 Vodafone Group PLC (ADR) 7,784,469
------------
TOTAL UNITED KINGDOM 10,541,627
------------
UNITED STATES (83.2%)
ELECTRIC UTILITIES
399,900 AES Corp. (The)* 6,694,326
205,300 Ameren Corp. 10,566,791
218,000 Cinergy Corp. 8,818,100
165,700 Consolidated Edison, Inc. 7,083,675
200,900 Constellation Energy
Group, Inc. 10,340,323
148,700 Dominion Resources, Inc. 10,710,861
332,400 Energy East Corp. 8,549,328
165,700 Entergy Corp. 11,453,184
264,200 Exelon Corp. 11,984,112
84,600 FirstEnergy Corp. 3,488,904
162,700 FPL Group, Inc. 12,910,245
95,000 PG&E Corp.* 3,342,100
181,500 PPL Corp. 9,899,010
146,500 Public Service Enterprise
Group, Inc. 7,991,575
193,900 Puget Energy, Inc. 4,444,188
245,300 SCANA Corp. $ 9,331,212
285,900 Southern Co. (The) 9,183,108
150,000 TXU Corp. 11,437,500
146,800 Wisconsin Energy Corp. 5,096,896
------------
163,325,438
------------
ENERGY
245,100 AGL Resources, Inc. 8,485,362
85,100 Equitable Resources, Inc. 5,053,238
202,300 KeySpan Corp. 8,000,965
102,000 Kinder Morgan, Inc. 8,177,340
47,600 NiSource, Inc. 1,077,664
94,100 Questar Corp. 4,989,182
103,000 Sempra Energy 4,120,000
115,000 Southern Union Co.* 2,916,400
78,400 UGI Corp. 3,508,400
------------
46,328,551
------------
TELECOMMUNICATIONS
85,400 BellSouth Corp. 2,203,320
40,000 Crown Castle
International Corp.* 653,600
195,100 Nextel Partners, Inc.
(Class A)* 3,884,441
105,900 SBC Communications, Inc. 2,546,895
111,800 SpectraSite, Inc.* 6,909,240
157,000 Sprint Corp. 3,717,760
106,200 Verizon Communications Inc. 3,820,014
195,300 Western Wireless Corp.
(Class A)* 7,675,290
------------
31,410,560
------------
TOTAL UNITED STATES 241,064,549
------------
TOTAL COMMON STOCKS
(COST $210,019,520) 284,160,512
------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
9
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (1.5%)
REPURCHASE AGREEMENT
$ 4,395 Joint repurchase agreement
account 2.62% due
03/01/05 (dated 02/28/05;
proceeds $4,395,320) (a)
(COST $4,395,000) $ 4,395,000
-------------
TOTAL INVESTMENTS
(COST $214,414,520)(c) 99.6% 288,555,512
OTHER ASSETS IN EXCESS OF
LIABILITIES 0.4 1,107,213
----- -------------
NET ASSETS 100.0% $ 289,662,725
===== =============
</Table>
- ----------
ADR AMERICAN DEPOSITARY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
(a) COLLATERALIZED BY FEDERAL AGENCY AND U.S. TREASURY OBLIGATIONS.
(b) SECURITIES WITH TOTAL MARKET VALUE EQUAL TO $18,071,726 HAVE BEEN VALUED
AT THEIR FAIR VALUE AS DETERMINED IN GOOD FAITH UNDER PROCEDURES
ESTABLISHED BY AND UNDER THE GENERAL SUPERVISION OF THE FUND'S TRUSTEES.
(c) THE AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $215,555,534. THE
AGGREGATE GROSS UNREALIZED APPRECIATION IS $78,866,823 AND THE AGGREGATE
GROSS UNREALIZED DEPRECIATION IS $5,866,845, RESULTING IN NET UNREALIZED
APPRECIATION OF $72,999,978.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT FEBRUARY 28, 2005:
<Table>
<Caption>
CONTRACTS IN EXCHANGE DELIVERY UNREALIZED
TO DELIVER FOR DATE DEPRECIATION
- ------------------------------------------------------------------------------
GBP 238,311 $ 454,555 03/01/05 $ (3,575)
GBP 236,035 452,527 03/03/05 (1,227)
---------
Total unrealized depreciation $ (4,802)
=========
</Table>
CURRENCY ABBREVIATION:
GBP British Pound.
SUMMARY OF INVESTMENTS
<Table>
<Caption>
PERCENT OF
INDUSTRY* VALUE NET ASSETS
- ------------------------------------------------------------------------
Electric Utilities $ 171,419,723 59.2%
Telecommunications 63,655,080 22.0
Energy 49,085,709 16.9
Repurchase Agreement 4,395,000 1.5
------------- -------------
$ 288,555,512 99.6%
============= =============
</Table>
- ----------
* DOES NOT INCLUDE OUTSTANDING FORWARD FOREIGN CURRENCY CONTRACTS WITH
UNREALIZED DEPRECIATION OF $4,802.
SEE NOTES TO FINANCIAL STATEMENTS
10
<Page>
MORGAN STANLEY GLOBAL UTILITIES FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2005
<Table>
ASSETS:
Investments in securities, at value (cost $214,414,520) $ 288,555,512
Receivable for:
Investments sold 1,437,145
Dividends 713,689
Foreign withholding taxes reclaimed 56,994
Shares of beneficial interest sold 42,943
Prepaid expenses and other assets 4,421
---------------
TOTAL ASSETS 290,810,704
---------------
LIABILITIES:
Unrealized depreciation on open forward foreign currency contracts 4,802
Payable for:
Investments purchased 473,910
Shares of beneficial interest redeemed 226,924
Distribution fee 218,557
Investment advisory fee 127,011
Administration fee 17,826
Accrued expenses and other payables 78,949
---------------
TOTAL LIABILITIES 1,147,979
---------------
NET ASSETS $ 289,662,725
===============
COMPOSITION OF NET ASSETS:
Paid-in-capital $ 315,549,912
Net unrealized appreciation 74,152,915
Accumulated undistributed net investment income 4,787,571
Accumulated net realized loss (104,827,673)
---------------
NET ASSETS $ 289,662,725
===============
CLASS A SHARES:
Net Assets $ 4,989,950
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE) 349,292
NET ASSET VALUE PER SHARE $ 14.29
===============
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE) $ 15.08
===============
CLASS B SHARES:
Net Assets $ 277,737,668
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE) 19,424,644
NET ASSET VALUE PER SHARE $ 14.30
===============
CLASS C SHARES:
Net Assets $ 5,076,394
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE) 358,415
NET ASSET VALUE PER SHARE $ 14.16
===============
CLASS D SHARES:
Net Assets $ 1,858,713
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE) 129,837
NET ASSET VALUE PER SHARE $ 14.32
===============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
11
<Page>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED FEBRUARY 28, 2005
<Table>
NET INVESTMENT INCOME:
INCOME
Dividends (net of $232,327 foreign withholding tax) $ 10,022,373
Interest 106,691
-------------
TOTAL INCOME 10,129,064
-------------
EXPENSES
Distribution fee (Class A shares) 11,495
Distribution fee (Class B shares) 2,703,979
Distribution fee (Class C shares) 48,614
Investment advisory fee 1,755,993
Transfer agent fees and expenses 503,484
Professional fees 83,625
Administration fee 75,317
Registration fees 73,299
Shareholder reports and notices 40,399
Custodian fees 25,246
Trustees' fees and expenses 3,120
Other 25,595
-------------
TOTAL EXPENSES 5,350,166
-------------
NET INVESTMENT INCOME 4,778,898
-------------
NET REALIZED AND UNREALIZED GAIN:
NET REALIZED GAIN ON:
Investments 10,460,920
Foreign exchange transactions 2,045
-------------
NET REALIZED GAIN 10,462,965
-------------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments 38,740,913
Translation of other assets and liabilities denominated in foreign currencies 5,142
-------------
NET APPRECIATION 38,746,055
-------------
NET GAIN 49,209,020
-------------
NET INCREASE $ 53,987,918
=============
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
12
<Page>
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
FEBRUARY 28, 2005 FEBRUARY 29, 2004
----------------- -----------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 4,778,898 $ 5,853,760
Net realized gain 10,462,965 24,002,125
Net change in unrealized appreciation 38,746,055 47,805,106
----------------- -----------------
NET INCREASE 53,987,918 77,660,991
----------------- -----------------
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A shares (137,674) (182,402)
Class B shares (5,581,802) (9,102,987)
Class C shares (104,781) (175,267)
Class D shares (48,952) (60,665)
----------------- -----------------
TOTAL DIVIDENDS (5,873,209) (9,521,321)
----------------- -----------------
Net decrease from transactions in shares of beneficial interest (68,604,493) (75,801,985)
----------------- -----------------
NET DECREASE (20,489,784) (7,662,315)
NET ASSETS:
Beginning of period 310,152,509 317,814,824
----------------- -----------------
END OF PERIOD
(Including accumulated undistributed net investment income of
$4,787,571 and $5,879,837, respectively) $ 289,662,725 $ 310,152,509
================= =================
</Table>
SEE NOTES TO FINANCIAL STATEMENTS
13
<Page>
MORGAN STANLEY GLOBAL UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS - FEBRUARY 28, 2005
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Global Utilities Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is to
seek both capital appreciation and current income. The Fund was organized as a
Massachusetts business trust on October 22, 1993 and commenced operations on May
31, 1994. On July 28, 1997, the Fund converted to a multiple class share
structure.
The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) an equity portfolio security listed or traded
on the New York Stock Exchange ("NYSE") or American Stock Exchange or other
exchange is valued at its latest sale price prior to the time when assets are
valued; if there were no sales that day, the security is valued at the mean
between the last reported bid and asked price; (2) an equity portfolio security
listed or traded on the Nasdaq is valued at the Nasdaq Official Closing Price;
if there were no sales that day, the security is valued at the mean between the
last reported bid and asked price; (3) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the mean
between the last reported bid and asked price. In cases where a security is
traded on more than one exchange, the security is valued on the exchange
designated as the primary market; (4) for equity securities traded on foreign
exchanges, the last reported sale price or the latest bid price may be used if
there were no sales on a particular day; (5) when market quotations are not
readily available or Morgan Stanley Investment Advisors Inc. (the "Investment
Adviser") determines that the latest sale price, the bid price or the mean
between the last reported bid and asked price do not reflect a security's market
value, portfolio securities are valued at their fair value as determined in good
faith under procedures established by and under the general supervision of the
Fund's Trustees. Occasionally, developments affecting the closing prices of
securities and other assets may occur between the times at which valuations of
such securities are determined (that is, close of the foreign market on which
the securities trade) and the close of business on the NYSE. If developments
occur during such periods that are expected to materially affect the value of
such securities, such valuations may be adjusted to reflect the estimated fair
value of such securities as of the close of the NYSE, as determined in good
faith by the Fund's Trustees or by the Investment Adviser using a pricing
service and/or procedures approved by the Trustees of the Fund; (6) certain
portfolio securities may be valued by an outside pricing service
14
<Page>
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.
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 Adviser, may transfer uninvested cash
balances into one or more joint repurchase agreement accounts. These balances
are invested in one or more repurchase agreements and are collateralized by
cash, U.S. Treasury or federal agency obligations. The Fund may also invest
directly with institutions in repurchase agreements. The Fund's custodian
receives the collateral, which is marked-to-market daily to determine that the
value of the collateral does not decrease below the repurchase price plus
accrued interest.
D. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.
E. 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.
15
<Page>
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.
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 ADVISORY/ADMINISTRATION AGREEMENTS
Effective November 1, 2004, pursuant to an Investment Advisory Agreement, the
Fund pays the Investment Adviser an advisory 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: 0.57% to the portion of the
daily net assets not exceeding $500 million; 0.545% to the portion of the daily
net assets exceeding $500 million but not exceeding $1 billion; 0.52% to the
portion of daily net assets exceeding $1 billion but not exceeding $1.5 billion;
and 0.495% to the portion of daily net assets exceeding $1.5 billion.
Effective November 1, 2004 pursuant to an Administration Agreement with Morgan
Stanley Services Company Inc. (the "Administrator"), an affiliate of the
Investment Adviser, the Fund pays an administration fee, accrued daily and
payable monthly, by applying the annual rate of 0.08% to the Fund's daily net
assets.
Prior to November 1, 2004, the Fund had retained the Investment Adviser to
provide administrative services and to manage the investment of the Fund's
assets pursuant to an investment management agreement pursuant to which the Fund
paid the Investment Adviser a monthly 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: 0.65% to the portion of the
daily net assets not exceeding $500 million; 0.625% to the portion of the daily
net assets exceeding $500 million but not exceeding $1 billion; 0.60% to the
portion of daily net assets exceeding $1 billion but not exceeding $1.5 billion;
and 0.575% to the portion of daily net assets exceeding $1.5 billion
3. PLAN OF DISTRIBUTION
Shares of the Fund are distributed by Morgan Stanley Distributors Inc. (the
"Distributor"), an affiliate of the Investment Adviser and Administrator. The
Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1
under the Act. The Plan provides that the Fund will pay the Distributor a fee
16
<Page>
which is accrued daily and paid monthly at the following annual rates: (i) Class
A -- up to 0.25% of the average daily net assets of Class A; (ii) Class B -- up
to 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 $7,896,232
at February 28, 2005.
In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 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 representatives may be reimbursed in the subsequent calendar year.
For the year ended February 28, 2005, the distribution fee was accrued for Class
A shares and Class C shares at the annual rate of 0.24% and 0.97%, respectively.
The Distributor has informed the Fund that for the year ended February 28, 2005,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class B shares and Class C shares of $193,630 and $366, respectively and
received $9,968 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 year ended February 28, 2005 aggregated
$48,413,394 and $109,307,327, respectively.
For the year ended February 28, 2005, the Fund incurred brokerage commissions of
$39,319 with Morgan Stanley & Co. Inc., an affiliate of the Investment Adviser,
Administrator and Distributor, for portfolio transactions executed on behalf of
the Fund. At February 28, 2005, the Fund's receivable for investments sold
included unsettled trades with Morgan Stanley & Co., Inc. of $911,884.
17
<Page>
Morgan Stanley Trust, an affiliate of the Investment Adviser, Administrator and
Distributor, is the Fund's transfer agent. At February 28, 2005, the Fund had
transfer agent fees and expenses payable of approximately $4,500.
Effective April 1, 2004, the Fund began an unfunded Deferred Compensation Plan
(the "Compensation Plan") which allows each independent Trustee to defer payment
of all, or a portion, of the fees he receives for serving on the Board of
Trustees. Each eligible Trustee generally may elect to have the deferred amounts
credited with a return equal to the total return on one or more of the Morgan
Stanley funds that are offered as investment options under the Compensation
Plan. Appreciation/depreciation and distributions received from these
investments are recorded with an offsetting increase/decrease in the deferred
compensation obligation and do not affect the net asset value of the Fund.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<Table>
<Caption>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
FEBRUARY 28, 2005 FEBRUARY 29, 2004
------------------------------ ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------- ------------- ------------- -------------
CLASS A SHARES
Sold 58,494 $ 720,812 96,805 $ 1,063,129
Reinvestment of dividends 8,671 99,024 12,577 138,350
Redeemed (123,115) (1,527,205) (156,216) (1,680,197)
------------- ------------- ------------- -------------
Net decrease -- Class A (55,950) (707,369) (46,834) (478,718)
------------- ------------- ------------- -------------
CLASS B SHARES
Sold 668,510 8,544,246 898,046 9,858,570
Reinvestment of dividends 408,632 4,695,178 706,639 7,808,361
Redeemed (6,482,545) (79,663,139) (8,462,835) (91,888,153)
------------- ------------- ------------- -------------
Net decrease -- Class B (5,405,403) (66,423,715) (6,858,150) (74,221,222)
------------- ------------- ------------- -------------
CLASS C SHARES
Sold 31,874 403,258 46,214 495,744
Reinvestment of dividends 8,332 94,816 14,518 158,968
Redeemed (148,409) (1,823,692) (167,415) (1,799,357)
------------- ------------- ------------- -------------
Net decrease -- Class C (108,203) (1,325,618) (106,683) (1,144,645)
------------- ------------- ------------- -------------
CLASS D SHARES
Sold 46,515 576,115 54,191 609,021
Reinvestment of dividends 3,651 41,699 4,910 54,061
Redeemed (63,602) (765,605) (56,772) (620,482)
------------- ------------- ------------- -------------
Net increase (decrease) -- Class D (13,436) (147,791) 2,329 42,600
------------- ------------- ------------- -------------
Net decrease in Fund (5,582,992) $ (68,604,493) (7,009,338) $ (75,801,985)
============= ============= ============= =============
</Table>
18
<Page>
6. FEDERAL INCOME TAX STATUS
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for tax purposes are reported as distributions of paid-in-capital.
The tax character of distributions paid was as follows:
<Table>
<Caption>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
FEBRUARY 28, 2005 FEBRUARY 29, 2004
----------------- -----------------
Ordinary income $ 5,873,209 $ 9,521,321
================= =================
</Table>
As of February 28, 2005, the tax-basis components of accumulated losses were as
follows:
<Table>
Undistributed ordinary income $ 4,809,317
Undistributed long-term gains --
-----------------
Net accumulated earnings 4,809,317
Capital loss carryforward* (103,686,656)
Post-October losses (22,785)
Temporary differences (191)
Net unrealized appreciation 73,013,128
-----------------
Total accumulated losses $ (25,887,187)
=================
</Table>
*During the year ended February 28, 2005, the Fund utilized $10,474,002 of its
net capital loss carryforward. As of February 28, 2005, the Fund had a net
capital loss carryforward of $103,686,656 of which $25,457,455 will expire on
February 28, 2010 and $78,229,201 will expire on February 28, 2011 to offset
future capital gains to the extent provided by regulations.
As of February 28, 2005, the Fund had temporary book/tax differences primarily
attributable to post-October losses (foreign currency losses incurred after
October 31 within the taxable year which are deemed to arise on the first
business day of the Fund's next taxable year) and capital loss deferrals on wash
sales and permanent book/tax differences attributable to foreign currency gains.
To reflect reclassifications arising from the permanent differences, accumulated
net realized loss was charged and accumulated undistributed net investment
income was credited $2,045.
19
<Page>
7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Fund may enter into forward foreign currency contracts ("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 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.
8. LEGAL MATTERS
The Investment Adviser, certain affiliates of the Investment Adviser, certain
officers of such affiliates and certain investment companies advised by the
Investment Adviser or its affiliates, including the Fund, are named as
defendants in a consolidated class action. This consolidated action also names
as defendants certain individual Trustees and Directors of the Morgan Stanley
funds. The consolidated amended complaint generally alleges that defendants,
including the Fund, violated their statutory disclosure obligations and
fiduciary duties by failing properly to disclose (i) that the Investment Adviser
and certain affiliates of the Investment Adviser allegedly offered economic
incentives to brokers and others to recommend the funds advised by the
Investment Adviser or its affiliates to investors rather than funds managed by
other companies, and (ii) that the funds advised by the Investment Adviser or
its affiliates, including the Fund, allegedly paid excessive commissions to
brokers in return for their efforts to recommend these funds to investors. The
complaint seeks, among other things, unspecified compensatory damages,
rescissionary damages, fees and costs. The defendants have moved to dismiss the
action and intend to otherwise vigorously defend it. On March 10, 2005,
Plaintiffs sought leave to supplement their complaint to assert claims on behalf
of other investors. While the Fund and Adviser believe that each has meritorious
defenses, the ultimate outcome of this matter is not presently determinable at
this early stage of the litigation, and no provision has been made in the Fund's
financial statements for the effect, if any, of this matter.
20
<Page>
MORGAN STANLEY GLOBAL UTILITIES FUND
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<Table>
<Caption>
FOR THE YEAR ENDED FEBRUARY 28,
--------------------------------------------------------------------
2005 2004* 2003 2002 2001
---------- ---------- ---------- ---------- ----------
CLASS A SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period $ 12.01 $ 9.70 $ 12.47 $ 16.51 $ 20.02
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income++ 0.30 0.28 0.32 0.31 0.29
Net realized and unrealized gain (loss) 2.33 2.45 (2.73) (3.91) (1.22)
---------- ---------- ---------- ---------- ----------
Total income (loss) from investment operations 2.63 2.73 (2.41) (3.60) (0.93)
---------- ---------- ---------- ---------- ----------
Less dividends and distributions from:
Net investment income (0.35) (0.42) (0.36) (0.08) (0.26)
Net realized gain - - - (0.36) (2.32)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (0.35) (0.42) (0.36) (0.44) (2.58)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 14.29 $ 12.01 $ 9.70 $ 12.47 $ 16.51
========== ========== ========== ========== ==========
TOTAL RETURN+ 22.68% 28.57% (19.79)% (22.21)% (5.05)%
RATIOS TO AVERAGE NET ASSETS(1):
Expenses 1.16% 1.18% 1.15% 1.06% 1.00%
Net investment income 2.44% 2.57% 2.91% 2.06% 1.54%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $ 4,990 $ 4,868 $ 4,387 $ 7,723 $ 16,970
Portfolio turnover rate 18% 31% 18% 19% 31%
</Table>
- ----------
* YEAR ENDED FEBRUARY 29.
++ 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) REFLECTS OVERALL FUND RATIOS FOR INVESTMENT INCOME AND NON-CLASS SPECIFIC
EXPENSES.
SEE NOTES TO FINANCIAL STATEMENTS
21
<Page>
<Table>
<Caption>
FOR THE YEAR ENDED FEBRUARY 28,
--------------------------------------------------------------------
2005 2004* 2003 2002 2001
---------- ---------- ---------- ---------- ----------
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period $ 12.00 $ 9.67 $ 12.40 $ 16.50 $ 20.01
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income++ 0.21 0.20 0.24 0.20 0.15
Net realized and unrealized gain (loss) 2.34 2.44 (2.73) (3.89) (1.22)
---------- ---------- ---------- ---------- ----------
Total income (loss) from investment operations 2.55 2.64 (2.49) (3.69) (1.07)
---------- ---------- ---------- ---------- ----------
Less dividends and distributions from:
Net investment income (0.25) (0.31) (0.24) (0.05) (0.12)
Net realized gain - - - (0.36) (2.32)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (0.25) (0.31) (0.24) (0.41) (2.44)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 14.30 $ 12.00 $ 9.67 $ 12.40 $ 16.50
========== ========== ========== ========== ==========
TOTAL RETURN+ 21.74% 27.60% (20.43)% (22.75)% (5.76)%
RATIOS TO AVERAGE NET ASSETS(1):
Expenses 1.92% 1.93% 1.90% 1.82% 1.74%
Net investment income 1.68% 1.82% 2.16% 1.30% 0.80%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $ 277,738 $ 298,012 $ 306,554 $ 562,343 $ 914,995
Portfolio turnover rate 18% 31% 18% 19% 31%
</Table>
- ----------
* YEAR ENDED FEBRUARY 29.
++ 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) REFLECTS OVERALL FUND RATIOS FOR INVESTMENT INCOME AND NON-CLASS SPECIFIC
EXPENSES.
SEE NOTES TO FINANCIAL STATEMENTS
22
<Page>
<Table>
<Caption>
FOR THE YEAR ENDED FEBRUARY 28,
--------------------------------------------------------------------
2005 2004* 2003 2002 2001
---------- ---------- ---------- ---------- ----------
CLASS C SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period $ 11.89 $ 9.60 $ 12.33 $ 16.38 $ 19.90
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income++ 0.21 0.20 0.24 0.22 0.14
Net realized and unrealized gain (loss) 2.31 2.42 (2.70) (3.85) (1.21)
---------- ---------- ---------- ---------- ----------
Total income (loss) from investment operations 2.52 2.62 (2.46) (3.63) (1.07)
---------- ---------- ---------- ---------- ----------
Less dividends and distributions from:
Net investment income (0.25) (0.33) (0.27) (0.06) (0.13)
Net realized gain - - - (0.36) (2.32)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (0.25) (0.33) (0.27) (0.42) (2.45)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 14.16 $ 11.89 $ 9.60 $ 12.33 $ 16.38
========== ========== ========== ========== ==========
TOTAL RETURN+ 21.71% 27.53% (20.15)% (22.78)% (5.81)%
RATIOS TO AVERAGE NET ASSETS(1):
Expenses 1.89% 1.93% 1.87% 1.67% 1.78%
Net investment income 1.71% 1.82% 2.19% 1.45% 0.76%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $ 5,076 $ 5,548 $ 5,502 $ 9,374 $ 15,266
Portfolio turnover rate 18% 31% 18% 19% 31%
</Table>
- ----------
* YEAR ENDED FEBRUARY 29.
++ 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) REFLECTS OVERALL FUND RATIOS FOR INVESTMENT INCOME AND NON-CLASS SPECIFIC
EXPENSES.
SEE NOTES TO FINANCIAL STATEMENTS
23
<Page>
<Table>
<Caption>
FOR THE YEAR ENDED FEBRUARY 28,
--------------------------------------------------------------------
2005 2004* 2003 2002 2001
---------- ---------- ---------- ---------- ----------
CLASS D SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period $ 12.04 $ 9.73 $ 12.53 $ 16.54 $ 20.06
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income++ 0.33 0.30 0.35 0.35 0.29
Net realized and unrealized gain (loss) 2.33 2.47 (2.73) (3.91) (1.18)
---------- ---------- ---------- ---------- ----------
Total income (loss) from investment operations 2.66 2.77 (2.38) (3.56) (0.89)
---------- ---------- ---------- ---------- ----------
Less dividends and distributions from:
Net investment income (0.38) (0.46) (0.42) (0.09) (0.31)
Net realized gain - - - (0.36) (2.32)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (0.38) (0.46) (0.42) (0.45) (2.63)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 14.32 $ 12.04 $ 9.73 $ 12.53 $ 16.54
========== ========== ========== ========== ==========
TOTAL RETURN+ 22.94% 28.87% (19.56)% (21.98)% (4.85)%
RATIOS TO AVERAGE NET ASSETS(1):
Expenses 0.92% 0.93% 0.90% 0.82% 0.78%
Net investment income 2.68% 2.82% 3.16% 2.30% 1.76%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $ 1,859 $ 1,725 $ 1,371 $ 2,308 $ 2,750
Portfolio turnover rate 18% 31% 18% 19% 31%
</Table>
- ----------
* YEAR ENDED FEBRUARY 29.
++ 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) REFLECTS OVERALL FUND RATIOS FOR INVESTMENT INCOME AND NON-CLASS SPECIFIC
EXPENSES.
SEE NOTES TO FINANCIAL STATEMENTS
24
<Page>
MORGAN STANLEY GLOBAL UTILITIES FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of
Trustees of Morgan Stanley Global Utilities Fund:
We have audited the accompanying statement of assets and liabilities of Morgan
Stanley Global Utilities Fund (the "Fund"), including the portfolio of
investments, as of February 28, 2005, and the related statements of operations
for the year then ended and changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the five years
in the period then ended. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of February 28, 2005, by correspondence with the
custodian and brokers. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Morgan
Stanley Global Utilities Fund as of February 28, 2005, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
Deloitte & Touche LLP
NEW YORK, NEW YORK
APRIL 19, 2005
25
<Page>
MORGAN STANLEY GLOBAL UTILITIES FUND
TRUSTEE AND OFFICER INFORMATION
INDEPENDENT TRUSTEES:
<Table>
<Caption>
NUMBER OF
PORTFOLIOS
TERM OF IN FUND
POSITION(S) OFFICE AND COMPLEX
NAME, AGE AND ADDRESS OF HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
INDEPENDENT TRUSTEE REGISTRANT TIME SERVED* DURING PAST 5 YEARS** BY TRUSTEE*** HELD BY TRUSTEE
- --------------------------------------- ----------- ------------ ----------------------- ------------- ---------------------
Michael Bozic (64) Trustee Since Private Investor; 197 Director of various
c/o Kramer Levin Naftalis & Frankel LLP April 1994 Director or Trustee of business
Counsel to the Independent Trustees the Retail Funds (since organizations.
919 Third Avenue April 1994) and the
New York, NY 10022-3902 Institutional Funds
(since July 2003);
formerly Vice Chairman
of Kmart Corporation
(December 1998-October
2000), 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 (72) Trustee Since Consultant; Managing 197 Director of Franklin
1031 N. Chartwell Court January 1993 Director of Summit Covey (time
Salt Lake City, UT 84103 Ventures LLC; Director management systems),
or Trustee of the BMW Bank of North
Retail Funds (since America, Inc.
January 1993) and the (industrial loan
Institutional Funds corporation), Escrow
(since July 2003); Bank USA (industrial
member of the Utah loan corporation),
Regional Advisory Board United Space
of Pacific Corp.; Alliance (joint
formerly Managing venture between
Director of Summit Lockheed Martin and
Ventures LLC the Boeing Company)
(2000-2004); United and Nuskin Asia
States Senator (R-Utah) Pacific (multilevel
(1974-1992) and marketing); member
Chairman, Senate of the board of
Banking Committee various civic and
(1980-1986), Mayor of charitable
Salt Lake City, Utah organizations.
(1971-1974), Astronaut,
Space Shuttle Discovery
(April 12-19, 1985),
and Vice Chairman,
Huntsman Corporation
(chemical company).
Wayne E. Hedien (71) Trustee Since Retired; Director or 197 Director of The PMI
c/o Kramer Levin Naftalis & Frankel LLP September Trustee of the Retail Group Inc. (private
Counsel to the Independent Trustees 1997 Funds (since mortgage insurance);
919 Third Avenue September 1997) and the Trustee and Vice
New York, NY 10022-3902 Institutional Funds Chairman of The
(since July 2003); Field Museum of
formerly associated Natural History;
with the Allstate director of various
Companies (1966-1994), other business and
most recently as charitable
Chairman of The organizations.
Allstate Corporation
(March 1993-
December 1994) and
Chairman and Chief
Executive Officer of
its wholly-owned
subsidiary, Allstate
Insurance Company
(July 1989-December
1994).
</Table>
26
<Page>
<Table>
<Caption>
NUMBER OF
PORTFOLIOS
TERM OF IN FUND
POSITION(S) OFFICE AND COMPLEX
NAME, AGE AND ADDRESS OF HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
INDEPENDENT TRUSTEE REGISTRANT TIME SERVED* DURING PAST 5 YEARS** BY TRUSTEE*** HELD BY TRUSTEE
- --------------------------------------- ----------- ------------ ----------------------- ------------- ---------------------
Dr. Manuel H. Johnson (56) Trustee Since Senior Partner, Johnson 197 Director of NVR, Inc.
c/o Johnson Smick Group, Inc. July 1991 Smick International, (home construction);
888 16th Street NW Inc., a consulting Director of KFX
Suite 740 firm; Chairman of the Energy; Director of
Washington, D.C. 20006 Audit Committee and RBS Greenwich Capital
Director or Trustee of Holdings (financial
the Retail Funds (since holding company).
July 1991) and the
Institutional Funds
(since July 2003);
Co-Chairman and a
founder of the Group of
Seven Council (G7C), an
international economic
commission; formerly
Vice Chairman of the
Board of Governors of
the Federal Reserve
System and Assistant
Secretary of the U.S.
Treasury.
Joseph J. Kearns (62) Trustee Since President, Kearns & 198 Director of Electro
c/o Kearns & Associates LLC July 2003 Associates LLC Rent Corporation
PMB754 (investment (equipment leasing),
23852 Pacific Coast Highway consulting); Deputy The Ford Family
Malibu, CA 90265 Chairman of the Audit Foundation, and the
Committee and Director UCLA Foundation.
or Trustee of the
Retail Funds (since
July 2003) and the
Institutional Funds
(since August 1994);
previously Chairman of
the Audit Committee of
the Institutional Funds
(October 2001-July
2003); formerly CFO of
the J.PaulGetty Trust.
Michael E. Nugent (68) Trustee Since General Partner of 197 Director of various
c/o Triumph Capital, L.P. July 1991 Triumph Capital, L.P., business
445 Park Avenue a private investment organizations.
New York, NY 10022 partnership; Chairman
of the Insurance
Committee 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 (72) Trustee Since Chairman of Lumelite 198 Trustee and Director
c/o Lumelite Plastics Corporation July 2003 Plastics Corporation; of certain investment
85 Charles Colman Blvd. Chairman of the companies in the
Pawling, NY 12564 Governance Committee JPMorgan Funds
and Director or Trustee complex managed by
of the Retail Funds J.P. Morgan
(since July 2003) and Investment Management
the Institutional Funds Inc.
(since June 1992).
</Table>
27
<Page>
<Table>
<Caption>
NUMBER OF
PORTFOLIOS
TERM OF IN FUND
POSITION(S) OFFICE AND COMPLEX
NAME, AGE AND ADDRESS OF HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
INDEPENDENT TRUSTEE REGISTRANT TIME SERVED* DURING PAST 5 YEARS** BY TRUSTEE*** HELD BY TRUSTEE
- --------------------------------------- ----------- ------------ ----------------------- ------------- ---------------------
Charles A. Fiumefreddo (71) Chairman of Since Chairman and Director 197 None.
c/o Morgan Stanley Trust the Board July 1991 or Trustee of the
Harborside Financial Center, and Trustee Retail Funds (since
Plaza Two, July 1991) and the
Jersey City, NJ 07311 Institutional Funds
(since July 2003);
formerly Chief
Executive Officer of
the Retail Funds (until
September 2002).
James F. Higgins (57) Trustee Since Director or Trustee of 197 Director of AXA
c/o Morgan Stanley Trust June 2000 the Retail Funds (since Financial, Inc. and
Harborside Financial Center, June 2000) and the The Equitable Life
Plaza Two, Institutional Funds Assurance Society of
Jersey City, NJ 07311 (since July 2003); the United States
Senior Advisor of (financial
Morgan Stanley (since services).
August 2000); Director
of the 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).
</Table>
- -----------
* THIS IS THE EARLIEST DATE THE TRUSTEE BEGAN SERVING THE FUNDS ADVISED BY
MORGAN STANLEY INVESTMENT ADVISORS INC. (THE "INVESTMENT ADVISER ") (THE
"RETAIL FUNDS ").
** THE DATES REFERENCED BELOW INDICATING COMMENCEMENT OF SERVICES AS
DIRECTOR/TRUSTEE FOR THE RETAIL FUNDS AND THE FUNDS ADVISED BY MORGAN
STANLEY INVESTMENT MANAGEMENT INC. AND MORGAN STANLEY AIP GP LP (THE
"INSTITUTIONAL FUNDS") REFLECT THE EARLIEST DATE THE DIRECTOR/TRUSTEE BEGAN
SERVING THE RETAIL OR INSTITUTIONAL FUNDS AS APPLICABLE.
*** THE FUND COMPLEX INCLUDES ALL OPEN-END AND CLOSED-END FUNDS (INCLUDING ALL
OF THEIR PORTFOLIOS) ADVISED BY THE INVESTMENT ADVISER AND ANY FUNDS THAT
HAVE AN INVESTMENT ADVISER THAT IS AN AFFILIATED PERSON OF THE INVESTMENT
ADVISER (INCLUDING, BUT NOT LIMITED TO, MORGAN STANLEY INVESTMENT
MANAGEMENT INC.).
28
<Page>
OFFICERS:
<Table>
<Caption>
TERM OF
POSITION(S) OFFICE AND
NAME, AGE AND ADDRESS OF HELD WITH LENGTH OF
EXECUTIVE OFFICER REGISTRANT TIME SERVED* PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS**
- --------------------------- --------------- ---------------- -----------------------------------------------------
Mitchell M. Merin (51) President Since May 1999 President and Chief Operating Officer of Morgan
1221 Avenue of the Americas Stanley Investment Management Inc.; President,
New York, NY 10020 Director and Chief Executive Officer of the
Investment Adviser and the Administrator; Chairman
and Director of the Distributor; Chairman and
Director of the Transfer Agent; Director of various
Morgan Stanley subsidiaries; President of the
Institutional Funds (since July 2003) and President
of the Retail Funds; Trustee (since July 2003) and
President (since December 2002) of the Van Kampen
Closed-End Funds; Trustee and President (since
October 2002) of the Van Kampen Open-End Funds.
Ronald E. Robison (66) Executive Vice Since April 2003 Principal Executive Officer of Funds in the Fund
1221 Avenue of the Americas President and Complex (since May 2003); Managing Director of Morgan
New York, NY 10020 Principal Stanley & Co. Incorporated, Morgan Stanley Investment
Executive Management Inc. and Morgan Stanley; Managing
Officer Director, Chief Administrative Officer and Director
of the Investment Adviser and the Administrator;
Director of the Transfer Agent; Managing Director and
Director of the Distributor; Executive Vice President
and Principal Executive Officer of the Institutional
Funds (since July 2003) and the Retail Funds (since
April 2003); Director of Morgan Stanley SICAV (since
May 2004); previously President 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 (62) Vice President Since July 1995 Managing Director and Chief Investment Officer of the
1221 Avenue of the Americas Investment Adviser and Morgan Stanley Investment
New York, NY 10020 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).
Barry Fink (50) Vice President Since February General Counsel (since May 2000) and Managing
1221 Avenue of the Americas 1997 Director (since December 2000) of Morgan Stanley
New York, NY 10020 Investment Management; Managing Director (since
December 2000), Secretary (since February 1997) and
Director of the Investment Adviser and the
Administrator; Vice President of the Retail Funds;
Assistant Secretary of Morgan Stanley DW; Vice
President of the Institutional Funds (since July
2003); Managing Director, Secretary and Director 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
Adviser and the Administrator (February 1997-
December 2001).
Amy R. Doberman (42) Vice President Since July 2004 Managing Director and General Counsel, U.S.
1221 Avenue of the Americas Investment Management; Managing Director of Morgan
New York, NY 10020 Stanley Investment Management Inc. and the Investment
Adviser, Vice President of the Institutional and
Retail Funds (since July 2004); Vice President of the
Van Kampen Funds (since August 2004); previously,
Managing Director and General Counsel - Americas, UBS
Global Asset Management (July 2000 - July 2004) and
General Counsel, Aeltus Investment Management, Inc.
(January 1997 - July 2000).
Carsten Otto (41) Chief Since October Executive Director and U.S. Director of Compliance
1221 Avenue of the Americas Compliance 2004 for Morgan Stanley Investment Management (since
New York, NY 10020 Officer October 2004); Executive Director of the Investment
Adviser and Morgan Stanley Investment Management
Inc.; formerly Assistant Secretary and Assistant
General Counsel of the Morgan Stanley Retail Funds.
</Table>
29
<Page>
<Table>
<Caption>
TERM OF
POSITION(S) OFFICE AND
NAME, AGE AND ADDRESS OF HELD WITH LENGTH OF
EXECUTIVE OFFICER REGISTRANT TIME SERVED* PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS**
- --------------------------- --------------- ---------------- -----------------------------------------------------
Stefanie V. Chang (38) Vice President Since July 2003 Executive Director of Morgan Stanley & Co.
1221 Avenue of the Americas Incorporated, Morgan Stanley Investment Management
New York, NY 10020 Inc., and the Investment Adviser; Vice President of
the Institutional Funds 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 (39) Treasurer and Treasurer since Executive Director of the Investment Adviser and
c/o Morgan Stanley Trust Chief Financial July 2003 and Morgan Stanley Services (since December 2001);
Harborside Financial Center, Officer Chief Financial previously, Vice President of the Retail Funds
Plaza Two, Officer since (September 2002-July 2003), and Vice President of the
Jersey City, NJ 07311 September 2002 Investment Adviser and the Administrator (August
2000-November 2001) and Senior Manager at
PricewaterhouseCoopers LLP (January 1998-August 2000).
Thomas F. Caloia (58) Vice President Since July 2003 Executive Director (since December 2002) and
c/o Morgan Stanley Trust Assistant Treasurer of the Investment Adviser, the
Harborside Financial Center, Distributor and the Administrator; previously
Plaza Two, Treasurer of the Retail Funds (April 1989-July 2003);
Jersey City, NJ 07311 formerly First Vice President of the Investment
Adviser, the Distributor and the Administrator.
Mary E. Mullin (37) Secretary Since July 2003 Executive Director of Morgan Stanley & Co.
1221 Avenue of the Americas Incorporated, Morgan Stanley Investment Management
New York, NY 10020 Inc. and the Investment Adviser; Secretary of the
Institutional Funds 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.
</Table>
- ----------
* THIS IS THE EARLIEST DATE THE OFFICER BEGAN SERVING THE RETAIL FUNDS. EACH
OFFICER SERVES AN INDEFINITE TERM, UNTIL HIS OR HER SUCCESSOR IS ELECTED.
** 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.
2005 FEDERAL TAX NOTICE (UNAUDITED)
During the fiscal year ended February 28, 2005, 100% of the ordinary
dividends paid by the Fund qualified for the dividends received deduction
available to corporations. Additionally, please note that 100% of the
Fund's ordinary dividends paid during the fiscal year ended February 28,
2005 qualified for the lower income tax rate available to individuals under
the Jobs and Growth Tax Relief Reconciliation Act of 2003.
30
<Page>
(This page has been left blank intentionally.)
<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
Fergus Reid
OFFICERS
Charles A. Fiumefreddo
CHAIRMAN OF THE BOARD
Mitchell M. Merin
PRESIDENT
Ronald E. Robison
EXECUTIVE VICE PRESIDENT and PRINCIPAL EXECUTIVE OFFICER
Joseph J. McAlinden
VICE PRESIDENT
Barry Fink
VICE PRESIDENT
Amy R. Doberman
VICE PRESIDENT
Carsten Otto
CHIEF COMPLIANCE OFFICER
Stefanie V. Chang
VICE PRESIDENT
Francis J. 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 REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
INVESTMENT ADVISER
Morgan Stanley Investment Advisors Inc.
1221 Avenue of the Americas
New York, New York 10020
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) 2005 Morgan Stanley
[MORGAN STANLEY LOGO]
37873RPT-RA05-003OOP-Y02/05
[GRAPHIC]
MORGAN STANLEY FUNDS
MORGAN STANLEY
GLOBAL UTILITIES FUND
ANNUAL REPORT
FEBRUARY 28, 2005
[MORGAN STANLEY LOGO]
<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 to delete from the end of the
following paragraph on page 2 of the Code the phrase "to the detriment of the
Fund.":
"Each Covered Officer must not use his personal influence or personal
relationship improperly to influence investment decisions or financial reporting
by the Fund whereby the Covered Officer would benefit personally (directly or
indirectly)."
(d) Not applicable.
(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 4. Principal Accountant Fees and Services.
(a)(b)(c)(d) and (g). Based on fees billed for the periods shown:
<Table>
<Caption>
2005 REGISTRANT COVERED ENTITIES(1)
AUDIT FEES $ 40,142 N/A
NON-AUDIT FEES
AUDIT-RELATED FEES $ 452(2) $ 3,746,495(2)
TAX FEES $ 5,828(3) $ 79,800(4)
ALL OTHER FEES $ - $ -
TOTAL NON-AUDIT FEES $ 6,280 $ 3,826,295
TOTAL $ 46,422 $ 3,826,295
<Caption>
2004 REGISTRANT COVERED ENTITIES(1)
AUDIT FEES $ 38,530 N/A
NON-AUDIT FEES
AUDIT-RELATED FEES $ 684(2) $ 3,364,576(2)
TAX FEES $ 5,667(3) $ 652,431(4)
ALL OTHER FEES $ - $ -(5)
TOTAL NON-AUDIT FEES $ 6,351 $ 4,017,007
TOTAL $ 44,881 $ 4,017,007
</Table>
N/A- Not applicable, as not required by Item 4.
(1) Covered Entities include the Adviser (excluding
sub-advisors) and any entity controlling, controlled by or under
common control with the Adviser that provides ongoing services
to the Registrant.
(2) Audit-Related Fees represent assurance and related services
provided that are reasonably related to the performance of the
audit of the financial statements of the Covered Entities' and
funds advised by the Adviser or its affiliates, specifically
data verification and agreed-upon procedures related to asset
securitizations and agreed-upon procedures engagements.
(3) Tax Fees represent tax compliance, tax planning and tax advice
services provided in connection with the preparation and review
of the Registrant's tax returns.
(4) Tax Fees represent tax compliance, tax planning and tax advice
services provided in connection with the review of Covered
Entities' tax returns.
(5) All other fees represent project management for future business
applications and improving business and operational processes.
<Page>
(e)(1) The audit committee's pre-approval policies and procedures are as
follows:
APPENDIX A
AUDIT COMMITTEE
AUDIT AND NON-AUDIT SERVICES
PRE-APPROVAL POLICY AND PROCEDURES
OF THE
MORGAN STANLEY RETAIL AND INSTITUTIONAL FUNDS
AS ADOPTED AND AMENDED JULY 23, 2004,(1)
1. STATEMENT OF PRINCIPLES
The Audit Committee of the Board is required to review and, in its sole
discretion, pre-approve all Covered Services to be provided by the Independent
Auditors to the Fund and Covered Entities in order to assure that services
performed by the Independent Auditors do not impair the auditor's independence
from the Fund.
The SEC has issued rules specifying the types of services that an independent
auditor may not provide to its audit client, as well as the audit committee's
administration of the engagement of the independent auditor. The SEC's rules
establish two different approaches to pre-approving services, which the SEC
considers to be equally valid. Proposed services either: may be pre-approved
without consideration of specific case-by-case services by the Audit Committee
("GENERAL PRE-APPROVAL"); or require the specific pre-approval of the Audit
Committee or its delegate ("SPECIFIC PRE-APPROVAL"). The Audit Committee
believes that the combination of these two approaches in this Policy will result
in an effective and efficient procedure to pre-approve services performed by the
Independent Auditors. As set forth in this Policy, unless a type of service has
received general pre-approval, it will require specific pre-approval by the
Audit Committee (or by any member of the Audit Committee to which pre-approval
authority has been delegated) if it is to be provided by the Independent
Auditors. Any proposed services exceeding pre-approved cost levels or budgeted
amounts will also require specific pre-approval by the Audit Committee.
The appendices to this Policy describe the Audit, Audit-related, Tax and All
Other services that have the general pre-approval of the Audit Committee. The
term of any general pre-approval is 12 months from the date of pre-approval,
unless the Audit Committee considers and provides a different period and states
otherwise. The Audit Committee will annually review and pre-approve the services
that may be provided by the Independent Auditors without obtaining specific
pre-approval from the Audit Committee. The Audit Committee will add to or
subtract from the list of general pre-approved services from time to time, based
on subsequent determinations.
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(1) This Audit Committee Audit and Non-Audit Services Pre-Approval Policy and
Procedures (the "POLICY"), adopted as of the date above, supersedes and
replaces all prior versions that may have been adopted from time to time.
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The purpose of this Policy is to set forth the policy and procedures by which
the Audit Committee intends to fulfill its responsibilities. It does not
delegate the Audit Committee's responsibilities to pre-approve services
performed by the Independent Auditors to management.
The Fund's Independent Auditors have reviewed this Policy and believes that
implementation of the Policy will not adversely affect the Independent Auditors'
independence.
2. DELEGATION
As provided in the Act and the SEC's rules, the Audit Committee may delegate
either type of pre-approval authority to one or more of its members. The member
to whom such authority is delegated must report, for informational purposes
only, any pre-approval decisions to the Audit Committee at its next scheduled
meeting.
3. AUDIT SERVICES
The annual Audit services engagement terms and fees are subject to the specific
pre-approval of the Audit Committee. Audit services include the annual financial
statement audit and other procedures required to be performed by the Independent
Auditors to be able to form an opinion on the Fund's financial statements. These
other procedures include information systems and procedural reviews and testing
performed in order to understand and place reliance on the systems of internal
control, and consultations relating to the audit. The Audit Committee will
approve, if necessary, any changes in terms, conditions and fees resulting from
changes in audit scope, Fund structure or other items.
In addition to the annual Audit services engagement approved by the Audit
Committee, the Audit Committee may grant general pre-approval to other Audit
services, which are those services that only the Independent Auditors reasonably
can provide. Other Audit services may include statutory audits and services
associated with SEC registration statements (on Forms N-1A, N-2, N-3, N-4,
etc.), periodic reports and other documents filed with the SEC or other
documents issued in connection with securities offerings.
The Audit Committee has pre-approved the Audit services in Appendix B.1. All
other Audit services not listed in Appendix B.1 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).
4. AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are reasonably
related to the performance of the audit or review of the Fund's financial
statements and, to the extent they are Covered Services, the Covered Entities or
that are traditionally performed by the Independent Auditors. Because the Audit
Committee believes that the provision of Audit-related services does not impair
the independence of the auditor and is consistent with the SEC's rules on
auditor independence, the Audit Committee may grant general pre-approval to
Audit-related services. Audit-related services include, among others, accounting
consultations related to accounting, financial reporting or disclosure matters
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not classified as "Audit services"; assistance with understanding and
implementing new accounting and financial reporting guidance from rulemaking
authorities; agreed-upon or expanded audit procedures related to accounting
and/or billing records required to respond to or comply with financial,
accounting or regulatory reporting matters; and assistance with internal control
reporting requirements under Forms N-SAR and/or N-CSR.
The Audit Committee has pre-approved the Audit-related services in Appendix B.2.
All other Audit-related services not listed in Appendix B.2 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).
5. TAX SERVICES
The Audit Committee believes that the Independent Auditors can provide Tax
services to the Fund and, to the extent they are Covered Services, the Covered
Entities, such as tax compliance, tax planning and tax advice without impairing
the auditor's independence, and the SEC has stated that the Independent Auditors
may provide such services.
Pursuant to the preceding paragraph, the Audit Committee has pre-approved the
Tax Services in Appendix B.3. All Tax services in Appendix B.3 must be
specifically pre-approved by the Audit Committee (or by any member of the Audit
Committee to which pre-approval has been delegated).
6. ALL OTHER SERVICES
The Audit Committee believes, based on the SEC's rules prohibiting the
Independent Auditors from providing specific non-audit services, that other
types of non-audit services are permitted. Accordingly, the Audit Committee
believes it may grant general pre-approval to those permissible non-audit
services classified as All Other services that it believes are routine and
recurring services, would not impair the independence of the auditor and are
consistent with the SEC's rules on auditor independence.
The Audit Committee has pre-approved the All Other services in Appendix B.4.
Permissible All Other services not listed in Appendix B.4 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).
7. PRE-APPROVAL FEE LEVELS OR BUDGETED AMOUNTS
Pre-approval fee levels or budgeted amounts for all services to be provided by
the Independent Auditors will be established annually by the Audit Committee.
Any proposed services exceeding these levels or amounts will require specific
pre-approval by the Audit Committee. The Audit Committee is mindful of the
overall relationship of fees for audit and non-audit services in determining
whether to pre-approve any such services.
8. PROCEDURES
All requests or applications for services to be provided by the Independent
Auditors that do not require specific approval by the Audit Committee will be
submitted to the Fund's Chief Financial Officer and must include a detailed
description of the services to be
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rendered. The Fund's Chief Financial Officer will determine whether such
services are included within the list of services that have received the general
pre-approval of the Audit Committee. The Audit Committee will be informed on a
timely basis of any such services rendered by the Independent Auditors. Requests
or applications to provide services that require specific approval by the Audit
Committee will be submitted to the Audit Committee by both the Independent
Auditors and the Fund's Chief Financial Officer, and must include a joint
statement as to whether, in their view, the request or application is consistent
with the SEC's rules on auditor independence.
The Audit Committee has designated the Fund's Chief Financial Officer to monitor
the performance of all services provided by the Independent Auditors and to
determine whether such services are in compliance with this Policy. The Fund's
Chief Financial Officer will report to the Audit Committee on a periodic basis
on the results of its monitoring. Both the Fund's Chief Financial Officer and
management will immediately report to the chairman of the Audit Committee any
breach of this Policy that comes to the attention of the Fund's Chief Financial
Officer or any member of management.
9. ADDITIONAL REQUIREMENTS
The Audit Committee has determined to take additional measures on an annual
basis to meet its responsibility to oversee the work of the Independent Auditors
and to assure the auditor's independence from the Fund, such as reviewing a
formal written statement from the Independent Auditors delineating all
relationships between the Independent Auditors and the Fund, consistent with
Independence Standards Board No. 1, and discussing with the Independent Auditors
its methods and procedures for ensuring independence.
10. COVERED ENTITIES
Covered Entities include the Fund's investment adviser(s) and any entity
controlling, controlled by or under common control with the Fund's investment
adviser(s) that provides ongoing services to the Fund(s). Beginning with
non-audit service contracts entered into on or after May 6, 2003, the Fund's
audit committee must pre-approve non-audit services provided not only to the
Fund but also to the Covered Entities if the engagements relate directly to the
operations and financial reporting of the Fund. This list of Covered Entities
would include:
MORGAN STANLEY RETAIL FUNDS
Morgan Stanley Investment Advisors Inc.
Morgan Stanley & Co. Incorporated
Morgan Stanley DW Inc.
Morgan Stanley Investment Management Inc.
Morgan Stanley Investment Management Limited
Morgan Stanley Investment Management Private Limited
Morgan Stanley Asset & Investment Trust Management Co., Limited
Morgan Stanley Investment Management Company
Van Kampen Asset Management
Morgan Stanley Services Company, Inc.
Morgan Stanley Distributors Inc.
Morgan Stanley Trust FSB
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MORGAN STANLEY INSTITUTIONAL FUNDS
Morgan Stanley Investment Management Inc.
Morgan Stanley Investment Advisors Inc.
Morgan Stanley Investment Management Limited
Morgan Stanley Investment Management Private Limited
Morgan Stanley Asset & Investment Trust Management Co., Limited
Morgan Stanley Investment Management Company
Morgan Stanley & Co. Incorporated
Morgan Stanley Distribution, Inc.
Morgan Stanley AIP GP LP
Morgan Stanley Alternative Investment Partners LP
(e)(2) Beginning with non-audit service contracts entered into on or after May
6, 2003, the audit committee also is required to pre-approve services to Covered
Entities to the extent that the services are determined to have a direct impact
on the operations or financial reporting of the Registrant. 100% of such
services were pre-approved by the audit committee pursuant to the Audit
Committee's pre-approval policies and procedures (attached hereto).
(f) Not applicable.
(g) See table above.
(h) The audit committee of the Board of Trustees has considered whether the
provision of services other than audit services performed by the auditors to the
Registrant and Covered Entities is compatible with maintaining the auditors'
independence in performing audit services.
Item 5. Audit Committee of Listed Registrants.
(a) The Fund has a separately-designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act whose members are:
Michael Bozic, Edwin J. Garn, Wayne E. Hedien, Manual H. Johnson, Joseph J.
Kearns, Michael Nugent and Fergus Reid.
(b) Not applicable.
Item 6. Schedule of Investments
Refer to Item 1.
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Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Applicable only to reports filed by closed-end funds.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Applicable only to reports filed by closed-end funds.
Item 9. Closed-End Fund Repurchases
Applicable only to reports filed by closed-end funds.
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures
(a) The Fund's principal executive officer and principal financial officer have
concluded that the Fund's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Fund in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits
(a) 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.
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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 Global Utilities Fund
/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
April 19, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
April 19, 2005
/s/ Francis Smith
Francis Smith
Principal Financial Officer
April 19, 2005