<PAGE>
File No. 333-3013
811-7607
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM N-1A
REGISTRATION STATEMENT (No. 333-03013)
UNDER
THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 3
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 4
---------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
1221 Avenue of the Americas, New York, New York 10020
(Address of Principal Executive Office)
Registrant's Telephone Number (800) 548-7786
Harold J. Schaaff, Jr., Esquire
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas, New York, New York 10020
(Name and Address of Agent for Service)
--------------
COPIES TO:
Michael F. Klein Richard W. Grant, Esquire
Morgan Stanley Asset Management Inc. Morgan, Lewis & Bockius LLP
1221 Avenue of the Americas 2000 One Logan Square
New York, NY 10020 Philadelphia, PA 19103
--------------
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE
(CHECK APPROPRIATE BOX)
/X/ IMMEDIATELY UPON FILING PURSUANT TO PARAGRAGH (b) OF RULE 485
/ / ON _____________ PURSUANT TO PARAGRAPH (b) OF RULE 485
/ / 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (a) OF RULE 485
/ / 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (a) OF RULE 485
/ / ON _____________ PURSUANT TO PARAGRAPH (a) OF RULE 485
--------------
Registrant has elected to register an indefinite number of shares
pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended.
Registrant filed its Rule 24f-2 notice for the period ended December 31, 1996 on
February 28, 1997.
================================================================================
<PAGE>
MORGAN STANLEY UNIVERSAL FUNDS, INC.
CROSS REFERENCE SHEET
Part A - Information Required in a Prospectus
- -------- ------------------------------------
Form N-1A
Item Number Location in Prospectus for the Emerging Markets Equity Portfolio.
- ----------- -----------------------------------------------------------------
Item 1. Cover Page -- Cover Page
Item 2. Synopsis -- The Fund; Management; Offering of Shares; Prospectus
Outline
Item 3. Condensed Financial Information -- *
Item 4. General Description of Registrant -- Portfolio Summary; The
Portfolio's Investments; Securities and Investment Techniques;
Fundamental Investment Limits
Item 5. Management of the Fund -- Management; Management of the Fund
Item 5A. Management's Discussion of Fund Performance -- **
Item 6. Capital Stock and Other Securities -- Management of the Fund; Account
Policies
Item 7. Purchase of Securities Being Offered -- Cover Page; Offering of Shares;
Management of the Fund; Account Policies
Item 8. Redemption or Repurchase -- Account Policies
Item 9. Pending Legal Proceedings -- *
___________________
* Omitted since the answer is negative or the Item is not applicable.
** Information required by Item 5A is contained in the 1997 Semi-Annual Report
to Shareholders.
Form N-1A
Item Number Location in Prospectus for the U.S. Real Estate, Global Equity,
- ----------- International Magnum, Emerging Markets Equity and Asian Equity
Portfolios.
---------------------------------------------------------------
Item 1. Cover Page -- Cover Page
Item 2. Synopsis -- The Fund; Management; Offering of Shares; Prospectus
Outline
Item 3. Condensed Financial Information -- *
Item 4. General Description of Registrant -- Portfolio Summaries; The
Portfolio's Investments; Securities and Investment Techniques;
Fundamental Investment Limits
Item 5. Management of the Fund -- Management; Management of the Fund
Item 5A. Management's Discussion of Fund Performance -- **
Item 6. Capital Stock and Other Securities -- Management of the Fund; Account
Policies
Item 7. Purchase of Securities Being Offered -- Cover Page; Offering of Shares;
Management of the Fund; Account Policies
Item 8. Redemption or Repurchase -- Account Policies
Item 9. Pending Legal Proceedings -- *
___________________
* Omitted since the answer is negative or the Item is not applicable.
** Information required by Item 5A is contained in the 1997 Semi-Annual
Report to Shareholders.
<PAGE>
Form N-1A
Item Number Location in Prospectus for the U.S. Real Estate, Value, Fixed
- ----------- Income, Mid Cap Value and Emerging Markets Equity Portfolios.
-------------------------------------------------------------
Item 1. Cover Page -- Cover Page
Item 2. Synopsis -- The Fund; Management; Offering of Shares; Prospectus
Outline
Item 3. Condensed Financial Information -- *
Item 4. General Description of Registrant -- Portfolio Summaries; The
Portfolio's Investments; Securities and Investment Techniques;
Fundamental Investment Limits
Item 5. Management of the Fund -- Management; Management of the Fund
Item 5A. Management's Discussion of Fund Performance -- **
Item 6. Capital Stock and Other Securities -- Management of the Fund; Account
Policies
Item 7. Purchase of Securities Being Offered -- Cover Page; Offering of Shares;
Management of the Fund; Account Policies
Item 8. Redemption or Repurchase -- Account Policies
Item 9. Pending Legal Proceedings -- *
___________________
* Omitted since the answer is negative or the Item is not applicable.
** Information required by Item 5A is contained in the 1997 Semi-Annual Report
to Shareholders.
Form N-1A
Item Number Location in Prospectus for the U.S. Real Estate and Fixed Income
- ----------- Portfolios.
------------------------------------------------------------------
Item 1. Cover Page -- Cover Page
Item 2. Synopsis -- The Fund; Management; Offering of Shares; Prospectus
Outline
Item 3. Condensed Financial Information -- *
Item 4. General Description of Registrant -- Portfolio Summaries; The
Portfolio's Investments; Securities and Investment Techniques;
Fundamental Investment Limits
Item 5. Management of the Fund -- Management; Management of the Fund
Item 5A. Management's Discussion of Fund Performance -- **
Item 6. Capital Stock and Other Securities -- Management of the Fund; Account
Policies
Item 7. Purchase of Securities Being Offered -- Cover Page; Offering of Shares;
Management of the Fund; Account Policies
Item 8. Redemption or Repurchase -- Account Policies
Item 9. Pending Legal Proceedings -- *
___________________
* Omitted since the answer is negative or the Item is not applicable.
** Information required by Item 5A is contained in the 1997 Semi-Annual Report
to Shareholders.
<PAGE>
Form N-1A
Item Number Location in Prospectus for the Fixed Income, High Yield, Equity
- ----------- Growth, Mid Cap Value, Value, Global Equity, Emerging Markets
Equity, International Magnum and Asian Equity Portfolios.
--------------------------------------------------------------
Item 1. Cover Page -- Cover Page
Item 2. Synopsis -- The Fund; Management; Offering of Shares; Prospectus
Outline
Item 3. Condensed Financial Information -- *
Item 4. General Description of Registrant -- Portfolio Summaries; The
Portfolio's Investments; Securities and Investment Techniques;
Fundamental Investment Limits
Item 5. Management of the Fund -- Management; Management of the Fund
Item 5A. Management's Discussion of Fund Performance -- **
Item 6. Capital Stock and Other Securities -- Management of the Fund; Account
Policies
Item 7. Purchase of Securities Being Offered -- Cover Page; Offering of Shares;
Management of the Fund; Account Policies
Item 8. Redemption or Repurchase -- Account Policies
Item 9. Pending Legal Proceedings -- *
___________________
* Omitted since the answer is negative or the Item is not applicable.
** Information required by Item 5A is contained in the 1997 Semi-Annual Report
to Shareholders.
Form N-1A
Item Number Location in Prospectus for the Money Market, High Yield, Fixed
- ----------- Income, Core Equity, Mid Cap Growth, Equity Growth, Mid Cap Value,
Value, U.S. Real Estate, International Fixed Income, International
Magnum, Emerging Markets Debt, Emerging Markets Equity, Global
Equity, Asian Equity, Balanced and Multi-Asset-Class Portfolios.
------------------------------------------------------------------
Item 1. Cover Page -- Cover Page
Item 2. Synopsis -- The Fund; Management; Offering of Shares; Prospectus
Outline
Item 3. Condensed Financial Information -- *
Item 4. General Description of Registrant -- Portfolio Summaries; The
Portfolio's Investments; Securities and Investment Techniques;
Fundamental Investment Limits
Item 5. Management of the Fund -- Management; Management of the Fund
Item 5A. Management's Discussion of Fund Performance -- **
Item 6. Capital Stock and Other Securities -- Management of the Fund; Account
Policies
Item 7. Purchase of Securities Being Offered -- Cover Page; Offering of Shares;
Management of the Fund; Account Policies
Item 8. Redemption or Repurchase -- Account Policies
Item 9. Pending Legal Proceedings -- *
___________________
* Omitted since the answer is negative or the Item is not applicable.
** Information required by Item 5A is contained in the 1997 Semi-Annual Report
to Shareholders.
<PAGE>
Form N-1A
Item Number Location in Prospectus for the Emerging Markets Debt Portfolio.
- ----------- -----------------------------------------------------------------
Item 1. Cover Page -- Cover Page
Item 2. Synopsis -- The Fund; Management; Offering of Shares; Prospectus
Outline
Item 3. Condensed Financial Information -- *
Item 4. General Description of Registrant -- Portfolio Summaries; The
Portfolio's Investments; Securities and Investment Techniques;
Fundamental Investment Limits
Item 5. Management of the Fund -- Management; Management of the Fund
Item 5A. Management's Discussion of Fund Performance -- **
Item 6. Capital Stock and Other Securities -- Management of the Fund; Account
Policies
Item 7. Purchase of Securities Being Offered -- Cover Page; Offering of Shares;
Management of the Fund; Account Policies
Item 8. Redemption or Repurchase -- Account Policies
Item 9. Pending Legal Proceedings -- *
___________________
* Omitted since the answer is negative or the Item is not applicable.
** Information required by Item 5A is contained in the 1997 Semi-Annual Report
to Shareholders.
Form N-1A
Item Number Location in Prospectus for the Emerging Markets Debt, Global
Equity, International Magnum and Emerging Markets Equity
Portfolios.
-----------------------------------------------------------------
Item 1. Cover Page -- Cover Page
Item 2. Synopsis -- The Fund; Management; Offering of Shares; Prospectus
Outline
Item 3. Condensed Financial Information -- *
Item 4. General Description of Registrant -- Portfolio Summaries; The
Portfolio's Investments; Securities and Investment Techniques;
Fundamental Investment Limits
Item 5. Management of the Fund -- Management; Management of the Fund
Item 5A. Management's Discussion of Fund Performance -- **
Item 6. Capital Stock and Other Securities -- Management of the Fund; Account
Policies
Item 7. Purchase of Securities Being Offered -- Cover Page; Offering of Shares;
Management of the Fund; Account Policies
Item 8. Redemption or Repurchase -- Account Policies
Item 9. Pending Legal Proceedings -- *
___________________
* Omitted since the answer is negative or the Item is not applicable.
** Information required by Item 5A is contained in the 1997 Semi-Annual Report
to Shareholders.
<PAGE>
Part B - Information Required in a Statement of Additional Information
- -------- -------------------------------------------------------------
Form N-1A
Item Number Location in Statement of Additional Information
- ----------- -----------------------------------------------
Item 10. Cover Page -- Cover Page
Item 11. Table of Contents -- Cover Page
Item 12. General Information and History -- *
Item 13. Investment Objectives and Policies -- Securities and Investment
Techniques; Investment Limitations; Determining Maturities of Certain
Instruments; Description of Securities and Ratings
Item 14. Management of the Fund -- Management of the Fund
Item 15. Control Persons and Principal Holders of Securities -- Management of
the Fund; General Information
Item 16. Investment Advisory and Other Services -- Management of the Fund;
General Information
Item 17. Brokerage Allocation and Other Practices -- *
Item 18. Capital Stock and Other Securities -- General Information
Item 19. Purchase, Redemption and Pricing of Securities Being Offered --
Purchase of Shares; Redemption of Shares; Net Asset Value for the
Money Market Fund; General Information
Item 20. Tax Status -- Taxes; Special Tax Considerations Relating to Foreign
Investments; Taxes and Foreign Shareholders
Item 21. Underwriters -- Management of the Fund
Item 22. Calculation of Performance Data -- Performance Information
Item 23. Financial Statements -- Financial Statements
Part C - Other Information
- -------- -----------------
Part C contains the information required by the Items of the Form N-1A
under such Items as set forth in the Form N-1A.
- ------------------------------
* Omitted since the answer is negative or the Item is not applicable.
<PAGE>
The Prospectus for the Emerging Markets Equity Portfolio dated May 1, 1997,
included as part of Post-Effective Amendment No. 1 to the Registration Statement
on Form N-1A of Morgan Stanley Universal Funds, Inc. (File No. 333-03013) as
filed with the Securities and Exchange Commission on April 30, 1997, and in
final form under Rule 497(c) on May 1, 1997, is hereby incorporated by reference
as if set forth herein. The Prospectus is supplemented by its Financial
Highlights as of June 30, 1997 filed herein to comply with the SEC's
requirements regarding the updating of financial statements filed in post-
effective amendments.
<PAGE>
Supplement dated September 8, 1997
to the Prospectus dated May 1, 1997
Emerging Markets Equity Portfolio
Portfolio of
Morgan Stanley Universal Funds, Inc. (the "Fund")
P.O. Box 2798
Boston, Massachusetts
02208-2798
----------
The Prospectus is hereby amended and supplemented as follows: The following
paragraph and table are added after the first paragraph under the heading
"Financial Highlights" on page 3 of the Prospectus:
The following table provides financial highlights for the Emerging Markets
Equity Portfolio for the period January 1, 1997 through June 30, 1997, and are
part of the Fund's unaudited financial statements which are included in the
Fund's current Statement of Additional Information and in the Fund's Semi-Annual
Report to Shareholders for the six months ended June 30, 1997.
<TABLE>
<CAPTION>
EMERGING MARKETS
EQUITY PORTFOLIO
SIX MONTHS ENDED
JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- ----------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.78
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.05
Net Realized and Unrealized Gain (Loss) 2.20
-------
Total From Investment Operations 2.25
-------
DISTRIBUTIONS
Net Investment Income --
-------
Total Distributions --
-------
NET ASSET VALUE, END OF PERIOD $ 12.03
=======
TOTAL RETURN 23.01%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $20,308
Ratio of Expenses to Average Net Assets 1.75%**
Ratio of Net Investment Income to Average Net Assets 1.03%**
Portfolio Turnover Rate 38%
Average Commission Rate:
Per Share $0.0012
As a Percentage of Trade Amount 0.40%
- ----------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income (Loss) $ 0.12
Ratios Before Expense Limitation:
Expenses to Average Net Assets 4.49%**
Net Investment Loss to Average Net Assets (1.67)%**
- ----------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
The Prospectus for the U.S. Real Estate, Global Equity, International Magnum,
Emerging Markets Equity and Asian Equity Portfolios dated May 1, 1997, included
as part of Post-Effective Amendment No. 1 to the Registration Statement on Form
N-1A of Morgan Stanley Universal Funds, Inc. (File No. 333-03013) as filed with
the Securities and Exchange Commission on April 30, 1997, and in final form
under Rule 497(c) on May 1, 1997, is hereby incorporated by reference as if set
forth herein. The Prospectus is supplemented by its Financial Highlights as of
June 30, 1997 with respect to each of the foregoing Portfolios and, except for
the Emerging Markets Equity Portfolio, are filed herein to comply with the
Fund's undertaking to file a post-effective amendment which need not be
certified within four to six months of each such Portfolio's effective date or
commencement of operations, whichever is later. With respect to the Emerging
Markets Equity Portfolio, Financial Highlights are filed herein to comply with
the SEC's requirements regarding the updating of financial statements filed in
post-effective amendments.
<PAGE>
Supplement dated September 8, 1997
to the Prospectus dated May 1, 1997
U.S. Real Estate Portfolio
Global Equity Portfolio
International Magnum Portfolio
Emerging Markets Equity Portfolio
Asian Equity Portfolio
Portfolios of
Morgan Stanley Universal Funds, Inc. (the "Fund")
P.O. Box 2798
Boston, Massachusetts
02208-2798
------------
The Prospectus is hereby amended and supplemented as follows: The following
paragraph and tables are added after the first paragraph under the heading
"Financial Highlights" on page 3 of the Prospectus:
The following tables provide financial highlights for the U.S. Real Estate
and Asian Equity Portfolios for the period March 3, 1997 through June 30, 1997,
for the Global Equity and International Magnum Portfolios for the period January
2, 1997 through June 30, 1997, and for the Emerging Markets Equity Portfolio for
the period January 1, 1997 through June 30, 1997, and are part of the Fund's
unaudited financial statements which are included in the Fund's current
Statement of Additional Information and in the Fund's Semi-Annual Report to
Shareholders for the six months ended June 30, 1997.
<TABLE>
<CAPTION>
U.S. REAL
ESTATE PORTFOLIO
PERIOD FROM MARCH 3,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- ------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.10
Net Realized and Unrealized Gain 0.27
-------
Total From Investment Operations 0.37
-------
NET ASSET VALUE, END OF PERIOD $ 10.37
=======
TOTAL RETURN 3.70%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 6,025
Ratio of Expenses to Average Net Assets 1.10%**
Ratio of Net Investment Income to
Average Net Assets 3.52%**
Portfolio Turnover Rate 56%
Average Commission Rate Per Share $0.0576
- ------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.08
Ratios Before Expense Limitation:
Expenses to Average Net Assets 3.71%**
Net Investment Income to Average Net Assets 0.90%**
- ------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
<TABLE>
<CAPTION>
INTERNATIONAL
GLOBAL EQUITY MAGNUM
PORTFOLIO PORTFOLIO
PERIOD FROM JANUARY 2, PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997 1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) (UNAUDITED)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.08 0.09
Net Realized and Unrealized Gain 1.41 1.58
------- -------
Total From Investment Operations 1.49 1.67
------- -------
NET ASSET VALUE, END OF PERIOD $ 11.49 $ 11.67
======= =======
TOTAL RETURN 14.90% 16.70%
======= =======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 7,326 $14,643
Ratio of Expenses to Average Net Assets 1.15%** 1.15%**
Ratio of Net Investment Income to
Average Net Assets 1.81%** 1.96%**
Portfolio Turnover Rate 3% 19%
Average Commission Rate:
Per Share $0.0225 $0.0170
As a Percentage of Trade Amount 0.17% 0.17%
- ----------------------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.06 $ 0.05
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.46%** 2.38%**
Net Investment Income to Average Net Assets 0.50%** 0.73%**
- ----------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
<TABLE>
<CAPTION>
EMERGING MARKETS
EQUITY PORTFOLIO
SIX MONTHS ENDED
JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- -----------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.78
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.05
Net Realized and Unrealized Gain (Loss) 2.20
-------
Total From Investment Operations 2.25
-------
DISTRIBUTIONS
Net Investment Income --
-------
Total Distributions --
-------
NET ASSET VALUE, END OF PERIOD $ 12.03
=======
TOTAL RETURN 23.01%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $20,308
Ratio of Expenses to Average Net Assets 1.75%**
Ratio of Net Investment Income to Average Net Assets 1.03%**
Portfolio Turnover Rate 38%
Average Commission Rate:
Per Share $0.0012
As a Percentage of Trade Amount 0.40%
- -------------------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income (Loss) $ 0.12
Ratios Before Expense Limitation:
Expenses to Average Net Assets 4.49%**
Net Investment Loss to Average Net Assets (1.67)%**
- -------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
<TABLE>
<CAPTION>
ASIAN EQUITY
PORTFOLIO
PERIOD FROM MARCH 3,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- ----------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03
Net Realized and Unrealized Gain 0.63
-------
Total From Investment Operations 0.66
-------
NET ASSET VALUE, END OF PERIOD $ 10.66
=======
TOTAL RETURN 6.60%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $10,946
Ratio of Expenses to Average Net Assets 1.20%**
Ratio of Net Investment Income to
Average Net Assets 1.06%**
Portfolio Turnover Rate 49%
Average Commission Rate:
Per Share $0.0170
As a Percentage of Trade Amount 0.56%
- ----------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment Loss $ 0.04
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.55%**
Net Investment Loss to Average Net Assets (0.22)%**
- ----------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
The Prospectus for the U.S. Real Estate, Value, Fixed Income, Mid Cap Value and
Emerging Markets Equity Portfolios dated May 1, 1997, included as part of
Post-Effective Amendment No. 1 to the Registration Statement on Form N-1A of
Morgan Stanley Universal Funds, Inc. (File No. 333-03013) as filed with the
Securities and Exchange Commission on April 30, 1997, and in final form under
Rule 497(c) on May 1, 1997, is hereby incorporated by reference as if set forth
herein. The Prospectus is supplemented by its Financial Highlights as of June
30, 1997 with respect to each of the foregoing Portfolios and, except for the
Emerging Markets Equity Portfolio, are filed herein to comply with the Fund's
undertaking to file a post-effective amendment which need not be certified
within four to six months of each such Portfolio's effective date or
commencement of operations, whichever is later. With respect to the Emerging
Markets Equity Portfolio, Financial Highlights are filed herein to comply with
the SEC's requirements regarding the updating of financial statements filed in
post-effective amendments.
<PAGE>
Supplement dated September 8, 1997
to the Prospectus dated May 1, 1997
U.S. Real Estate Portfolio
Value Portfolio
Fixed Income Portfolio
Mid Cap Value Portfolio
Emerging Markets Equity Portfolio
Portfolios of
Morgan Stanley Universal Funds, Inc. (the "Fund")
P.O. Box 2798
Boston, Massachusetts
02208-2798
--------
The Prospectus is hereby amended and supplemented as follows: The
following paragraph and tables are added after the first paragraph under the
heading "Financial Highlights" on page 3 of the Prospectus.
The following tables provide financial highlights for the U.S. Real
Estate Portfolio for the period March 3, 1997 through June 30, 1997, for the
Value, Fixed Income and Mid Cap Value Portfolios for the period January 2, 1997
through June 30, 1997, and for the Emerging Markets Equity Portfolio for the
period January 1, 1997 through June 30, 1997, and are part of the Fund's
unaudited financial statements which are included in the Fund's current
Statement of Additional Information and in the Fund's Semi-Annual Report to
Shareholders for the six months ended June 30, 1997.
<TABLE>
<CAPTION>
U.S. REAL
ESTATE PORTFOLIO VALUE PORTFOLIO
Period from March 3, Period from January 2,
1997* to June 30, 1997 1997* to June 30, 1997
Selected Per Share Data and Ratios (Unaudited) (Unaudited)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 10.00 $ 10.00
-------- --------
Income From Investment Operations
Net Investment Income 0.10 0.07
Net Realized and Unrealized Gain 0.27 1.48
-------- --------
Total From Investment Operations 0.37 1.55
-------- --------
Net Asset Value, End of Period $ 10.37 $ 11.55
======== ========
Total Return 3.70% 15.50%
======== ========
Ratios and Supplemental Data:
Net Assets, End of Period (000's) $ 6,025 $ 5,264
Ratio of Expenses to Average Net Assets 1.10%** 0.85%**
Ratio of Net Investment Income to Average Net Assets 3.52%** 1.82%**
Portfolio Turnover Rate 56% 22%
Average Commission Rate Per Share $ 0.0576 $ 0.0585
- ---------------------------------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.08 $ 0.06
Ratios Before Expense Limitation:
Expenses to Average Net Assets 3.71%** 2.35%**
Net Investment Income to Average Net Assets 0.90%** 0.32%**
- ---------------------------------------------------------------------------------------------------------
</TABLE>
*Commencement of operations
**Annualized
<TABLE>
<CAPTION>
FIXED INCOME
PORTFOLIO
Period from January 2,
1997* to June 30, 1997
Selected Per Share Data and Ratios (Unaudited)
- --------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period $ 10.00
--------
Income From Investment Operations
Net Investment Income 0.25
Net Realized and Unrealized Gain 0.10
--------
Total From Investment Operations 0.35
--------
Net Asset Value, End of Period $ 10.35
========
Total Return 3.50%
========
Ratios and Supplemental Data:
Net Assets, End of Period (000's) $ 9,033
Ratio of Expenses to Average Net Assets 0.70%**
Ratio of Net Investment Income to Average Net Assets 5.27%**
Portfolio Turnover Rate 100%
- --------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.04
Ratios Before Expense Limitation:
Expenses to Average Net Assets 1.59%**
Net Investment Income to Average Net Assets 4.38%**
- --------------------------------------------------------------------------------
</TABLE>
*Commencement of operations
**Annualized
<TABLE>
<CAPTION>
MID CAP VALUE
PORTFOLIO
Period from January 2,
1997* to June 30, 1997
Selected Per Share Data and Ratios (Unaudited)
- --------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period $ 10.00
--------
Income From Investment Operations
Net Investment Income 0.02
Net Realized and Unrealized Gain 1.89
--------
Total From Investment Operations 1.91
--------
Net Asset Value, End of Period $ 11.91
========
Total Return 19.10%
========
Ratios and Supplemental Data:
Net Assets, End of Period (000's) $ 4,922
Ratio of Expenses to Average Net Assets 1.05%**
Ratio of Net Investment Income to Average Net Assets 0.43%**
Portfolio Turnover Rate 76%
Average Commission Rate Per Share $ 0.0429
- --------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.06
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.45%**
Net Investment Income to Average Net Assets (0.97)%**
- --------------------------------------------------------------------------------
</TABLE>
*Commencement of operations
**Annualized
<TABLE>
<CAPTION>
EMERGING MARKETS
EQUITY PORTFOLIO
SIX MONTHS ENDED
JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- ------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.78
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.05
Net Realized and Unrealized Gain (Loss) 2.20
-------
Total From Investment Operations 2.25
-------
DISTRIBUTIONS
Net Investment Income --
-------
Total Distributions --
-------
NET ASSET VALUE, END OF PERIOD $ 12.03
=======
TOTAL RETURN 23.01%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $20,308
Ratio of Expenses to Average Net Assets 1.75%**
Ratio of Net Investment Income to Average Net Assets 1.03%**
Portfolio Turnover Rate 38%
Average Commission Rate:
Per Share $0.0012
As a Percentage of Trade Amount 0.40%
- -----------------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income (Loss) $ 0.12
Ratios Before Expense Limitation:
Expenses to Average Net Assets 4.49%**
Net Investment Loss to Average Net Assets (1.67)%**
- -----------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
The Prospectus for the U.S. Real Estate and Fixed Income Portfolios dated May 1,
1997, included as part of Post-Effective Amendment No. 1 to the Registration
Statement on Form N-1A of Morgan Stanley Universal Funds, Inc. (File No.
333-03013) as filed with the Securities and Exchange Commission on April 30,
1997, and in final form under Rule 497(c) on May 1, 1997, is hereby incorporated
by reference as if set forth herein. The Prospectus is supplemented by the
addition of a Financial Highlights section that includes Financial Highlights as
of June 30, 1997 filed herein to comply with the Fund's undertaking to file a
post-effective amendment which need not be certified within four to six months
of its effective date or commencement of operations, whichever is later.
<PAGE>
Supplement dated September 8, 1997
to the Prospectus dated May 1, 1997
U.S. Real Estate Portfolio
Fixed Income Portfolio
Portfolios of
Morgan Stanley Universal Funds, Inc. (the "Fund")
P.O. Box 2798
Boston, Massachusetts
02208-2798
----------
The Prospectus is hereby amended and supplemented as follows: The following
section is added on page 3 of the Prospectus:
FINANCIAL HIGHLIGHTS
The following table provides financial highlights for the U.S. Real Estate
Portfolio for the period March 3, 1997 through June 30, 1997, and for the Fixed
Income Portfolio for the period January 2, 1997 through June 30, 1997, and are
part of the Fund's unaudited financial statements which are included in the
Fund's current Statement of Additional Information and in the Fund's Semi-Annual
Report to Shareholders for the six months ended June 30, 1997.
<TABLE>
<CAPTION>
U.S. REAL ESTATE FIXED INCOME
PORTFOLIO PORTFOLIO
PERIOD FROM MARCH 3, PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997 1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 $10.00
------- ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.10 0.25
Net Realized and Unrealized Gain 0.27 0.10
------- ------
Total From Investment Operations 0.37 0.35
------- ------
NET ASSET VALUE, END OF PERIOD $ 10.37 $10.35
======= ======
TOTAL RETURN 3.70% 3.50%
======= ======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 6,025 $9,033
Ratio of Expenses to Average Net Assets 1.10%** 0.70%**
Ratio of Net Investment Income to Average Net Assets 3.52%** 5.27%**
Portfolio Turnover Rate 56% 100%
Average Commission Rate Per Share $0.0576 N/A
- ------------------------------------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.08 $ 0.04
Ratios Before Expense Limitation:
Expenses to Average Net Assets 3.71%** 1.59%**
Net Investment Income to Average Net Assets 0.90%** 4.38%**
- ------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
The Prospectus for the Fixed Income, High Yield, Equity Growth, Value, Mid Cap
Value, Global Equity, International Magnum, Emerging Markets Equity and Asian
Equity Portfolios dated May 1, 1997, included as part of Post-Effective
Amendment No. 1 to the Registration Statement on Form N-1A of Morgan Stanley
Universal Funds, Inc. (File No. 333-03013) as filed with the Securities and
Exchange Commission on April 30, 1997, and in final form under Rule 497(c) on
May 1, 1997, is hereby incorporated by reference as if set forth herein. The
Prospectus is supplemented by its Financial Highlights as of June 30, 1997
with respect to each of the foregoing portfolios and, except for the Emerging
Markets Equity Portfolio, are filed herein to comply with the Fund's undertaking
to file a post-effective amendment which need not be certified within four to
six months of each such Portfolio's effective date or commencement of
operations, whichever is later. With respect to the Emerging Markets Equity
Portfolio, Financial Highlights are filed herein to comply with the SEC's
requirements regarding the filing of financial statements filed in post-
effective amendments.
<PAGE>
Supplement dated September 8, 1997
to the Prospectus dated May 1, 1997
Fixed Income Portfolio
High Yield Portfolio
Equity Growth Portfolio
Value Portfolio
Mid Cap Value Portfolio
Global Equity Portfolio
International Magnum Portfolio
Emerging Markets Equity Portfolio
Asian Equity Portfolio
Portfolios of
Morgan Stanley Universal Funds, Inc. (the "Fund")
P.O. Box 2798
Boston, Massachusetts
02208-2798
----------
The Prospectus is hereby amended and supplemented as follows: The following
paragraph and tables are added after the first paragraph under the heading
"Financial Highlights" on page 3 of the Prospectus:
The following tables provide financial highlights for the Fixed Income,
High Yield, Equity Growth, Value, Mid Cap Value, Global Equity and International
Magnum Portfolios for the period January 2, 1997 through June 30, 1997, for the
Emerging Markets Equity Porfolio for the period January 1, 1997 through June 30,
1997, and for the Asian Equity Portfolio for the period March 3, 1997 through
June 30, 1997, and are part of the Fund's unaudited financial statements which
are included in the Fund's current Statement of Additional Information and in
the Fund's Semi-Annual Report to Shareholders for the six months ended June 30,
1997.
<TABLE>
<CAPTION>
FIXED INCOME PORTFOLIO HIGH YIELD PORTFOLIO
PERIOD FROM JANUARY 2, PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997 1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) (UNAUDITED)
- -------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.00 $10.00
------ ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.25 0.35
Net Realized and Unrealized Gain 0.10 0.23
------ ------
Total From Investment Operations 0.35 0.58
------ ------
NET ASSET VALUE, END OF PERIOD $10.35 $10.58
====== ======
TOTAL RETURN 3.50% 5.80%
====== ======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $9,033 $9,282
Ratio of Expenses to Average Net Assets 0.70%** 0.80%**
Ratio of Net Investment Income to
Average Net Assets 5.27%** 7.41%**
Portfolio Turnover Rate 100% 63%
- -------------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net
Investment Income $ 0.04 $ 0.02
Ratios Before Expense Limitation:
Expenses to Average Net Assets 1.59%** 1.30%**
Net Investment Income to Average
Net Assets 4.38%** 6.91%**
- -------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
EQUITY GROWTH PORTFOLIO MID CAP VALUE PORTFOLIO
PERIOD FROM JANUARY 2, PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997 1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) (UNAUDITED)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03 0.02
Net Realized and Unrealized Gain 1.50 1.89
------- -------
Total From Investment Operations 1.53 1.91
------- -------
NET ASSET VALUE, END OF PERIOD $ 11.53 $ 11.91
======= =======
TOTAL RETURN 15.30% 19.10%
======= =======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 3,959 $ 4,922
Ratio of Expenses to Average Net
Assets 0.85%** 1.05%**
Ratio of Net Investment Income to
Average Net Assets 0.60%** 0.43%**
Portfolio Turnover Rate 95% 76%
Average Commission Rate Per Share $0.0510 $0.0429
- --------------------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net
Investment Income (Loss) $ 0.85 $ 0.06
Ratios Before Expense Limitation:
Expenses to Average Net Assets 5.55%** 2.45%**
Net Investment Loss to Average
Net Assets (4.11)%** (0.97)%**
- --------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
VALUE PORTFOLIO
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- ---------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.07
Net Realized and Unrealized Gain 1.48
-------
Total From Investment Operations 1.55
-------
NET ASSET VALUE, END OF PERIOD $ 11.55
=======
TOTAL RETURN 15.50%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 5,264
Ratio of Expenses to Average Net Assets 0.85%**
Ratio of Net Investment Income to
Average Net Assets 1.82%**
Portfolio Turnover Rate 22%
Average Commission Rate Per Share $0.0585
- --------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.06
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.35%**
Net Investment Income to Average
Net Assets 0.32%**
- ---------------------------------------------------------------------
* Commencement of operations
** Annualized
</TABLE>
<TABLE>
<CAPTION>
GLOBAL EQUITY INTERNATIONAL
PORTFOLIO MAGNUM PORTFOLIO
PERIOD FROM JANUARY 2, PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997 1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) (UNAUDITED)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.08 0.09
Net Realized and Unrealized Gain 1.41 1.58
------- -------
Total From Investment Operations 1.49 1.67
------- -------
NET ASSET VALUE, END OF PERIOD $ 11.49 $ 11.67
======= =======
TOTAL RETURN 14.90% 16.70%
======= =======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 7,326 $14,643
Ratio of Expenses to Average Net
Assets 1.15%** 1.15%**
Ratio of Net Investment Income to
Average Net Assets 1.81%** 1.96%**
Portfolio Turnover Rate 3% 19%
Average Commission Rate:
Per Share $0.0225 $0.0170
As a Percentage of Trade Amount 0.17% 0.17%
- --------------------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net
Investment Income $ 0.06 $ 0.05
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.46%** 2.38%**
Net Investment Income to Average
Net Assets 0.50%** 0.73%**
- --------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
<TABLE>
<CAPTION>
EMERGING MARKETS
EQUITY PORTFOLIO
SIX MONTHS ENDED
JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- -----------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.78
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.05
Net Realized and Unrealized Gain (Loss) 2.20
-------
Total From Investment Operations 2.25
-------
DISTRIBUTIONS
Net Investment Income --
-------
Total Distributions --
-------
NET ASSET VALUE, END OF PERIOD $ 12.03
=======
TOTAL RETURN 23.01%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $20,308
Ratio of Expenses to Average Net Assets 1.75%**
Ratio of Net Investment Income to Average Net Assets 1.03%**
Portfolio Turnover Rate 38%
Average Commission Rate:
Per Share $0.0012
As a Percentage of Trade Amount 0.40%
- -----------------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income (Loss) $ 0.12
Ratios Before Expense Limitation:
Expenses to Average Net Assets 4.49%**
Net Investment Loss to Average Net Assets (1.67)%**
- -----------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
<TABLE>
<CAPTION>
ASIAN EQUITY
PORTFOLIO
PERIOD FROM MARCH 3,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- ---------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03
Net Realized and Unrealized Gain 0.63
-------
Total From Investment Operations 0.66
-------
NET ASSET VALUE, END OF PERIOD $ 10.66
=======
TOTAL RETURN 6.60%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $10,946
Ratio of Expenses to Average Net Assets 1.20%**
Ratio of Net Investment Income to
Average Net Assets 1.06%**
Portfolio Turnover Rate 49%
Average Commission Rate:
Per Share $0.0170
As a Percentage of Trade Amount 0.56%
- ---------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net
Investment Loss $ 0.04
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.55%**
Net Investment Loss to Average Net Assets (0.22)%**
- ---------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
The Prospectus for the Money Market, Fixed Income, High Yield, Core Equity,
Equity Growth, Value, Mid Cap Growth, Mid Cap Value, U.S. Real Estate,
International Fixed Income, Emerging Markets Debt, Global Equity, International
Magnum, Emerging Markets Equity, Asian Equity, Balanced and Multi-Asset-Class
Portfolios dated May 1, 1997, included as part of Post-Effective Amendment No. 1
to the Registration Statement on Form N-1A of Morgan Stanley Universal Funds,
Inc. (File No. 333-03013) as filed with the Securities and Exchange Commission
on April 30, 1997, and in final form under Rule 497(c) on May 1, 1997, is hereby
incorporated by reference as if set forth herein. The Prospectus is supplemented
by its Financial Highlights as of June 30, 1997 with respect to the Fixed
Income, High Yield, Equity Growth, Mid Cap Value, Value, Global Equity,
International Magnum, U.S. Real Estate and Asian Equity Portfolios and, except
for the Emerging Markets Equity Portfolio, are filed herein to comply with the
Fund's undertaking to file a post-effective amendment which need not be
certified within four to six months of each such Portfolio's effective date or
commencement of operations, whichever is later. With respect to the Emerging
Markets Equity Portfolio, Financial Highlights are filed herein to comply with
the SEC's requirements regarding the updating of financial statements filed in
post-effective amendments.
<PAGE>
Supplement dated September 8, 1997
to the Prospectus dated May 1, 1997
Money Market Portfolio
Fixed Income Portfolio
High Yield Portfolio
Core Equity Portfolio
Equity Growth Portfolio
Value Portfolio
Mid Cap Growth Portfolio
Mid Cap Value Portfolio
U.S. Real Estate Portfolio
International Fixed Income Portfolio
Emerging Markets Debt Portfolio
Global Equity Portfolio
International Magnum Portfolio
Emerging Markets Equity Portfolio
Asian Equity Portfolio
Balanced Portfolio
Multi-Asset-Class Portfolio
Portfolios of
Morgan Stanley Universal Funds, Inc. (the "Fund")
P.O. Box 2798
Boston, Massachusetts
02208-2798
----------
The Prospectus is hereby amended and supplemented as follows: The
following paragraph and tables are added after the first paragraph under the
heading "Financial Highlights" in page 3 of the Prospectus:
The following tables provide financial highlights for the Fixed Income,
High Yield, Equity Growth, Mid Cap Value, Value, Global Equity and International
Magnum Portfolios for the period January 2, 1997 through June 30, 1997, for the
U.S. Real Estate and Asian Equity Portfolios for the period March 3, 1997
through June 30, 1997, and for the Emerging Markets Equity Portfolio for the
period January 1, 1997 through June 30, 1997, and are part of the Fund's
unaudited financial statements which are included in the Fund's current
Statement of Additional Information and in the Fund's Semi-Annual Report to
Shareholders for the six months ended June 30, 1997.
<TABLE>
<CAPTION>
FIXED INCOME HIGH YIELD
PORTFOLIO PORTFOLIO
PERIOD FROM JANUARY 2, PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997 1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) (UNAUDITED)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.00 $10.00
------ ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.25 0.35
Net Realized and Unrealized Gain 0.10 0.23
------ ------
Total From Investment Operations 0.35 0.58
------ ------
NET ASSET VALUE, END OF PERIOD $10.35 $10.58
====== ======
TOTAL RETURN 3.50% 5.80%
====== ======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $9,033 $9,282
Ratio of Expenses to Average Net
Assets 0.70%** 0.80%**
Ratio of Net Investment Income to
Average Net Assets 5.27%** 7.41%**
Portfolio Turnover Rate 100% 63%
- -------------------------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment
Income $ 0.04 $ 0.02
Ratios Before Expense Limitation:
Expenses to Average Net Assets 1.59%** 1.30%**
Net Investment Income to Average
Net Assets 4.38%** 6.91%**
- -------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
<TABLE>
<CAPTION>
EQUITY MID-CAP VALUE
GROWTH PORTFOLIO PORTFOLIO
PERIOD FROM JANUARY 2, PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997 1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) (UNAUDITED)
- -------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03 0.02
Net Realized and Unrealized Gain 1.50 1.89
------- -------
Total From Investment Operations 1.53 1.91
------- -------
NET ASSET VALUE, END OF PERIOD $ 11.53 $ 11.91
======= =======
TOTAL RETURN 15.30% 19.10%
======= =======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 3,959 $ 4,922
Ratio of Expenses to Average Net
Assets 0.85%** 1.05%**
Ratio of Net Investment Income to
Average Net Assets 0.60%** 0.43%**
Portfolio Turnover Rate 95% 76%
Average Commission Rate Per Share $0.0510 $0.0429
- -------------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment
Income (Loss) $ 0.85 $ 0.06
Ratios Before Expense Limitation:
Expenses to Average Net Assets 5.55%** 2.45%**
Net Investment Loss to Average Net
Assets (4.11)%** (0.97)%**
- -------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
<TABLE>
<CAPTION>
U.S. REAL
ESTATE PORTFOLIO VALUE PORTFOLIO
PERIOD FROM JANUARY 2, PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997 1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) (UNAUDITED)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.10 0.07
Net Realized and Unrealized Gain 0.27 1.48
------- -------
Total From Investment Operations 0.37 1.55
------- -------
NET ASSET VALUE, END OF PERIOD $ 10.37 $ 11.55
======= =======
TOTAL RETURN 3.70% 15.50%
======= =======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 6,025 $ 5,264
Ratio of Expenses to Average Net
Assets 1.10%** 0.85%**
Ratio of Net Investment Income to
Average Net Assets 3.52%** 1.82%**
Portfolio Turnover Rate 56% 22%
Average Commission Rate
Per Share $0.0576 $0.0585
- ----------------------------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment
Income $ 0.08 $ 0.06
Ratios Before Expense Limitation:
Expenses to Average Net Assets 3.71%** 2.35%**
Net Investment Income to Average
Net Assets 0.90%** 0.32%**
- ---------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
<TABLE>
<CAPTION>
GLOBAL EQUITY INTERNATIONAL
PORTFOLIO MAGNUM PORTFOLIO
PERIOD FROM JANUARY 2, PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997 1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) (UNAUDITED)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.08 0.09
Net Realized and Unrealized Gain 1.41 1.58
------- -------
Total From Investment Operations 1.49 1.67
------- -------
NET ASSET VALUE, END OF PERIOD $ 11.49 $ 11.67
======= =======
TOTAL RETURN 14.90% 16.70%
======= =======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 7,326 $14,643
Ratio of Expenses to Average Net
Assets 1.15%** 1.15%**
Ratio of Net Investment Income to
Average Net Assets 1.81%** 1.96%**
Portfolio Turnover Rate 3% 19%
Average Commission Rate:
Per Share $0.0225 $0.0170
As a Percentage of Trade Amount 0.17% 0.17%
- ---------------------------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment
Income $ 0.06 $ 0.05
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.46%** 2.38%**
Net Investment Income to Average
Net Assets 0.50%** 0.73%**
- ---------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
<TABLE>
<CAPTION>
EMERGING MARKETS
EQUITY PORTFOLIO
SIX MONTHS ENDED
JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- -----------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.78
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.05
Net Realized and Unrealized Gain (Loss) 2.20
-------
Total From Investment Operations 2.25
-------
DISTRIBUTIONS
Net Investment Income --
-------
Total Distributions --
-------
NET ASSET VALUE, END OF PERIOD $ 12.03
=======
TOTAL RETURN 23.01%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $20,308
Ratio of Expenses to Average Net Assets 1.75%**
Ratio of Net Investment Income to Average Net Assets 1.03%**
Portfolio Turnover Rate 38%
Average Commission Rate:
Per Share $0.0012
As a Percentage of Trade Amount 0.40%
- -------------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income (Loss) $ 0.12
Ratios Before Expense Limitation:
Expenses to Average Net Assets 4.49%**
Net Investment Loss to Average Net Assets (1.67)%**
- -------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
<TABLE>
<CAPTION>
ASIAN EQUITY
PORTFOLIO
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- ---------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03
Net Realized and Unrealized Gain 0.63
-------
Total From Investment Operations 0.66
-------
NET ASSET VALUE, END OF PERIOD $ 10.66
=======
TOTAL RETURN 6.60%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $10,946
Ratio of Expenses to Average Net
Assets 1.20%**
Ratio of Net Investment Income to
Average Net Assets 1.06%**
Portfolio Turnover Rate 49%
Average Commission Rate:
Per Share $0.0170
As a Percentage of Trade Amount 0.56%
- ---------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment
Loss $ 0.04
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.55%**
Net Investment Loss to Average
Net Assets (0.22)%**
- ---------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
The Prospectus for the Emerging Markets Debt Portfolio dated July 1, 1997, filed
with the Securities and Exchange Commission under Rule 497 on July 2, 1997 and
July 14, 1997, is hereby incorporated by reference as if set forth herein.
<PAGE>
The Prospectus for the Emerging Markets Debt, Global Equity, International
Magnum and Emerging Markets Equity Portfolios dated July 15, 1997, filed with
the Securities and Exchange Commission under Rule 497 on July 14, 1997, is
hereby incorporated by reference as if set forth herein. The Prospectus is
supplemented by its Financial Highlights as of June 30, 1997 with respect to
the Global Equity and International Magnum Portfolios and, except for the
Emerging Markets Equity Portfolio, are filed herein to comply with the Fund's
undertaking to file a post-effective amendment which need not be certified
within four to six months of each such Portfolio's effective date or
commencement of operations, whichever is later. With respect to the Emerging
Markets Equity Portfolio, Financial Highlights are filed herein to comply with
the SEC's requirements regarding the updating of financial statements filed in
post-effective amendments.
<PAGE>
Supplement dated September 8, 1997
to the Prospectus dated July 15, 1997
Emerging Markets Debt Portfolio
Global Equity Portfolio
International Magnum Portfolio
Emerging Markets Equity Portfolio
Portfolios of
Morgan Stanley Universal Funds, Inc. (the "Fund")
P.O. Box 2798
Boston, Massachusetts
02208-2798
-------------
The Prospectus is hereby amended and supplemented as follows: The following
paragraph and tables are added after the first paragraph under the heading
"Financial Highlights" on page 3 of the Prospectus:
The following tables provide financial highlights for the Global Equity and
International Magnum Portfolios for the period January 2, 1997 through June 30,
1997 and for the Emerging Markets Equity Portfolio for the period January 1,
1997 through June 30, 1997, and are part of the Fund's unaudited financial
statements which are included in the Fund's current Statement of Additional
Information and in the Fund's Semi-Annual Report to Shareholders for the six
months ended June 30, 1997.
<TABLE>
<CAPTION>
GLOBAL EQUITY INTERNATIONAL
PORTFOLIO MAGNUM PORTFOLIO
PERIOD FROM JANUARY 2, PERIOD FROM JANUARY 2
1997* TO JUNE 30, 1997 1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) (UNAUDITED)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.08 0.09
Net Realized and Unrealized Gain 1.41 1.58
------- -------
Total From Investment Operations 1.49 1.67
------- -------
NET ASSET VALUE, END OF PERIOD $ 11.49 $ 11.67
======= =======
TOTAL RETURN 14.90% 16.70%
======= =======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 7,326 $14,643
Ratio of Expenses to Average Net
Assets 1.15%** 1.15%**
Ratio of Net Investment Income to
Average Net Assets 1.81%** 1.96%**
Portfolio Turnover Rate 3% 19%
Average Commission Rate:
Per Share $0.0225 $0.0170
As a Percentage of Trade Amount 0.17% 0.17%
- --------------------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment
Income $ 0.06 $ 0.05
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.46%** 2.38%**
Net Investment Income to Average
Net Assets 0.50%** 0.73%**
- --------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
<TABLE>
<CAPTION>
EMERGING MARKETS
EQUITY PORTFOLIO
SIX MONTHS ENDED
JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- ---------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.78
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.05
Net Realized and Unrealized Gain (Loss) 2.20
-------
Total From Investment Operations 2.25
-------
DISTRIBUTIONS
Net Investment Income --
-------
Total Distributions --
-------
NET ASSET VALUE, END OF PERIOD $ 12.03
=======
TOTAL RETURN 23.01%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $20,308
Ratio of Expenses to Average Net Assets 1.75%**
Ratio of Net Investment Income to Average Net Assets 1.03%**
Portfolio Turnover Rate 38%
Average Commission Rate:
Per Share $0.0012
As a Percentage of Trade Amount 0.40%
- ---------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income (Loss) $ 0.12
Ratios Before Expense Limitation:
Expenses to Average Net Assets 4.49%**
Net Investment Loss to Average Net Assets (1.67)%**
- ---------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
The Statement of Additional Information dated May 1, 1997 and as supplemented by
supplements dated July 1, 1997 and July 15, 1997 (filed with the SEC on July 2,
1997 and July 14, 1997, respectively, under Rule 497), relating to the Fund's
Money Market, Fixed Income, High Yield, Core Equity, Equity Growth, Value, Mid
Cap Growth, Mid Cap Value, U.S. Real Estate, International Fixed Income,
Emerging Markets Debt, Global Equity, International Magnum, Emerging Markets
Equity, Asian Equity, Balanced and Multi-Asset-Class Portfolios and the audited
financial statements for the Emerging Markets Equity Portfolio for the fiscal
period ended December 31, 1996 and the unaudited financial statements for the
Fixed Income, Global Equity, Equity Growth (formally known as the "Growth
Portfolio"), High Yield, International Magnum, Mid Cap Value and Value
Portfolios for the fiscal period from January 2, 1997 to March 31, 1997, are
included as part of Post-Effective Amendment No. 1 to the Registration Statement
on Form N-1A of Morgan Stanley Universal Funds, Inc. (File No. 333-03013) as
filed with the Securities and Exchange Commission on April 30, 1997, and in
final form under Rule 497(c) on May 1, 1997 and as supplemented by supplements
dated July 1, 1997 and July 15, 1997 (filed with the SEC on July 2, 1997 and
July 14, 1997, respectively, under Rule 497), is hereby incorporated by
reference as if set forth herein. Included herewith as part of such Statement
of Additional Information are the Fund's unaudited financial statements and
notes thereon for the period ended June 30, 1997 for the Asian Equity, Emerging
Markets Equity, Global Equity, International Magnum, Equity Growth, Mid Cap
Value, U.S. Real Estate, Value, Emerging Markets Debt, Fixed Income and High
Yield Portfolios.
<PAGE>
Supplement dated September 8, 1997 to
Statement of Additional Information dated May 1, 1997
Previously Supplemented July 1, 1997 and July 15, 1997
Portfolios of
Morgan Stanley Universal Funds, Inc. (the "Fund")
P.O. Box 2798
Boston, Massachusetts 02208-2798
------------
The Statement of Additional Information for the Morgan Stanley Universal
Funds, Inc. (the "Fund") is hereby amended and supplemented by the following
unaudited financial statements for the Asian Equity, Emerging Markets Equity,
Global Equity, International Magnum, Equity Growth, Mid Cap Value, U.S. Real
Estate, Value, Emerging Markets Debt, Fixed Income and High Yield Portfolios of
the Fund for the periods ended June 30, 1997.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
ASIAN EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (97.2%)
CHINA (1.1%)
(a)35,000 First Tractor Co., Ltd., Class H............................ $ 23
44,000 Shenzhen Fangda Co., Ltd., Class B.......................... 64
(a)159,000 Zhehuang Expressway Co., Ltd., Class H...................... 39
-------
126
-------
HONG KONG (30.7%)
80,000 Cheung Kong Holdings Ltd.................................... 790
13,000 China Merchants Holdings International Co., Ltd............. 40
93,000 China Resources Enterprise Ltd.............................. 456
13,000 Hang Seng Bank Ltd.......................................... 185
49,000 Henderson Land Development Co., Ltd......................... 435
20,400 HSBC Holdings plc........................................... 613
36,000 New World Development Co., Ltd.............................. 215
32,000 Ng Fung Hong Ltd............................................ 48
58,000 Shanghai Industrial Holdings Ltd............................ 361
18,000 Sun Hung Kai Properties Ltd................................. 217
-------
3,360
-------
INDONESIA (9.4%)
(a)142,000 Astra International (Foreign)............................... 584
(d)27,500 Bimantara Citra (Foreign)................................... 48
(d)44,000 Mayora Indah (Foreign)...................................... 25
(a,d)113,500 Putra Surya Multidana (Foreign)............................. 181
(d)118,000 Telekomunikasi Indonesia (Foreign).......................... 193
-------
1,031
-------
KOREA (6.8%)
1,700 Hansol Paper Co............................................. 43
(d)2,600 Housing & Commercial Bank, Korea............................ 49
(a)5,037 Kookmin Bank GDR............................................ 106
3,400 Korea Electric Power Corp................................... 101
5,700 Korea Electric Power Corp. ADR.............................. 107
(a)82 Samsung Electronics GDR (New)............................... 5
(a)5,000 Samsung Electronics GDS (New)............................... 281
(d)3,330 Shinhan Bank Co., Ltd....................................... 48
-------
740
-------
MALAYSIA (13.7%)
99,000 Berjaya Group Bhd........................................... 122
10,000 Berjaya Sports Toto Bhd..................................... 47
40,000 Commerce Asset Holding Bhd.................................. 105
28,000 Dialog Group Bhd............................................ 405
19,000 Genting Bhd................................................. 91
14,000 Jaya Tiasa Holdings Bhd..................................... 70
19,000 Leader Universal Holdings Bhd............................... 34
1,000 Lityan Holdings Bhd......................................... 12
14,000 Malayan Banking Bhd......................................... 147
7,000 Malaysian Pacific Industries Bhd............................ 31
14,000 Malaysian Resources Corp. Bhd............................... 39
28,000 Multi-Purpose Holdings Bhd.................................. 39
22,000 Rashid Hussain Bhd.......................................... 140
36,000 Resorts World Bhd........................................... 108
15,000 United Engineers Ltd........................................ 108
-------
1,498
-------
PHILIPPINES (4.7%)
144,000 Ayala Land, Inc., Class B................................... 132
(a)581,000 Digital Telecommunications Philippines, Inc................. 56
(a)154,000 DMCI Holdings, Inc.......................................... 51
(a)87,000 Fil-Estate Land, Inc........................................ 26
39,400 Manila Electric Co., Class B................................ 194
183,000 SM Prime Holdings, Inc...................................... 54
-------
513
-------
SINGAPORE (15.5%)
7,000 Development Bank of Singapore Ltd. (Foreign)................ 88
21,000 Electronic Resources Ltd.................................... 33
88,000 NatSteel Ltd................................................ 224
8,400 Oversea-Chinese Banking Corp. (Foreign)..................... 87
(a)26,000 Pacific Century Regional Development........................ 36
19,000 Parkway Holdings Ltd........................................ 85
11,000 Singapore Press Holdings (Foreign).......................... 221
61,000 Summit Holdings Ltd......................................... 46
(a)120,000 Super Coffeemix Manufacturing Ltd........................... 100
10,000 United Overseas Bank Ltd. (Foreign)......................... 103
(a)108,000 Want Want Holdings.......................................... 359
110,000 Wing Tai Holdings Ltd....................................... 317
-------
1,699
-------
TAIWAN (11.7%)
(a)39,000 Acer, Inc................................................... 140
(a)22,500 Asustek Computer, Inc....................................... 298
14,000 Cathay Life Insurance Co., Ltd.............................. 80
(a)24,000 China Development Corp...................................... 124
41,600 Compal Electronics.......................................... 164
99,000 Far Eastern Textile Ltd..................................... 156
44,690 Formosa Plastics Corp....................................... 108
(a)25,000 Kuoyang Construction........................................ 60
46,200 Siliconware Precision Industries Co......................... 156
-------
1,286
-------
THAILAND (3.6%)
16,200 Bangkok Bank PCL (Foreign).................................. 111
24,000 Big C Supercenter PCL....................................... 8
30,000 CVD Entertainment PCL....................................... 51
(a)9,400 Eastern Water Resources Development & Management PCL........ 11
3,400 I.C.C. International PCL.................................... 11
(d)7,000 Nation Multimedia Group PCL (Foreign)....................... 15
(d)55,600 National Petrochemical PCL (Foreign)........................ 57
(d)5,000 Post Publishing PCL (Foreign)............................... 5
9,000 Quality House PCL........................................... 3
(d)27,000 Robinson Department Store PCL (Foreign)..................... 10
(a)4,000 Sino Thai Engineering & Construction PCL.................... 11
17,000 Thai Farmers Bank PCL (Foreign)............................. 72
1,000 Thai Rung Union Car PCL..................................... 4
(a,d)4,000 Thai Stanley Electric PCL (Foreign)......................... 8
5,000 Thai Storage Battery PCL.................................... 5
5,800 Thai Theparos Food Product PCL (Foreign).................... 9
-------
391
-------
TOTAL COMMON STOCKS (COST $9,873)............................................. 10,644
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
ASIAN EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
NO. OF VALUE
RIGHTS (000)
- -----------------------------------------------------------------------------------------------
<S> <C>
RIGHTS (0.1%)
MALAYSIA (0.0%)
(a)7,200 Commerce Asset Holding Bhd.................................. $ --
(a)3,142 Rashid Hussain Bhd.......................................... --
-------
--
-------
SINGAPORE (0.1%)
(a)10,500 Electronic Resources Ltd. Bhd............................... 7
-------
TOTAL RIGHTS (COST $0)........................................................ 7
-------
<CAPTION>
NO. OF
WARRANTS
- ---------------
<S> <C>
WARRANTS (0.0%)
MALAYSIA (0.0%)
(a)4,500 Commerce Asset Holding Bhd, expiring 3/16/02 (COST $0)...... 1
-------
TOTAL FOREIGN SECURITIES (97.3%) (COST $9,873)................................ 10,652
-------
<CAPTION>
FACE
AMOUNT
(000)
- ---------------
<S> <C>
SHORT-TERM INVESTMENT (6.3%)
REPURCHASE AGREEMENT (6.3%)
$693 Chase Securities, Inc. 5.70%, dated 6/30/97, due 7/1/97, to
be repurchased at $693, collateralized by U.S. Treasury
Notes, 5.625%, due 2/15/06, valued at $706 (COST $693).... 693
-------
FOREIGN CURRENCY (2.5%)
HKD 2 Hong Kong Dollar............................................ --
IDR 14,756 Indonesian Rupiah........................................... 6
MYR 2 Malaysian Ringgit........................................... 1
SGD 1 Singapore Dollar............................................ 1
TWD 7,342 Taiwan Dollar............................................... 264
-------
TOTAL FOREIGN CURRENCY (COST $272)............................................ 272
-------
TOTAL INVESTMENTS (106.1%) (COST $10,838*).................................... 11,617
-------
</TABLE>
<TABLE>
<S> <C> <C>
OTHER ASSETS (1.8%)
Cash...................................................................... $ 56
Receivable for Investments Sold........................................... 126
Due from Adviser.......................................................... 8
Dividends Receivable...................................................... 4
Receivable for Portfolio Shares Sold...................................... 2 196
-------
LIABILITIES (-7.9%)
Payable for Investments Purchased......................................... (817)
Custodian Fees Payable.................................................... (10)
Deferred Foreign Taxes Payable............................................ (4)
Administrative Fees Payable............................................... (4)
Net Unrealized Loss on Foreign Currency Exchange Contracts................ (2)
Other Liabilities......................................................... (30) (867)
------- -------
NET ASSETS (100%).................................................................... $10,946
=======
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
(000)
- ------------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
Applicable to 1,026,507 outstanding $0.001 par value shares (authorized 500,000,000
shares)............................................................................ $ 10.66
=======
NET ASSETS CONSIST OF:
Paid in Capital...................................................................... $10,277
Undistributed Net Investment Income.................................................. 35
Accumulated Net Realized Loss........................................................ (139)
Unrealized Appreciation on Investments and Foreign Currency Translations (Net of
foreign taxes of $4)............................................................... 773
--------
NET ASSETS........................................................................... $10,946
=======
</TABLE>
FOREIGN CURRENCY EXCHANGE CONTRACT INFORMATION:
Under the terms of foreign currency exchange contracts open at June 30, 1997,
the Portfolio is obligated to deliver or is to receive foreign currency in
exchange for U.S. dollars as indicated below:
<TABLE>
<CAPTION>
CURRENCY IN EXCHANGE
TO DELIVER VALUE SETTLEMENT FOR VALUE NET UNREALIZED
(000) (000) DATE (000) (000) GAIN (LOSS) (000)
- ---------- ----- ---------- ----------- ----- -----------------
<S> <C> <C> <C> <C> <C>
U.S.$ 1 $ 1 7/2/97 THB 19 $ 1 $ --
THB 6,876 261 8/18/97 U.S.$ 259 259 (2)
----- ----- ----
$ 262 $ 260 $ (2)
===== ===== ====
</TABLE>
- ---------------
(a) -- Non-income producing security
(d) -- Securities (totaling $639 or 5.8% of net assets at June 30, 1997)
valued at fair value -- See Note A-1 to financial statements.
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
GDS -- Global Depositary Shares
PCL -- Public Company Limited
THB -- Thai Baht
- ---------------
*At June 30, 1997, cost and unrealized appreciation (depreciation) for U.S.
Federal income tax purposes of the investments of the Asian Equity Portfolio
were:
<TABLE>
<CAPTION>
NET
COST APPRECIATION (DEPRECIATION) APPRECIATION
(000) (000) (000) (000)
- --------- ------------- --------------- ---------------
<S> <C> <C> <C>
$10,566 $1,182 $(403) $779
</TABLE>
- --------------------------------------------------------------------------------
For the period ended June 30, 1997, purchases and sales of investment securities
for the Asian Equity Portfolio, other than long-term U.S. Government securities
and short-term investments, were approximately $13,636,000 and $3,636,000,
respectively.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
ASIAN EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION
<TABLE>
<CAPTION>
VALUE % OF
SECTOR DIVERSIFICATION (000) NET ASSETS
- ---------------------- ------- ----------
<S> <C> <C>
Capital Equipment....................... $ 1,139 10.4%
Consumer Products....................... 2,503 22.9
Energy.................................. 807 7.4
Finance................................. 4,719 43.1
Materials............................... 433 4.0
Multi-Industry.......................... 247 2.2
Services................................ 804 7.3
Other................................... 965 8.8
------- --------
Total Investments....................... $11,617 106.1%
======= ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKETS EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (86.6%)
ARGENTINA (2.0%)
(a)1,150 Nortel ADR.................................................. $ 31
1,020 Telecom Argentina ADR....................................... 53
6,780 Telefonica Argentina ADR.................................... 235
2,885 YPF ADR..................................................... 89
-------
408
-------
BRAZIL (15.1%)
3,874,000 Banco Bradesco (Preferred).................................. 39
423,000 Brahma (Preferred).......................................... 322
3,330 Brahma ADR (Preferred)...................................... 51
(a)190 Celesc GDR, Class B (Preferred)............................. 26
6,008,000 CEMIG (Preferred)........................................... 310
2,710 CEMIG ADR (Preferred)....................................... 136
(a)361,400 CRT (Preferred)............................................. 544
110,000 Coneminas (Preferred)....................................... 43
573,000 Eletrobras.................................................. 320
2,677 Eletrobras ADR.............................................. 75
950 Eletrobras ADR, Class B (Preferred)......................... 28
103,000 Eletrobras, Class B (Preferred)............................. 61
174,000 Itaubanco (Preferred)....................................... 98
89,000 Lightpar.................................................... 35
1,159,000 Lojas Arapua (Preferred).................................... 19
1,305 Lojas Arupua ADR (Preferred)................................ 22
552,000 Lojas Renner (Preferred).................................... 28
(a)1,470 Pao de Acucar ADR (Preferred)............................... 34
634,000 Petrobras (Preferred)....................................... 176
833,000 Telebras.................................................... 113
1,977 Telebras ADR (Preferred).................................... 300
955,000 Telebras (Preferred)........................................ 145
(a)88,000 TELESP...................................................... 26
27,836 TELESP (Preferred).......................................... 9
(a)2,955 Unibanco GDR (Preferred).................................... 110
-------
3,070
-------
CHILE (0.6%)
1,510 CCU ADR..................................................... 33
695 Enersis ADR................................................. 25
1,700 Santa Isabel ADR............................................ 55
-------
113
-------
CHINA (0.1%)
64,000 Guangshen Railway Co. Ltd., Class H......................... 28
-------
COLOMBIA (0.2%)
86,000 Banco de Colombia........................................... 32
-------
EGYPT (0.7%)
1,750 Commercial International Bank............................... 37
1,200 Eastern Tobacco............................................. 30
1,000 Helwan Portland Cement Co................................... 21
650 North Cairo Flour Mills Co.................................. 34
1,000 Tora Portland Cement........................................ 25
-------
147
-------
HONG KONG (2.5%)
7,000 Cheung Kong Holdings Ltd.................................... 69
(a)30,000 China Everbright-IHD Holdings Ltd........................... 90
90,000 China Resources Beijing Land................................ 67
27,000 China Resources Enterprise Ltd.............................. 132
4,000 Hutchison Whampoa Ltd....................................... 35
5,000 New World Development Co., Ltd.............................. 30
9,000 Shanghai Industrial Holdings Ltd............................ 56
64,000 Zhenhai Rifining and Chemical Co. Ltd., Class H............. 23
-------
502
-------
HUNGARY (0.4%)
(a)950 MOL Magyar Olaj-es Gazipari Rt. GDR......................... 21
350 Pannonplast Rt.............................................. 18
280 Richter Gedeon Rt........................................... 26
(a)1,200 Tisza Vegyi Kombinat Rt. GDR................................ 20
-------
85
-------
INDIA (6.8%)
2,500 Century Textiles and Industries Ltd. GDR.................... 133
(a)60,000 Crompton Greaves Ltd. GDR................................... 177
25,000 Indian Petrochemicals Corp. Ltd. GDR........................ 353
(g)55,500 Morgan Stanley India Investment Fund, Inc................... 718
-------
1,381
-------
INDONESIA (4.6%)
60,000 Astra International (Foreign)............................... 247
(d)80,004 Bank International Indonesia (Foreign)...................... 69
(d)171,000 Bank Negara Indonesia (Foreign)............................. 109
(d)37,000 Bimantara Citra (Foreign)................................... 65
(d)24,000 Gudang Garam (Foreign)...................................... 101
(d)21,000 Hanjaya Mandala Sampoerna (Foreign)......................... 80
(d)64,000 Indah Kiat Pulp & Paper Corp. (Foreign)..................... 37
(d)27,000 Indofood Sukses Makmur (Foreign)............................ 62
(d)59,000 Matahari Putra Prima (Foreign).............................. 119
(d)9,000 Mayora Indah (Foreign)...................................... 5
(d)4,000 Putra Surya Multidana (Foreign)............................. 6
(d)22,000 Telekomunikasi Indonesia (Foreign).......................... 36
-------
936
-------
ISRAEL (2.9%)
(a)5,150 Blue Square-Israel Ltd. ADR................................. 89
6,467 Elbit Ltd................................................... 22
6,466 Elbit Medical Imaging Ltd................................... 46
6,466 Elbit Systems Ltd........................................... 77
160 First International Bank of Israel Ltd., Class 5............ 123
940 Koor Industries Ltd......................................... 83
48,950 Supersol Ltd................................................ 157
-------
597
-------
KOREA (5.2%)
13,300 Cho Hung Bank Co. Ltd. GDR.................................. 96
2,000 Hansol Paper................................................ 51
(d)4,400 Housing & Commercial Bank, Korea............................ 82
(d)1,227 Kookmin Bank................................................ 23
6,409 Kookmin Bank GDR............................................ 135
2,000 Korea Electric Power Corp................................... 60
2,600 Korea Electric Power Corp. ADR.............................. 49
1,100 LG Information and Communication Ltd........................ 136
990 Pohang Iron & Steel Co. Ltd. ADR............................ 32
(a)5,896 Samsung Electronics GDR..................................... 331
(d)4,040 Shinhan Bank Co., Ltd....................................... 58
-------
1,053
-------
MALAYSIA (0.9%)
18,000 Commerce Asset Holding Bhd.................................. 48
10,000 Genting Bhd................................................. 48
4,000 Rashid Hussain Bhd.......................................... 25
13,000 Resorts World Bhd........................................... 39
4,000 United Engineers Ltd........................................ 29
-------
189
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKETS EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (cont.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------------------------------------------
<C> <S> <C>
MEXICO (10.0%)
4,035 Apasco...................................................... $ 29
(a)37,979 Banacci, Class B............................................ 98
(a)370 Bancomer ADR, Class B....................................... 4
(a)192,325 Bancomer, Class B........................................... 93
2,405 Carso ADR................................................... 34
9,260 Carso, Class A1............................................. 64
7,790 Cemex ADR, Class B.......................................... 75
33,304 Cemex CPO................................................... 145
920 Cemex CPO ADR............................................... 8
6,300 Cemex, Class B.............................................. 31
1,273 Cifra, Series A............................................. 2
10,410 Cifra, Series C............................................. 17
1,372 Desc ADR.................................................... 40
70,240 FEMSA, Class B.............................................. 419
(a)3,303 Gruma, Class B.............................................. 15
(a)418 Gruma GDR (Registered)...................................... 8
27,255 Kimberly, Class A........................................... 109
10,005 Maseca, Class B............................................. 11
(a)10,285 Televisa CPO GDR............................................ 312
10,810 Telmex ADR, Class L......................................... 516
-------
2,030
-------
PAKISTAN (3.0%)
84,000 Fauji Fertilizer Co., Ltd................................... 165
(a)7,600 Hub Power Co................................................ 8
15,000 Pakistan State Oil Co., Ltd................................. 121
406,700 Pakistan Telecommunications, Class A........................ 309
-------
603
-------
PERU (0.4%)
3,520 Tel Peru, Class A ADR....................................... 92
-------
POLAND (1.6%)
(a)2,425 Agros Holding S.A., Class C................................. 65
442 Agros Holding S.A., Class D................................. 9
(a)800 Bank Handlowy W Warszawie................................... 9
1,000 Bank Rozwoju Eksportu S.A................................... 21
450 Bank Slaski S.A............................................. 32
19,760 BIG S.A..................................................... 24
1,550 Debica S.A.................................................. 32
7,000 Elektrim S.A................................................ 61
(a)3,500 Exbud S.A................................................... 35
8,400 Polifarb Wroclaw S.A........................................ 31
-------
319
-------
RUSSIA (7.5%)
(a)3,500 Gazprom ADR................................................. 58
(a)3,400 LUKoil Holding ADR.......................................... 267
(a)2,800 Mosenergo ADR............................................... 119
(a)45,000 Rostelecom.................................................. 175
3,400 Surgutneftegaz ADR.......................................... 182
(a)800 Tatneft ADR................................................. 85
(a)800,000 Unified Energy Systems...................................... 289
(a)9,600 Unified Energy Systems GDR.................................. 358
-------
1,533
-------
SOUTH AFRICA (8.1%)
4,100 Amalgamated Banks of South Africa........................... 29
10,500 Barlow Ltd.................................................. 114
2,900 De Beers Centenary AG....................................... 107
13,000 Ellerine Holdings Ltd....................................... 93
10,100 First National Bank Holdings Ltd............................ 87
35,000 Gencor Ltd.................................................. 161
14,400 Illovo Sugar Ltd............................................ 33
10,000 Persetel Holdings Ltd....................................... 70
56,500 Polfin Ltd.................................................. 106
24,200 Rembrandt Group Ltd......................................... 258
27,600 Reunert Ltd................................................. 95
37,000 Sasol Ltd................................................... 485
-------
1,638
-------
TAIWAN (3.9%)
(a)22,000 Acer, Inc................................................... 79
(a)19,500 Asustek Computer, Inc....................................... 258
(a)9,000 China Development Corp...................................... 47
(a)36,400 Compal Electronics.......................................... 144
81,000 Far Eastern Textile Ltd..................................... 127
14,170 Formosa Plastics Corp....................................... 34
(a)18,300 Kuoyang Construction........................................ 44
17,640 Siliconware Precision Industries Co......................... 60
-------
793
-------
THAILAND (5.1%)
6,800 Advanced Ino Service PCL.................................... 59
12,000 Advanced Info Service PCL (Foreign)......................... 86
31,800 Bangkok Bank PCL (Foreign).................................. 219
1,000 Banpu PCL (Foreign)......................................... 15
7,300 Central Pattana PCL (Foreign)............................... 10
18,000 Industrial Finance (Foreign)................................ 23
5,000 Lanna Lignite PCL........................................... 35
5,000 National Finance and Securities PCL......................... 3
23,000 National Finance and Securities PCL (Foreign)............... 14
18,800 National Petrochemical PCL.................................. 19
8,000 Shinawatra Computer Co. PCL................................. 55
(d)11,600 Shinawatra Computer Co. PCL (Foreign)....................... 80
1,500 Siam Cement PCL (Foreign)................................... 26
25,100 Siam Commercial Bank PCL (Foreign).......................... 103
47,100 Thai Farmers Bank PCL (Foreign)............................. 200
3,000 Tipco Asphalt PCL........................................... 16
16,900 United Communications Industry PCL.......................... 70
-------
1,033
-------
TURKEY (3.8%)
1,131,000 Bossa....................................................... 25
1,542,000 Eregli Demir Celik.......................................... 257
(a)2,062,843 Garanti Bankasi A.S......................................... 78
3,766,044 Turkiye Garanti Bankasi A.S................................. 142
370,000 Vestel Elektronik Sanayi ve Ticaret A.S..................... 21
11,159,400 Yapi ve Kredi Bankasi A.S................................... 255
-------
778
-------
VENEZUELA (0.3%)
820 Cantv ADR................................................... 35
11,100 Electricidad de Caracas..................................... 18
-------
53
-------
ZIMBABWE (0.9%)
29,850 Delta Corp. Ltd............................................. 46
53,400 Meikles Africa Ltd.......................................... 131
-------
177
-------
TOTAL COMMON STOCKS (COST $15,348)............................................ 17,590
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKETS EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
NO. OF VALUE
RIGHTS (000)
- ------------------------------------------------------------------------------------------
<C> <S> <C>
RIGHTS (0.1%)
BRAZIL (0.0%)
(a,d)11,850 CRT......................................................... $ 3
-------
INDONESIA (0.1%)
(a,d)57,600 Indah Kiat Pulp & Paper Corp. (Foreign), expiring 8/18/97... 10
-------
MALAYSIA (0.0%)
(a,d)3,600 Commerce Asset Holding Bhd, expiring 7/23/97................ --
-------
TOTAL RIGHTS (COST $0)........................................................ 13
-------
<CAPTION>
NO. OF
WARRANTS
- ---------------
<C> <S> <C>
WARRANTS (0.0%)
HONG KONG (0.0%)
(a)2 Lai Sun Hotels Int, expiring 4/30/99........................ --
-------
INDONESIA (0.0%)
(a)7,112 Bank International Indonesia (Foreign), expiring 1/17/00.... 3
(a)10,240 Indah Kiat Pulp & Paper Corp. (Foreign), expiring 7/11/02... 2
-------
5
-------
MALAYSIA (0.0%)
(a)2,250 Commerce Asset Holding Bhd, expiring 3/16/02................ --
-------
TOTAL WARRANTS (COST $0)...................................................... 5
-------
TOTAL FOREIGN SECURITIES (86.7%) (COST $15,348)............................... 17,608
-------
<CAPTION>
FACE
AMOUNT
(000)
- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENT (10.8%)
REPURCHASE AGREEMENT (10.8%)
$2,188 Chase Securities, Inc. 5.70%, dated 6/30/97, due 7/1/97, to
be repurchased at $2,188, collateralized by U.S. Treasury
Notes, 5.625%, due 2/15/06, valued at $2,229 (COST
$2,188)................................................... 2,188
-------
FOREIGN CURRENCY (1.3%)
BRC 21 Brazilian Real.............................................. 20
COP 1,085 Colombian Pesos............................................. 1
HKD 3 Hong Kong Dollar............................................ --
IDR 726 Indonesian Rupiah........................................... --
KRW 16,650 Korea Won................................................... 19
MYR 2 Malaysian Ringgit........................................... 1
MXP 25 Mexican Peso................................................ 3
PKR 5,092 Pakistani Rupee............................................. 126
PHP 10 Philippines Peso............................................ --
PLZ 49 Polish Zloty................................................ 15
ZAR 69 South African Rand.......................................... 15
TWD 1,551 Taiwan Dollar............................................... 56
TRL 444,838 Turkish Lira................................................ 3
-------
TOTAL FOREIGN CURRENCY (COST $260)............................................ 259
-------
</TABLE>
<TABLE>
<CAPTION>
VALUE
(000)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
TOTAL INVESTMENTS (98.8%) (COST $17,796*)...........................................$20,055
-------
OTHER ASSETS (6.2%)
Cash................................................................ $ 423
Deferred Organization Costs......................................... 437
Receivable for Portfolio Shares Sold................................ 150
Receivable for Investments Sold..................................... 138
Dividends Receivable................................................ 75
Due from Adviser.................................................... 49 1,272
-----
LIABILITIES (-5.0%)
Payable for Investments Purchased................................... (840)
Professional Fees Payable........................................... (77)
Payable for Closed Foreign Currency Contracts....................... (32)
Custodian Fees Payable.............................................. (31)
Administrative Fees Payable......................................... (10)
Payable for Portfolio Shares Redeemed............................... (4)
Deferred Foreign Taxes Payable...................................... (1)
Other Liabilities................................................... (24) (1,019)
----- -------
NET ASSETS (100%).............................................................. $20,308
=======
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
Applicable to 1,688,498 outstanding $0.001 par value shares
(authorized 500,000,000 shares).............................................. $ 12.03
=======
NET ASSETS CONSIST OF:
Paid in Capital................................................................ $17,343
Undistributed Net Investment Income............................................ 83
Accumulated Net Realized Gain.................................................. 654
Unrealized Appreciation on Investments and Foreign Currency Translations
(Net of foreign taxes of $1)................................................. 2,228
--------
NET ASSETS..................................................................... $20,308
========
</TABLE>
- --------------------------------------------------------------------------------
FOREIGN CURRENCY EXCHANGE CONTRACT INFORMATION:
Under the terms of foreign currency exchange contracts open at June 30, 1997,
the Portfolio is obligated to deliver U.S. Dollars in exchange for foreign
currency as indicated below:
<TABLE>
<CAPTION>
NET
CURRENCY IN EXCHANGE UNREALIZED
TO DELIVER VALUE SETTLEMENT FOR VALUE GAIN (LOSS)
(000) (000) DATE (000) (000) (000)
- ----------- ----- ----------- ------------ ----- ---------------
<S> <C> <C> <C> <C> <C>
U.S.$46 $46 7/1/97 ZAR 209 $46 $ --
U.S.$26 26 7/2/97 THB 672 26 --
--- --- -----
$72 $72 $ --
=== === =====
</TABLE>
- ---------------
(a) -- Non-income producing security
(d) -- Security valued at fair value -- See Note A-1 to financial statements.
(g) -- The Fund is advised by an affiliate.
ADR -- American Depositary Receipt
CPO -- Certificate of Participation
GDR -- Global Depositary Receipt
PCL -- Public Company Limited
THB -- Thai Baht
- ---------------
*At June 30, 1997, cost and unrealized appreciation (depreciation) for U.S.
Federal income tax purposes of the investments of the Emerging Markets Equity
Portfolio were:
<TABLE>
<CAPTION>
NET
COST APPRECIATION (DEPRECIATION) APPRECIATION
(000) (000) (000) (000)
------- ------------- --------------- -------------
<S> <C> <C> <C>
$17,536 $3,255 $(995) $2,260
</TABLE>
- --------------------------------------------------------------------------------
For the period ended June 30, 1997, purchases and sales of investment securities
for the Emerging Markets Equity Portfolio, other than long-term U.S. Government
securities and short-term investments, were approximately $9,400,000 and
$5,271,000, respectively.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKETS EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION
<TABLE>
<CAPTION>
VALUE % OF
SECTOR DIVERSIFICATION (000) NET ASSETS
- ---------------------- --------- ----------
<S> <C> <C>
Capital Equipment..................................... $ 1,819 9.0%
Consumer Goods........................................ 365 1.8
Consumer Products..................................... 2,638 13.0
Energy................................................ 2,380 11.7
Finance............................................... 3,014 14.8
Materials............................................. 1,967 9.7
Multi-Industry........................................ 1,450 7.1
Services.............................................. 3,975 19.6
Other................................................. 2,447 12.1
--------- ----
Total Investments..................................... $ 20,055 98.8%
========= ====
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
GLOBAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<S> <C>
COMMON STOCKS (90.9%)
AUSTRALIA (0.8%)
14,300 CSR Ltd. ........................................ $ 55
--------
BELGIUM (1.3%)
1,220 Delhaize-Le Lion, S.A............................ 64
600 G.I.B. Holdings Ltd. ............................ 29
--------
93
--------
CANADA (1.4%)
1,350 Potash Corp. of Saskatchewan, Inc. .............. 102
--------
FRANCE (3.9%)
2,000 Banque Nationale de Paris........................ 83
190 Bongrain S.A. ................................... 74
400 Groupe Danone.................................... 66
370 Peugeot S.A. .................................... 36
700 Scor S.A......................................... 28
--------
287
--------
GERMANY (6.6%)
1,300 BASF AG.......................................... 48
3,100 Bayer AG......................................... 119
100 Karstadt AG...................................... 36
1,500 VEBA AG.......................................... 85
50 Viag AG.......................................... 23
225 Volkswagen AG.................................... 171
--------
482
--------
HONG KONG (1.4%)
28,000 Jardine Strategic Holdings, Inc. ................ 106
--------
IRELAND (2.3%)
3,600 Clondalkin Group plc (Units)..................... 35
26,500 Irish Life plc................................... 136
--------
171
--------
JAPAN (10.4%)
11 East Japan Railway Co. .......................... 56
4,000 Fuji Photo Film Ltd. ............................ 161
5,000 Hitachi Ltd. .................................... 57
5,000 Kao Corp. ....................................... 69
5,000 Matsushita Electric Industries Co., Ltd. ........ 101
4 Nippon Telegraph & Telephone Corp. .............. 38
29,000 NKK Corp. ....................................... 62
12,000 Sumitomo Marine & Fire Insurance Co. ............ 99
1,000 TDK Corp. ....................................... 73
2,200 Toyo Seikan Kaisha Ltd. ......................... 49
--------
765
--------
NETHERLANDS (2.8%)
200 Akzo Nobel N.V................................... 27
2,100 ING Groep N.V.................................... 97
1,100 Philips Electronics N.V.......................... 79
--------
203
--------
SPAIN (0.6%)
3,600 Iberdrola S.A.................................... 45
--------
SWITZERLAND (4.5%)
(a)35 Ascom Holdings AG (Bearer)....................... 49
160 Forbo Holding AG (Registered).................... 69
90 Holderbank Financiere Glarus AG, Class B
(Bearer)....................................... 85
70 Nestle S.A. (Registered)......................... 93
40 Sulzer AG (Registered)........................... 34
--------
330
--------
UNITED KINGDOM (12.6%)
5,800 Bass plc......................................... 71
3,000 B.A.T. Industries plc............................ 27
3,850 Burmah Castrol plc............................... 65
9,155 Christian Salvesen plc........................... 43
6,500 Grand Metropolitan plc........................... 62
10,400 Imperial Tobacco Group plc....................... 67
20,000 Matthews (Bernard) plc........................... 38
5,000 Peninsular & Oriental Steam Navigation Co. ...... 50
15,950 Racal Electronics plc............................ 64
8,200 Reckitt & Colman plc............................. 122
7,000 Rolls-Royce plc.................................. 27
3,600 Scottish Hydro-Electric plc...................... 25
12,900 Tate & Lyle plc.................................. 96
4,200 Unilever plc..................................... 120
1,600 WPP Group plc.................................... 47
--------
924
--------
UNITED STATES (42.3%)
2,100 Albertson's, Inc. ............................... 77
(a)900 AMR Corp. ....................................... 83
2,004 Ascent Entertainment Group, Inc. ................ 18
1,200 AT&T Corp. ...................................... 42
1,600 BankBoston Corp. ................................ 115
2,000 Boise Cascade Corp. ............................. 71
1,350 Borg-Warner Automotive, Inc. .................... 73
3,800 Browning-Ferris Industries, Inc. ................ 126
4,100 Comsat Corp. .................................... 98
(a)5,200 Data General Corp. .............................. 135
(a)14,200 Egghead, Inc. ................................... 56
2,100 Enhance Financial Services Group, Inc. .......... 92
2,000 Equitable Companies, Inc. ....................... 67
2,200 Federal-Mogul Corp. ............................. 77
800 Finova Group, Inc. .............................. 61
(a)3,100 GenRad, Inc. .................................... 70
700 Georgia Pacific Corp. ........................... 60
3,230 Greenfield Industries, Inc. ..................... 87
1,600 Greenpoint Financial Corp. ...................... 107
2,700 Houghton Mifflin Co. ............................ 180
2,730 IBP, Inc. ....................................... 64
(a)9,600 InteliData Technologies Corp. ................... 46
1,300 Limited (The), Inc. ............................. 26
500 MBIA, Inc. ...................................... 56
1,500 MCI Communications Corp. ........................ 57
1,400 Mellon Bank Corp. ............................... 63
(a)1,350 NCR Corp. ....................................... 40
2,360 Penncorp Financial Group, Inc. .................. 91
450 Pennzoil Co. .................................... 35
3,800 Pharmacia & Upjohn, Inc. ........................ 132
4,500 Philip Morris Cos., Inc. ........................ 200
1,300 Polaroid Corp. .................................. 72
(a)2,950 Rohr, Inc. ...................................... 65
1,700 Tandy Corp. ..................................... 95
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
- --------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
GLOBAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
UNITED STATES (CONT.)
1,700 Tecumseh Products Co., Class A................... $ 102
2,450 Terra Nova (Bermuda) Holdings Ltd................ 52
(a)950 Toys "R" Us, Inc................................. 33
2,400 UST Corp......................................... 54
(a)3,800 Waban, Inc....................................... 122
--------
3,100
--------
TOTAL COMMON STOCKS (COST $5,880)............................... 6,663
--------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
(000)
- ------------
SHORT-TERM INVESTMENT (9.5%)
REPURCHASE AGREEMENT (9.5%)
$697 Chase Securities, Inc. 5.70%, dated 6/30/97, due
7/1/97, to be repurchased at $697,
collateralized by U.S. Treasury Notes, 5.625%,
due 2/15/06, valued at $711 (COST $697)........ 697
--------
FOREIGN CURRENCY (0.3%)
<S> <C>
BEF 52 Belgian Franc....................................... 1
DEM 1 Deutsche Mark....................................... 1
FRF 69 French Franc........................................ 12
JPY 301 Japanese Yen........................................ 3
NLG 1 Netherlands Guilder................................. 1
CHF 2 Swiss Franc......................................... 1
--------
TOTAL FOREIGN CURRENCY (COST $20)............................... 19
--------
TOTAL INVESTMENTS (100.7%) (COST $6,597*)....................... 7,379
--------
<CAPTION>
<S> <C> <C>
OTHER ASSETS (0.9%)
Cash.................................................. $ 1
Receivable for Portfolio Shares Sold.................. 35
Dividends Receivable.................................. 19
Foreign Withholding Tax Reclaim Receivable............ 5
Receivable for Investments Sold....................... 4 64
------
LIABILITIES (-1.6%)
Payable for Investments Purchased..................... (86)
Professional Fees Payable............................. (14)
Administrative Fees Payable........................... (3)
Custodian Fees Payable................................ (3)
Investment Advisory Fees Payable...................... (2)
Other Liabilities..................................... (9) (117)
------ -------
NET ASSETS (100%)............................................... $ 7,326
=======
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
(000)
- --------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
Applicable to 637,379 outstanding $0.001 par value shares
(authorized 500,000,000 shares)............................... $ 11.49
=======
NET ASSETS CONSIST OF:
Paid in Capital................................................. $ 6,483
Undistributed Net Investment Income............................. 50
Accumulated Net Realized Gain................................... 10
Unrealized Appreciation on Investments and Foreign Currency
Translations.................................................. 783
-------
NET ASSETS...................................................... $ 7,326
=======
</TABLE>
- ---------------
(a) -- Non-income producing security
- ---------------
*At June 30, 1997, cost and unrealized appreciation (depreciation) for U.S.
Federal income tax purposes of the investments of the Global Equity Portfolio
were:
<TABLE>
<CAPTION>
NET
COST APPRECIATION (DEPRECIATION) APPRECIATION
(000) (000) (000) (000)
--------- --------------- ----------------- -----------------
<S> <C> <C> <C>
$6,577 $869 $(86) $783
</TABLE>
- --------------------------------------------------------------------------------
For the period ended June 30, 1997, purchases and sales of investment securities
for the Global Equity Portfolio, other than long-term U.S. Government securities
and short-term investments, were $6,026,000 and $151,000, respectively.
- --------------------------------------------------------------------------------
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION
<TABLE>
<CAPTION>
VALUE % OF
SECTOR DIVERSIFICATION (000) NET ASSETS
- ---------------------- ------- ----------
<S> <C> <C>
Capital Equipment.......................... $1,392 19.0%
Consumer Products.......................... 1,669 22.8
Energy..................................... 80 1.1
Finance.................................... 1,200 16.4
Materials.................................. 556 7.6
Mining..................................... 161 2.2
Multi-Industry............................. 370 5.0
Services................................... 942 12.8
Tobacco.................................... 293 4.0
Other...................................... 716 9.8
------ -----
Total Investments.......................... $7,379 100.7%
====== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
INTERNATIONAL MAGNUM PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (92.3%)
AUSTRALIA (2.9%)
8,528 Amcor Ltd................................................... $ 57
5,300 Broken Hill Proprietary Co., Ltd............................ 78
4,600 Commonwealth Bank of Australia.............................. 55
2,300 Lend Lease Corp., Ltd....................................... 49
11,700 News Corp., Ltd............................................. 56
3,830 National Australia Bank, Ltd................................ 55
12,200 WMC Ltd..................................................... 77
-------
427
-------
AUSTRIA (0.6%)
1,000 Boehler-Uddeholm AG......................................... 78
130 Radex-Heraklith Industriebet AG............................. 5
-------
83
-------
BELGIUM (0.5%)
1,640 G.I.B. Holdings Ltd......................................... 78
-------
DENMARK (1.3%)
1,700 BG Bank A/S................................................. 94
1,650 Unidanmark A/S, Class A (Registered)........................ 93
-------
187
-------
FINLAND (1.3%)
210 Kone Oy, Class B............................................ 25
12,100 Merita Ltd., Class A........................................ 40
7,900 Rautaruukki Oy.............................................. 83
2,300 Valmet Corp................................................. 40
-------
188
-------
FRANCE (6.6%)
300 Alcatel Alsthom............................................. 38
950 Banque Nationale de Paris................................... 39
140 Bongrain S.A................................................ 55
770 Cie de Saint Gobain......................................... 112
800 Elf Aquitaine S.A........................................... 86
600 Eridania Beghin-Say S.A..................................... 90
620 Groupe Danone............................................... 103
1,450 Lafarge S.A................................................. 90
1,800 Legris Industries S.A....................................... 85
(a)900 SGS-Thomson Microelectronics N.V............................ 71
1,220 Total S.A., Class B......................................... 123
4,500 Usinor Sacilor.............................................. 81
-------
973
-------
GERMANY (5.4%)
2,160 BASF AG..................................................... 80
2,070 Bayer AG.................................................... 80
70 Buderus AG.................................................. 39
4,840 Gerresheimer Glas AG........................................ 81
5,200 Lufthansa AG................................................ 100
(a)410 Metro AG.................................................... 45
1,700 VEBA AG..................................................... 96
200 Viag AG..................................................... 91
240 Volkswagen AG............................................... 182
-------
794
-------
HONG KONG (4.3%)
11,000 Cheung Kong Holdings Ltd.................................... 109
15,000 China Resources Enterprise Ltd.............................. 74
8,000 Dao Heng Bank Group Ltd..................................... 44
6,000 Henderson Land Development Co., Ltd......................... 53
7,000 Hutchison Whampoa Ltd....................................... 60
4,000 HSBC Holdings plc........................................... 120
9,000 New World Development Co., Ltd.............................. 54
10,000 Shanghai Industrial Holdings Ltd............................ 62
4,000 Sun Hung Kai Properties Ltd................................. 48
-------
624
-------
ITALY (2.5%)
18,000 Editoriale L'Expresso S.p.A................................. 60
8,600 Marzotto (Gaetano) & Figli S.p.A............................ 72
29,800 Sogefi S.p.A................................................ 75
22,500 Stet Di Risp (NCS).......................................... 78
39,000 Telecom Italia S.p.A., Di Risp (NCS)........................ 77
-------
362
-------
JAPAN (29.5%)
8,000 Amada Co., Ltd.............................................. 71
7,000 Asahi Tec Corp.............................................. 34
5,000 Canon, Inc.................................................. 136
4,000 Dai Nippon Printing Co., Ltd................................ 90
11,000 Daicel Chemical Industry Ltd................................ 43
6,000 Daifuku Co., Ltd............................................ 79
5,000 Daikin Industries Ltd....................................... 45
1,200 FamilyMart.................................................. 59
3,000 Fuji Machine Manufacturing Co............................... 109
3,000 Fuji Photo Film Ltd......................................... 121
4,000 Fujitec Co., Ltd............................................ 47
9,000 Fujitsu Ltd................................................. 125
15,000 Furukawa Electric Co........................................ 95
3,000 Hitachi Credit Corp......................................... 58
11,000 Hitachi Ltd................................................. 123
5,000 Inabata & Co................................................ 34
11,000 Kaneka Corp................................................. 69
3,000 Kurita Water Industries..................................... 80
1,000 Kyocera Ltd................................................. 79
4,000 Kyudenko Co., Ltd........................................... 34
3,000 Lintec...................................................... 55
6,000 Matsushita Electric Industries Ltd.......................... 121
19,000 Mitsubishi Chemical Corp.................................... 62
4,000 Mitsubishi Estate Co., Ltd.................................. 58
12,000 Mitsubishi Heavy Industries Ltd............................. 92
4,000 Mitsumi Electric Co., Ltd................................... 95
2,000 Murata Manufacturing Co., Ltd............................... 80
10,000 NEC Corp.................................................... 140
3,000 Nifco, Inc.................................................. 31
1,000 Nintendo Corp., Ltd......................................... 84
12 Nippon Telegraph & Telephone................................ 115
12,000 Nissan Motor Co............................................. 93
5,000 Nissha Printing............................................. 58
10,000 Obayashi Corp............................................... 67
9,000 Ricoh Co., Ltd.............................................. 118
3,000 Rinnai Corp................................................. 64
1,000 Sangetsu Co., Ltd........................................... 21
4,000 Sankyo Co., Ltd............................................. 134
7,000 Sanwa Shutter............................................... 63
6,000 Sekisui Chemical Co......................................... 61
6,000 Sekisui House Ltd........................................... 61
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
INTERNATIONAL MAGNUM PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------------------------------------------
<C> <S> <C>
JAPAN (CONT.)
1,000 Shimamura Co., Ltd.......................................... $ 36
1,500 Sony Corp................................................... 131
8,000 Sumitomo Marine & Fire Insurance Co......................... 66
6,000 Suzuki Motor Co., Ltd....................................... 76
13,000 Taisei Corp................................................. 60
2,000 TDK Corp.................................................... 147
3,200 Tokyo Electron Ltd.......................................... 153
17,000 Toshiba Corp................................................ 109
4,000 Toyota Motor Corp........................................... 118
10,000 Tsubakimoto Chain........................................... 61
3,000 Yamaha Corp................................................. 55
4,000 Yamanouchi Pharmaceutical Co................................ 108
-------
4,324
-------
MALAYSIA (1.9%)
15,000 Berjaya Group Bhd........................................... 18
10,000 Commerce Asset Holding Bhd.................................. 26
1,000 Dialog Group Bhd............................................ 15
3,000 Genting Bhd................................................. 14
6,000 IJM Corp. Bhd............................................... 13
4,000 Malayan Banking Bhd......................................... 42
5,000 Malaysian International Shipping Bhd
(Foreign)................................................. 13
6,000 Malaysian Resources Corp., Bhd.............................. 17
5,000 Rashid Hussain Bhd.......................................... 32
5,000 Resorts World Bhd........................................... 15
13,000 Sime Darby Bhd.............................................. 43
4,000 United Engineers (Malaysia) Ltd............................. 29
-------
277
-------
NETHERLANDS (5.6%)
4,250 ABN Amro Holdings N.V....................................... 79
860 Akzo Nobel N.V.............................................. 118
306 Hollandsche Beton Groep N.V................................. 70
2,636 ING Groep N.V............................................... 122
1,300 KLM Royal Dutch Airlines N.V................................ 40
1,100 Koninklijke Bijendorf Beheer N.V............................ 77
4,100 Koninklijke KNP BT N.V...................................... 93
1,600 Koninklijke Van Ommeren N.V................................. 62
2,300 Philips Electronics N.V..................................... 165
-------
826
-------
NEW ZEALAND (0.3%)
15,600 Fletcher Challenge Paper.................................... 38
-------
NORWAY (1.1%)
10,700 Den Norske Bank ASA......................................... 42
4,900 Saga Petroleum ASA, Class B................................. 85
(a)4,300 Storebrand ASA.............................................. 26
-------
153
-------
SINGAPORE (2.1%)
6,000 Datacraft Asia Ltd.......................................... 19
2,000 Development Bank of Singapore Ltd.
(Foreign)................................................. 25
11,000 Electronic Resources Ltd.................................... 17
14,000 NatSteel Ltd................................................ 36
2,400 Oversea-Chinese Banking Corp. (Foreign)..................... 25
(a)12,000 Pacific Century Regional Development........................ 17
2,000 Parkway Holdings Ltd........................................ 9
2,000 Singapore Press Holdings (Foreign).......................... 40
21,000 Summit Holdings Ltd......................................... 16
(a)24,000 Super Coffeemix Manufacturing Ltd........................... 20
3,000 United Overseas Bank Ltd. (Foreign)......................... 31
(a)10,800 Want Want Holdings.......................................... 36
6,000 Wing Tai Holdings Ltd....................................... 17
-------
308
-------
SPAIN (2.9%)
1,030 Banco Bilbao Vizcaya S.A. (Registered)...................... 84
7,700 Iberdrola S.A............................................... 97
3,800 Telefonica de Espana S.A.................................... 110
11,420 Uralita S.A................................................. 128
-------
419
-------
SWEDEN (3.4%)
1,700 Esselte AB, Class B......................................... 40
3,800 Nordbanken AB............................................... 128
1,200 Pharmacia & Upjohn, Inc..................................... 40
1,640 Skandia Forsakrings AB...................................... 60
2,160 S.K.F. AB, Class B.......................................... 56
2,650 Sparbaken Sverige AB, Class A............................... 59
3,100 Spectra-Physics AB, Class A................................. 56
1,960 Svenska Handelsbanken, Class A.............................. 63
-------
502
-------
SWITZERLAND (7.2%)
(a)30 Baloise Holdings Ltd. (Registered).......................... 72
50 Bobst AG (Bearer)........................................... 85
270 Forbo Holdings AG (Registered).............................. 116
130 Holderbank Financiere Glarus AG, Class B (Bearer)........... 123
120 Nestle S.A. (Registered).................................... 158
50 Novartis AG (Registered).................................... 80
340 Oerlikon-Buehrle Holding AG (Registered).................... 40
65 Schindler Holding AG (Registered)........................... 83
60 Schweizerisch Industrie-Gesellschaft Holdings
(Registered).............................................. 89
140 Sulzer AG (Registered)...................................... 120
(a)250 Valora Holding AG (Registered).............................. 53
100 Zurich Versicherungs (Registered)........................... 40
-------
1,059
-------
UNITED KINGDOM (12.9%)
9,450 Associated British Foods plc................................ 81
7,654 Bank of Scotland............................................ 49
7,900 Bass plc.................................................... 96
9,000 BAT Industries plc.......................................... 80
10,800 BG plc...................................................... 40
13,200 British Telecommunications plc.............................. 98
7,100 Burmah Castrol plc.......................................... 120
23,000 Christian Salvesen plc...................................... 108
17,600 Courtaulds Textiles plc..................................... 90
14,800 Grand Metropolitan plc...................................... 142
21,000 Imperial Tobacco Group plc.................................. 135
23,867 John Mowlem & Co. plc....................................... 49
16,000 Kwik Save Group plc......................................... 81
3,900 Peninsular & Oriental Steam Navigation Co................... 39
600 Premier Farnell plc......................................... 5
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
INTERNATIONAL MAGNUM PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM (CONT.)
20,000 Racal Electronics plc....................................... $ 80
8,279 Reckitt & Colman plc........................................ 124
12,116 Royal & Sun Alliance Insurance Group plc.................... 90
10,500 Scottish Hydro-Electric plc................................. 73
16,300 Tate & Lyle plc............................................. 121
3,100 Unilever plc................................................ 89
25,000 WPP Group plc............................................... 102
-------
1,892
-------
TOTAL COMMON STOCKS (COST $12,187)............................................ 13,514
-------
PREFERRED STOCKS (1.5%)
GERMANY (1.5%)
240 Dyckerhoff AG............................................... 87
930 Hornbach Holding AG......................................... 77
110 Suedzucker AG............................................... 59
-------
TOTAL PREFERRED STOCKS (COST $192)............................................ 223
-------
</TABLE>
<TABLE>
<CAPTION>
NO. OF
RIGHTS
- ---------------
<C> <S> <C>
RIGHTS (0.0%)
MALAYSIA (0.0%)
(a)2,000 Commerce Asset Holding Bhd, expiring 7/23/97................ --
-------
SWITZERLAND (0.0%)
(a)100 Sulzer AG, expiring 7/11/97................................. --
-------
TOTAL RIGHTS (COST $0)........................................................ --
-------
</TABLE>
<TABLE>
<CAPTION>
NO. OF
WARRANTS
- ---------------
<C> <S> <C>
WARRANTS (0.0%)
MALAYSIA (0.0%)
(a)1,250 Commerce Asset Holding Bhd, expiring 3/16/02................ --
(a)714 Rashid Hussain Bhd, expiring 12/31/02....................... --
-------
TOTAL WARRANTS (COST $0)...................................................... --
-------
TOTAL FOREIGN SECURITIES (93.8%) (COST $12,379)............................... 13,737
-------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
(000)
- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENT (10.2%)
REPURCHASE AGREEMENT (10.2%)
$1,489 Chase Securities, Inc. 5.70%, dated 6/30/97, due 7/1/97, to
be repurchased at $1,489, collateralized by U.S. Treasury
Notes, 5.625%, due 2/15/06, valued at $1,518
(COST $1,489)............................................. 1,489
-------
</TABLE>
<TABLE>
<CAPTION>
AMOUNT VALUE
(000) (000)
- -----------------------------------------------------------------------------------------------
<C> <S> <C>
FOREIGN CURRENCY (1.2%)
BEF 779 Belgian Franc............................................... $ 22
DEM 8 Deutsche Mark............................................... 5
FRF 85 French Franc................................................ 15
ITL 7,332 Italian Lira................................................ 4
JPY 11,781 Japanese Yen................................................ 103
NLG 55 Netherlands Guilder......................................... 28
SGD 1 Singapore Dollar............................................ --
ESP 166 Spanish Peseta.............................................. 1
CHF 5 Swiss Franc................................................. 3
-------
TOTAL FOREIGN CURRENCY (COST $182)............................................ 181
-------
TOTAL INVESTMENTS (105.2%) (COST $14,050*).................................... 15,407
-------
OTHER ASSETS (1.7%)
Cash................................................................... $ 91
Receivable for Portfolio Shares Sold................................... 49
Dividends Receivable................................................... 46
Net Unrealized Gain on Foreign Currency Exchange Contracts............. 45
Foreign Withholding Tax Reclaim Receivable............................. 10
Receivable for Investments Sold........................................ 8 249
---------
LIABILITIES (-6.9%)
Payable for Investments Purchased...................................... (966)
Custodian Fees Payable................................................. (16)
Investment Advisory Fees Payable....................................... (6)
Administrative Fees Payable............................................ (5)
Professional Fees Payable.............................................. (2)
Payable for Closed Foreign Currency Contracts.......................... (1)
Other Liabilities...................................................... (17) (1,013)
--------- --------
NET ASSETS (100%)................................................................... $ 14,643
========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
Applicable to 1,255,156 outstanding $0.001 par value shares (authorized 500,000,000
shares)........................................................................... $ 11.67
========
NET ASSETS CONSIST OF:
Paid in Capital..................................................................... $ 12,802
Undistributed Net Investment Income................................................. 109
Accumulated Net Realized Gain....................................................... 328
Unrealized Appreciation on Investments and Foreign Currency Translations............
1,404
--------
NET ASSETS.......................................................................... $ 14,643
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
INTERNATIONAL MAGNUM PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
FOREIGN CURRENCY EXCHANGE CONTRACT INFORMATION:
Under the terms of foreign currency exchange contracts open at June 30, 1997,
the Portfolio is obligated to deliver or is to receive foreign currency in
exchange for U.S. dollars as indicated below:
<TABLE>
<CAPTION>
CURRENCY IN EXCHANGE
TO DELIVER VALUE SETTLEMENT FOR VALUE NET UNREALIZED GAIN
(000) (000) DATE (000) (000) (LOSS) (000)
--------------- --------- ----------- ----------- --------- -------------------
<S> <C> <C> <C> <C> <C>
U.S.$ 125 $ 125 8/18/97 NLG 242 $ 124 $(1)
U.S.$ 125 125 8/18/97 CHF 178 123 (2)
NLG 641 328 8/18/97 U.S.$ 338 338 10
CHF 19 13 8/18/97 U.S.$ 13 13 --
CHF 499 344 8/18/97 U.S.$ 351 351 7
JPY 100,442 884 8/25/97 U.S.$ 900 900 16
DEM 590 340 8/29/97 U.S.$ 344 344 4
U.S.$ 100 100 8/29/97 DEM 172 99 (1)
BEF 1,475 41 8/29/97 DEM 42 42 1
U.S.$ 25 25 8/29/97 BEF 886 25 --
U.S.$ 150 150 9/15/97 FRF 868 149 (1)
FRF 2,218 379 9/15/97 U.S.$ 391 391 12
------ ------ ---
$2,854 $2,899 $45
====== ====== ===
</TABLE>
- ---------------
(a) -- Non-income producing security
NCS -- Non Convertible Shares
*At June 30, 1997, cost and unrealized appreciation (depreciation) for U.S.
Federal income tax purposes of the investments of the International Magnum
Portfolio were:
<TABLE>
<CAPTION>
Net
Cost Appreciation (Depreciation) Appreciation
(000) (000) (000) (000)
- --------- ------------- --------------- ---------------
<S> <C> <C> <C>
$13,868 $1,533 $(175) $1,358
</TABLE>
- ----------------------------------------------------------------
For the period ended June 30, 1997, purchases and sales of investment securities
for the International Magnum Portfolio other than long-term U.S. Government
securities and short-term investments were $14,030,000 and $1,701,000,
respectively.
- ----------------------------------------------------------------
- --------------------------------------------------------------------------------
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION
<TABLE>
<CAPTION>
Value % of
Sector Diversification (000) Net Assets
- ------------------------------------------------------------------------------ --------- -------------
<S> <C> <C>
Capital Equipment............................................................. $ 2,606 17.8%
Consumer Products............................................................. 2,982 20.4
Electrical and Electronics.................................................... 1,717 11.7
Energy........................................................................ 615 4.2
Finance....................................................................... 2,304 15.7
Materials..................................................................... 1,569 10.7
Multi-Industry................................................................ 271 1.9
Services...................................................................... 1,673 11.4
Other......................................................................... 1,670 11.4
--------- -----
Total Investments............................................................. $ 15,407 105.2%
========= =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EQUITY GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------------
<S> <C>
COMMON STOCK (94.9%)
CAPITAL GOODS--CONSTRUCTION (10.4%)
AEROSPACE & DEFENSE (10.4%)
900 Boeing Co........................................ $ 48
700 Gulfstream Aerospace Corp........................ 21
(a)700 Litton Industries, Inc........................... 34
900 McDonnell Douglas Corp........................... 62
900 Thiokol Corp..................................... 63
2,200 United Technologies Corp......................... 182
------
TOTAL CAPITAL GOODS--CONSTRUCTION............................. 410
------
CONSUMER CYCLICAL (23.4%)
AUTOMOTIVE (1.0%)
500 Ford Motor Co.................................... 19
(a)500 O'Reilly Automotive, Inc......................... 19
------
38
------
BROADCAST--RADIO & TELEVISION (3.0%)
(a)1,300 Clear Channel Communications, Inc................ 80
(a)400 Heftel Broadcasting Corp., Class A............... 22
400 Time Warner, Inc................................. 19
------
121
------
ENTERTAINMENT & LEISURE (2.6%)
(a)2,900 GTECH Holdings Corp.............................. 94
300 WMS Industries, Inc.............................. 7
------
101
------
FOOD SERVICE (2.3%)
1,700 Cracker Barrel Old Country Store, Inc............ 45
600 Einstein/Noah Bagel Corp......................... 7
800 McDonald's Corp.................................. 39
------
91
------
GAMING & LODGING (9.2%)
(a)5,700 HFS, Inc......................................... 331
2,000 International Game Technology.................... 35
------
366
------
PUBLISHING (2.4%)
200 Gannett Co., Inc................................. 20
(a)6,300 K-III Communications Corp........................ 75
------
95
------
RETAIL--FOOD (0.3%)
400 Dominick's Supermarkets, Inc..................... 11
------
RETAIL--GENERAL (2.6%)
1,300 Home Depot, Inc.................................. 90
(a)500 Woolworth Corp................................... 12
------
102
------
TOTAL CONSUMER CYCLICAL....................................... 925
------
CONSUMER STAPLES (13.0%)
BEVERAGES (2.0%)
3,400 Coca Cola Enterprises, Inc....................... 78
------
CIGARETTES (6.6%)
5,900 Philip Morris Cos., Inc.......................... 262
------
FOOD (1.1%)
900 Campbell Soup Co................................. $ 45
------
HOSPITAL SUPPLIES & SERVICES (3.3%)
700 Aetna, Inc....................................... 71
800 Becton Dickinson & Co............................ 40
500 Columbia/HCA Healthcare Corp..................... 20
------
131
------
TOTAL CONSUMER STAPLES........................................ 516
------
DIVERSIFIED (11.6%)
1,100 Allied Signal, Inc............................... 92
(a)2 Berkshire Hathaway, Inc., Class A................ 94
600 Hillenbrand Industries........................... 29
1,700 ITT Industries, Inc.............................. 44
900 Loews Corp....................................... 90
1,100 Textron, Inc..................................... 73
2,000 Viad Corp........................................ 39
------
TOTAL DIVERSIFIED............................................. 461
------
ENERGY (2.3%)
COAL, GAS, & OIL (2.3%)
(a)200 AES Corp......................................... 14
300 Amoco Corp....................................... 26
200 British Petroleum Co. plc ADR.................... 15
(a)300 Diamond Offshore Drilling, Inc................... 23
100 Schlumberger, Ltd................................ 13
------
TOTAL ENERGY.................................................. 91
------
FINANCE (20.5%)
BANKING (7.0%)
1,000 BankAmerica Corp................................. 65
400 Chase Manhattan Corp............................. 39
400 Citicorp......................................... 48
400 H.F. Ahmanson & Co............................... 17
400 Wells Fargo & Co................................. 108
------
277
------
FINANCIAL SERVICES (5.8%)
800 American Express Co.............................. 60
700 Charles Schwab Corp.............................. 28
100 CIGNA Corp....................................... 18
500 Franklin Resources, Inc.......................... 36
700 Merrill Lynch & Co............................... 42
200 Ocwen Financial Corp............................. 7
300 Student Loan Marketing Association............... 38
------
229
------
INSURANCE (7.7%)
1,000 Ace Ltd.......................................... 74
1,800 CMAC Investment Corp............................. 86
(a)500 CNA Financial Corp............................... 53
400 Equitable of Iowa Cos............................ 22
500 MGIC Investment Corp............................. 24
200 Progressive Corp................................. 17
1,200 USF&G Corp....................................... 29
------
305
------
TOTAL FINANCE................................................. 811
------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EQUITY GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------------------
<S> <C> <C>
MATERIALS (1.0%)
CHEMICALS (1.0%)
300 E.I. DuPont de Nemours & Co...................... $ 19
500 Monsanto Co...................................... 21
------
TOTAL MATERIALS............................................... 40
------
SERVICES (2.5%)
PROFESSIONAL SERVICES (0.3%)
400 Snyder Communications, Inc....................... 11
------
TRANSPORTATION (2.2%)
(a)500 AMR Corp......................................... 46
(a)1,200 US Airways Group, Inc............................ 42
------
88
------
TOTAL SERVICES................................................ 99
------
TECHNOLOGY (10.2%)
COMPUTERS (1.6%)
(a)300 Compaq Computer Corp............................. 30
(a)200 Dell Computer Corp............................... 23
(a)300 Seagate Technology, Inc.......................... 11
------
64
------
ELECTRONICS (2.9%)
(a)400 Applied Materials, Inc........................... 28
200 Intel Corp....................................... 28
400 Linear Technology Corp........................... 21
300 Motorola, Inc.................................... 23
200 Texas Instruments, Inc........................... 17
------
117
------
OFFICE EQUIPMENT (2.2%)
700 International Business Machines Corp............. 63
300 Xerox Corp....................................... 24
------
87
------
SOFTWARE SERVICES (2.9%)
(a)300 America Online, Inc.............................. 17
(a)500 Microsoft Corp................................... 63
(a)400 Oracle Corp...................................... 20
(a)400 Sterling Commerce, Inc........................... 13
------
113
------
TELECOMMUNICATIONS (0.6%)
(a)200 Globalstar Telecommunications Ltd................ 6
(a)200 Iridium World Communications Ltd................. 3
(a)500 WorldCom, Inc.................................... 16
------
25
------
TOTAL TECHNOLOGY.............................................. 406
------
TOTAL COMMON STOCK (COST $3,388)................................ 3,759
------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (15.4%)
REPURCHASE AGREEMENT (15.4%)
$608 Chase Securities, Inc. 5.70%, dated 6/30/97,
due 7/1/97, to be repurchased at $608,
collateralized by U.S. Treasury Notes, 5.625%,
due 2/15/06, valued at $620, (COST $608)....... $ 608
------
TOTAL INVESTMENTS (110.3%) (COST $3,996*)....................... 4,367
------
</TABLE>
<TABLE>
<S> <C> <C>
OTHER ASSETS (2.1%)
Dividends Receivable....................... $ 3
Receivable for Investments Sold............ 27
Due from Adviser........................... 27
Receivable for Portfolio Shares Sold....... 26 83
-----
LIABILITIES (-12.4%)
Payable for Investments Purchased.......... (415)
Custodian Fees Payable..................... (36)
Professional Fees Payable.................. (14)
Bank Overdraft............................. (6)
Administrative Fees Payable................ (2)
Other Liabilities.......................... (18) (491)
----- ------
NET ASSETS (100%) $3,959
======
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
Applicable to 343,470 outstanding $0.001 par
value shares (authorized 500,000,000 shares).................. $11.53
======
NET ASSETS CONSIST OF:
Paid in Capital................................................. $3,519
Undistributed Net Investment Income............................. 9
Accumulated Net Realized Gain................................... 60
Unrealized Appreciation on Investments.......................... 371
------
NET ASSETS...................................................... $3,959
======
</TABLE>
- ---------------
(a) -- Non-income producing security
ADR -- American Depositary Receipt
- ---------------
*At June 30, 1997, cost and unrealized appreciation (depreciation) for U.S.
Federal income tax purposes of the investments of the Equity Growth Portfolio
were:
<TABLE>
<CAPTION>
NET
COST APPRECIATION (DEPRECIATION) APPRECIATION
(000) (000) (000) (000)
- --------- --------------- ----------------- ---------------
<S> <C> <C> <C>
$3,996 $401 $(30) $371
</TABLE>
- --------------------------------------------------------------------------------
For the period ended June 30, 1997, purchases and sales of investment securities
for the Equity Growth Portfolio, other than long-term U.S. Government securities
and short-term investments, were $5,724,000 and $2,396,000, respectively.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
MID CAP VALUE PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (97.6%)
BASIC RESOURCES (2.5%)
400 H. B. Fuller Co.................................. $ 22
200 Oregon Steel Mills, Inc.......................... 4
(a)1,100 Owens-Illinois, Inc.............................. 34
1,100 P.H. Glatfelter Co............................... 22
200 Rohm & Haas Co................................... 18
(a)800 Tetra Technologies, Inc.......................... 20
------
120
------
CONSUMER DURABLES (5.2%)
100 Armstrong World Industries, Inc.................. 7
400 Callaway Golf Co................................. 14
(a)700 Champion Enterprises, Inc........................ 11
300 Ethan Allen Interiors, Inc....................... 17
(a)700 Furniture Brands International, Inc.............. 14
500 Harley-Davidson, Inc............................. 24
(a)900 Lear Corp........................................ 40
500 Mascotech, Inc................................... 10
600 PACCAR, Inc...................................... 28
700 Premark International, Inc....................... 19
600 Southdown, Inc................................... 26
(a)500 Tower Automotive, Inc............................ 21
(a)700 USG Corp......................................... 26
------
257
------
CONSUMER SERVICES (3.3%)
400 Hertz Corp., Class A............................. 14
100 Jostens, Inc..................................... 3
2,100 Journal Register Co.............................. 42
(a)500 MGM Grand, Inc................................... 18
800 McClatchy Newspapers, Inc., Class A.............. 24
200 New York Times Co., Class A...................... 10
(a)500 Valassis Communications, Inc..................... 12
100 Washington Post Co., Class B..................... 40
------
163
------
ENERGY (10.5%)
700 Apache Corp...................................... 23
(a)900 BJ Services Co................................... 48
500 Columbia Gas System, Inc......................... 33
(a)400 Cooper Cameron Corp.............................. 19
(a)400 Diamond Offshore Drilling, Inc................... 31
200 El Paso Natural Gas Co........................... 11
(a)1,200 ENSCO International, Inc......................... 63
(a)700 Global Marine, Inc............................... 16
400 National Fuel Gas Co............................. 17
400 NICOR, Inc....................................... 14
(a)2,600 Noble Drilling Corp.............................. 59
400 ONEOK, Inc....................................... 13
400 Pacific Enterprises.............................. 13
(a)600 Precision Drilling Corp.......................... 29
(a)800 Santa Fe International Corp...................... 27
400 Sun Co., Inc..................................... 12
500 Transocean Offshore, Inc......................... 36
800 Union Texas Petro Holdings, Inc.................. 17
(a)400 Varco International, Inc......................... 13
200 Vastar Resources, Inc............................ 7
(a)300 Weatherford Enterra, Inc......................... 12
------
513
------
FINANCE (19.9%)
BANKING (9.8%)
200 AMBAC, Inc....................................... 15
600 AmSouth Bancorp.................................. 23
400 Astoria Financial Corp........................... 19
300 City National Corp............................... 7
300 Collective Bancorp, Inc.......................... 13
800 Comerica, Inc.................................... 54
900 Community First Bankshares, Inc.................. 34
800 Cullen/Frost Bankers, Inc........................ 34
800 First Financial Corp. of Wisconsin............... 24
450 First of America Bank Corp....................... 20
300 FirstBank Puerto Rico............................ 8
300 MAF Bancorp, Inc................................. 13
800 National Commerce Bancorp........................ 18
1,400 North Fork Bancorp, Inc.......................... 30
400 Northern Trust Corp.............................. 19
900 Southtrust Corp.................................. 37
600 Summit Bancorp................................... 30
900 Union Planters Corp.............................. 47
200 UnionBanCal Corp................................. 14
500 Wilmington Trust Corp............................ 23
------
482
------
CREDIT & FINANCE (1.6%)
700 Capital One Financial Corp....................... 26
700 CMAC Investment Corp............................. 33
(a)200 Healthcare Financial Partners, Inc............... 4
100 Student Loan Marketing Association............... 13
------
76
------
INSURANCE (4.0%)
100 Chartwell Re Corp................................ 3
500 Everest Reinsurance Holdings, Inc................ 20
400 Hartford Life, Inc., Class A..................... 15
500 Mercury General Corp............................. 36
1,300 Nationwide Financial Services, Inc., Class A..... 35
400 Progressive Corp................................. 35
1,100 Reliance Group Holdings, Inc..................... 13
300 Torchmark Corp................................... 21
700 Western National Corp............................ 19
------
197
------
INVESTMENT RELATED COMPANIES (2.9%)
600 Bear Stearns Co., Inc............................ 21
1,400 Franklin Resources, Inc.......................... 102
300 Paine Webber Group, Inc.......................... 11
400 United Asset Management Corp..................... 11
------
145
------
REAL ESTATE INVESTMENT TRUSTS (1.6%)
2,300 CarrAmerica Realty Corp. REIT.................... 66
500 Kilroy Realty Corp. REIT......................... 13
------
79
------
TOTAL FINANCE............................................... 979
------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
- --------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
MID CAP VALUE PORTFOLIO
- --------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------
<C> <S> <C>
FOOD, TOBACCO & OTHER (4.4%)
400 Consolidated Cigar Holdings, Inc................. $ 11
800 Dean Foods Co.................................... 32
800 Dimon, Inc....................................... 21
200 Interstate Bakeries Corp......................... 12
300 Lancaster Colony Corp............................ 14
1,100 Schweitzer-Mauduit International, Inc............ 41
1,300 Tyson Foods, Inc., Class A....................... 25
1,700 Universal Corp. VA............................... 54
100 Universal Foods Corp............................. 4
------
214
------
HEALTH CARE (7.5%)
(a)500 Biogen, Inc...................................... 17
(a)600 Coherent, Inc.................................... 27
(a)1,100 FPA Medical Management, Inc...................... 26
(a)400 Health Care and Retirement Corp.................. 13
(a)2,500 Healthdyne Technologies, Inc..................... 43
(a)500 Marquette Medical Systems, Class A............... 11
(a)1,900 Nellcor Puritan Bennett, Inc..................... 35
(a)600 Personnel Group of America, Inc.................. 17
(a)200 Rotech Medical Corp.............................. 4
3,300 Sullivan Dental Products, Inc.................... 60
(a)800 Universal Health Services, Inc., Class B......... 31
(a)500 Vencor, Inc...................................... 21
(a)200 Watson Pharmaceuticals, Inc...................... 8
(a)1,000 Wellpoint Health Networks, Inc................... 46
600 Xomed Surgical Products, Inc..................... 12
------
371
------
HEAVY INDUSTRY/TRANSPORTATION (17.1%)
(a)2,400 AccuStaff, Inc................................... 57
400 Agco Corp........................................ 14
2,700 Air Express International Corp................... 107
1,600 Arnold Industries, Inc........................... 27
(a)1,000 Aviation Sales Co................................ 24
(a)1,700 CDI Corp......................................... 71
(a)300 Coltec Industries, Inc........................... 6
1,800 Crane Co......................................... 75
1,200 Danka Business Systems plc ADR................... 49
500 DONCASTERS plc ADR............................... 12
800 Expeditors International of Washington, Inc...... 23
400 Halter Marine Group, Inc......................... 10
(a)600 Hirsch International Corp., Class A.............. 13
100 Ingersoll Rand Co................................ 6
(a)500 Interim Services, Inc............................ 22
1,300 JLG Industries, Inc.............................. 18
400 Kaydon Corp...................................... 20
(a)750 Midwest Express Holdings, Inc.................... 20
2,000 Miller (Herman), Inc............................. 72
(a)2,200 OMI Corp......................................... 21
(a)1,400 Offshore Logistics, Inc.......................... 26
700 Precision Castparts Corp......................... 42
(a)400 SPS Technologies, Inc............................ 28
300 Thiokol Corp..................................... 21
600 Triumph Group, Inc............................... 19
(a)400 Tuboscope Vetco International Corp............... 8
(a)700 USA Waste Services, Inc.......................... 27
100 York International Corp.......................... 5
------
843
------
RETAIL (10.2%)
300 American Stores Co............................... 15
(a)700 Boston Chicken, Inc.............................. 10
400 Brylane, Inc..................................... 15
1,400 CVS Corp......................................... 72
(a)700 Designer Holdings Ltd............................ 7
1,500 Duty Free International, Inc..................... 28
(a)300 Fred Meyer, Inc.................................. 15
(a)500 Fruit of the Loom, Inc., Class A................. 16
1,200 Hughes Supply, Inc............................... 48
(a)1,000 Office Depot, Inc................................ 19
1,100 Pier 1 Imports, Inc.............................. 29
(a)500 Polo Ralph Lauren Corp........................... 14
2,100 ProSource, Inc................................... 15
1,300 Richfood Holdings, Inc........................... 34
1,400 Ross Stores, Inc................................. 46
2,000 TJX Companies, Inc............................... 53
800 V.F. Corp........................................ 68
------
504
------
TECHNOLOGY (14.1%)
(a)600 ADC Telecommunications, Inc...................... 20
800 Adobe Systems, Inc............................... 28
(a)700 Altera Corp...................................... 35
(a)200 BMC Software, Inc................................ 11
(a)1,000 Cadence Design Systems, Inc...................... 34
(a)500 Ceridian Corp.................................... 21
(a)1,000 Computer Products, Inc........................... 25
(a)300 ESS Technology, Inc.............................. 4
(a)500 FactSet Research Systems, Inc.................... 12
(a)1,000 Fiserv, Inc...................................... 45
(a)1,200 Gateway 2000, Inc................................ 39
1,000 General Cable Corp............................... 26
(a)1,600 HMT Technology Corp.............................. 21
(a)800 Inacom Corp...................................... 25
(a)800 Intevac, Inc..................................... 10
(a)1,700 Overland Data, Inc............................... 9
(a)600 Parametric Technology Corp....................... 26
1,200 Penn Engineering & Manufacturing Corp............ 24
(a)600 SCI Systems, Inc................................. 38
(a)600 Seagate Technology............................... 21
(a)300 Solectron Corp................................... 21
(a)1,200 Symantec Corp.................................... 23
(a)800 Tech Data Corp................................... 25
800 Technology Modeling Association, Inc............. 11
600 Tektronix, Inc................................... 36
(a)900 Teradyne, Inc.................................... 35
(a)600 USCS International, Inc.......................... 20
(a)400 Vishay Intertechnology, Inc...................... 12
(a)1,200 Western Digital Corp............................. 38
------
695
------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
MID CAP VALUE PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------
<C> <S> <C>
UTILITIES (2.9%)
900 Black Hills Corp................................. $ 26
1,200 IPALCO Enterprises, Inc.......................... 37
900 LG&E Energy Corp................................. 20
500 Nevada Power Co.................................. 11
(a)700 Nextel Communications, Inc., Class A............. 13
300 Pinnacle West Capital Corp....................... 9
400 Public Service Co. of Colorado................... 16
700 St. Joseph Light & Power Co...................... 11
------
143
------
TOTAL COMMON STOCK (COST $4,229)............................ 4,802
------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
(000)
- --------
<S> <C> <C>
SHORT-TERM INVESTMENT (4.8%)
REPURCHASE AGREEMENT (4.8%)
$238 Chase Securities, Inc. 5.70%, dated 6/30/97, due
7/1/97, to be repurchased at $238,
collateralized by U.S. Treasury Notes, 5.625%,
due 2/15/06, valued at $245 (COST $238)........ 238
------
TOTAL INVESTMENTS (102.4%) (COST $4,467*)................... 5,040
------
OTHER ASSETS (1.7%)
Receivable for Investments Sold.................. $ 60
Receivable for Portfolio Shares Sold............. 15
Due from Adviser................................. 6
Dividends Receivable............................. 3 84
------
LIABILITIES (-4.1%)
Payable for Investments Purchased................ (131)
Bank Overdraft................................... (45)
Custodian Fees Payable........................... (11)
Professional Fees Payable........................ (9)
Administrative Fees Payable...................... (1)
Other Liabilities................................ (5) (202)
------ ------
NET ASSETS (100%).......................................... $4,922
======
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
(000)
- ---------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
Applicable to 413,203 outstanding $0.001 par value shares
(authorized 500,000,000 shares).......................... $11.91
======
NET ASSETS CONSIST OF:
Paid in Capital............................................ $4,231
Undistributed Net Investment Income........................ 8
Accumulated Net Realized Gain.............................. 110
Unrealized Appreciation on Investments..................... 573
------
NET ASSETS................................................. $4,922
======
</TABLE>
- ---------------
(a) -- Non-income producing security
ADR -- American Depositary Receipt
REIT -- Real Estate Investment Trust
- ---------------
*At June 30, 1997, cost and unrealized appreciation (depreciation) for U.S.
Federal income tax purposes of the investments of the Mid Cap Value Portfolio
were:
<TABLE>
<CAPTION>
NET
COST APPRECIATION (DEPRECIATION) APPRECIATION
(000) (000) (000) (000)
------ ------------ -------------- ------------
<S> <C> <C> <C>
$4,467 $642 $(69) $573
</TABLE>
- --------------------------------------------------------------------------------
For the period ended June 30, 1997, purchases and sales of investment securities
for the Mid Cap Value Portfolio, other than long-term U.S. Government securities
and short-term investments, were approximately $6,523,000 and $2,403,000
respectively.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
U.S. REAL ESTATE PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (88.6%)
APARTMENT (20.6%)
600 Amli Residential Properties Trust REIT........... $ 14
3,400 Associated Estates Realty Corp. REIT............. 80
5,500 Avalon Properties, Inc. REIT..................... 158
5,000 Bay Apartment Communities, Inc. REIT............. 185
500 Columbus Realty Trust REIT....................... 11
6,900 Essex Property Trust, Inc. REIT.................. 222
3,800 Gables Residential Trust REIT.................... 96
5,000 Merry Land & Investment Co., Inc. REIT........... 108
4,600 Oasis Residential, Inc. REIT..................... 108
4,800 Security Capital Atlantic, Inc. REIT............. 115
700 Summit Properties, Inc. REIT..................... 14
12,007 Wellsford Real Properties, Inc................... 132
-------
1,243
-------
HEALTHCARE (9.7%)
(a)1,900 Alexandria Real Estate Equities, Inc. REIT....... 42
(a)3,900 Assisted Living Concepts, Inc.................... 43
1,800 Health Care Property Investors, Inc. REIT........ 63
11,000 Nationwide Health Properties, Inc. REIT.......... 242
5,900 Omega Healthcare Investors, Inc. REIT............ 193
-------
583
-------
LAND (1.9%)
(a)10,948 Atlantic Gulf Communities Corp................... 70
(a)2,500 Catellus Development Corp........................ 45
-------
115
-------
LODGING/LEISURE (12.2%)
11,300 American General Hospitality Corp. REIT.......... 280
(a)1,300 Bristol Hotel Co................................. 50
(a)6,600 Extended Stay America, Inc....................... 104
(a)6,200 Host Marriott Corp............................... 110
(a)3,800 Servico, Inc..................................... 56
3,200 Starwood Lodging Trust REIT...................... 137
-------
737
-------
MANUFACTURED HOME (6.8%)
10,600 Chateau Communities, Inc. REIT................... 304
4,600 Manufactured Home Communities, Inc. REIT......... 106
-------
410
-------
OFFICE AND INDUSTRIAL (21.4%)
INDUSTRIAL (3.2%)
2,200 Meridian Industrial Trust, Inc. REIT............. 52
6,300 Pacific Gulf Properties, Inc. REIT............... 138
-------
190
-------
OFFICE (16.8%)
5,500 Arden Realty Group, Inc.......................... 143
3,700 Beacon Properties Corp. REIT..................... 124
9,900 Brandywine Realty Trust REIT..................... 200
(a)4,600 Brookfield Properties (Installment Receipts-
second installment: CAD6.50/Shr due on
2/13/98)....................................... 32
4,200 CarrAmerica Realty Corp. REIT.................... 121
2,600 Cornerstone Properties, Inc. REIT................ 40
6,200 Great Lakes, Inc. REIT........................... 102
1,700 Kilroy Realty Corp. REIT......................... 43
2,700 Koger Equity, Inc. REIT.......................... 49
7,400 Trizec Hahn Corp. REIT........................... 158
-------
1,012
-------
OFFICE AND INDUSTRIAL (1.4%)
(a)1,600 Boston Properties, Inc. REIT..................... 44
1,600 Prentiss Properties Trust REIT................... 41
-------
85
-------
TOTAL OFFICE AND INDUSTRIAL.................................. 1,287
-------
RETAIL (14.9%)
REGIONAL MALL (10.2%)
11,300 First Union Real Estate REIT..................... 160
7,800 Tauban Centers, Inc. REIT........................ 103
6,500 Urban Shopping Centers, Inc. REIT................ 207
(a)8,400 Westfield America, Inc. REIT..................... 142
-------
612
-------
SHOPPING CENTER (1.7%)
1,500 Federal Realty Investment Trust REIT............. 40
800 IRT Property Co. REIT............................ 9
300 Price, Inc. REIT................................. 11
100 Ramco-Gershenson Properties Trust REIT........... 2
3,000 Western Investment Real Estate Trust REIT........ 42
-------
104
-------
STRIP CENTER (3.0%)
2,700 Alexander Haagen Properties, Inc. REIT........... 44
10,100 Burnham Pacific Property Trust REIT.............. 139
-------
183
-------
TOTAL RETAIL................................................. 899
-------
SELF STORAGE (1.1%)
2,300 Shurgard Storage Centers, Inc., Series A, REIT... 65
-------
TOTAL COMMON STOCKS (COST $5,135).............................. 5,339
-------
PREFERRED STOCK (0.3%)
LAND (0.3%)
(a,d)2,003 Atlantic Gulf Communities Corp. (COST $20)....... 20
-------
</TABLE>
<TABLE>
<CAPTION>
NO. OF
WARRANTS
- -----------
<C> <S> <C>
WARRANTS (0.0%)
LAND (0.0%)
(a,d)1,878 Atlantic Gulf Communities, Class A............... --
(a,d)1,878 Atlantic Gulf Communities, Class B............... --
(a,d)1,878 Atlantic Gulf Communities, Class C............... --
-------
TOTAL WARRANTS (COST $0)....................................... --
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
U.S. REAL ESTATE PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENT (7.6%)
REPURCHASE AGREEMENT (7.6%)
$458 Chase Securities, Inc. 5.70%, dated 6/30/97, due
7/1/97, to be repurchased at $458,
collateralized by U.S. Treasury Notes, 5.625%,
due 2/15/06, valued at $466 (COST $458)........ $ 458
-------
TOTAL INVESTMENTS (96.5%) (COST $5,613*)....................... 5,817
-------
</TABLE>
<TABLE>
<S> <C> <C>
OTHER ASSETS (4.8%)
Cash.................................................. $ 22
Receivable for Investments Sold....................... 219
Dividends Receivable.................................. 27
Due from Adviser...................................... 22
Receivable for Portfolio Shares Sold.................. 1 291
-----
LIABILITIES (-1.3%)
Payable for Investments Purchased..................... (35)
Custodian Fees Payable................................ (21)
Professional Fees Payable............................. (9)
Administrative Fees Payable........................... (2)
Other Liabilities..................................... (16) (83)
----- -------
NET ASSETS (100%)....................................... $ 6,025
=======
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
(000)
- ----------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
Applicable to 580,767 outstanding $0.001 par value shares
(authorized 500,000,000 shares).............................. $ 10.37
=======
NET ASSETS CONSIST OF:
Paid in Capital................................................ $ 5,799
Undistributed Net Investment Income............................ 59
Accumulated Net Realized Loss.................................. (37)
Unrealized Appreciation on Investments......................... 204
-------
NET ASSETS..................................................... $ 6,025
=======
</TABLE>
- ---------------
(a) -- Non-income producing security
(d) -- Security valued at fair value -- see Note A-1 to financial statements.
CAD -- Canadian Dollar
REIT -- Real Estate Investment Trust
- ---------------
*At June 30, 1997, cost and unrealized appreciation (depreciation) for U.S.
Federal income tax purposes of the investments of the U.S. Real Estate
Portfolio were:
<TABLE>
<CAPTION>
COST APPRECIATION (DEPRECIATION) NET APPRECIATION
(000) (000) (000) (000)
- --------- --------------- ----------------- -----------------
<S> <C> <C> <C>
$5,613 $277 $(73) $204
</TABLE>
- --------------------------------------------------------------------------------
For the period ended June 30, 1997, purchases and sales of investment securities
for the U.S. Real Estate Portfolio, other than long-term U.S. Government
securities and short-term investments, were $7,269,000 and $2,044,000
respectively.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
VALUE PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (81.2%)
BASIC RESOURCES (4.5%)
1,000 Cabot Oil & Gas Corp., Class A................... $ 29
300 Dow Chemical Co.................................. 26
700 E.I. DuPont de Nemours & Co...................... 44
1,400 Great Lakes Chemical Corp........................ 73
500 Rohm & Haas Co................................... 45
700 Westvaco Corp.................................... 22
------
239
------
CONSUMER DURABLES (8.4%)
900 Dana Corp........................................ 34
3,400 Ford Motor Co.................................... 128
1,300 General Motors Corp.............................. 73
1,600 Goodyear Tire & Rubber Co........................ 101
1,100 Owens Corning.................................... 47
800 Premark International, Inc....................... 21
1,000 Tupperware Corp.................................. 37
------
441
------
CONSUMER SERVICES (0.3%)
600 Standard Register Co............................. 18
------
ENERGY (7.8%)
600 Amoco Corp....................................... 52
700 Atlantic Richfield Co............................ 49
700 British Petroleum plc ADR........................ 53
600 El Paso Natural Gas Co........................... 33
500 IMC Global, Inc.................................. 18
1,300 MAPCO, Inc....................................... 41
800 Phillips Petroleum Co............................ 35
1,100 Repsol SA ADR.................................... 47
900 Ultramar Diamond Shamrock Corp................... 29
1,700 YPF SA ADR....................................... 52
------
409
------
FINANCIAL SERVICES (16.0%)
BANKING (6.4%)
1,000 Bank of New York Co.............................. 44
700 Chase Manhattan Corp............................. 68
400 Citicorp......................................... 48
500 Crestar Financial Corp........................... 19
100 First Chicago NBD Corp........................... 6
400 First Union Corp................................. 37
900 Mellon Bank Corp................................. 41
400 Republic New York Corp........................... 43
900 Signet Banking Corp.............................. 32
------
338
------
CREDIT & FINANCE/INVESTMENT RELATED COMPANIES (1.8%)
1,100 Capital One Financial Corp....................... 42
800 Federal National Mortgage Association............ 35
300 Salomon, Inc..................................... 17
------
94
------
INSURANCE (7.8%)
304 Aegon N.V. ARS................................... 21
800 Allstate Corp.................................... 58
800 American General Corp............................ 38
500 Chubb Corp....................................... 33
1,300 Everest Reinsurance Holdings, Inc................ 52
400 Hartford Financial Services Group, Inc........... 33
1,200 Old Republic International Corp.................. 36
700 Providian Corp................................... 23
600 ReliaStar Financial Corp......................... 44
800 TIG Holdings, Inc................................ 25
100 Torchmark Corp................................... 7
400 Transatlantic Holdings, Inc...................... 40
------
410
------
TOTAL FINANCIAL SERVICES.................................. 842
------
FOOD, TOBACCO & OTHER (4.9%)
1,300 IBP, Inc......................................... 30
2,500 Philip Morris Cos., Inc.......................... 111
2,100 RJR Nabisco Holdings Corp........................ 69
1,200 Universal Foods Corp............................. 46
------
256
------
HEALTH CARE (5.5%)
1,400 Beckman Instruments, Inc......................... 67
1,600 Bergen Brunswig Corp., Class A................... 45
900 Columbia/HCA Healthcare Corp..................... 35
(a)1,670 Foundation Health Corp........................... 51
1,000 Mallinckrodt, Inc................................ 38
(a)800 Maxicare Health Plans, Inc....................... 18
(a)1,900 Nellcor Puritan Bennett, Inc..................... 34
------
288
------
HEAVY INDUSTRY/TRANSPORTATION (19.9%)
2,300 Aeroquip-Vickers, Inc............................ 109
(a)400 AMR Corp......................................... 37
300 Burlington Northern Santa Fe, Inc................ 27
1,800 Case Corp........................................ 124
300 Caterpillar, Inc................................. 32
600 CSX Corp......................................... 33
2,600 Cummins Engine Co., Inc.......................... 183
600 Deere & Co....................................... 33
700 Eaton Corp....................................... 61
(a)700 FMC Corp......................................... 56
1,500 Harnischfeger Industries, Inc.................... 62
1,200 Kennametal, Inc.................................. 52
1,200 Olsten Corp...................................... 23
800 Parker Hannifin Corp............................. 49
600 Raytheon Corp.................................... 31
900 Tecumseh Products Co., Class A................... 54
800 TRW, Inc......................................... 45
(a)500 UAL Corp......................................... 36
------
1,047
------
RETAIL (4.9%)
1,000 Dillard Department Stores, Inc., Class A......... 35
1,100 Russell Corp..................................... 33
700 Springs Industries, Inc., Class A................ 37
1,300 Talbots, Inc..................................... 44
(a)1,400 Toys "R" Us, Inc................................. 49
700 V.F. Corp........................................ 59
------
257
------
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
VALUE PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------
<C> <S> <C>
TECHNOLOGY (6.6%)
(a)300 Arrow Electronics, Inc........................... $ 16
(a)500 Compaq Computer Corp............................. 50
1,300 International Business Machines Corp............. 117
(a)1,700 Seagate Technology............................... 60
(a)100 Stratus Computer, Inc............................ 5
800 Tektronix, Inc................................... 48
(a)1,600 Western Digital Corp............................. 50
------
346
------
UTILITIES (2.4%)
700 Central Maine Power Co........................... 9
600 CINergy Corp..................................... 21
900 DTE Energy Co.................................... 25
418 Duke Energy Corp................................. 20
900 Entergy Corp..................................... 24
800 GPU, Inc......................................... 29
------
128
------
TOTAL COMMON STOCK (COST $3,802)............................ 4,271
------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
(000)
- --------
<S> <C>
SHORT-TERM INVESTMENT (18.4%)
REPURCHASE AGREEMENT (18.4%)
$970 Chase Securities, Inc. 5.70%, dated 6/30/97, due
7/1/97, to be repurchased at $970,
collateralized by various U.S. Treasury Note,
5.625%, due 2/15/06, valued at $989, (COST
$970).......................................... 970
------
TOTAL INVESTMENTS (99.6%) (COST $4,772*).................... 5,241
------
</TABLE>
<TABLE>
<S> <C> <C>
OTHER ASSETS (1.7%)
Cash............................................... $ 3
Receivable for Investments Sold.................... 47
Receivable for Portfolio Shares Sold............... 27
Due from Adviser................................... 8
Dividends Receivable............................... 5 90
---
LIABILITIES (-1.3%)
Payable for Investments Purchased.................. (40)
Professional Fees Payable.......................... (15)
Custodian Fees Payable............................. (6)
Administrative Fees Payable........................ (1)
Other Liabilities.................................. (5) (67)
--- --------
NET ASSETS (100%)......................................... $ 5,264
========
<CAPTION>
AMOUNT
(000)
- -------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
Applicable to 455,591 outstanding $0.001 par value
shares (authorized 500,000,000 shares).................. $ 11.55
========
NET ASSETS CONSIST OF:
Paid in Capital......................................... $ 4,690
Undistributed Net Investment Income..................... 33
Accumulated Net Realized Gain........................... 72
Unrealized Appreciation on Investments.................. 469
--------
NET ASSETS................................................ $ 5,264
========
</TABLE>
- ---------------
(a) -- Non-income producing security
ADR -- American Depositary Receipt
ARS -- American Registered Share
- ---------------
*At June 30, 1997, cost and unrealized appreciation (depreciation) for U.S.
Federal income tax purposes of the investments of the Value Portfolio were:
<TABLE>
<CAPTION>
NET
COST APPRECIATION (DEPRECIATION) APPRECIATION
(000) (000) (000) (000)
- --------- --------------- ----------------- ---------------
<S> <C> <C> <C>
$4,772 $520 $(51) $469
</TABLE>
- --------------------------------------------------------------------------------
For the period ended June 30, 1997, purchases and sales of investment securities
for the Value Portfolio, other than long-term U.S. Government securities and
short-term investments, were approximately $4,330,000 and $600,000,
respectively.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKETS DEBT PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------------------------
<C> <S> <C>
DEBT INSTRUMENTS (88.8%)
ARGENTINA (12.9%)
BONDS (12.9%)
U.S.$ 250 Republic of Argentina Global Bond, Series BGL4,
11.00%, 10/9/06................................ $ 278
ARP (e)100 Republic of Argentina, 11.75%, 2/12/07........... 112
U.S.$ 970 Republic of Argentina, Series L, 'Euro',
(Floating Rate), 6.75%, 3/31/05................ 912
-------
1,302
-------
BRAZIL (12.2%)
BONDS (12.2%)
224 Federative Republic of Brazil, Series C, 'Euro',
(Floating Rate), PIK, 8.00%, 4/15/14........... 180
800 Federative Republic of Brazil Debt Conversion
Bond, Series L, (Floating Rate), 6.938%,
4/15/12........................................ 662
400 Federative Republic of Brazil Global Bond,
10.125%, 5/15/27............................... 386
-------
1,228
-------
BULGARIA (5.7%)
BOND (5.7%)
1,000 Bulgaria Front Loaded Interest Reduction Bond,
Series A , 2.25%, 7/28/12...................... 571
-------
IVORY COAST (3.3%)
BOND (3.3%)
(b,e)1,000 Republic of Ivory Coast Front Loaded Interest
Reduction Bond, Zero Coupon, 12/29/49.......... 334
-------
JAMAICA (1.5%)
BOND (1.5%)
150 Government of Jamaica, 9.625%, 7/2/02............ 151
-------
MEXICO (15.5%)
BONDS (15.5%)
400 Banco National Global Bond, 7.25%, 2/2/04........ 373
700 United Mexican States Discount Bond, Series A,
(Floating Rate), 6.867%, 12/31/19 (Value
Recovery Rights Attached)...................... 651
400 United Mexican States Par Bond, Series B, 6.25%,
12/31/19 (Value Recovery Rights Attached)...... 309
200 United Mexican States Global Bond, 11.50%,
5/15/26........................................ 229
-------
1,562
-------
MOROCCO (4.6%)
LOAN AGREEMENT (4.6%)
500 Kingdom of Morocco, Restructuring & Consolidation
Agreement, Tranche A, (Floating Rate), 6.375%,
1/1/09 (Participation: Chase Securities)....... 458
-------
PANAMA (0.8%)
BOND (0.8%)
(e)100 Republic of Panama Interest Reduction Bond,
(Floating Rate), 3.50%, 7/17/14................ 77
-------
PERU (2.4%)
BOND (2.4%)
U.S.$ (n)400 Republic of Peru Front Loaded Interest Reduction
Bond, 3.25%, 3/7/17............................ $ 239
-------
RUSSIA (16.6%)
BOND (10.0%)
1,500 Ministry of Finance Tranche IV, GDR, 3.00%,
5/14/03........................................ 1,007
-------
NOTES (6.6%)
250 Russia Interest Arrears Note 12/31/99............ 191
700 Russian Principal Notes 12/31/99................. 467
-------
658
-------
1,665
-------
SOUTH AFRICA (2.0%)
BOND (2.0%)
ZAR 1,000 Republic of South Africa Series 150, 12.00%,
2/28/05........................................ 197
-------
VENEZUELA (11.3%)
BONDS (11.3%)
U.S.$ 750 Republic of Venezuela Debt Conversion Bonds,
Series DL, (Floating Rate), 6.75%, 12/18/07.... 696
238 Republic of Venezuela Front Loaded Interest
Reduction Bonds, Series A, (Floating Rate),
6.75%, 3/31/07................................. 221
250 Republic of Venezuela Discount Bonds, Series A,
(Floating Rate), 6.813%, 3/31/20............... 222
-------
1,139
-------
TOTAL FOREIGN DEBT INSTRUMENTS (COST $8,950).................... 8,923
<CAPTION>
NO. OF
WARRANTS
- ------------
<C> <S> <C>
WARRANTS (0.0%)
VENEZUELA (0.0%)
(a)1,785 Republic of Venezuela Oil, expiring 3/31/20
(COST $0)...................................... --
-------
<CAPTION>
FACE
AMOUNT
(000)
- -----------
<C> <S> <C>
SHORT-TERM INVESTMENTS (29.2%)
DISCOUNT NOTE (21.9%)
U.S.$ 2,200 Federal Home Loan Discount Note, 7/08/97.......... 2,198
-------
REPURCHASE AGREEMENT (7.3%)
734 Chase Securities, Inc. 5.70%, dated 6/30/97, due
7/1/97 to be repurchased at $734,
collateralized by U.S. Treasury Notes, 5.625%,
due 2/15/06, valued at $749.................... 734
-------
TOTAL SHORT-TERM INVESTMENTS (COST $2,932)..................... 2,932
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKETS DEBT PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
(000)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
TOTAL INVESTMENTS (118.0%) (COST $11,882*)...................................... $11,855
-------
OTHER ASSETS (2.8%)
Cash................................................................ $ 1
Receivable for Investments Sold..................................... 159
Interest Receivable................................................. 117
Due from Adviser.................................................... 3 280
-------
LIABILITIES (-20.8%)
Payable for Investments Purchased................................... (2,076)
Professional Fees Payable........................................... (3)
Custodian Fees Payable.............................................. (3)
Administrative Fees Payable......................................... (2)
Net Unrealized Loss on Foreign Currency Exchange Contracts.......... (1)
Other Liabilities................................................... (1) (2,086)
------- -------
NET ASSETS (100%)............................................................... $10,049
=======
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
Applicable to 1,005,276 outstanding $0.001 par value shares (authorized 500,000,000
shares).............................................................................. $ 10.00
=======
NET ASSETS CONSIST OF:
Paid in Capital........................................................................ $10,053
Undistributed Net Investment Income.................................................... 27
Accumulated Net Realized Loss.......................................................... (5)
Unrealized Depreciation on Investments and Foreign Currency Translations............... (26)
-------
NET ASSETS............................................................................. $10,049
=======
</TABLE>
- --------------------------------------------------------------------------------
FOREIGN CURRENCY EXCHANGE CONTRACTS INFORMATION:
Under the terms of foreign currency exchange contracts open at June 30, 1997,
the Portfolio is obligated to deliver U.S. dollars in exchange for foreign
currency as indicated below:
<TABLE>
<CAPTION>
CURRENCY IN EXCHANGE NET UNREALIZED
TO DELIVER VALUE SETTLEMENT FOR VALUE GAIN (LOSS)
(000) (000) DATE (000) (000) (000)
- ---------- ----- ---------- ----------- ----- --------------
<S> <C> <C> <C> <C> <C>
U.S.$ 204 $204 7/3/97 ZAR 921 $203 $ (1)
==== ==== ====
</TABLE>
- ---------------
(a) -- Non-income producing security
(b) -- Non-income producing-in default
(e) -- 144A Security -- certain conditions for public sale may exist.
(n) -- Step Bond-coupon rate increases in increments to maturity. Rate
disclosed is as of June 30, 1997. Maturity date disclosed is the
ultimate maturity.
ARP -- Argentine Peso
GDR -- Global Depositary Receipt
PIK -- Payment-in-Kind. Income may be paid in additional securities or
cash at the discretion of the issuer.
ZAR -- South African Rand
Floating Rate Security -- Interest rate changes on these instruments are
based on changes in a designated base rate. The rates shown are those in
effect at June 30, 1997.
- ---------------
*At June 30, 1997, cost and unrealized appreciation (depreciation) for U.S.
Federal income tax purposes of the investments of the Emerging Markets Debt
Portfolio were:
<TABLE>
<CAPTION>
NET
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
(000) (000) (000) (000)
------- ------------ -------------- --------------
<S> <C> <C> <C>
$11,882 $26 $(53) $(27)
</TABLE>
- --------------------------------------------------------------------------------
For the period ended June 30, 1997, purchases and sales of investment securities
for the Emerging Markets Debt Portfolio, other than long-term U.S. Government
securities and short-term investments, were $9,577,000 and $626,000
respectively.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
FIXED INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- --------------------------------------------------------------------
<C> <S> <C>
FIXED INCOME SECURITIES (84.1%)
ADJUSTABLE RATE MORTGAGES (4.7%)
Government National Mortgage Association
$ 269 7.125%, 7/20/25.................................. $ 275
150 6.00%, 6/20/27 August TBA........................ 150
--------
425
--------
AGENCY FIXED RATE MORTGAGES (14.5%)
Federal Home Loan Mortgage Corporation
61 10.50%, 2/1/15-9/1/16............................ 68
--------
Federal National Mortgage Corporation
Conventional Pools:
19 10.00%, 9/1/10................................... 20
45 11.50%, 7/1/13................................... 51
71 12.00%, 11/1/11-9/1/12........................... 81
175 6.00%, 06/15/26 July TBA......................... 163
--------
315
--------
Government National Mortage Association
Various Pools:
450 7.00%, 12/15/23.................................. 445
250 10.00%, 7/15/16-5/15/19.......................... 276
69 10.50%, 1/15/18.................................. 77
75 11.00%, 2/15/19-4/15/20.......................... 85
21 11.50%, 5/15/13-9/15/15.......................... 23
17 12.00%, 12/15/14................................. 20
--------
926
--------
1,309
--------
COLLATERALIZED MORTGAGE OBLIGATIONS--
AGENCY COLLATERAL SERIES (2.4%)
Federal Home Loan Mortgage Corporation, Series:
5 1709 H PO REMIC, 1/15/24......................... 2
9 1750 C PD PO REMIC, 3/15/24...................... 6
5 1813 K PO, 2/15/24............................... 3
10 1844 PC PO, 3/15/24.............................. 6
5 1887 I PO, 10/15/22.............................. 3
13 93-149 O PO REMIC, 8/25/23....................... 7
--------
27
--------
Federal National Mortgage Association, Series:
100 282 1 PO 5/15/24................................. 65
10 96-14 PC PO REMIC, 12/25/23...................... 5
10 96-46 PB PO REMIC, 9/25/23....................... 6
5 96-54 PO REMIC, 7/25/23.......................... 3
10 96-54 O PO REMIC, 11/25/23....................... 6
50 97-3 E PO 12/25/23............................... 30
49 97-7 E PO REMIC, 2/15/23......................... 31
73 97-7 EB PO 3/18/27............................... 45
--------
191
--------
218
--------
COMMERCIAL MORTGAGE (1.1%)
50 CSFB, Series 97-C1 A1C 7.24%, 4/20/07............ 50
50 Mortgage Capital Funding, Inc., Series 97-MC1 A3
7.288%, 3/20/07................................ 51
--------
101
--------
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- --------------------------------------------------------------------
<C> <S> <C>
FINANCE (0.4%)
$ 40 New Jersey Economic Development Authority,
Series A 7.425%, 2/15/29....................... $ 40
--------
FOREIGN GOVERNMENTS (2.7%)
125 Government of Germany, Series 95,
7.375%, 1/3/05................................. 80
Swedish Government Bonds
700 6.00%, 2/9/05.................................... 89
500 10.25%, 5/5/03................................... 78
--------
247
--------
INDUSTRIALS (1.9%)
50 Kmart Corp. 7.75%, 10/1/12....................... 46
25 News America Holdings 8.875%, 4/26/23............ 27
50 Paramount Communications, Inc. 8.25%, 8/1/22..... 48
25 RJR Nabisco, Inc. 8.75%, 4/15/04................. 25
30 Southland Corp. 5.00%, 12/15/03.................. 25
--------
171
--------
STRIPPED MORTGAGE BACKED SECURITIES--
AGENCY COLLATERAL SERIES (0.3%)
41 Federal National Mortgage Association, Series 249
1 PO 10/25/23.................................. 26
--------
TELEPHONES (0.8%)
70 Telecommunications, Inc. 8.75%, 2/15/23.......... 70
--------
U.S. TREASURY SECURITIES (53.9%)
525 U.S. Treasury Bond 8.75%, 8/15/20................ 638
U.S. Treasury Notes
101 3.375%, 1/15/07 (Inflation Indexed)............ 99
350 7.00%, 4/15/99................................. 355
1,100 7.125%, 9/30/99................................ 1,123
1,175 7.25%, 8/15/04................................. 1,225
1,275 7.50%, 2/15/05................................. 1,349
350 U.S. Treasury Strip 2/15/19...................... 78
--------
4,867
--------
YANKEE BONDS (1.4%)
National Power Corp.
25 7.875%, 12/15/06............................... 24
25 8.40%, 12/15/16................................ 25
(n)75 Republic of Argentina Par, Series L, `Euro'
5.50%, 3/31/23................................. 52
25 Republic of Colombia 8.70%, 2/15/16.............. 25
--------
126
--------
TOTAL FIXED INCOME SECURITIES (COST $7,574)............... 7,600
--------
SHORT-TERM INVESTMENT (23.8%)
REPURCHASE AGREEMENT (23.8%)
2,147 Chase Securities, Inc. 5.70%, dated 6/30/97, due
7/1/97, to be repurchased at $2,147,
collateralized by U.S. Treasury Notes, 5.875%,
due 1/31/99, valued at $2,152 (COST $2,147).... 2,147
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
FIXED INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
(000)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
TOTAL INVESTMENTS (107.9%) (COST $9,721*).............................................. $ 9,747
-------
OTHER ASSETS (24.5%)
Receivable for Investments Sold..................................... $ 2,051
Interest Receivable................................................. 151
Due From Adviser.................................................... 10
Net Unrealized Gain on Foreign Currency Exchange Contracts.......... 5 2,217
-------
LIABILITIES (-32.4%)
Payable for Investments Purchased................................... (2,446)
Bank Overdraft...................................................... (449)
Professional Fees Payable........................................... (17)
Custodian Fees Payable.............................................. (11)
Administrative Fees Payable......................................... (2)
Other Liabilities................................................... (6) (2,931)
------- -------
NET ASSETS (100%)...................................................................... $ 9,033
=======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
Applicable to 872,453 outstanding $0.001 par value shares (authorized
500,000,000 shares).................................................................. $ 10.35
=======
NET ASSETS CONSIST OF:
Paid in Capital........................................................................ $ 8,733
Undistributed Net Investment Income.................................................... 218
Accumulated Net Realized Gain.......................................................... 52
Unrealized Appreciation on Investments and Foreign
Currency Translations................................................................ 30
-------
NET ASSETS............................................................................. $ 9,033
=======
</TABLE>
- --------------------------------------------------------------------------------
FOREIGN CURRENCY EXCHANGE CONTRACT INFORMATION:
Under the terms of foreign currency exchange contracts open at June 30, 1997,
the Portfolio is obligated to deliver foreign currency in exchange for U.S.
dollars as indicated below:
<TABLE>
<CAPTION>
NET
CURRENCY IN EXCHANGE UNREALIZED
TO DELIVER VALUE SETTLEMENT FOR VALUE GAIN (LOSS)
(000) (000) DATE (000) (000) (000)
- ------------ ----- ---------- ------------ ----- -----------
<S> <C> <C> <C> <C> <C>
SEK 1,305 $ 169 8/27/97 U.S.$ 172 $ 172 $ 3
DEM 145 84 8/29/97 U.S.$ 86 86 2
----- ----- -----
$ 253 $ 258 $ 5
===== ===== =====
</TABLE>
- ---------------
(n) --Step Bond-coupon rate increases in increments to maturity. Rate
disclosed is as of June 30, 1997. Maturity date disclosed is the
ultimate maturity date.
DEM --German Mark
PO --Principal Only
REMIC --Real Estate Mortgage Investment Conduit
SEK --Swedish Krona
TBA --Security is subject to delayed delivery.
- ---------------
*At June 30, 1997, cost and unrealized appreciation (depreciation) for U.S.
Federal income tax purposes of the investments of the Fixed Income Portfolio
were:
<TABLE>
<CAPTION>
NET
COST APPRECIATION (DEPRECIATION) APPRECIATION
(000) (000) (000) (000)
------ ------------ -------------- ------------
<S> <C> <C> <C>
$9,721 $39 $(13) $26
</TABLE>
- ----------------------------------------------------------------
For the period ended June 30, 1997, purchases and sales of investment securities
for the Fixed Income Portfolio, other than long-term U.S. Government securities
and short-term investments, were approximately $13,993,000 and $6,411,000
respectively.
- ----------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
HIGH YIELD PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------------
<C> <S> <C>
FIXED INCOME SECURITIES (78.2%)
ASSET BACKED CORPORATES (0.9%)
$ 75 Aircraft Lease Portfolio Securitization, Ltd.,
Series 96-1 D
12.75%, 6/15/06................................ $ 81
-------
CABLE (6.5%)
150 Cablevision Systems Corp.
9.875%, 5/15/06................................ 160
200 Paramount Communications, Inc.
8.25%, 8/1/22.................................. 191
Rogers Cablesystems Ltd.
185 10.00%, 3/15/05, Series B...................... 200
50 10.125%, 9/1/12................................ 54
-------
605
-------
CONSUMER SERVICES\PRODUCTS (4.1%)
205 RJR Nabisco, Inc.
8.75%, 4/15/04................................. 209
150 TLC Beatrice International Holdings, Inc.
11.50%, 10/1/05................................ 169
-------
378
-------
ENERGY (2.4%)
120 Snyder Oil Corp.
8.75%, 6/15/07................................. 119
100 Vintage Petroleum, Inc.
8.625%, 2/1/09................................. 100
-------
219
-------
FINANCE (3.1%)
100 Amresco, Inc., Series 97-A
10.00%, 3/15/04................................ 103
First Nationwide Holdings, Inc.
55 9.125%, 1/15/03................................ 57
115 10.625%, 10/1/03............................... 126
-------
286
-------
INDUSTRIALS (19.6%)
125 Advanced Micro Devices, Inc.
11.00%, 8/1/03................................. 139
DR Securitized Lease Trust, Series:
177 93-K1 A1, 6.66%, 8/15/10....................... 156
87 94-K1 A1, 7.60%, 8/15/07....................... 83
100 94-K1 A2, 8.375%, 8/15/15...................... 93
125 Grand Casinos, Inc.
10.125%, 12/1/03............................... 131
175 Host Marriott Travel Plaza, Series B
9.50%, 5/15/05................................. 183
245 ISP Holdings, Inc., Series B
9.00%, 10/15/03................................ 253
105 Kmart Corp.
7.75%, 10/1/12................................. 96
(n)185 Norcal Waste Systems, Inc., Series B
13.00%, 11/15/05............................... 210
100 SD Warren Co.
12.00%, 12/15/04............................... 112
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
<C> <S> <C>
- ------------------------------------------------------------------------
$ 120 Tenet Healthcare Corp.
8.625%, 1/15/07................................ $ 122
250 Viacom, Inc.
8.00%, 7/7/06.................................. 243
-------
1,821
-------
SUPERMARKETS (1.8%)
200 Southland Corp.
5.00%, 12/15/03................................ 170
-------
TELEPHONES (13.5%)
Brooks Fiber Properties, Inc.
(n)250 0.00%, 3/1/06.................................. 170
(n)110 0.00%, 11/1/06................................. 72
(n)75 EchoStar Satellite Broadcasting
0.00%, 3/15/04................................. 53
125 IXC Communications Inc., Series B
12.50%, 10/1/05................................ 143
(n)480 Nextel Communications, Inc.
0.00%, 8/15/04................................. 367
210 Telecommunications, Inc.
9.25%, 1/15/23................................. 219
(n)320 Teleport Communications Group, Inc.
0.00%, 7/1/07.................................. 231
-------
1,255
-------
U.S. TREASURY SECURITY (8.6%)
800 U.S. Treasury Note
6.50%, 10/15/06................................ 797
-------
UTILITIES (5.7%)
160 Cleveland Electric Illuminating Co., Series B
8.375%, 12/1/11................................ 161
158 Midland Funding Corp. I, Series C-94
10.33%, 7/23/02................................ 169
200 Quezon Power Ltd.
8.86%, 6/15/17................................. 200
-------
530
-------
YANKEE (12.0%)
150 National Power Corp.
7.875%, 12/15/06............................... 147
75 Net Sat Servicos Ltd.
12.75%, 8/5/04................................. 82
(n)265 Republic of Argentina Par, Series L, 'Euro'
5.50%, 3/31/23................................. 183
125 Republic of Brazil Front Loaded Interest
Reduction Bond (Floating Rate)
4.50%, 4/15/09................................. 98
210 Republic of Colombia
8.70%, 2/15/16................................. 213
250 Republic of Venezuela, Series A
6.75%, 3/31/20................................. 197
250 United Mexican States, Series A
6.25%, 12/31/19................................ 193
-------
1,113
-------
TOTAL FIXED INCOME SECURITIES (COST $7,123).................... 7,255
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
HIGH YIELD PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONT.)
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------------------
<C> <S> <C>
PREFERRED STOCKS (4.0%)
CABLE (4.0%)
337 Time Warner, Inc., Series M,
10.25%, 7/1/16.............................. $ 370
-------
TOTAL PREFERRED STOCKS (COST $357).......................... 370
-------
CONVERTIBLE PREFERRED STOCKS (1.1%)
TELEPHONES (1.1%)
1,025 TCI Pacific Communications,
5.00%, 7/31/06.............................. 106
-------
TOTAL CONVERTIBLE PREFERRED STOCKS (COST $95)............... 106
-------
</TABLE>
<TABLE>
<CAPTION>
NO. OF
RIGHTS
- -----------
<C> <S> <C>
RIGHTS (0.0%)
YANKEE (0.0%)
(a)1,250 Republic of Venezuela Recovery Rights,
expiring 3/31/20............................ --
(a)250,000 United Mexican States Recovery Rights,
expiring 6/30/03............................ --
-------
TOTAL RIGHTS (COST $0)...................................... --
-------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
(000)
- -----------
<C> <S> <C>
SHORT-TERM INVESTMENT (17.8%)
REPURCHASE AGREEMENT (17.8%)
$1,652 Chase Securities, Inc.
5.70%, due 6/30/97, dated 7/1/97, to be
repurchased at $1,652, collateralized by
U.S. Treasury Notes, 5.625%, due 2/15/06,
valued at $1,681 (COST $1,652).............. 1,652
-------
TOTAL INVESTMENTS (101.1%) (COST $9,227*)................... 9,383
-------
OTHER ASSETS (3.8%)
Cash........................................... $ 83
Interest Receivable............................ 178
Receivable for Investments Sold................ 95
Receivable for Portfolio Shares Sold........... 1 357
---------
LIABILITIES (-4.9%)
Payable for Investments Purchased.............. (438)
Custodian Fees Payable......................... (6)
Professional Fees Payable...................... (6)
Administrative Fees Payable.................... (2)
Other Liabilities.............................. (6) (458)
--------- -------
NET ASSETS (100%)........................................... $ 9,282
=======
<CAPTION>
AMOUNT
(000)
- ------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
Applicable to 877,218 outstanding $0.001 par value shares
(authorized 500,000,000 shares)......................... $ 10.58
=======
NET ASSETS CONSIST OF:
Paid in Capital............................................. $ 8,794
Undistributed Net Investment Income......................... 308
Accumulated Net Realized Gain............................... 24
Unrealized Appreciation on Investments...................... 156
-------
NET ASSETS.................................................. $ 9,282
=======
</TABLE>
- ---------------
(a)--Non-income producing security
(n)--Step Bond-coupon rate increases in increments to maturity. Rate
disclosed is as of June 30, 1997. Maturity date disclosed is the
ultimate maturity date.
Floating Rate Security--The interest rate changes on these instruments are
based on changes in a designated base rate. The rates shown are those in
effect on June 30, 1997.
- ---------------
*At June 30, 1997, cost and unrealized appreciation (depreciation) for U.S.
Federal income tax purposes of the investments of the High Yield Portfolio
were:
<TABLE>
<CAPTION>
NET
COST APPRECIATION (DEPRECIATION) APPRECIATION
(000) (000) (000) (000)
----- ------------ -------------- ------------
<S> <C> <C> <C>
$9,227 $174 $(18) $156
</TABLE>
- --------------------------------------------------------------------------------
For the period ended June 30, 1997, purchases and sales of investment securities
for the High Yield Portfolio, other than long-term U.S. Government securities
and short-term investments, were approximately $11,634,000 and $4,134,000,
respectively.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
ASIAN EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM MARCH 3,
1997* TO JUNE 30, 1997
(000)
- ------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends $ 52
Interest 27
Less: Foreign Taxes Withheld (2)
-----
Total Income 77
-----
EXPENSES:
Investment Advisory Fees 26
Less: Fees Waived (26)
-----
Net Investment Advisory Fees --
Professional Fees 20
Custodian Fees 13
Shareholder Reports 12
Administrative Fees 9
Foreign Tax Expense 2
Other 2
Expenses Reimbursed by Adviser (16)
-----
Net Expenses 42
-----
Net Investment Income 35
-----
NET REALIZED LOSS ON:
Investments Sold (126)
Foreign Currency Transactions (13)
-----
Net Realized Loss (139)
-----
CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments (Net of foreign taxes
of $4 on unrealized appreciation.) 775
Foreign Currency Translations (2)
-----
Change in Unrealized Appreciation/Depreciation 773
-----
Net Realized Gain and Change in Unrealized
Appreciation/Depreciation 634
-----
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 669
=====
</TABLE>
- ---------------
* Commencement of operations
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM MARCH 3,
1997* TO JUNE 30, 1997
(000)
- -----------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS OPERATIONS:
Net Investment Income $ 35
Net Realized Loss (139)
Change in Unrealized
Appreciation/Depreciation 773
-------
Net Increase in Net Assets
Resulting from Operations 669
-------
CAPITAL SHARE TRANSACTIONS (1):
Subscribed 10,329
Redeemed (52)
-------
Net Increase in Net Assets Resulting
from Capital Share Transactions 10,277
-------
Total Increase in Net Assets 10,946
NET ASSETS:
Beginning of Period --
-------
End of Period (Including undistributed
net investment income of $35) $10,946
=======
- -----------------------------------------------------------------------------
(1) Capital Share Transactions:
Shares Subscribed 1,032
Shares Redeemed (5)
-------
Net Increase in Capital Shares Outstanding 1,027
=======
</TABLE>
- -----------------------------------------------------------------------------
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKETS EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends $ 190
Interest 38
Less: Foreign Taxes Withheld (9)
------
Total Income 219
------
EXPENSES:
Investment Advisory Fees 97
Less: Fees Waived (97)
------
Net Investment Advisory Fees --
Professional Fees 116
Custodian Fees 62
Amortization of Organizational Costs 41
Administrative Fees 14
Shareholder Reports 14
Foreign Tax Expense 2
Directors' Fees and Expenses 1
Other 3
Expenses Reimbursed by Adviser (114)
------
Net Expenses 139
------
Net Investment Income 80
------
NET REALIZED GAIN (LOSS) ON:
Investments Sold 716
Foreign Currency Transactions (5)
------
Net Realized Gain 711
------
CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments (Net of foreign taxes
of $1 on unrealized appreciation.) 2,394
Foreign Currency Translations (31)
------
Change in Unrealized Appreciation/Depreciation 2,363
------
Net Realized Gain and Change in Unrealized
Appreciation/Depreciation 3,074
------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $3,154
======
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD FROM
JUNE 30, 1997 OCTOBER 1, 1996* TO
(UNAUDITED) DECEMBER 31, 1996
(000) (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income $ 80 $ 8
Net Realized Gain (Loss) 711 (60)
Change in Unrealized
Appreciation/Depreciation 2,363 (135)
-------- -------
Net Increase (Decrease) in Net
Assets Resulting from Operations 3,154 (187)
-------- -------
DISTRIBUTIONS:
Net Investment Income -- (20)
-------- -------
CAPITAL SHARE TRANSACTIONS (1):
Subscribed 16,479 11,993
Distributions Reinvested -- 3
Redeemed (11,114) --
-------- -------
Net Increase in Net Assets Resulting
from Capital Share Transactions 5,365 11,996
-------- -------
Total Increase in Net Assets 8,519 11,789
NET ASSETS:
Beginning of Period 11,789 --
-------- -------
End of Period (Including undistributed
net investment income of $83 and $3,
respectively) $ 20,308 $11,789
======== =======
- -----------------------------------------------------------------------------
(1) Capital Share Transactions:
Shares Subscribed 1,466 1,205
Shares Issued on Distributions
Reinvested -- 1
Shares Redeemed (983) --
-------- -------
Net Increase in Capital Shares
Outstanding 483 1,206
======== =======
- -----------------------------------------------------------------------------
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
GLOBAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
(000)
- -----------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends $ 69
Interest 19
Less: Foreign Taxes Withheld (6)
-----
Total Income 82
-----
EXPENSES:
Investment Advisory Fees 22
Less: Fees Waived (22)
-----
Net Investment Advisory Fees --
Professional Fees 21
Administrative Fees 9
Shareholder Reports 7
Custodian Fees 6
Other 3
Expenses Reimbursed by Adviser (14)
-----
Net Expenses 32
-----
Net Investment Income 50
-----
NET REALIZED GAIN ON:
Investments Sold 5
Foreign Currency Transactions 5
-----
Net Realized Gain 10
-----
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments 783
-----
Net Realized Gain and Change in Unrealized
Appreciation/Depreciation 793
-----
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 843
=====
</TABLE>
- ---------------
* Commencement of operations
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income $ 50
Net Realized Gain 10
Change in Unrealized Appreciation/Depreciation 783
------
Net Increase in Net Assets Resulting from Operations 843
------
CAPITAL SHARE TRANSACTIONS (1):
Subscribed 6,567
Redeemed (84)
------
Net Increase in Net Assets Resulting
from Capital Share Transactions 6,483
------
Total Increase in Net Assets 7,326
NET ASSETS:
Beginning of Period --
------
End of Period (Including undistributed net
investment income of $50) $7,326
======
- --------------------------------------------------------------------------------
(1) Capital Share Transactions:
Shares Subscribed 645
Shares Redeemed (8)
------
Net Increase in Capital Shares Outstanding 637
======
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
INTERNATIONAL MAGNUM PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
(000)
<S> <C>
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 163
Interest 32
Less: Foreign Taxes Withheld (22)
------
Total Income 173
------
EXPENSES:
Investment Advisory Fees 44
Less: Fees Waived (44)
------
Net Investment Advisory Fees --
Custodian Fees 35
Administrative Fees 23
Shareholder Reports 16
Professional Fees 13
Other 1
Expenses Reimbursed by Adviser (24)
------
Net Expenses 64
------
Net Investment Income 109
------
NET REALIZED GAIN ON:
Investments Sold 46
Foreign Currency Transactions 282
------
Net Realized Gain 328
------
CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments 1,358
Foreign Currency Translations 46
------
Change in Unrealized Appreciation/Depreciation 1,404
------
Net Realized Gain and Change in
Unrealized Appreciation/Depreciation 1,732
------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,841
======
</TABLE>
- ---------------
* Commencement of operations
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income $ 109
Net Realized Gain 328
Change in Unrealized
Appreciation/Depreciation 1,404
-------
Net Increase in Net Assets Resulting from Operations 1,841
-------
CAPITAL SHARE TRANSACTIONS (1):
Subscribed 12,853
Redeemed (51)
-------
Net Increase in Net Assets Resulting
from Capital Share Transactions 12,802
-------
Total Increase in Net Assets 14,643
NET ASSETS:
Beginning of Period --
-------
End of Period (Including
undistributed net investment
income of $109) $14,643
=======
- --------------------------------------------------------------------------------
(1) Capital Share Transactions:
Shares Subscribed 1,260
Shares Redeemed (5)
-------
Net Increase in Capital Shares
Outstanding 1,255
=======
- --------------------------------------------------------------------------------
* Commencement of operations
</TABLE>
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EQUITY GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends $ 14
Interest 8
-------
Total Income 22
-------
EXPENSES:
Investment Advisory Fees 8
Less: Fees Waived (8)
-------
Net Investment Advisory Fees --
Custodian Fees 36
Shareholder Reports 16
Professional Fees 15
Administrative Fees 6
Other 2
Expenses Reimbursed by Adviser (62)
-------
Net Expenses 13
-------
Net Investment Income 9
-------
NET REALIZED GAIN ON:
Investments Sold 60
-------
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments 371
-------
Net Realized Gain and Change in Unrealized
Appreciation/Depreciation 431
-------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 440
=======
</TABLE>
- ---------------
* Commencement of operations
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS OPERATIONS:
Net Investment Income $ 9
Net Realized Gain 60
Change in Unrealized Appreciation/Depreciation 371
------
Net Increase in Net Assets Resulting from Operations 440
------
CAPITAL SHARE TRANSACTIONS (1):
Subscribed 3,542
Redeemed (23)
------
Net Increase in Net Assets Resulting
from Capital Share Transactions 3,519
------
Total Increase in Net Assets 3,959
NET ASSETS:
Beginning of Period --
------
End of Period (Including undistributed net investment
income of $9) $3,959
======
- --------------------------------------------------------------------------------
(1) Capital Share Transactions:
Shares Subscribed 346
Shares Redeemed (2)
------
Net Increase in Capital Shares Outstanding 344
======
- --------------------------------------------------------------------------------
* Commencement of operations
</TABLE>
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
MID CAP VALUE PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
(000)
- ------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends $ 20
Interest 7
-----
Total Income 27
-----
EXPENSES:
Investment Advisory Fees 14
Less: Fees Waived (14)
-----
Net Investment Advisory Fees --
Custodian Fees 11
Professional Fees 9
Shareholder Reports 5
Administrative Fees 5
Other 1
Expenses Reimbursed by Adviser (12)
-----
Net Expenses 19
-----
Net Investment Income 8
-----
NET REALIZED GAIN ON:
Investments Sold 110
-----
CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments 573
-----
Net Realized Gain and Change in Unrealized
Appreciation/Depreciation 683
-----
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $691
=====
</TABLE>
- ---------------
* Commencement of operations
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
(000)
- -------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS OPERATIONS:
Net Investment Income $ 8
Net Realized Gain 110
Change in Unrealized Appreciation/Depreciation 573
------
Net Increase in Net Assets
Resulting from Operations 691
------
CAPITAL SHARE TRANSACTIONS (1):
Subscribed 4,233
Redeemed (2)
------
Net Increase in Net Assets Resulting from Capital
Share Transactions 4,231
------
Total Increase in Net Assets 4,922
NET ASSETS:
Beginning of Period --
------
End of Period (Including undistributed net investment
income of $8) $4,922
======
- --------------------------------------------------------------------------------
(1) Capital Share Transactions:
Shares Subscribed 413
======
</TABLE>
- -----------------------------------------------------------------------------
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
U.S. REAL ESTATE PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM MARCH 3,
1997* TO JUNE 30, 1997
(000)
- -------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends $ 61
Interest 17
-----
Total Income 78
-----
EXPENSES:
Investment Advisory Fees 14
Less: Fees Waived (14)
-----
Net Investment Advisory Fees --
Custodian Fees 21
Shareholder Reports 14
Professional Fees 9
Administrative Fees 5
Other 1
Expenses Reimbursed by Adviser (31)
-----
Net Expenses 19
-----
Net Investment Income 59
-----
NET REALIZED LOSS ON:
Investments Sold (37)
-----
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments 204
-----
Net Realized Loss and Change in Unrealized
Appreciation/Depreciation 167
-----
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 226
=====
</TABLE>
- ---------------
* Commencement of operations
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM MARCH 3,
1997* TO JUNE 30, 1997
(000)
- -------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income $ 59
Net Realized Loss (37)
Change in Unrealized Appreciation/Depreciation 204
-------
Net Increase in Net Assets Resulting from Operations 226
-------
CAPITAL SHARE TRANSACTIONS (1):
Subscribed 5,799
-------
Total Increase in Net Assets 6,025
-------
NET ASSETS:
Beginning of Period --
-------
End of Period (Including undistributed net investment
income of $59) $ 6,025
=======
- -------------------------------------------------------------------------------
(1) Capital Share Transactions:
Shares Subscribed 581
=======
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
35
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
VALUE PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends $ 32
Interest 16
----
Total Income 48
----
EXPENSES:
Investment Advisory Fees 10
Less: Fees Waived (10)
----
Net Investment Advisory Fees --
Professional Fees 15
Custodian Fees 6
Shareholder Reports 5
Administrative Fees 5
Other 1
Expenses Reimbursed by Adviser (17)
----
Net Expenses 15
----
Net Investment Income 33
----
NET REALIZED GAIN ON:
Investments Sold 72
----
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments 469
----
Net Realized Gain and Change in Unrealized
Appreciation/Depreciation 541
----
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $574
====
</TABLE>
- ---------------
* Commencement of operations
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income $ 33
Net Realized Gain 72
Change in Unrealized Appreciation/Depreciation 469
------
Net Increase in Net Assets Resulting from Operations 574
------
CAPITAL SHARE TRANSACTIONS (1):
Subscribed 4,690
------
Total Increase in Net Assets 5,264
NET ASSETS:
Beginning of Period --
------
End of Period (Including undistributed net investment
income of $33) $5,264
======
- --------------------------------------------------------------------------------
(1) Capital Share Transactions:
Shares Subscribed 456
======
- --------------------------------------------------------------------------------
* Commencement of operations
</TABLE>
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKETS DEBT PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period from June 16,
1997* to June 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest $ 32
---
EXPENSES:
Investment Advisory Fees 3
Less: Fees Waived (3)
---
Net Investment Advisory Fees --
Custodian Fees 3
Professional Fees 3
Shareholder Reports 1
Administrative Fees 1
Expenses Reimbursed by Adviser (3)
---
Net Expenses 5
---
Net Investment Income 27
---
NET REALIZED LOSS ON:
Investments Sold (5)
---
CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments (27)
Foreign Currency Translations 1
---
Change in Unrealized
Appreciation/Depreciation (26)
---
Net Realized Loss and Change in Unrealized
Appreciation/Depreciation (31)
---
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ (4)
===
</TABLE>
- ---------------
* Commencement of operations
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM JUNE 16,
1997* TO JUNE 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income $ 27
Net Realized Loss (5)
Change in Unrealized
Appreciation/Depreciation (26)
-------
Net Decrease in Net Assets
Resulting from Operations (4)
-------
CAPITAL SHARE TRANSACTIONS (1):
Subscribed 10,053
-------
Total Increase in Net Assets 10,049
NET ASSETS:
Beginning of Period --
-------
End of Period (Including undistributed net investment
income of $27) $10,049
=======
- --------------------------------------------------------------------------------
(1) Capital Share Transactions:
Shares Subscribed 1,005
=======
- --------------------------------------------------------------------------------
* Commencement of operations
</TABLE>
The accompanying notes are an integral part of the financial statements.
37
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
FIXED INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Period from January 2,
1997* to June 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest $ 248
-----
EXPENSES:
Investment Advisory Fees 17
Less: Fees Waived (17)
-----
Net Investment Advisory Fees --
Custodian Fees 11
Professional Fees 22
Shareholder Reports 6
Administrative Fees 10
Other 1
Expenses Reimbursed by Adviser (20)
-----
Net Expenses 30
-----
Net Investment Income 218
-----
NET REALIZED GAIN ON:
Investments Sold 44
Foreign Currency Transactions 8
-----
Net Realized Gain 52
-----
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments 25
Foreign Currency Translations 5
-----
Change in Unrealized Appreciation/Depreciation 30
-----
Net Realized Gain and Change in Unrealized
Appreciation/Depreciation 82
-----
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 300
=====
</TABLE>
- ---------------
* Commencement of operations
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
Period from January 2,
1997* to June 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income $ 218
Net Realized Gain 52
Change in Unrealized Appreciation/Depreciation 30
------
Net Increase in Net Assets Resulting from Operations 300
------
CAPITAL SHARE TRANSACTIONS (1):
Subscribed 8,793
Redeemed (60)
------
Net Increase in Net Assets Resulting
from Capital Share Transactions 8,733
------
Total Increase in Net Assets 9,033
NET ASSETS:
Beginning of Period --
------
End of Period (Including undistributed net
investment income of $218) $9,033
======
- --------------------------------------------------------------------------------
(1) Capital Share Transactions:
Shares Subscribed 878
Shares Redeemed (6)
------
Net Increase in Capital Shares Outstanding 872
======
- --------------------------------------------------------------------------------
* Commencement of operations
</TABLE>
The accompanying notes are an integral part of the financial statements.
38
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
HIGH YIELD PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Period from January 2,
1997* to June 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends $ 2
Interest 339
----
Total Income 341
----
EXPENSES:
Investment Advisory Fees 21
Less: Fees Waived (21)
----
Net Investment Advisory Fees --
Professional Fees 11
Administrative Fees 10
Custodian Fees 6
Shareholder Reports 5
Other 1
----
Net Expenses 33
----
Net Investment Income 308
----
NET REALIZED GAIN ON:
Investments Sold 24
----
CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments 156
----
Net Realized Gain and Change in Unrealized
Appreciation/Depreciation 180
----
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $488
====
</TABLE>
- ---------------
*Commencement of operations
- ---------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
Period from January 2,
1997* to June 30, 1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income $ 308
Net Realized Gain 24
Change in Unrealized
Appreciation/Depreciation 156
------
Net Increase in Net Assets
Resulting from Operations 488
------
CAPITAL SHARE TRANSACTIONS (1):
Subscribed 8,806
Redeemed (12)
------
Net Increase in Net Assets Resulting
from Capital Share Transactions 8,794
------
Total Increase in Net Assets 9,282
NET ASSETS:
Beginning of Period --
------
End of Period (Including
undistributed net investment
income of $308) $9,282
======
- --------------------------------------------------------------------------------
(1) Capital Share Transactions:
Shares Subscribed 878
Shares Redeemed (1)
------
Net Increase in Capital Shares
Outstanding 877
======
- --------------------------------------------------------------------------------
* Commencement of operations
</TABLE>
The accompanying notes are an integral part of the financial statements.
39
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
ASIAN EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIOD FROM MARCH 3,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- ----------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03
Net Realized and Unrealized Gain 0.63
-------
Total From Investment Operations 0.66
-------
NET ASSET VALUE, END OF PERIOD $ 10.66
=======
TOTAL RETURN 6.60%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $10,946
Ratio of Expenses to Average Net Assets 1.20%**
Ratio of Net Investment Income to
Average Net Assets 1.06%**
Portfolio Turnover Rate 49%
Average Commission Rate:
Per Share $0.0170
As a Percentage of Trade Amount 0.56%
- ----------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment Loss $ 0.04
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.55%**
Net Investment Loss to Average Net Assets (0.22)%**
- ----------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
The accompanying notes are an integral part of the financial statements.
40
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKETS EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD FROM
JUNE 30, 1997 OCTOBER 1, 1996*
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) TO DECEMBER 31, 1996
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.78 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.05 0.01
Net Realized and Unrealized Gain (Loss) 2.20 (0.21)
------- -------
Total From Investment Operations 2.25 (0.20)
------- -------
DISTRIBUTIONS
Net Investment Income -- (0.02)
------- -------
Total Distributions -- (0.02)
------- -------
NET ASSET VALUE, END OF PERIOD $ 12.03 $ 9.78
======= =======
TOTAL RETURN 23.01% (2.03)%
======= =======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $20,308 $11,789
Ratio of Expenses to Average Net Assets 1.75%** 1.75%**
Ratio of Net Investment Income to Average Net Assets 1.03%** 0.32%**
Portfolio Turnover Rate 38% 9%
Average Commission Rate:
Per Share $0.0012 $0.0013
As a Percentage of Trade Amount 0.40% 0.45%
- -------------------------------------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income (Loss) $ 0.12 $ 0.08
Ratios Before Expense Limitation:
Expenses to Average Net Assets 4.49%** 6.17%**
Net Investment Loss to Average Net Assets (1.67)%** (4.06)%**
- -------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
The accompanying notes are an integral part of the financial statements.
41
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
GLOBAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- ------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
--------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.08
Net Realized and Unrealized Gain 1.41
--------
Total From Investment Operations 1.49
--------
NET ASSET VALUE, END OF PERIOD $ 11.49
========
TOTAL RETURN 14.90%
========
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 7,326
Ratio of Expenses to Average Net Assets 1.15%**
Ratio of Net Investment Income to Average Net Assets 1.81%**
Portfolio Turnover Rate 3%
Average Commission Rate:
Per Share $0.0225
As a Percentage of Trade Amount 0.17%
- ------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.06
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.46%**
Net Investment Income to Average Net Assets 0.50%**
</TABLE>
- ------------------------------------------------------------------------------
*Commencement of operations
**Annualized
The accompanying notes are an integral part of the financial statements.
42
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
INTERNATIONAL MAGNUM PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- -------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.09
Net Realized and Unrealized Gain 1.58
-------
Total From Investment Operations 1.67
-------
NET ASSET VALUE, END OF PERIOD $ 11.67
=======
TOTAL RETURN 16.70%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $14,643
Ratio of Expenses to Average Net Assets 1.15%**
Ratio of Net Investment Income to Average Net Assets 1.96%**
Portfolio Turnover Rate 19%
Average Commission Rate:
Per Share $0.0170
As a Percentage of Trade Amount 0.17%
- -------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.05
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.38%**
Net Investment Income to Average Net Assets 0.73%**
</TABLE>
- -------------------------------------------------------------------
* Commencement of operations
** Annualized
The accompanying notes are an integral part of the financial statements.
43
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EQUITY GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- -------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03
Net Realized and Unrealized Gain 1.50
-------
Total From Investment Operations 1.53
-------
NET ASSET VALUE, END OF PERIOD $ 11.53
=======
TOTAL RETURN 15.30%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 3,959
Ratio of Expenses to Average Net Assets 0.85%**
Ratio of Net Investment Income to Average Net Assets 0.60%**
Portfolio Turnover Rate 95%
Average Commission Rate Per Share $0.0510
- -------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income (Loss) $ 0.85
Ratios Before Expense Limitation:
Expenses to Average Net Assets 5.55%**
Net Investment Loss to Average Net Assets (4.11)%**
</TABLE>
- -------------------------------------------------------------------
* Commencement of operations
** Annualized
The accompanying notes are an integral part of the financial statements.
44
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
MID CAP VALUE PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- -------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.02
Net Realized and Unrealized Gain 1.89
-------
Total From Investment Operations 1.91
-------
NET ASSET VALUE, END OF PERIOD $ 11.91
=======
TOTAL RETURN 19.10%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 4,922
Ratio of Expenses to Average Net Assets 1.05%**
Ratio of Net Investment Income to Average Net Assets 0.43%**
Portfolio Turnover Rate 76%
Average Commission Rate Per Share $0.0429
- -------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income (Loss) $ 0.06
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.45%**
Net Investment Loss to Average Net Assets (0.97)%**
</TABLE>
- -------------------------------------------------------------------
* Commencement of operations
** Annualized
The accompanying notes are an integral part of the financial statements.
45
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
U.S. REAL ESTATE PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIOD FROM MARCH 3,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- ----------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.10
Net Realized and Unrealized Gain 0.27
-------
Total From Investment Operations 0.37
-------
NET ASSET VALUE, END OF PERIOD $ 10.37
=======
TOTAL RETURN 3.70%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 6,025
Ratio of Expenses to Average Net Assets 1.10%**
Ratio of Net Investment Income to
Average Net Assets 3.52%**
Portfolio Turnover Rate 56%
Average Commission Rate Per Share $0.0576
- ----------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.08
Ratios Before Expense Limitation:
Expenses to Average Net Assets 3.71%**
Net Investment Income to Average Net Assets 0.90%**
- ----------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
The accompanying notes are an integral part of the financial statements.
46
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
VALUE PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIOD FROM JANUARY 2,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- --------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.07
Net Realized and Unrealized Gain 1.48
-------
Total From Investment Operations 1.55
-------
NET ASSET VALUE, END OF PERIOD $ 11.55
=======
TOTAL RETURN 15.50%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 5,264
Ratio of Expenses to Average Net Assets 0.85%**
Ratio of Net Investment Income to
Average Net Assets 1.82%**
Portfolio Turnover Rate 22%
Average Commission Rate Per Share $0.0585
- --------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.06
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.35%**
Net Investment Income to Average Net Assets 0.32%**
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
The accompanying notes are an integral part of the financial statements.
47
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKETS DEBT PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIOD FROM JUNE 16,
1997* TO JUNE 30, 1997
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED)
- --------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03
Net Realized and Unrealized Loss (0.03)
-------
Total From Investment Operations --
-------
NET ASSET VALUE, END OF PERIOD $ 10.00
=======
TOTAL RETURN 0.00%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $10,049
Ratio of Expenses to Average Net Assets 1.30%**
Ratio of Net Investment Income to
Average Net Assets 6.48%**
Portfolio Turnover Rate 14%
- --------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment
Income $ 0.01
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.77%**
Net Investment Income to Average
Net Assets 5.01%**
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
The accompanying notes are an integral part of the financial statements.
48
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
FIXED INCOME PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Period from January 2,
1997* to June 30, 1997
Selected per Share Data and Ratios (Unaudited)
- --------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.25
Net Realized and Unrealized Gain 0.10
------
Total From Investment Operations 0.35
------
NET ASSET VALUE, END OF PERIOD $ 10.35
======
TOTAL RETURN 3.50%
======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 9,033
Ratio of Expenses to Average Net Assets 0.70%**
Ratio of Net Investment Income to
Average Net Assets 5.27%**
Portfolio Turnover Rate 100%
- --------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.04
Ratios Before Expense Limitation:
Expenses to Average Net Assets 1.59%**
Net Investment Income to Average
Net Assets 4.38%**
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
The accompanying notes are an integral part of the financial statements.
49
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
HIGH YIELD PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Period from January 2,
1997* to June 30, 1997
Selected per Share Data and Ratios (Unaudited)
- --------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.35
Net Realized and Unrealized Gain 0.23
------
Total From Investment Operations 0.58
------
NET ASSET VALUE, END OF PERIOD $10.58
======
TOTAL RETURN 5.80%
======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $9,282
Ratio of Expenses to Average Net Assets 0.80%**
Ratio of Net Investment Income to
Average Net Assets 7.41%**
Portfolio Turnover Rate 63%
- --------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period:
Per Share Benefit to Net Investment Income $ 0.02
Ratios Before Expense Limitation:
Expenses to Average Net Assets 1.30%**
Net Investment Income to Average
Net Assets 6.91%**
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
The accompanying notes are an integral part of the financial statements.
50
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
Morgan Stanley Universal Funds, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. As of June 30, 1997, the Fund was comprised of eleven separate active
portfolios (individually referred to as a "Portfolio", collectively as the
"Portfolios"). The Emerging Markets Equity Portfolio commenced operations on
October 1, 1996. The Global Equity, International Magnum, Equity Growth, Mid Cap
Value, Value, Fixed Income and High Yield Portfolios each commenced operations
on January 2, 1997. The Asian Equity and U.S. Real Estate Portfolios each
commenced operations on March 3, 1997 and the Emerging Markets Debt Portfolio
commenced operations on June 16, 1997.
The Fund is intended to be the funding vehicle for variable annuity contracts
and variable life insurance policies to be offered by the separate accounts of
certain life insurance companies.
A. ACCOUNTING POLICIES: The following significant accounting policies are in
conformity with generally accepted accounting principles for investment
companies. Such policies are consistently followed by the Fund in the
preparation of the financial statements. Generally accepted accounting
principles may require management to make estimates and assumptions that affect
the reported amounts and disclosures in the financial statements. Actual results
may differ from those estimates.
1. SECURITY VALUATION: Equity securities listed on a U.S. exchange and equity
securities traded on NASDAQ are valued at the latest quoted sales price on the
valuation date. Securities listed on a foreign exchange are valued at their
closing price. Unlisted securities and listed securities not traded on the
valuation date, for which market quotations are readily available, are valued at
the mean between the current bid and asked prices obtained from reputable
brokers. Bonds and other fixed income securities may be valued according to the
broadest and most representative market. In addition, bonds and other fixed
income securities may be valued on the basis of prices provided by a pricing
service which are based primarily on institutional size trading in similar
groups of securities. Debt securities purchased with remaining maturities of 60
days or less are valued at amortized cost, if it approximates market value. All
other securities and assets for which market values are not readily available,
including restricted securities, are valued at fair value as determined in good
faith by the Board of Directors, although the actual calculations may be done by
others.
2. INCOME TAXES: It is each Portfolio's intention to qualify as a regulated
investment company and distribute all of its taxable and tax-exempt income.
Accordingly, no provision for Federal income taxes is required in the financial
statements.
A Portfolio may be subject to taxes imposed by countries in which it invests.
Such taxes are generally based on income and/or capital gains earned or
repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation as income and/or capital gains
are earned.
3. REPURCHASE AGREEMENTS: Each Portfolio may enter into repurchase agreements
under which a Portfolio lends cash and takes possession of securities with an
agreement that the counterparty will repurchase such securities. In connection
with transactions in repurchase agreements, a bank as custodian for the Fund
takes possession of the underlying securities which are held as collateral, with
a market value at least equal to the amount of the repurchase transaction,
including principal and accrued interest. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to determine the adequacy of the collateral.
In the event of default on the obligation to repurchase, the Fund has the right
to liquidate the collateral and apply the proceeds in satisfaction of the
obligation. In the event of default or bankruptcy by the counterparty to the
agreement, realization and/or retention of the collateral or proceeds may be
subject to legal proceedings.
4. FOREIGN CURRENCY TRANSLATION AND FOREIGN INVESTMENTS: The books and records
of the Fund are maintained in U.S. dollars. Foreign currency amounts are
translated into U.S. dollars at the mean of the bid and asked prices of such
currencies against U.S. dollars last quoted by a major bank as follows:
. investments, other assets and liabilities at the prevailing rates of
exchange on the valuation date;
. investment transactions and investment income at the prevailing rates of
exchange on the dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates
and market values at the close of the period, the Fund does not isolate that
portion of the results of operations arising as a result of changes in the
foreign exchange rates from the fluctuations arising from changes in the market
prices of the securities held at period end. Similarly, the Fund does not
isolate the effect of changes in foreign exchange rates from the fluctuations
arising from changes in the market prices of securities sold during the period.
Accordingly, realized and unrealized foreign currency gains (losses) are
included in the reported net realized and unrealized gains (losses) on
investment transactions and balances. However, pursuant to U.S. Federal income
tax regulations, gains and losses from certain foreign currency transactions and
the foreign currency portion of gains and losses realized on sales and
maturities of foreign denominated debt securities are treated as ordinary income
for U.S. Federal income tax purposes.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from foreign
51
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONT.)
JUNE 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
currency exchange contracts, disposition of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, and the difference between the amount of investment income and
foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent amounts actually received or paid. Net unrealized currency gains
(losses) from valuing foreign currency denominated assets and liabilities at
period end exchange rates are reflected as a component of unrealized
appreciation (depreciation) on the Statement of Net Assets. The change in net
unrealized currency gains (losses) for the period is reflected on the Statement
of Operations.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. dollar denominated
transactions as a result of, among other factors, the possibility of lower
levels of governmental supervision and regulation of foreign securities markets
and the possibility of political or economic instability.
Prior governmental approval for foreign investments may be required under
certain circumstances in some countries, and the extent of foreign investments
in domestic companies may be subject to limitation in other countries. Foreign
ownership limitations also may be imposed by the charters of individual
companies to prevent, among other concerns, violation of foreign investment
limitations. As a result, an additional class of shares (identified as "Foreign"
in the Statement of Net Assets) may be created and offered for investment. The
"local" and "foreign" shares' market values may differ. In the absence of
trading of the foreign shares in such markets at June 30, 1997, the Portfolios
value the foreign shares at the closing exchange price of the local shares. Such
securities are reflected as fair valued in the Statement of Net Assets.
5. FOREIGN CURRENCY EXCHANGE CONTRACTS: The Portfolios may enter into foreign
currency exchange contracts to attempt to protect securities and related
receivables and payables against changes in future foreign currency exchange
rates. A foreign currency exchange contract is an agreement between two parties
to buy or sell currency at a set price on a future date. The market value of the
contract will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily and the change in market value is recorded by the
Portfolios as unrealized gain or loss. The Portfolios record realized gains or
losses when the contract is closed equal to the difference between the value of
the contract at the time is was opened and the value at the time it was closed.
Risk may arise upon entering into these contracts from the potential inability
of counterparties to meet the terms of their contracts and is generally limited
to the amount of the unrealized gain on the contracts, if any, at the date of
default. Risks may also arise from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar.
6. FORWARD COMMITMENTS AND WHEN-ISSUED/DELAYED DELIVERY SECURITIES: Each
Portfolio may make forward commitments to purchase or sell securities. Payment
and delivery for securities which have been purchased or sold on a forward
commitment basis can take place a month or more (not to exceed 120 days) after
the date of the transaction. Additionally, each Portfolio may purchase
securities on a when-issued or delayed delivery basis. Securities purchased on a
when-issued or delayed delivery basis are purchased for delivery beyond the
normal settlement date at a stated price and yield, and no income accrues to the
Portfolio on such securities prior to delivery. When the Portfolio enters into a
purchase transaction on a when-issued or delayed delivery basis, it establishes
a segregated account in which it maintains liquid assets in an amount at least
equal in value to the Portfolio's commitments to purchase such securities.
Purchasing securities on a forward commitment or when-issued or delayed-delivery
basis may involve a risk that the market price at the time of delivery may be
lower than the agreed upon purchase price, in which case there could be an
unrealized loss at the time of delivery.
7. LOAN AGREEMENTS: The Portfolios may invest in fixed and floating rate loans
("Loans") arranged through private negotiations between an issuer of sovereign
debt obligations and one or more financial institutions ("Lenders") deemed to be
creditworthy by the investment adviser. A Portfolio's investments in Loans may
be in the form of participations in Loans ("Participations") or assignments of
all or a portion of Loans ("Assignments") from third parties. A Portfolio's
investment in Participations typically results in the Portfolio having a
contractual relationship with only the Lender and not with the borrower. The
Portfolio has the right to receive payments of principal, interest and any fees
to which it is entitled only upon receipt by the Lender of the payments from the
borrower. The Portfolio generally has no right to enforce compliance by the
borrower with the terms of the loan agreement. As a result, the Portfolio may be
subject to the credit risk of both the borrower and the Lender that is selling
the Participation. When a Portfolio purchases Assignments from Lenders, it
acquires direct rights against the borrower on the Loan. Because Assignments are
arranged through private negotiations between potential assignees and potential
assignors, the rights and obligations acquired by the Portfolio as the purchaser
of an Assignment may differ from, and be more limited than, those held by the
assigning Lender.
8. ORGANIZATIONAL COSTS: The organizational costs of the Fund are being
amortized on a straight line basis over a period of five years beginning with
the Emerging Markets Equity Portfolio's commencement of operations. Morgan
Stanley Asset Management Inc. has agreed that in the event any of it's initial
shares which comprised the Fund at it's inception are redeemed, the proceeds on
redemption will be reduced by the pro-rata portion of any unamortized
organizational costs in the same proportion as the number of shares redeemed
bears to the initial shares held at time of redemption.
52
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONT.)
JUNE 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
9. OTHER: Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses on the sale of investment
securities are determined on the identified cost basis. Dividend income is
recorded on the ex-dividend date (except for certain foreign dividends which may
be recorded as soon as the Fund is informed of such dividends) net of applicable
withholding taxes where recovery of such taxes is not reasonably assured.
Interest income is recognized on the accrual basis except where collection is in
doubt. Discounts and premiums on securities purchased (other than
mortgage-backed securities) are amortized according to the effective yield
method over their respective lives. Most expenses of the Fund can be directly
attributed to a particular Portfolio. Expenses which cannot be directly
attributed are apportioned among the Portfolios based upon relative net assets.
Distributions from the Portfolios are recorded on the ex-distribution date.
The U.S. Real Estate Portfolio owns shares of real estate investment trusts
("REITs") which report information on the source of their distributions
annually. A portion of distributions received from REITs during the year is
estimated to be a return of capital and is recorded as a reduction of their
cost.
B. ADVISERS: Morgan Stanley Asset Management Inc. ("MSAM"), a wholly-owned
subsidiary of Morgan Stanley, Dean Witter, Discover & Co., provides the
following Portfolios with investment advisory services for a fee, paid
quarterly, at the annual rate based on average daily net assets as follows:
<TABLE>
<CAPTION>
Assets
-----------------------------------------------
From More
First $500 Million than
Portfolio $500 Million to $1 Billion $1 Billion
- -------------------------- --------------- --------------- -------------
<S> <C> <C> <C>
Asian Equity.............. 0.80% 0.75% 0.70%
Emerging Markets Equity... 1.25 1.20 1.15
Global Equity............. 0.80 0.75 0.70
International Magnum...... 0.80 0.75 0.70
Equity Growth............. 0.55 0.50 0.45
U.S. Real Estate.......... 0.80 0.75 0.70
Emerging Markets Debt..... 0.80 0.75 0.70
</TABLE>
Miller Anderson & Sherrerd, LLP ("MAS"), a wholly-owned subsidiary of Morgan
Stanley, Dean Witter, Discover & Co., provides the following Portfolios with
investment advisory services for a fee, paid quarterly, at the annual rate based
on average daily net assets as follows:
<TABLE>
<CAPTION>
Assets
-----------------------------------------------
From More
First $500 Million than
Portfolio $500 Million to $1 Billion $1 Billion
- -------------------------- --------------- --------------- -------------
<S> <C> <C> <C>
Mid Cap Value............. 0.75% 0.70% 0.65%
Value..................... 0.55 0.50 0.45
Fixed Income.............. 0.40 0.35 0.30
High Yield................ 0.50 0.45 0.40
</TABLE>
MSAM and MAS have agreed to reduce fees payable to them and to reimburse the
Portfolios, if necessary, if the annual operating expenses, as defined,
expressed as a percentage of average daily net assets, exceed the maximum ratios
indicated as follows:
<TABLE>
<CAPTION>
Maximum Expense
Portfolio Ratio
- --------- ---------------------
<S> <C>
Asian Equity................................. 1.20%
Emerging Markets Equity...................... 1.75
Global Equity................................ 1.15
International Magnum......................... 1.15
Equity Growth................................ 0.85
Mid Cap Value................................ 1.05
U.S. Real Estate............................. 1.10
Value........................................ 0.85
Emerging Markets Debt........................ 1.30
Fixed Income................................. 0.70
High Yield................................... 0.80
</TABLE>
C. ADMINISTRATORS: MSAM and MAS (the "Administrators") also provide their
respective Portfolios with administrative services pursuant to an administrative
agreement for a monthly fee which on an annual basis equals 0.25% of the average
daily net assets of each Portfolio, plus reimbursement of out-of-pocket
expenses. Under an agreement between the Administrators and Chase Global Funds
Services Company ("CGFSC"), a subsidiary of The Chase Manhattan Bank ("Chase"),
CGFSC provides certain administrative services to the Fund. For such services,
each Administrator pays CGFSC a portion of the fee the Administrators receive
from the Fund. Certain employees of CGFSC are officers of the Fund. In addition,
the Fund incurs local administration fees in connection with doing business in
certain emerging market countries.
D. CUSTODIANS: Morgan Stanley Trust Company ("MSTC"), a wholly-owned subsidiary
of Morgan Stanley, Dean Witter, Discover & Co., acts as custodian for the Fund's
assets held outside the United States in accordance with a custodian agreement.
Chase serves as custodian for the Fund's domestic assets in accordance with a
separate custodian agreement. Custodian fees are computed and payable monthly
based on assets held, investment purchases and sales activity, an account
maintenance fee, plus reimbursement for certain out-of-pocket expenses. For the
period ended June 30, 1997, the following Portfolios incurred custody fees and
had amounts payable to MSTC at June 30, 1997:
<TABLE>
<CAPTION>
MSTC Custody Custody Fees
Fees Incurred Payable to MSTC
Portfolio (000) (000)
- --------- ------------------- ---------------------
<S> <C> <C>
Asian Equity.................. $11 $ 7
Emerging Markets Equity....... 58 27
Global Equity................. 3 1
International Magnum.......... 31 13
Emerging Markets Debt......... 2 2
</TABLE>
53
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONT.)
JUNE 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
In addition, for the period ended June 30, 1997, the following Portfolios have
earned interest income and incurred interest expense on balances with MSTC as
follows:
<TABLE>
<CAPTION>
Interest Interest
Income Expense
Portfolio (000) (000)
- --------- -------- --------
<S> <C> <C>
Asian Equity................................. $ -- $ 1
Emerging Markets Equity...................... 1 1
</TABLE>
E. Other: During the period ended June 30, 1997, the following Portfolios paid
brokerage commissions to Morgan Stanley & Co., Incorporated and Dean Witter
Reynolds, Inc., affiliated broker/dealers, of approximately:
<TABLE>
<CAPTION>
Brokerage Commissions
(000)
-----------------------------------
Morgan Stanley & Dean Witter
Portfolio Co., Inc. Reynolds, Inc.
- --------- ---------------- --------------
<S> <C> <C>
Emerging Markets Equity.......... $ 2 $ --
Equity Growth.................... -- 11
</TABLE>
At June 30, 1997, the net assets of certain Portfolios were substantially
comprised of foreign denominated securities and currency. Changes in currency
exchange rates will affect the U.S. dollar value of and investment income from
such securities.
From time to time, certain Portfolios of the Fund have shareholders that hold a
significant portion of a Portfolio's outstanding shares. Investment activities
of these shareholders could have a material impact on those Portfolios.
54
<PAGE>
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONT.)
JUNE 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
F. SUPPLEMENTAL PROXY INFORMATION: On May 1, 1997, a special meeting of the
stockholders of Morgan Stanley Universal Funds, Inc. (the "Fund") was held for
the purpose of voting on the following matters:
1. To approve or disapprove a new investment advisory agreement with Morgan
Stanley Asset Management Inc.; and
2. To approve or disapprove a new investment advisory agreement with Miller
Anderson & Sherrerd, LLP.
Only Shareholders of investment portfolios (the "Portfolios") advised by Morgan
Stanley Asset Management Inc. are entitled to vote on Proposal 1. Likewise, only
Shareholders of the Portfolios advised by Miller Anderson & Sherrerd, LLP are
entitled to vote on Proposal 2. The result of the shares voted were:
<TABLE>
<CAPTION>
TOTAL
VOTED SHARES
PORTFOLIO VOTED FOR AGAINST ABSTENTIONS VOTED
- --------- --------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Asian Equity................................................ 1,000,000 -- -- 1,000,000
Emerging Markets Equity..................................... 1,280,015 49,199 52,793 1,382,007
Global Equity............................................... 464,777 -- 43,899 508,676
International Magnum........................................ 1,009,006 -- 25,236 1,034,242
Equity Growth............................................... 270,061 -- -- 270,061
Mid Cap Value............................................... 314,112 -- 7,559 321,671
U.S. Real Estate............................................ 500,000 -- -- 500,000
Value....................................................... 310,552 -- -- 310,552
Fixed Income................................................ 819,655 -- -- 819,655
High Yield.................................................. 812,069 -- -- 812,069
</TABLE>
55
<PAGE>
PART C
Morgan Stanley Universal Funds, Inc.
Other Information
Item 24. Financial Statements and Exhibits
---------------------------------
(A) FINANCIAL STATEMENTS
--------------------
1. Included in Part A (Prospectus)
-------------------------------
The Registrant's audited financial highlights for the Emerging
Markets Equity Portfolio for the fiscal period ended December 31,
1996, are incorporated herein by reference to Post-Effective
Amendment No.1 to the Registration Statement on Form N-1A (File No.
333-03013) as filed with the Securities and Exchange Commission on
April 30, 1997 and in final form under Rule 497(c) on May 1, 1997. No
other portfolio was operational in the fiscal period ended December
31, 1996. The Registrant's unaudited financial highlights for the
Emerging Markets Equity Portfolio for the period January 1, 1997
through June 30, 1997 are included in the supplement to the
prospectus of the Emerging Markets Equity Portfolio filed herewith.
The Registrant's unaudited financial highlights for the U.S. Real
Estate, Global Equity, International Magnum, Emerging Markets Equity
and Asian Equity Portfolios for the periods ended June 30, 1997 are
included in the supplement to the prospectus of the U.S. Real Estate,
Global Equity, International Magnum, Emerging Markets Equity and
Asian Equity Portfolios filed herewith.
The Registrant's unaudited financial highlights for the U.S. Real
Estate, Value, Fixed Income, Mid Cap Value and Emerging Markets
Equity Portfolios for the periods ended June 30, 1997 are included in
the supplement to the prospectus of the U.S. Real Estate, Value,
Fixed Income, Mid Cap Value and Emerging Markets Equity Portfolios
filed herewith.
The Registrant's unaudited financial highlights for the U.S. Real
Estate and Fixed Income Portfolios for the periods ended June 30,
1997 are included in the supplement to the prospectus of the U.S.
Real Estate and Fixed Income Portfolios filed herewith.
The Registrant's unaudited financial highlights for the Fixed Income,
High Yield, Equity Growth, Value, Mid Cap Value, Global Equity,
International Magnum, Emerging Markets Equity and Asian Equity
Portfolios for the periods ended June 30, 1997 are included in the
supplement to the prospectus of the Fixed Income, High Yield, Equity
Growth, Value, Mid Cap Value, Global Equity, International Magnum,
Emerging Markets Equity and Asian Equity Portfolios filed herewith.
The Registrant's unaudited financial highlights for the Fixed Income,
High Yield, Equity Growth, Mid Cap Value, U.S. Real Estate, Value,
Global Equity, International Magnum, Emerging Markets Equity and
Asian Equity Portfolios for the periods ended June 30, 1997 are
included in the supplement to the prospectus of the Money Market,
Fixed Income, High Yield, Core Equity, Equity Growth, Value, Mid Cap
Growth, Mid Cap Value, U.S. Real Estate, International Fixed Income,
Emerging Markets Debt, Global Equity, International Magnum, Emerging
Markets Equity, Asian Equity, Balanced and Multi-Asset-Class
Portfolios filed herewith.
The Registrant's unaudited financial highlights for the Global
Equity, International Magnum and Emerging Markets Equity Portfolios
for the period ended June 30, 1997 are included in the supplement to
the prospectus of the Emerging Markets Debt, Global Equity,
International Magnum and Emerging Markets Equity Portfolios filed
herewith.
The Emerging Markets Debt Portfolio commenced operations on June 16,
1997.
2. Included in Part B (Statement of Additional Information)
--------------------------------------------------------
The Registrant's audited financial statements for the Emerging
Markets Equity Portfolio for the fiscal year ended December 31, 1996,
including Price Waterhouse LLP's report thereon, are included in the
Statement of Additional Information which is incorporated
herein by reference to Post-Effective Amendment No.1 to the
Registration Statement on Form N-1A (File No. 333-03013) as filed
with the Securities and Exchange Commission on April 30, 1997 and in
final form under Rule 497(c) on May 1, 1997 and supplemented by
supplements dated July 1, 1997 and July 15, 1997 (filed with the SEC
on July 2, 1997 and July 14, 1997, respectively, under Rule 497), and
are part of the Registrant's December 31, 1996 Annual Report to
Shareholders. The financial statements incorporated by reference are:
1. Statement of Net Assets
2. Statement of Operations
3. Statement of Changes in Net Assets
4. Financial Highlights
5. Notes to Financial Statements
6. Report of Independent Accountants
No other portfolio was operational in the fiscal period ended
December 31, 1996.
The Registrant's unaudited financial statements for the Fixed Income,
Global Equity, Equity Growth (formally known as the "Growth
Portfolio"), High Yield, International Magnum, Mid Cap Value and
Value Portfolios for the period from January 2, 1997 (commencement of
operations) to March 31, 1997, are included in the Statement of
Additional Information which is incorporated herein by reference to
Post-Effective Amendment No.1 to the Registration Statement on Form
N-1A (File No. 333-03013) as filed with the Securities and Exchange
Commission on April 30, 1997 and in final form under Rule 497(c) on
May 1, 1997 and supplemented by supplements dated July 1, 1997 and
July 15, 1997 (filed with the SEC on July 2, 1997 and July 14, 1997,
respectively, under Rule 497). The financial statements incorporated
by reference are:
1. Statement of Net Assets
2. Statement of Operations
3. Statement of Changes in Net Assets
4. Financial Highlights
5. Notes to Financial Statements
The Registrant's unaudited financial statements for the Asian Equity,
Emerging Markets Equity, Global Equity, International Magnum, Equity
Growth, Mid Cap Value, U.S. Real Estate, Value, Emerging Markets
Debt, Fixed Income and High Yield for the periods ended June 30, 1997
are included in Part B (as a supplement to the Statement of
Additional Information which is incorporated by reference). Included
in such financial statements are the following:
1. Statement of Net Assets
2. Statement of Operations
3. Statement in Changes of Net Assets
4. Financial Highlights
5. Notes to Financial Statements
The Emerging Markets Debt Portfolio commenced operations on June 16,
1997.
(B) EXHIBITS
--------
1 (a) Articles of Incorporation between Registrant and Morgan Stanley
Asset Management Inc. are incorporated by reference to Registrant's
Registration Statement on Form N-1A (File Nos. 333-3013 and 811-
7607), as filed with the SEC via EDGAR on May 1, 1996.
(b) Articles of Amendment to Articles of Incorporation (changing "Growth
Portfolio" to "Equity Growth Portfolio") are incorporated by
reference to Post-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form N-1A (File No. 333-3013 and 811-
7607), as filed with the SEC via EDGAR on June 24, 1997.
2 By-laws are incorporated by reference to Registrant's Registration
Statement on Form N-1A (File Nos. 333-3013 and 811-7607), as filed with
the SEC via EDGAR on May 1, 1996.
3 Not applicable.
4 Not applicable.
5 (a) Form of Investment Advisory Agreement between Registrant and Morgan
Stanley Asset Management Inc. ("MSAM") with respect to the Money
Market, Emerging Markets Debt, Growth, U.S. Real Estate, Global
Equity, International Magnum, Emerging Markets Equity and Asian
Equity Portfolios is incorporated by reference to Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on Form
N-1A (File Nos. 333-3013 and 811-7607), as filed with the SEC via
EDGAR on September 16, 1996.
(b) Form of Investment Advisory Agreement between Registrant and Miller
Anderson & Sherrerd, LLP ("MAS") with respect to the Fixed Income,
High Yield, International Fixed Income, Balanced, Multi-Asset-Class,
Value, Core Equity, Mid Cap Growth and Mid Cap Value Portfolios is
incorporated by reference to Pre-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form N-1A (File Nos. 333-3013
and 811-7607), as filed with the SEC via EDGAR on September 16,
1996.
6 Form of Distribution Agreement between Registrant and Morgan Stanley &
Co. Incorporated is incorporated by reference to Pre-Effective Amendment
No. 1 to the Registrant's Registration Statement on Form N-1A (File Nos.
333-3013 and 811-7607), as filed with the SEC via EDGAR on September 16,
1996.
7 Not applicable.
8 (a) Form of Domestic Mutual Fund Custody Agreement between Registrant
and Chase Manhattan Bank, N.A. is incorporated by reference to Pre-
Effective Amendment No. 1 to the Registrant's Registration Statement
on Form N-1A (File Nos. 333-3013 and 811-7607), as filed with the
SEC via EDGAR on September 16, 1996.
(b) Form of International Custody Agreement between the Registrant and
Morgan Stanley Trust Company is incorporated by reference to Pre-
Effective Amendment No. 1 to the Registrant's Registration Statement
on Form N-1A (File Nos. 333-3013 and 811-7607), as filed with the
SEC via EDGAR on September 16, 1996.
9 (a) Form of Administration Agreement between Registrant and Morgan
Stanley Asset Management Inc. is incorporated by reference to Pre-
Effective Amendment No. 1 to the Registrant's Registration Statement
on Form N-1A (File Nos. 333-3013 and 811-7607), as filed with the
SEC via EDGAR on September 16, 1996.
(b) Form of Administration Agreement between Registrant and Miller
Anderson & Sherrerd, LLP is incorporated by reference to Pre-
Effective Amendment No. 1 to the Registrant's Registration Statement
on Form N-1A (File Nos. 333-3013 and 811-7607), as filed with the
SEC via EDGAR on September 16, 1996.
(c) Form of Sub-Administration Agreement between Morgan Stanley Asset
Management Inc. and Chase Global Funds Services Company is
incorporated by reference to Pre-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form N-1A (File Nos. 333-3013
and 811-7607), as filed with the SEC via EDGAR on September 16,
1996.
C-1
<PAGE>
(d) Form of Sub-Administration Agreement between Miller Anderson &
Sherrerd LLP and Chase Global Funds Services Company is incorporated
by reference to Pre-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form N-1A (File Nos. 333-3013 and 811-
7607), as filed with the SEC via EDGAR on September 16, 1996.
10 Opinion of Counsel is incorporated by reference to Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on Form N-1A
(Filed Nos. 333-3013 and 811-7607), as filed with the SEC via EDGAR on
September 16, 1996.
11 Consent of Price Waterhouse, LLP, Independent Accountants is
incorporated by reference to Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form N-1A (File No. 333-3013 and
811-7607), as filed with the SEC via EDGAR on April 30, 1997.
12 Not applicable.
13 Not applicable.
14 Not applicable.
15 Not applicable.
16 Not applicable.
24 Powers of Attorney are incorporated by reference to Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on Form N-1A
(File Nos. 333-3013 and 811-7607), as filed with the SEC via EDGAR on
September 16, 1996.
27 Financial Data Schedules are filed herewith.
- --------------------
Item 25. Persons Controlled by or Under Common Control with Registrant
-------------------------------------------------------------
As of August 8, 1997, Morgan Stanley, Dean Witter, Discover & Co.
("MSDWD"), a Delaware corporation located at 1585 Broadway, New York,
New York 10036, owned of record 84.16%, 71.34%, 80.75%, 54.11%,
49.07%, 70.85%, 90.33%, 87.27%, 52.75% and 95.24% of the outstanding
voting securities of the Emerging Markets Debt, International Magnum,
U.S. Real Estate, Mid Cap Value, Value, Global Equity, Fixed Income,
High Yield, Equity Growth and Asian Equity Portfolios, respectively.
MSDWD will vote shares of the Portfolios that it owns in the same
proportion as shares of the Portfolios are voted by insurance
companies. Insurance companies vote shares of the Portfolios held in
their separate accounts in accordance with voting instructions of
their variable annuity contract and variable life insurance policy
owners. Accordingly, MSDWD is not viewed as in control of the
Portfolios and therefore MSDWD's affiliates are not viewed as under
common control with the Portfolios.
Item 26. Number of Holders of Securities
-------------------------------
The following information is given as of August 8, 1997.
<TABLE>
<CAPTION>
Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
Money Market Portfolio............................ 0
Fixed Income Portfolio............................ 3
High Yield Portfolio.............................. 2
International Fixed Income Portfolio.............. 0
Emerging Markets Debt Portfolio................... 5
Balanced Portfolio................................ 0
Multi-Asset-Class Portfolio....................... 0
Equity Growth Portfolio........................... 2
Value Portfolio................................... 2
</TABLE>
C-2
<PAGE>
Core Equity Portfolio............................. 0
Mid Cap Growth Portfolio.......................... 0
Mid Cap Value Portfolio........................... 2
U.S. Real Estate Portfolio........................ 5
Global Equity Portfolio........................... 4
International Magnum Portfolio.................... 4
Emerging Markets Equity Portfolio................. 11
Asian Equity Portfolio............................ 4
Item 27. Indemnification
---------------
Reference is made to Article SEVEN of the Registrant's Articles
of Incorporation. Insofar as indemnification for liability arising under the
Securities Act of 1933, as amended (the "1933 Act"), may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission (the "Commission") such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
Item 28. Business and Other Connections of Investment Advisers
-----------------------------------------------------
Reference is made to the caption "Management of the Fund--Investment
Advisers" in the Prospectuses constituting Part A which is incorporated by
reference to this Registration Statement and "Management of the Fund" in Part B
which is incorporated by reference to this Registration Statement.
Listed below are the officers and Directors of Morgan Stanley Asset
Management Inc.:
DIRECTORS:
---------
James M. Allwin Director
Barton M. Biggs Director
Gordon S. Gray Director
Peter A. Nadosy Director
Dennis G. Sherva Director
OFFICERS:
--------
Barton M. Biggs Chairman
Managing Director
Peter A. Nadosy Vice Chairman
Managing Director
James M. Allwin President
Managing Director
John R. Alkire Managing Director (MSAM) - Tokyo
P. Dominic Caldecott Managing Director (MSAM) - UK
A. Macdonald Caputo Managing Director
Ean Wah Chin Managing Director (MSAM) - Singapore
Garry B. Crowder Managing Director
Madhav Dhar Managing Director
Kurt A. Feuerman Managing Director
Paul B. Ghaffari Managing Director
Gordon S. Gray Managing Director
Marianne Liang Hay Managing Director (MSAM) - UK
Gary D. Latainer Managing Director
Mahmoud A. Mamdani Managing Director
Roger L. Meyer Managing Director
Russell C. Platt Managing Director
Robert A. Sargent Managing Director (MSAM) - UK
Bidyut C. Sen Managing Director
Vinod R. Sethi Managing Director
Dennis G. Sherva Managing Director
James L. Tanner Managing Director (MSAM) - UK
Richard G. Woolworth, Jr. Managing Director
Debra M. Aaron Principal
Warren Ackerman III Principal
Robert E. Angevine Principal
Suzanne S. Akers Principal
Gerald P. Barth-Wehrenalp Principal
Theodore R. Bigman Principal
Francine J. Bovich Principal
Stuart J. M. Breslow Principal
Andrew C. Brown Principal (MSAM) - UK
Jeffrey P. Brown Principal
Frances Campion Principal (MSAM) - UK
Terence P. Carmichael Principal
Arthur Certosimo Principal
<PAGE>
Stephen C. Cordy Principal
Jacqueline A. Day Principal (MSAM) - UK
Raye L. Dube Principal
Abigail Jones Feder Principal
Eugene Flood, Jr. Principal
Thomas C. Frame Principal
James Wayne Grisham Principal
Perry E. Hall II Principal
Ruth A. Hughes-Guden Principal
Margaret Kinsley Johnson Principal
Michael F. Klein Principal
Michael B. Kushma Principal
Khoon-Min Lim Principal
Marianne J. Lippmann Principal
Yvonne Longley Principal (MSAW) - UK
Andrew Mack Principal (MSAW) - Tokyo
Gary J. Mangino Principal
Jeffery Margolis Principal
M. Paul Martin Principal
Walter Maynard, Jr. Principal
Margaret P. Naylor Principal (MSAW) - UK
Yoshiro Okawa Principal (MSAW) - UK
Christopher G. Petrow Principal
Narayan Ramachandran Principal
Gail Hunt Reeke Principal
Christine I. Reilly Principal
Stefano Russo Principal (MSAW) - Milan
Bruce R. Sandberg Principal
Kiat Seng Seah Principal (MSAW) - Singapore
Stephen C. Sexauer Principal
Robert M. Smith Principal
Kunibiko Sugio Principal (MSAW) - Tokyo
Ann D. Thivierge Principal
Philip W. Winters Principal
Alford E. Zick, Jr. Principal
Maryann Savadelis Agre Vice President
Peter Aliprantis Vice President
Jeffery Alvino Vice President
Alistair Anderson Vice President
William S. Auslander Vice President
Kimberly L. Austin Vice President
Marshall T. Bassett Vice President
Christopher Blair Vice President
Richard Boon Vice President
Geraldine Boyle Vice President
Paul Boyne Vice President
L. Kenneth Brooks Vice President
Jonathan Paul Buckeridge Vice President (MSAM) - Melbourne
Carl Kuo-Wei Chien Vice President (MSAM) - Hong Kong
<PAGE>
Lori A. Cohane Vice President
James Colmenares Vice President
Kate Cornish-Bowden Vice President
Nikhil Dhaon Vice President
Chrisine H. du Bois Vice President
Richard S. Farden Vice President
Daniel E. Fox Vice President
Karen T. Frost Vice President
Lisa Gallo Vice President
Josephine M. Glass Vice President
Charles A. Golden Vice President
Dimitri Goulandris Vice President
James A. Grasselino Vice President
Kenneth John Greig Vice President (MSAM)-UK
Maureen A. Grover Vice President
Michael Hewett Vice President
Kenneth R. Holley Vice President
Holly D. Hopps Vice President
Etsuko Fuyeya Jennings Vice President
Donald B. Johnston Vice President
Jaideep Khanna Vice President
Peter L. Kirby Vice President
George Koshy Vice President
Paul Koske Vice President
Daniel R. Lascano Vice President
Arthur J. Lev Vice President
Valerie Y. Lewis Vice President
Jane Likins Vice President (MSAM)-UK
William David Lock Vice President (MSAM)-UK
Gordon W. Loery Vice President
Paula J. Morgan Vice President
Nancy Morton Vice President
Clare K. Mutome Vice President
Terumi Nagata Vice President (MSAM)-Tokyo
Bradley Okita Vice President
Martin O. Pearce Vice President (MSAM)-UK
Alexander A. Pena Vice President
Anthony J. Pesce Vice President
David J. Polansky Vice President
Karen Post Vice President
Akash Prakash Vice President (MSAM)-Muabai
Gregg A. Robinson Vice President
Gerald D. Rubin Vice President
Donald P. Ryan Vice President
Neil Siegel Vice President
Ashutosh Sinha Vice President
Andy B. Skov Vice President
Michael James Smith Vice President (MSAM)-UK
Kim I Spellman Vice President
Joseph P. Stadler Vice President
Christian K. Stadlinger Vice President
Catherine Steinhardt Vice President
Ram K. Sundaram Vice President
Keiko Tamaki-Kuroda Vice President
Shunso Tatsumi Vice President
Louise Teeple Vice President
Joseph Y.S. Tern Vice President (MSAM)-Singapore
Landon Thomas Vice President
Richard Boon Hwee Toh Vice President (MSAM)-Singapore
K.N. Vaidyanathan Vice President (MSAM)-Muabai
Dennis J. Walsh Vice President
Jacob Walthour Vice President
Kevin V. Wasp Vice President
Patricia Woo Vice President
Harold J. Schaaff, Jr. Principal
General Counsel and Secretary
Eileen K. Murray Treasurer
Madeline D. Barkhorn Assistant Secretary
Charlene R. Herzer Assistant Secretary
In addition, MSAM acts as investment adviser to the following registered
investment companies: American Advantage International Equity Fund; The
Brazilian Investment Fund, Inc.: certain portfolios of The Enterprise Group of
Funds, Inc.: Fountain Square International Equity Fund; General American Capital
Co.; The Latin American Discovery Fund, Inc.; certain portfolios of The Legends
Fund. Inc.; The Malaysia Fund, Inc.; Morgan Stanley Africa Investment Fund,
Inc.; Morgan Stanley Asia-Pacific Fund, Inc.; Morgan Stanley Emerging Markets
Debt Fund, Inc.; Morgan Stanley Emerging Markets Fund, Inc.; all funds of the
Morgan Stanley Fund, Inc.; Morgan Stanley Global Opportunity Bond Fund Inc..;
all funds of the Morgan Stanley High Yield Fund, Inc.; Morgan Stanley India
Investment Fund, Inc.; certain portfolios of Morgan Stanley Universal Funds,
Inc.; The Pakistan Investment Fund, Inc.; PCS Cash Fund, Inc.; The Thai Fund,
Inc.; The Turkish Investment Fund, Inc.; Principal Aggressive Growth Fund, Inc.;
Principal Asset Allocation Fund, Inc.; certain portfolios of the SunAmerica
Series Trust and certain portfolios of the Fortis Series Fund.
MAS is a Pennsylvania limited liability partnership founded in 1969. MAS
provides investment services to employee benefit plans, endowment funds,
foundations and other institutional investors as well as serving as investment
advisor to MAS Funds, a registered investment company.
C-3
<PAGE>
The information required by this Item 28 with respect to each
director, officer or partner of MAS together with information as to any other
business, profession, vocation or employment of a substantial nature engaged in
by such officers and directors during the past two years, is incorporated by
reference to Schedules B and D of Form ADV filed by MAS pursuant to the
Investment Advisers Act of 1940 (SEC file No. 801-10437).
Item 29. Principal Underwriters
----------------------
Morgan Stanley & Co. Incorporated ("MS&Co.") is distributor for Morgan
Stanley Universal Funds, Inc. and Morgan Stanley Institutional Fund, Inc. Van
Kampen American Capital, Inc. ("VKAC") is distributor for Morgan Stanley Fund,
Inc. The information required by this Item 29 with respect to each Director
and officer of MS&Co. is incorporated by reference to Schedule A of Form BD
filed by MS&Co. pursuant to the Securities and Exchange Act of 1934, as amended
(SEC File No. 8-15869).
Item 30. Location of Accounts and Records
--------------------------------
The books, accounts and other documents required by Section 31(a)
under the Investment Company Act of 1940, as amended, and the rules promulgated
thereunder are maintained in the physical possession of the Registrant;
Registrant's Transfer Agent, Chase Global Funds Services Company, P.O. Box 2798,
Boston, Massachusetts 02208-2798; and the Registrant's custodian banks,
including sub-custodians.
Item 31. Management Services
-------------------
Each of MSAM and MAS have entered into Sub-Administration Agreements
with Chase Global Funds Services Companies ("Chase") (filed as Exhibit No. 9(c)
and 9(d) to Pre-Effective Amendment No.1 to the Registration Statement) pursuant
to which Chase will provide fund administration, fund accounting and transfer
agency services to specified Portfolios of the Registrant.
Item 32. Undertakings
------------
(1) Registrant undertakes to file a post-effective amendment
containing reasonably current financial statements, which need not be certified,
for the Money Market, International Fixed Income, Balanced, Multi-Asset-Class,
Core Equity and Mid Cap Growth Portfolios within four to six months from the
effective date or this Registration Statement or the commencement of operations
of each such Investment Fund, whichever is later.
(2) Registrant hereby undertakes that whenever a Shareholder or
Shareholders who meet the requirements of Section 16(c) of the 1940 Act inform
the Board of Directors of his or their desire to communicate with other
Shareholders of the Fund, the Directors will inform such Shareholder(s) as to
the approximate number of Shareholders of record and the approximate costs of
mailing or afford said Shareholders access to a list of Shareholders.
(3) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's annual report to
shareholders, upon request and without charge.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this Amendment to the
Registration Statement pursuant to Rule 485(b) and has duly caused this
Amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York and State of New
York, on the 5th day of September, 1997.
MORGAN STANLEY UNIVERSAL FUNDS, INC.
By: /s/ Michael F. Klein
--------------------------------
Michael F. Klein
President and Director
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title(s) Date
- --------- -------- ----
<C> <S> <C>
/s/ Michael F. Klein Director, President September 5, 1997
- ---------------------------- (Principal Executive
Michael F. Klein Officer)
*/s/ Barton M. Biggs Director (Chairman) September 5, 1997
- ----------------------------
Barton M. Biggs
*/s/ Fergus Reid Director September 5, 1997
- ----------------------------
Fergus Reid
*/s/ Frederick O. Robertshaw Director September 5, 1997
- ----------------------------
Frederick O. Robertshaw
*/s/ Andrew McNally IV Director September 5, 1997
- ----------------------------
Andrew McNally IV
*/s/ John D. Barrett II Director September 5, 1997
- ----------------------------
John D. Barrett II
*/s/ Gerard E. Jones Director September 5, 1997
- ----------------------------
Gerard E. Jones
*/s/ Samuel T. Reeves Director September 5, 1997
- ----------------------------
Samuel T. Reeves
*/s/ Joanna M. Haigney Treasurer September 5, 1997
- ----------------------------
Joanna M. Haigney
</TABLE>
*By: /s/ Michael F. Klein
--------------------------------
Michael F. Klein
Attorney-In-Fact
C-5
<PAGE>
EXHIBIT INDEX
-------------
(B) EXHIBITS
--------
1 (a) Articles of Incorporation between Registrant and Morgan Stanley
Asset Management Inc. are incorporated by reference to
Registrant's Registration Statement on Form N-1A (File Nos. 333-
3013 and 811-7607), as filed with the SEC via EDGAR on May 1,
1996.
(b) Articles of Amendment to Articles of Incorporation (changing
"Growth Portfolio" to "Equity Growth Portfolio") are incorporated
by reference to Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form N-1A (File Nos. 333-
3013 and 811-7607), as filed with the SEC via EDGAR on June 24,
1997.
2 By-laws are incorporated by reference to Registrant's Registration
Statement on Form N-1A (File Nos. 333-3013 and 811-7607), as filed
with the SEC via EDGAR on May 1, 1996.
3 Not applicable.
4 Not applicable.
5 (a) Form of Investment Advisory Agreement between Registrant and
Morgan Stanley Asset Management Inc. ("MSAM") with respect to
the Money Market, Emerging Markets Debt, Growth, U.S. Real
Estate, Global Equity, International Magnum, Emerging Markets
Equity and Asian Equity Portfolio is incorporated by reference
to Pre-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form N-1A (File Nos. 333-3013 and 811-
7607), as filed with the SEC via EDGAR on September 16, 1996.
(b) Form of Investment Advisory Agreement between Registrant and
Miller Anderson & Sherrerd, LLP ("MAS") with respect to the
Fixed Income, High Yield, International Fixed Income, Balanced,
Multi-Asset-Class, Value, Core Equity, Mid Cap Growth and Mid
Cap Value Portfolios is incorporated by reference to Pre-
Effective Amendment No. 1 to the Registrant's Registration
Statement on Form N-1A (File Nos. 333-3013 and 811-7607), as
filed with the SEC via EDGAR on September 16, 1996.
6 Form of Distribution Agreement between Registrant and Morgan Stanley
& Co. Incorporated is incorporated by reference to Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on Form N-
1A (File Nos. 333-3013 and 811-7607), as filed with the SEC via EDGAR
on September 16, 1996
7 Not applicable.
8 (a) Form of Domestic Mutual Fund Custody Agreement between
Registrant and Chase Manhattan Bank, N.A. is incorporated by
reference to Pre-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form N-1A (File Nos. 333-3013 and 811-
7607, as filed with the SEC via EDGAR on September 16, 1996.
(b) Form of International Custody Agreement between Registrant and
Morgan Stanley Trust Company is incorporated by reference to
Pre-Effective Amendment No. 1 to the Registrant's Registration
Statement on Form N-1A (File Nos. 333-3013 and 811-7607, as
filed with the SEC via EDGAR on September 16, 1996.
9 (a) Form of Administration Agreement between Registrant and Morgan
Stanley Asset Management Inc. is incorporated by reference to
Pre-Effective Amendment No. 1 to the Registrant's Registration
Statement on Form N-1A (File Nos. 333-3013 and 811-7607, as
filed with the SEC via EDGAR on September 16, 1996.
(b) Form of Administration Agreement between Registrant and Miller
Anderson & Sherrerd, LLP is incorporated by reference to Pre-
Effective Amendment No. 1 to the Registrant's Registration
Statement on Form N-1A (File Nos. 333-3013 and 811-7607, as
filed with the SEC via EDGAR on September 16, 1996.
(c) Form of Sub-Administration Agreement between Morgan Stanley
Asset Management Inc. and Chase Global Funds Services Company is
incorporated by reference to Pre-Effective Amendment No. 1 to
C-6
<PAGE>
the Registrant's Registration Statement on Form N-1A (File
Nos. 333-3013 and 811-7607, as filed with the SEC via EDGAR on
September 16, 1996.
(d) Form of Sub-Administration Agreement between Miller Anderson &
Sherrerd LLP and Chase Global Funds Services Company is
incorporated by reference to Pre-Effective Amendment No. 1 to
the Registrant's Registration Statement on Form N-1A (File
Nos. 333-3013 and 811-7607), as filed with the SEC via EDGAR
on September 16, 1996.
10 Opinion of Counsel is incorporated by reference to Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on Form
N-1A (File Nos. 333-3013 and 811-7607), as filed with the SEC via
EDGAR on September 16, 1996.
11 Consent of Price Waterhouse, LLP, Independent Accountants is
incorporated by reference to Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form N-1A (File Nos. 333-
3013 and 811-7607), as filed with the SEC via EDGAR on April 30,
1997.
12 Not applicable.
13 Not applicable.
14 Not applicable.
15 Not applicable.
16 Not applicable.
24 Powers of Attorney are incorporated by reference to Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on Form
N-1A (File Nos. 333-3013 and 811-7607), as filed with the SEC via
EDGAR on September 16, 1996.
EX-99.B 27 Financial Data Schedules are filed herewith.
- ----------------------------------
C-7
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<PAGE>
<ARTICLE> 6
<NAME> MORGAN STANLEY UNIVERSAL FUNDS, INC
<CIK> 0001011378
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<NAME> EMERGING MARKETS EQUITY PORTFOLIO
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<ARTICLE> 6
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<NAME> MORGAN STANLEY UNIVERSAL FUNDS, INC.
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<NUMBER> 02
<NAME> FIXED INCOME PORTFOLIO
<MULTIPLIER> 1,000
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<EXPENSES-NET> (30)
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<GROSS-EXPENSE> 67
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<PER-SHARE-NAV-BEGIN> 10.00
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<NAME> MORGAN STANLEY UNIVERSAL FUNDS, INC
<CIK> 0001011378
<SERIES>
<NUMBER> 03
<NAME> HIGH YIELD PORTFOLIO
<MULTIPLIER> 1,000
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<PAID-IN-CAPITAL-COMMON> 8,794
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<ACCUMULATED-NET-GAINS> 24
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<NET-ASSETS> 9,282
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0001011378
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<CIK> 0001011378
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<SERIES>
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<NAME> GLOBAL EQUITY PORTFOLIO
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