<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. 4
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 5
---------------
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
--------------
<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 -- Financial Highlights
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 -- Financial Highlights
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 -- Financial Highlights
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 -- Financial Highlights
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 -- Financial Highlights
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 -- Financial Highlights
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>
<TABLE>
<CAPTION>
Form N-1A Location in Prospectus for the High Yield, U.S. Real Estate,
Item Number Emerging Markets Debt and Asian Equity Portfolios.
- ----------- -----------------------------------------------------------------
<S> <C>
Item 1. Cover Page -- Cover Page
Item 2. Synopsis -- The Fund; Management; Offering of Shares; Prospectus
Outline
Item 3. Condensed Financial Information -- Financial Highlights
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 -- *
</TABLE>
- -------------------
* 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.
<TABLE>
<CAPTION>
Form N-1A Location in Prospectus for the Fixed Income, High
Item Number Yield and International Magnum Portfolios.
- ----------- -------------------------------------------------
<S> <C>
Item 1. Cover Page -- Cover Page
Item 2. Synopsis -- The Fund; Management; Offering of Shares; Prospectus
Outline
Item 3. Condensed Financial Information -- Financial Highlights
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 -- *
</TABLE>
- -------------------
* 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 ("SEC") on April 30, 1997, and
in final form under Rule 497(c) on May 1, 1997, and as supplemented through
September 19, 1997 as filed with the SEC on September 19, 1997 under Rule 497,
is hereby incorporated by reference as if set forth herein.
<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 ("SEC") on April 30, 1997, and in final
form under Rule 497(c) on May 1, 1997, and as supplemented through September 19,
1997 as filed with the SEC on September 19, 1997 under Rule 497, is hereby
incorporated by reference as if set forth herein.
<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 ("SEC") on April 30, 1997, and in final form under Rule
497(c) on May 1, 1997, and as supplemented through September 19, 1997 as filed
with the SEC on September 19, 1997 under Rule 497, is hereby incorporated by
reference as if set forth herein.
<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 ("SEC") on April 30,
1997, and in final form under Rule 497(c) on May 1, 1997, and as supplemented
through September 19, 1997 as filed with the SEC on September 19, 1997 under
Rule 497, is hereby incorporated by reference as if set forth herein.
<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 as supplemented through October 15, 1997 and
as filed with the Securities and Exchange Commission on October 14, 1997 under
Rule 497, is hereby incorporated by reference as if set forth herein.
<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
("SEC") on April 30, 1997, and in final form under Rule 497(c) on May 1, 1997,
and as supplemented through September 19, 1997 as filed with the SEC on
September 19, 1997 under Rule 497, is hereby incorporated by reference as if set
forth herein. The Prospectus is supplemented by Financial Highlights as of
October 31, 1997 with respect to the Emerging Markets Debt Portfolio (the
"Portfolio") and is filed herein to comply with the Fund's undertaking to file a
post-effective amendment with the Financial Statements of the Portfolio which
need not be certified within four to six months of the Portfolio's effective
date or commencement of operations, whichever is later.
<PAGE>
Supplement dated December 16, 1997
to the Prospectus dated May 1, 1997
as supplemented September 19, 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 supplemented as follows: The following paragraph
and table are added under the heading "Financial Highlights" on page 3 of the
Prospectus:
The following table provides unaudited financial highlights for the
Emerging Markets Debt Portfolio for the period June 16, 1997 to October 31,
1997. These unaudited financial highlights are part of the Fund's unaudited
financial statements which are included in the Fund's current Statement of
Additional Information.
<TABLE>
<CAPTION>
EMERGING MARKETS
DEBT PORTFOLIO
PERIOD FROM JUNE 16,
1997* TO OCTOBER 31, 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 0.24
Net Realized and Unrealized Loss (0.90)
---------
Total From Investment Operations (0.66)
---------
NET ASSET VALUE, END OF PERIOD $ 9.34
=========
TOTAL RETURN (6.60)%
=========
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) 15,632
Ratio of Expenses to Average Net Assets 1.30%**
Ratio of Net Investment Income to Average Net Assets 7.84%**
Portfolio Turnover Rate 229%
- --------------------------------------------------------------------------------
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 1.81%**
Net Investment Income to Average Net Assets 7.33%**
- --------------------------------------------------------------------------------
</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 ("SEC") under Rule 497 on July 2,
1997 and July 14, 1997, and as supplemented through September 19, 1997 as filed
with the SEC on September 19, 1997 under Rule 497, is hereby incorporated by
reference as if set forth herein. The Prospectus is supplemented by Financial
Highlights as of October 31, 1997 with respect to the Emerging Markets Debt
Portfolio (the "Portfolio") and is filed herein to comply with the Fund's
undertaking to file a post-effective amendment with the Financial Statements of
the Portfolio which need not be certified within four to six months of the
Portfolio's effective date or commencement of operations, whichever is later.
<PAGE>
Supplement dated December 16, 1997
to the Prospectus dated July 1, 1997
as supplemented September 19, 1997
Emerging Markets Debt Portfolio
Portfolio of
Morgan Stanley Universal Funds, Inc. (the "Fund")
P.O. Box 2798
Boston, Massachusetts
02208-2798
----------
The Prospectus is hereby 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 unaudited financial highlights for the
Emerging Markets Debt Portfolio for the period June 16, 1997 to October 31,
1997. These unaudited financial highlights are part of the Fund's unaudited
financial statements which are included in the Fund's current Statement of
Additional Information.
<TABLE>
<CAPTION>
EMERGING MARKETS
DEBT PORTFOLIO
PERIOD FROM JUNE 16, 1997*
TO OCTOBER 31, 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 0.24
Net Realized and Unrealized Loss (0.90)
-------
Total From Investment Operations (0.66)
-------
NET ASSET VALUE, END OF PERIOD $ 9.34
=======
TOTAL RETURN (6.60)%
=======
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $15,632
Ratio of Expenses to Average Net Assets 1.30%**
Ratio of Net Investment Income to Average Net Assets 7.84%**
Portfolio Turnover Rate 229%
- ---------------------------------------------------------------------------------------------
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 1.81%**
Net Investment Income to Average Net Assets 7.33%**
- -----------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<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 ("SEC") under Rule 497 on July 14, 1997,
and as supplemented through September 19, 1997 as filed with the SEC on
September 19, 1997 under Rule 497, is hereby incorporated by reference as if set
forth herein. The Prospectus is supplemented by Financial Highlights as of
October 31, 1997 with respect to the Emerging Markets Debt Portfolio (the
"Portfolio") and is filed herein to comply with the Fund's undertaking to file a
post-effective amendment with the Financial Statements of the Portfolio which
need not be certified within four to six months of the Portfolio's effective
date or commencement of operations, whichever is later.
<PAGE>
Supplement dated December 16, 1997
to the Prospectus dated July 15, 1997
as supplemented September 19, 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 supplemented as follows: The following paragraph
and table are added under the heading "Financial Highlights" on page 3 of the
Prospectus:
The following table provides unaudited financial highlights for the
Emerging Markets Debt Portfolio for the period June 16, 1997 to October 31,
1997. These unaudited financial highlights are part of the Fund's unaudited
financial statements which are included in the Fund's current Statement of
Additional Information.
<TABLE>
<CAPTION>
EMERGING MARKETS
DEBT PORTFOLIO
PERIOD FROM JUNE 16,
1997* TO OCTOBER 31, 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 0.24
Net Realized and Unrealized Loss (0.90)
---------
Total From Investment Operations (0.66)
---------
NET ASSET VALUE, END OF PERIOD $ 9.34
=========
TOTAL RETURN (6.60)%
=========
RATIOS AND SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) 15,632
Ratio of Expenses to Average Net Assets 1.30%**
Ratio of Net Investment Income to Average Net Assets 7.84%**
Portfolio Turnover Rate 229%
- --------------------------------------------------------------------------------
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 1.81%**
Net Investment Income to Average Net Assets 7.33%**
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
The Prospectus for the High Yield, U.S. Real Estate, Emerging Markets Debt and
Asian Equity Portfolios dated October 1, 1997, filed with the Securities and
Exchange Commission under Rule 497 on October 1, 1997, is hereby incorporated by
reference as if set forth herein. The Prospectus is supplemented by Financial
Highlights as of October 31, 1997 with respect to the Emerging Markets Debt
Portfolio (the "Portfolio") and is filed herein to comply with the Fund's
undertaking to file a post-effective amendment with the Financial Statements of
the Portfolio which need not be certified within four to six months of the
Portfolio's effective date or commencement of operations, whichever is
later.
<PAGE>
Supplement dated December 16, 1997
to the Prospectus dated October 1, 1997
High Yield Portfolio
U.S. Real Estate Portfolio
Emerging Markets Debt 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 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 unaudited financial highlights for the
Emerging Markets Debt Portfolio for the period June 16, 1997 to October 31,
1997. These unaudited financial highlights are part of the Fund's unaudited
financial statements which are included in the Fund's current Statement of
Additional Information.
<TABLE>
<CAPTION>
EMERGING MARKETS
DEBT PORTFOLIO
PERIOD FROM
JUNE 16, 1997*
TO OCTOBER 31, 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 0.24
Net Realized and Unrealized Loss (0.90)
-------------
Total From Investment Operations (0.66)
-------------
Net Asset Value, End of Period $ 9.34
=============
Total Return (6.60)%
=============
Ratio and Supplemental Data:
Net Assets, End of Period (000's) $ 15,632
Ratio of Expenses to Average Net Assets 1.30%**
Ratio of Net Investment Income to Average Net Assets 7.84%**
Portfolio Turnover Rate 229%
- --------------------------------------------------------------------------------
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 1.81%**
Net Investment Income to Average Net Assets 7.33%**
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
The Prospectus for the Fixed Income, High Yield and International Magnum
Portfolios dated January 1, 1998 and filed with the Securities and Exchange
Commission under Rule 497 on December 10, 1997, is hereby incorporated by
reference as if set forth herein.
<PAGE>
The Statement of Additional Information dated May 1, 1997, 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
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 ("SEC") 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, July 15, 1997, September 19, 1997, October 1,
1997, October 15, 1997 and January 1, 1998 (filed with the SEC on July 2, 1997,
July 14, 1997, September 19, 1997, October 1, 1997, October 14, 1997 and
December 9, 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 October 31, 1997 for the Emerging Markets Debt
Portfolio.
<PAGE>
Supplement dated December 16, 1997 to
Statement of Additional Information dated May 1, 1997
Previously Supplemented on July 1, 1997, July 15, 1997,
September 19, 1997,
October 1, 1997, October 15, 1997 and January 1, 1998
Portfolios of
Morgan Stanley Universal Funds, Inc. (the "Fund")
P.O. Box 2798
Boston, Massachusetts 02208-2798
------------
The Fund's Statement of Additional Information is hereby amended and
supplemented by the following financial statements for the Emerging
Markets Debt Portfolio for the period June 16, 1997 to October 31, 1997.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
MORGAN STANLEY UNIVERSAL FUNDS,INC.
EMERGING MARKETS DEBT PORTFOLIO
STATEMENT OF NET ASSETS
October 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Face
Amount Value
(000) (000)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Debt Instruments (89.8%)
Argentina (15.3%)
Bonds (15.3%)
U.S.$ 250 Acindar Industrial Argentina SA, Series 2, "Euro", (Floating Rate),
11.75%, 11/12/98 $251
ARP 770 CIA International Telecommunications, 10.375%, 8/01/04 616
170 Republic of Argentina, 11.75%, 2/12/07 141
U.S.$ 550 Republic of Argentina Global Bond, 9.75%, 9/19/27 450
1,104 Republic of Argentina, Series L, "Euro", (Floating Rate), 6.688%, 3/31/05 938
--------------
2,396
--------------
Brazil (14.1%)
Bonds (14.1%)
1,859 Federative Republic of Brazil, Series C, (Floating Rate), PIK, 8.00%,
4/15/14 1,455
200 Federative Republic of Brazil Front Loaded Interest Reduction Bond,
Series L, (Step Bond), 4.50%, 4/15/09 137
510 Federative Republic of Brazil Global Bond, 10.125%, 5/15/27 398
300 Federative Republic of Brazil, Series L, (Floating Rate), 6.75%, 4/15/09 215
--------------
2,205
--------------
Bulgaria (4.1%)
Bonds (4.1%)
825 Republic of Bulgaria Front Loaded Interest Reduction Bond, Series A,
(Step Bond), 2.50%, 7/28/12 449
25 Republic of Bulgaria Interest Arrears Bond, Series PDI, (Floating Rate),
6.688%, 7/28/11 16
250 Republic of Bulgaria, Series A, (Floating Rate), 6.688%, 7/28/24 173
--------------
638
--------------
Cayman Islands (3.2%)
Bond (3.2%)
550 Pera Financial Services, 9.375%, 10/15/02 501
--------------
Ecuador (0.3%)
Bond (0.3%)
87 Republic of Ecuador Global Bond, (Floating Rate), 6.688%, 2/27/15 51
--------------
Ivory Coast (2.2%)
Bond (2.2%)
1,100 Republic of Ivory Coast Front Loaded Interest Reduction Bond, Zero
Coupon, 12/29/49 349
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Jamaica (1.2%)
Bond (1.2%)
200 Government of Jamaica, 9.625%, 7/02/02 $190
--------------
Mauritius (0.9%)
Bond (0.9%)
150 Pindo Deli Finance Mauritius Ltd., 10.75%, 10/01/07 138
--------------
Mexico (13.4%)
Bonds (13.4%)
120 Banco National Global Bond, 7.25%, 2/02/04 109
150 Petroleos Mexicanos, 9.50%, 9/15/27 134
700 United Mexican States Discount Bond, Series A, (Floating Rate),
6.693%, 12/31/19 (Value Recovery Rights Attached) 626
300 United Mexican States Global Bond, "Euro", 11.375%, 9/15/16 313
750 United Mexican States Global Bond, 11.50%, 5/15/26 630
350 United Mexican States Par Bond, Series W-A, 6.25%, 12/31/19 (Value
Recovery Rights Attached) 274
--------------
2,086
--------------
Morocco (2.3%)
Loan Agreement (2.3%)
450 Kingdom of Morocco, Restructuring & Consolidation Agreement,
Tranche A, (Floating Rate), 6.813%, 1/01/09
(Participation: J.P. Morgan and Salomon Brothers ) 363
--------------
Panama (1.1%)
Bond (1.1%)
200 Republic of Panama Global Bond, 8.875%, 9/30/27 171
--------------
Peru (2.7%)
Bond (2.7%)
850 Republic of Peru Front Loaded Interest Reduction Bond, (Step Bond),
3.25%, 3/07/17 425
--------------
Russia (16.7%)
Loan Agreements (1.9%)
300 International Bank for Economic Cooperation 12/31/00
(Participation: Salomon Brothers) 192
150 Russia II A, 12/31/99 (Participation: Salomon Brothers) 101
--------------
293
--------------
Notes (14.8%)
1,075 Russia Interest Arrears Note 12/31/99 712
2,700 Russian Principal Notes 12/31/99 1,593
--------------
2,305
--------------
2,598
--------------
Venezuela (12.3%)
Bonds (12.3%)
1,000 Republic of Venezuela Debt Conversion Bonds, Series DL, (Floating
Rate), 6.75%, 12/18/07 872
1,287 Venezuela Global Bond, 9.25%, 9/15/27 1,049
--------------
1,921
--------------
Total Debt Instruments (Cost $16,131) 14,032
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Structured Investments (1.2%)
United Kingdom (1.2%)
200 Ing Bank N.V. LIBOR or T-Bill Linked Note, 8/14/98 (Cost $200) $ 194
------------------------------
No. of
Rights
- ------
Rights (0.0%)
Mexico (0.0%)
1,447 United Mexican States, expiring 6/30/03 (Cost $0) --
------------------------------
Short-Term Investment (28.0%)
United States (28.0%)
Repurchase Agreement (28.0%)
4,377 Chase Securities, Inc. 5.48%, dated 10/31/97, due 11/03/97 to be
repurchased at $4,378, collateralized by U.S. Treasury Notes, 6.375%
due 4/30/99, valued at $4,472 (Cost $4,377) 4,377
------------------------------
Total Investments (119.0%) (Cost $20,708*) 18,603
------------------------------
- ------------------------------------------------------------------------------------------------ ------------------------------
Other Assets (42.4%)
Cash $ 778
Receivable for Investments Sold 5,640
Interest Receivable 204
Other 6
---------------
6,628
- ------------------------------------------------------------------------------------------------ ------------------------------
Liabilities (-61.4%)
Payable for Investments Purchased (9,544)
Investment Advisory Fees Payable (16)
Professional Fees (21)
Net Unrealized Loss on Forward Foreign Currency Exchange Contracts (6)
Custodian Fees Payable (5)
Administrative Fees Payable (1)
Other Liabilities (6)
---------------
(9,599)
- ------------------------------------------------------------------------------------------------ ------------------------------
NET ASSETS (100%) $ 15,632
==============================
Net Asset Value, Offering and Redemption
Price Per Share
Applicable to 1,673,993 outstanding $0.001 par value
shares (authorized 500,000,000 shares) $ 9.34
==============================
Net Assets Consist Of:
Paid in Capital $ 17,126
Undistributed Net Investment Income 406
Accumulated Net Realized Gain 211
Unrealized Depreciation on Investments and Foreign
Currency Translations (2,111)
------------------------------
Net Assets $ 15,632
==============================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Foreign Currency Exchange Contracts Information:
Under the terms of foreign currency exchange contracts open at October 31,
1997, the Portfolio is obligated to deliver or is to receive foreign currency in
exchange for U.S. dollars or foreign currency as indicated below:
<TABLE>
<CAPTION>
In Net
Currency Exchange Unrealized
to Deliver Value Settlement For Value Gain (Loss)
(000) (000) Date (000) (000) (000)
- ----------------- --------------- --------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
DEM 361 $210 12/02/97 U.S.$ 201 $201 $(9)
U.S.$ 154 154 12/02/97 DEM 269 156 2
U.S.$ 52 52 12/02/97 DEM 92 53 1
--------------- -------------- ----------------
$416 $410 $(6)
=============== ============== ================
</TABLE>
ARP- Argentine Peso
PIK- Payment-In-Kind. Income may be paid in additional securities or cash at
the discretion of the issuer.
PDI- Past Due Interest
- -----------------
* At October 31,1997, 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
Appreciation
Cost Appreciation (Depreciation) (Depreciation)
(000) (000) (000) (000)
------------- -------------- --------------- ---------------
<S> <C> <C> <C>
$20,708 $1 $(2,106) $(2,105)
</TABLE>
- --------------------------------------------------------------------------------
For the period ended October 31, 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 $37,817,000 and
$21,031,000, respectively. There were no purchases or sales of U.S. Government
securities for the Emerging Markets Debt Portfolio during the period ending
October 31, 1997.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKET DEBT PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Period from
June 16,
1997* to
October 31,
1997
(000)
- --------------------------------------------------------------------------------
<S> <C>
Investment Income:
Dividend $ 1
Interest 476
-------
477
-------
Expenses:
Investment Advisory Fees 42
Less: Fees Waived (24)
-------
Net Investment Advisory Fees 18
Professional Fees 22
Administrative Fees 13
Custodian Fees 8
Shareholder Reports 6
Other Expenses 4
-------
Net Expenses 71
-------
Net Investment Income 406
-------
Net Realized Gain\Loss on:
Investments Sold 232
Currency (21)
-------
211
-------
Change in Unrealized Appreciation/Depreciation on:
Investments (2,105)
Foreign Currency Translations (6)
-------
Change in Unrealized Appreciaiton/Depreciation (2,111)
-------
Net Realized Gain and Change in
Unrealized Appreciation/Depreciation (1,900)
-------
Net Decrease in Net Assets Resulting from Operations $(1,494)
=======
</TABLE>
- ------------------------------
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
<PAGE>
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKETS DEBT PORTFOLIO
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited) Period from
June 16, 1997* to
October 31, 1997
(000)
- ------------------------------------------------------------------------------------------------
<S> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income $ 406
Net Realized Gain 211
Change in Unrealized Appreciation/Depreciation (2,111)
-----------------
Net Decrease in Net Assets Resulting from Operations (1,494)
-----------------
Capital Share Transactions (1):
Subscribed 23,115
Redeemed (5,989)
-----------------
Net Increase in Net Assets Resulting from Capital Share Transactions 17,126
-----------------
Total Increase in Net Assets 15,632
-----------------
Net Assets:
Beginning of Period --
-----------------
End of Period (Including undistributed net investment income of $406) $ 15,632
=================
================================================================================================
(1) Capital Share Transactions:
Shares Subscribed 2,251
Shares Redeemed (577)
-----------------
Net Increase in Capital Shares Outstanding 1,674
=================
================================================================================================
* Commencement of operations
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
MORGAN STANLEY UNIVERSAL FUNDS, INC.
EMERGING MARKETS DEBT PORTFOLIO
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Period from
June 16, 1997*
to October 31,
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 0.24
Net Realized and Unrealized Loss (0.90)
----------------
Total From Investment Operations (0.66)
----------------
Net Asset Value, End of Period $9.34
================
Total Return (6.60)%
================
Ratios and Supplemental Data:
Net Assets, End of Period (000's) $15,632
Ratio of Expenses to Average Net Assets 1.30%**
Ratio of Net Investment Income to Average Net Assets 7.84%**
Portfolio Turnover Rate 229%
- ----------------------------------------------------------------------------------
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 1.81%**
Net Investment Income to Average Net Assets 7.33%**
- ----------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
The accompanying notes are an integral part of the financial statements.
<PAGE>
Morgan Stanley
Universal Funds, Inc.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
October 31, 1997
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 October 31, 1997, the Fund was comprised of eleven separate
active, diversified and non-diversified portfolios (individually referred to as
a "Portfolio", collectively as the "Portfolios"). The Emerging Markets Debt
Portfolio commenced operations on June 16, 1997. The financial statements
presented here are for the Emerging Markets Debt Portfolio only.
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 the 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.
The 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: The Portfolio may enter into repurchase agreements
under which the Portfolio lends excess 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 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)
<PAGE>
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.
5. Foreign Currency Exchange Contracts: The Portfolio 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
Portfolio as unrealized gain or loss. The Portfolio 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. Loan Agreements: The Portfolio 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. The 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. The 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 the 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.
7. Structured Securities: The Portfolio may invest in interests in entities
organized and operated solely for the purpose of restructuring the investment
characteristics of sovereign debt obligations. This type of restructuring
involves the deposit with or purchase by an entity of specified instruments and
the issuance by that entity of one or more classes of securities ("Structured
Securities") backed by, or representing interests in, the underlying
instruments. Structured securities generally will expose the Portfolio to credit
risks of the underlying instruments as well as of the issuer of the structured
security. Structured securities are typically sold in private placement
transactions with no active trading market. Investments in structured securities
may be more volatile than their underlying instruments, however, any loss is
limited to the amount of the original investment.
8. 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.
B. Advisers: Morgan Stanley Asset Management Inc. ("MSAM"), a wholly-owned
subsidiary of Morgan Stanley, Dean Witter, Discover & Co., provides the Emerging
Markets Debt Portfolio with investment advisory services for a fee, paid
quarterly, at the annual rate based on average daily net assets as follows:
<TABLE>
<CAPTION>
Assets
---------------------------------------------
More
From than
First $500 $1
Portfolio $500 million to --
- --------- million $1 billion billion
------- ---------- -------
<S> <C> <C> <C>
Emerging Markets
Debt 0.80 0.75 0.70
</TABLE>
MSAM has agreed to reduce fees payable to itself and to reimburse the Portfolio,
if necessary, if the annual
<PAGE>
operating expenses, as defined, expressed as a percentage of average daily net
assets, exceed the maximum ratio indicated as follows:
<TABLE>
<CAPTION>
Maximum Expense
Portfolio Ratio
- --------- -----
<S> <C>
Emerging Markets Debt 1.30
</TABLE>
C. Administrator: MSAM (the "Administrator") also provides the Portfolio 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 the
Portfolio, plus reimbursement of out-of-pocket expenses. Under an agreement
between the Administrator 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, the Administrator pays
CGFSC a portion of the fee the Administrator receives 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 with certain emerging
market countries.
D. Custodians: Morgan Stanley Trust Company ("MSTC"), a wholly-owned subsidiary
of Morgan Stanley Group, Inc., 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
October 31, 1997, the following Portfolios incurred custody fees and had amounts
payable to MSTC at October 31, 1997:
<TABLE>
<CAPTION>
MSTC Custody
Custody Fees Fees Payable
Portfolio Incurred to
- --------- (000) MSTC
----- (000)
-----
<S> <C> <C>
Emerging Markets
Debt $8 $5
</TABLE>
In addition, for the period ended October 31, 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>
Emerging Markets Debt $ - $ 2
</TABLE>
At October 31, 1997, the net assets of the Portfolio was 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.
<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 incorporated herein by reference to Post-
Effective Amendment No. 3 to the Registration Statement on Form N-1A
(File No. 333-03013) as filed with the Securities and Exchange
Commission on September 5, 1997.
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
incorporated herein by reference to Post-Effective Amendment No. 3 to
the Registration Statement on Form N-1A (File No. 333-03013) as filed
with the Securities and Exchange Commission on September 5,
1997.
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
incorporated herein by reference to Post-Effective Amendment No. 3 to
the Registration Statement on Form N-1A (File No. 333-03013) as filed
with the Securities and Exchange Commission on September 5,
1997.
The Registrant's unaudited financial highlights for the U.S. Real
Estate and Fixed Income Portfolios for the periods ended June 30,
1997 are incorporated herein by reference to Post-Effective Amendment
No. 3 to the Registration Statement on Form N-1A (File No. 333-03013)
as filed with the Securities and Exchange Commission on September 5,
1997.
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 incorporated
herein by reference to Post-Effective Amendment No. 3 to the
Registration Statement on Form N-1A (File No. 333-03013) as filed
with the Securities and Exchange Commission on September 5, 1997.
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
incorporated herein by reference to Post-Effective Amendment No. 3 to
the Registration Statement on Form N-1A (File No. 333-03013) as filed
with the Securities and Exchange Commission on September 5, 1997. The
Registrant's unaudited financial highlights for the Emerging Markets
Debt Portfolio for the period ended October 31, 1997 are included as
a 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 from January 2, 1997 to June 30, 1997 are incorporated
herein by reference to Post-Effective Amendment No. 3 to the
Registration Statement on Form N-1A (File No. 333-03013) as filed
with the Securities and Exchange Commission on September 5, 1997. The
Registrant's unaudited financial highlights for the Emerging Markets
Debt Portfolio for the period ended October 31, 1997 are included as
a supplement to the prospectus of the Emerging Markets Debt, Global
Equity, International Magnum and Emerging Markets Equity Portfolios
filed herewith.
The Registrant's unaudited financial highlights for the Emerging
Markets Debt Portfolio for the period ended October 31, 1997 are
included in the supplement to the prospectus of the Emerging Markets
Debt Portfolio filed herewith.
The Registrant's unaudited financial highlights for the High Yield,
U.S. Real Estate and Asian Equity Portfolios for the periods ended
June 30, 1997 are incorporated herein by reference to Post-Effective
Amendment No. 3 to the Registration Statement on Form N-1A (File No.
333-03013) as filed with the Securities and Exchange Commission on
September 5, 1997. The Registrant's unaudited financial highlights
for the Emerging Markets Debt Portfolio for the period ended October
31, 1997 are included in the supplement to the prospectus of the High
Yield, U.S. Real Estate, Emerging Markets Debt and Asian Equity
Portfolios filed herewith.
The Registrant's unaudited financial highlights for the Fixed Income,
High Yield and International Magnum Portfolios for the period from
January 2, 1997 to June 30, 1997 are incorporated herein by reference
to Post-Effective Amendment No. 3 to the Registration Statement on
Form N-1A (File No. 333-03013) as filed with the Securities and
Exchange Commission on September 5, 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 ("SEC") on April 30, 1997
and in final form under Rule 497(c) on May 1, 1997 and supplemented
by supplements dated July 1, 1997, July 15, 1997, September 19, 1997,
October 1, 1997, October 15, 1997 and January 1, 1998 (filed with the
SEC on July 2, 1997, July 14, 1997, September 19, 1997, October 1,
1997, October 14, 1997 and December 9, 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 ("SEC") on April 30, 1997 and in final form under Rule
497(c) on May 1, 1997 and supplemented by supplements dated July 1,
1997, July 15, 1997, September 19, 1997, October 1, 1997, October 15,
1997 and January 1, 1998 (filed with the SEC on July 2, 1997, July
14, 1997, September 19, 1997, October 1, 1997, October 14, 1997 and
December 9, 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 the Statement of Additional Information which is
incorporated herein by reference to Post-Effective Amendment No. 3 to
the Registration Statement on Form N-1A (File No. 333-03013) as filed
with the Securities and Exchange Commission on September 5, 1997 and
are part of the Registrant's June 30, 1997 Semi-Annual Report to
Shareholders. The financial statements incorporated by reference
are:
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 Registrant's unaudited financial statements for the Emerging
Markets Debt Portfolio for the period ended October 31, 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
(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 November 25, 1997, Morgan Stanley, Dean Witter, Discover & Co.
("MSDWD"), a Delaware corporation located at 1585 Broadway, New York,
New York 10036, owned of record 47%, 30%, 28%, 51%, 73%, 50%, 38% and
27% of the outstanding voting securities of the Asian Equity, Emerging
Markets Debt, Equity Growth, Global Equity, High Yield, U.S. Real
Estate, Mid Cap Value and Value 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 November 25, 1997.
<TABLE>
<CAPTION>
Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
Money Market Portfolio............................ 0
Fixed Income Portfolio............................ 3
High Yield Portfolio.............................. 4
International Fixed Income Portfolio.............. 0
Emerging Markets Debt Portfolio................... 9
Balanced Portfolio................................ 0
Multi-Asset-Class Portfolio....................... 0
Equity Growth Portfolio........................... 3
Value Portfolio................................... 5
</TABLE>
C-2
<PAGE>
Core Equity Portfolio............................. 0
Mid Cap Growth Portfolio.......................... 0
Mid Cap Value Portfolio........................... 5
U.S. Real Estate Portfolio........................ 8
Global Equity Portfolio........................... 6
International Magnum Portfolio.................... 6
Emerging Markets Equity Portfolio................. 15
Asian Equity Portfolio............................ 6
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
Stefanie Chang Vice President
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 16th day of December, 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 December 16, 1997
- ---------------------------- (Principal Executive
Michael F. Klein Officer)
*/s/ Barton M. Biggs Director (Chairman) December 16, 1997
- ----------------------------
Barton M. Biggs
*/s/ Fergus Reid Director December 16, 1997
- ----------------------------
Fergus Reid
*/s/ Frederick O. Robertshaw Director December 16, 1997
- ----------------------------
Frederick O. Robertshaw
*/s/ Andrew McNally IV Director December 16, 1997
- ----------------------------
Andrew McNally IV
*/s/ John D. Barrett II Director December 16, 1997
- ----------------------------
John D. Barrett II
*/s/ Gerard E. Jones Director December 16, 1997
- ----------------------------
Gerard E. Jones
*/s/ Samuel T. Reeves Director December 16, 1997
- ----------------------------
Samuel T. Reeves
*/s/ Joanna M. Haigney Treasurer December 16, 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>
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<NAME> MORGAN STANLEY UNIVERSAL FUNDS, INC
<CIK> 0001011378
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<NUMBER> 01
<NAME> EMERGING MARKETS EQUITY PORTFOLIO
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<SERIES>
<NUMBER> 02
<NAME> FIXED INCOME PORTFOLIO
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<PAGE>
<ARTICLE> 6
<NAME> MORGAN STANLEY UNIVERSAL FUNDS, INC
<CIK> 0001011378
<SERIES>
<NUMBER> 03
<NAME> HIGH YIELD PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0001011378
<NAME> MORGAN STANLEY UNIVERSAL FUNDS, INC.
<SERIES>
<NUMBER> 04
<NAME> EQUITY GROWTH PORTFOLIO
<MULTIPLIER> 1,000
<S> <C>
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<PAGE>
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<CIK> 0001011378
<NAME> MORGAN STANLEY UNIVERSAL FUNDS, INC.
<SERIES>
<NUMBER> 05
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<TABLE> <S> <C>
<PAGE>
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<CIK> 0001011378
<NAME> MORGAN STANLEY UNIVERSAL FUNDS, INC.
<SERIES>
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<NAME> MID CAP VALUE PORTFOLIO
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<PAGE>
<ARTICLE> 6
<CIK> 0001011378
<NAME> MORGAN STANLEY UNIVERSAL FUNDS, INC.
<SERIES>
<NUMBER> 07
<NAME> GLOBAL EQUITY PORTFOLIO
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<S> <C>
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<PAGE>
<ARTICLE> 6
<NAME> MORGAN STANLEY UNIVERSAL FUNDS, INC
<CIK> 0001011378
<SERIES>
<NUMBER> 08
<NAME> INTERNATIONAL MAGNUM PORTFOLIO
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<CIK> 0001011378
<NAME> MORGAN STANLEY UNIVERSAL FUNDS, INC
<SERIES>
<NUMBER> 09
<NAME> ASIAN EQUITY PORTFOLIO
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