<PAGE>
SUPPLEMENT DATED JULY 14, 1995
TO PROSPECTUS DATED OCTOBER 28, 1994
AS PREVIOUSLY SUPPLEMENTED BY SUPPLEMENTS DATED MARCH 31, 1995 AND JUNE 14, 1995
AND SUPPLEMENTING AND REPLACING SUPPLEMENTS DATED JANUARY 9, 1995
MORGAN STANLEY FUND, INC.
P.O. BOX 2798
BOSTON, MASSACHUSETTS
02208-2798
This supplement contains unaudited financial highlights for the Morgan
Stanley Latin American Fund (the "Latin American Fund") and the Morgan Stanley
Emerging Markets Fund (the "Emerging Markets Fund") for the period from
commencement of operations on July 6, 1994 to December 31, 1994. The financial
highlights are included in the Statement of Additional Information of the Morgan
Stanley Fund, Inc. (the "Fund"). The financial highlights should be read in
conjunction with the financial statements and notes thereto. The Statement of
Additional Information is available at no cost and can be requested by writing
the address above or calling the telephone number on the cover of the
Prospectus.
This supplement also contains information on the new portfolio managers of
the Morgan Stanley Global Equity Allocation Fund.
FINANCIAL HIGHLIGHTS
EMERGING MARKETS FUND
<TABLE>
<CAPTION>
CLASS A CLASS B
---------------- ----------------
JULY 6, 1994* JULY 6, 1994*
TO DECEMBER 31, TO DECEMBER 31,
SELECTED PER SHARE DATA AND 1994 1994
RATIOS (UNAUDITED) (UNAUDITED)
- ---------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $12.00 $12.00
------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Loss (0.01) (0.03)
Net Realized and Unrealized
Loss (0.94) (0.96)
------- -------
Total From Investment
Operations (0.95) (0.99)
------- -------
NET ASSET VALUE, END OF PERIOD $ 11.05 $ 11.01
------- -------
------- -------
TOTAL RETURN(1) -7.92%*** -8.25%***
------- -------
------- -------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period
(000's) $ 15,899 $ 11,946
Ratio of Expenses to Average
Net Assets 2.76%**+ 3.51%**+
Ratio of Net Investment Loss
to Average Net Assets (0.25)%** (1.00)%**
Portfolio Turnover Rate 8% 8%
- ---------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period
Per Share Benefit to Net
Investment Loss $ 0.03 $ 0.03
Ratios Before Expense
Limitation:
Expenses to Average Net
Assets (Including Brazilian
Tax Expense) 3.76%** 4.55%**
Net Investment Loss to
Average Net Assets (1.25)%** (2.04)%**
+ The ratio of expenses to average net assets includes Brazilian
tax expense. Without the effect of the Brazilian tax expense, the
ratio of expenses to average net assets would have been 2.15%**
and 2.90%**, for Class A and Class B, respectively.
- ---------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
*** Not annualized
(1) Total return is calculated exclusive of sales charges or deferred sales
charges.
88 The accompanying notes are an integral part of the financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS
LATIN AMERICAN FUND
<TABLE>
<CAPTION>
CLASS A CLASS B
---------------- ----------------
JULY 6, 1994* TO JULY 6, 1994* TO
DECEMBER 31, DECEMBER 31,
1994 1994
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) (UNAUDITED)
- -------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.00 $12.00
------ ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Loss (0.06) (0.10)
Net Realized and Unrealized Gain 0.12# 0.10#
------ ------
Total From Investment Operations 0.06 0.00
------ ------
DISTRIBUTIONS
Net Realized Gain (0.20) (0.20)
------ ------
NET ASSET VALUE, END OF PERIOD $11.86 $11.80
------ ------
------ ------
TOTAL RETURN(1) 0.48%*** -0.02%***
------ ------
------ ------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's) $ 7,522 $ 3,256
Ratio of Expenses to Average Net Assets 2.77%**+ 3.52%**+
Ratio of Net Investment Loss to Average
Net Assets (1.68)%** (2.37)%**
Portfolio Turnover Rate 45% 45%
- -------------------------------------------------------------------------------
Effect of Voluntary Expense Limitation During the Period
Per Share Benefit to Net Investment
Loss $ 0.08 $ 0.11
Ratios Before Expense Limitation:
Expenses to Average Net Assets
(Including Brazilian Tax Expense) 5.04%** 6.11%**
Net Investment Loss to Average Net
Assets (3.95)%** (4.96)%**
+ The ratio of expenses to average net assets includes Brazilian tax expense.
Without the effect of the Brazilian tax expense, the ratio of expenses to
average net assets would have been 2.10%** and 2.85%**, for Class A and
Class B, respectively.
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
** Annualized
*** Not annualized
# The amount shown for the period ended December 31, 1994 for a Fund share
outstanding throughout the period does not accord with the aggregate net loss
for the period because of the timing of sales and repurchases of Fund shares
in relation to fluctuating market value of investments of the Fund.
(1) Total return is calculated exclusive of sales charges or deferred sales
charges.
The accompanying notes are an integral part of the financial statements. 87
<PAGE>
REPLACEMENT OF PORTFOLIO MANAGER. Paul J. Jackson, the Portfolio Manager of
the Morgan Stanley Global Equity Allocation Fund (the "Global Equity Allocation
Fund") of the Fund, resigned from Morgan Stanley Asset Management Inc. in June,
1995. A team of four Portfolio Managers replaced Mr. Jackson upon his
resignation and now manages the Global Equity Allocation Fund. Accordingly, the
second full paragraph on p. 53 of the Prospectus of the Fund dated October 28,
1994 is deleted and replaced with the following paragraph:
PORTFOLIO MANAGERS -- BARTON M. BIGGS, MADHAV DHAR, FRANCINE J. BOVICH
AND ANN D. THIVIERGE. Barton Biggs has been Chairman and a director of the
Adviser since 1980 and a Managing Director of Morgan Stanley since 1975. He
is also a director of Morgan Stanley Group Inc. and a director and officer
of six registered investment companies to which the Adviser and certain of
its affiliates provide investment advisory services. Mr. Biggs holds a
B.A. from Yale University and an M.B.A. from New York University. Madhav
Dhar is a Managing Director of Morgan Stanley. He joined the Adviser in
1984 to focus on global asset allocation and investment strategy and now
heads the Adviser's emerging markets group and serves as the group's
principal portfolio manager. Mr. Dhar also coordinates the Adviser's
developing country funds effort and has been involved in the launching of
the Adviser's country funds. He is the portfolio manager of the Fund's
Emerging Markets Fund, the Emerging Markets and Active Country Allocation
Portfolios of the Morgan Stanley Institutional Fund, Inc., and the Morgan
Stanley Emerging Markets Fund, Inc. (a closed-end investment company listed
on the New York Stock Exchange). Mr. Dhar is also a director of the Morgan
Stanley Emerging Markets Fund, Inc. He holds a B.S. (honors) from St.
Stephens College, Delhi University (India), and an M.B.A. from Carnegie-
Mellon University. Francine Bovich joined the Adviser as a Principal in
1993. She is responsible for product development, portfolio management and
communication of the Adviser's asset allocation strategy to institutional
investor clients. Previously, Ms. Bovich was a Principal and Executive Vice
President of Westwood Management Corp. ("Westwood"), a registered
investment adviser. Before joining Westwood, she was a Managing Director of
Citicorp Investment Management, Inc. (now Chancellor Capital Management),
where she was responsible for the Institutional Investment Management
group. Ms. Bovich began her investment career with Banker's Trust Company.
She holds a B.A. in Economics from Connecticut College and an M.B.A. in
Finance from New York University. Ann Thivierge is a Vice President of the
Adviser. She is a member of the Adviser's asset allocation committee,
primarily representing the Total Fund Management team since its inception
in 1991. Prior to joining the Adviser in 1986, she spent two years at
Edgewood Management Company, a privately held investment management firm.
Ms. Thivierge holds a B.A. in International Relations from James Madison
College, Michigan State University, and an M.B.A. in Finance from New York
University.
<PAGE>
SUPPLEMENT DATED JUNE 14, 1995
TO PROSPECTUS DATED OCTOBER 28, 1994 OF
MORGAN STANLEY FUND, INC.
P.O. BOX 2798
BOSTON, MASSACHUSETTS
02205-2798
CHANGES TO WAIVER OF SALES CHARGES ARRANGEMENTS FOR CLASS A SHARES. Certain
changes have been made to some of the arrangements for waiver of sales charges
upon the purchase of Class A shares, particularly with respect to plans such as
employee benefit and retirement plans and to arrangements for omnibus accounts
with a broker, as follows.
The second full paragraph on page 61 of the Prospectus of the Morgan
Stanley Fund, Inc. (the "Fund"), dated October 28, 1994 (the "Prospectus"), is
deleted and replaced with the following paragraph:
Class A shares of the Non-Money Funds may be purchased at net asset
value without a sales charge by employee benefit plans, retirement plans
and deferred compensation plans and trusts used to fund such plans,
including, but not limited to, those defined in Section 401(a), 403(b) or
457 of the Code and "rabbi trusts." Morgan Stanley will not compensate
Participating Dealers at the time of purchase for sales made to such plans
and trusts.
The last two sentences of the carry-over paragraph from page 61 to page 62
of the Prospectus are deleted and replaced with the following two sentences:
In addition, Class A shares may be sold without a sales charge when
purchased (i) through bank trust departments; (ii) for an investor whose
account is managed by certain investment advisers registered under the
Investment Advisers Act of 1940, as amended; (iii) for investors through
certain broker/dealers and other financial services firms that have entered
into certain agreements with the Fund which may include a requirement that
such shares be sold for the benefit of clients participating in a "wrap
account" or a similar program under which such clients pay a fee to such
broker/dealer or other firm; (iv) with redemption proceeds from other
investment companies on which the investor had paid a front-end or
contingent deferred sales charge; or (v) through a broker that maintains an
omnibus account with the Fund and such purchases are made by the following:
(1) investment advisers or financial planners who place trades for their
own accounts or the accounts of their clients and who charge a management,
consulting or other fee for their services, (2) clients of such investment
advisers or financial planners who place trades for their own accounts if
the accounts are linked to the master account of such investment adviser or
financial planner on the books and records of the broker or agent, or (3)
retirement and deferred compensation plans and trusts used to fund such
plans, including, but not limited to, those defined in Section 401(a),
403(b) or 457 of the Code and "rabbi trusts." Investors who purchase or
redeem shares through a trust department, broker, dealer, agent, financial
planner, financial services firm, or investment adviser may be charged on
additional service or transaction fee by that institution.
The last two sentences in the paragraph with the heading "Retirement Plans"
on page 62 of the Prospectus are deleted and replaced with the following:
Certain employee benefit plans, retirement plans and deferred
compensation plans and trusts used to fund such plans may purchase Class A
shares of the Non-Money Funds at net asset value without imposition of a
sales charge. See "Offering Price of Class A Shares."
