2021-09-21MSIFMulti-AssetRealReturn_PSP_485B_April2022

 

image 
MORGAN STANLEY INSTITUTIONAL FUND, INC.
 
Statement of Additional Information
April 29, 2022
Morgan Stanley Institutional Fund, Inc. (the “Company”) is an open-end management investment company consisting of 32 funds offering a variety of investment alternatives, all of which are included in this Statement of Additional Information (“SAI”) (each a “Fund” and collectively the “Funds”). Some or all of the Funds offer the following shares: Class I, Class A, Class L, Class C, Class R6 and Class IR. Following is a list of the 32 Funds included in this SAI:
Share Class and Ticker Symbol
I
A
L*
C
R6
IR
GLOBAL AND INTERNATIONAL EQUITY FUNDS:
Active International Allocation Portfolio
MSACX
MSIBX
MSLLX
MSAAX
MAIJX
MAIHX
Asia Opportunity Portfolio
MSAQX
MSAUX
—
MSAWX
MSAYX
—
China Equity Portfolio
MAKIX
MAKAX
—
MAKCX
MAKSX
—
Counterpoint Global Portfolio
GLCIX
GLCAX
—
GLCDX
GLCSX
—
Developing Opportunity Portfolio
MDOEX
MDOAX
—
MDOBX
MDODX
—
Emerging Markets Leaders Portfolio
MELIX
MELAX
—
MEMLX
MELSX
MSIWX
Emerging Markets Portfolio
MGEMX
MMKBX
MSELX
MSEPX
MMMPX
MRGEX
Global Concentrated Portfolio
MLNIX
MLNAX
—
MLNCX
MLNSX
—
Global Core Portfolio
MLMIX
MLMAX
—
MLMCX
MLMSX
—
Global Endurance Portfolio
MSJIX
MSJAX
—
MSJCX
MSJSX
—
Global Franchise Portfolio
MSFAX
MSFBX
MSFLX
MSGFX
MGISX
—
Global Insight Portfolio
MIGIX
MIGPX
MIGLX
MSPTX
MGZZX
—
Global Opportunity Portfolio**
MGGIX
MGGPX
MGGLX
MSOPX
MGTSX
MGORX
Global Permanence Portfolio
MGKIX
MGKAX
—
MGKCX
MGKQX
—
Global Sustain Portfolio
MGQIX
MGQAX
MGQLX
MSGQX
MGQSX
—
International Advantage Portfolio
MFAIX
MFAPX
MSALX
MSIAX
IDVSX
—
International Equity Portfolio
MSIQX
MIQBX
MSQLX
MSECX
MIQPX
—
International Opportunity Portfolio
MIOIX
MIOPX
MIOLX
MSOCX
MNOPX
MRNPX
Next Gen Emerging Markets Portfolio
MFMIX
MFMPX
MFMLX
MSFEX
MSRFX
—
U.S. EQUITY FUNDS:
Advantage Portfolio
MPAIX
MAPPX
MAPLX
MSPRX
MADSX
—
Growth Portfolio
MSEQX
MSEGX
MSHLX
MSGUX
MGRPX
MGHRX
Inception Portfolio
MSSGX
MSSMX
MSSLX
MSCOX
MFLLX
—
Permanence Portfolio
MSHMX
MSHNX
—
MSHOX
MSHPX
—
US Core Portfolio
MUOIX
MUOAX
—
MUOCX
MUOSX
—
Vitality Portfolio
MSVDX
MSVEX
—
MSVMX
MSVOX
—
FIXED INCOME FUND:
Emerging Markets Fixed Income Opportunities Portfolio
MEAIX
MEAPX
MEALX
MSEDX
MRDPX
—
LISTED REAL ASSET FUNDS:
Global Focus Real Estate Portfolio
MSBDX
MSBEX
—
MSBKX
MSBPX
—
Global Infrastructure Portfolio
MTIIX
MTIPX
MTILX
MSGTX
MSGPX
MRGOX

 

Global Real Estate Portfolio
MRLAX
MRLBX
MGRLX
MSRDX
MGREX
MRLEX
U.S. Focus Real Estate Portfolio
MAAWX
MAAYX
—
MABBX
MABCX
—
U.S. Real Estate Portfolio
MSUSX
MUSDX
MSULX
MSURX
MURSX
MRETX
ASSET ALLOCATION FUND:
Multi-Asset Real Return Portfolio
MRJIX
MRJAX
—
MRJCX
MRJSX
—
* The Company has suspended offering Class L shares of each Fund for sale to all investors. Existing Class L shareholders may invest in additional Class L shares through reinvestment of dividends and distributions. Class L shares of the Asia Opportunity, China Equity, Counterpoint Global, Developing Opportunity, Emerging Markets Leaders, Global Concentrated, Global Core, Global Endurance, Global Focus Real Estate, Global Permanence, Multi-Asset Real Return, Permanence, US Core, U.S. Focus Real Estate and Vitality Portfolios are not being offered for sale at this time. You do not currently have the option of purchasing Class L shares.
** The Company has suspended offering Class I, Class A, Class C, Class R6 and Class IR shares of the Fund to new investors, except as follows. The Company will continue to offer Class I, Class A, Class C, Class R6 and Class IR shares of the Fund: (1) through certain retirement plan accounts, (2) to clients of certain registered investment advisers who currently offer shares of the Fund in their asset allocation programs, (3) to directors and trustees of the Morgan Stanley Funds, (4) to Morgan Stanley affiliates and their employees, (5) to benefit plans sponsored by Morgan Stanley and its affiliates and (6) omnibus accounts sponsored or serviced by a financial intermediary that currently hold shares of the Fund in such accounts. The Company will continue to offer Class I, Class A, Class C, Class R6 and Class IR shares of the Fund to existing shareholders. The Company may recommence offering shares of the Fund to new investors in the future. Any such offerings of the Fund’s shares may be limited in amount and may commence and terminate without any prior notice.
This SAI is not a prospectus, but should be read in conjunction with the Funds’ prospectuses, each dated April 29, 2022, as may be supplemented from time to time. To obtain any of these prospectuses, please call the Fund toll-free at 1-800-548-7786.
The Funds’ most recent Annual Reports to Shareholders are separate documents supplied with this SAI and include the Funds’ audited financial statements, including notes thereto, and the reports of the Funds’ independent registered public accounting firm, which are incorporated by reference into this SAI.
Certain Funds are “non-diversified” and, as such, such Funds’ investments are not required to meet certain diversification requirements under federal securities law. Compared with “diversified” funds or portfolios, each such Fund may invest a greater percentage of its assets in the securities of an individual corporation or governmental entity. Thus, the Fund’s assets may be focused in fewer securities than other funds. A decline in the value of those investments could cause the Fund’s overall value to decline to a greater degree. The China Equity, Emerging Markets Leaders, Global Concentrated, Global Core, Global Focus Real Estate, Global Franchise, Global Infrastructure, Global Sustain, US Core, U.S. Focus Real Estate and U.S. Real Estate Portfolios are non-diversified portfolios.

 

 

 

 
Table of Contents
1

 

INVESTMENT POLICIES AND STRATEGIES
This SAI provides additional information about the investment policies and operations of the Company and its Funds. Morgan Stanley Investment Management Inc. (the “Adviser”) acts as investment adviser to each Fund. Under the supervision of the Adviser, Morgan Stanley Investment Management Limited (“MSIM Limited”) acts as investment sub-adviser to the Emerging Markets Fixed Income Opportunities, Global Franchise, Global Real Estate, Global Sustain and International Equity; Morgan Stanley Investment Management Company (“MSIM Company”) acts as investment sub-adviser to the China Equity, Asia Opportunity, Counterpoint Global, Developing Opportunity, Emerging Markets Fixed Income Opportunities, Emerging Markets Leaders, Emerging Markets, Global Opportunity, Global Real Estate, International Advantage and International Opportunity Portfolios (MSIM Limited and MSIM Company are each referred to herein individually as the “Sub-Adviser” and together as the “Sub-Advisers”). References to the Adviser, when used in connection with its activities as investment adviser, include any Sub-Adviser acting under its supervision.
The following tables summarize the permissible strategies and investments for each Fund. These tables should be used in conjunction with the investment summaries for each Fund contained in the Prospectus in order to provide a more complete description of such Fund’s investment policies. More details about each investment and related risks are provided in the discussion following the tables.
GLOBAL AND INTERNATIONAL EQUITY FUNDS
Active International Allocation
Asia Opportunity
China Equity
Developing Opportunity
Emerging Markets
Emerging Markets Leaders
Next Gen Emerging Markets
Global Insight
Global Concentrated
Equity Securities:
Common Stocks
X
X
X
X
X
X
X
X
X
Depositary Receipts
X
X
X
X
X
X
X
X
X
Preferred Stocks
X
X
X
X
X
X
X
X
X
Rights
X
X
X
X
X
X
X
X
X
Warrants
X
X
X
X
X
X
X
X
X
IPOs
X
X
X
X
X
X
X
X
X
Convertible Securities
X
X
X
X
X
X
X
X
X
Limited Partnership and Limited Liability Company Interests
X
X
X
X
X
X
X
X
X
Investment Company Securities
X
X
X
X
X
X
X
X
X
Exchange-Traded Funds
X
X
X
X
X
X
X
X
X
Real Estate Investing
X
X
X
X
X
X
X
X
X
—REITs
X
X
X
X
X
X
X
X
X
—Foreign Real Estate Companies
X
X
X
X
X
X
X
X
X
—Specialized Ownership Vehicles
X
X
X
X
X
X
X
X
X
Special Purpose Acquisition Companies
X
X
X
Fixed-Income Securities:
1 

 

Back To Table of Contents

GLOBAL AND INTERNATIONAL EQUITY FUNDS
Active International Allocation
Asia Opportunity
China Equity
Developing Opportunity
Emerging Markets
Emerging Markets Leaders
Next Gen Emerging Markets
Global Insight
Global Concentrated
Investment Grade Securities
X
X
X
X
X
X
X
X
X
High Yield Securities
X
X
X
X
X
U.S. Government Securities
X
X
X
X
X
X
X
X
X
Agencies
X
X
X
X
X
X
X
X
X
Corporates
X
X
X
X
X
X
X
X
X
Money Market Instruments
X
X
X
X
X
X
X
X
X
Cash Equivalents
X
X
X
X
X
X
X
X
X
Chinese Fixed-Income Investments
X
Mortgage-Related Securities
X
X
X
X
X
Repurchase Agreements
X
X
X
X
X
X
X
X
X
Municipals
X
Asset-Backed Securities
X
Loan-Related Investments
X
X
X
X
Temporary Investments
X
X
X
X
X
X
X
X
X
Zero Coupons, Pay-In-Kind Securities or Deferred Payment Securities
X
X
X
X
X
X
X
X
X
Floaters
Inverse Floaters
Eurodollar and Yankee Dollar Obligations
X
X
X
X
X
X
X
X
X
Foreign Investment:
China Investments
X
X
X
X
X
X
X
X
X
Foreign Equity Securities
X
X
X
X
X
X
X
X
X
Foreign Government Fixed-Income Securities
X
X
X
X
X
X
X
X
2 

 

Back To Table of Contents

GLOBAL AND INTERNATIONAL EQUITY FUNDS
Active International Allocation
Asia Opportunity
China Equity
Developing Opportunity
Emerging Markets
Emerging Markets Leaders
Next Gen Emerging Markets
Global Insight
Global Concentrated
Foreign Corporate Fixed-Income Securities
X
X
X
X
X
X
X
X
Emerging Market Securities
X
X
X
X
X
X
X
X
X
Foreign Currency Transactions
X
X
X
X
X
X
X
X
X
Brady Bonds
X
X
X
X
X
X
X
X
X
Investment Funds
X
X
X
X
X
X
X
X
X
Exchange-Listed Equities via Stock Connect Program
X
X
X
X
X
X
X
Investments in Saudi Arabia and the QFI Regime
X
X
X
X
Variable Interest Entities
X
X
X
X
X
X
X
Other Securities and Investment Strategies:
Loans of Portfolio Securities
X
X
X
X
X
X
X
X
X
Non-Publicly Traded Securities, Private Placements and Restricted Securities
X
X
X
X
X
X
X
X
X
When-Issued and Delayed Delivery Securities and Forward Commitments
X
X
X
X
X
X
X
X
X
Borrowing for Investment Purposes
Temporary Borrowing
X
X
X
X
X
X
X
X
X
Reverse Repurchase Agreements
X
Short Sales
Illiquid Investments
X
X
X
X
X
X
X
X
X
Bitcoin Exposure
X
X
X
3 

 

Back To Table of Contents

GLOBAL AND INTERNATIONAL EQUITY FUNDS
Active International Allocation
Asia Opportunity
China Equity
Developing Opportunity
Emerging Markets
Emerging Markets Leaders
Next Gen Emerging Markets
Global Insight
Global Concentrated
Derivatives:
Currency Forwards
X
X
X
X
X
X
X
X
X
Futures Contracts
X
X
X
X
X
X
X
X
X
Options
X
X
X
X
X
X
X
Swaps
X
X
X
X
X
X
X
X
X
Contracts for Difference
X
X
X
X
X
X
X
X
X
Structured Investments
X
X
X
X
X
X
X
X
Combined Transactions
X
X
X
X
X
X
X
X
X
Commodity-Linked Investments
X
4 

 

Back To Table of Contents

GLOBAL AND INTERNATIONAL EQUITY FUNDS
Global Core
Counterpoint Global 
Global Endurance
Global Franchise
Global Opportunity
Global Permanence
Global Sustain
International Advantage
International Equity
International Opportunity
Equity Securities:
Common Stocks
X
X
X
X
X
X
X
X
X
X
Depositary Receipts
X
X
X
X
X
X
X
X
X
X
Preferred Stocks
X
X
X
X
X
X
X
X
X
X
Rights
X
X
X
X
X
X
X
X
X
X
Warrants
X
X
X
X
X
X
X
X
X
X
IPOs
X
X
X
X
X
X
X
X
X
X
Convertible Securities
X
X
X
X
X
X
X
X
X
X
Limited Partnership and Limited Liability Company Interests
X
X
X
X
X
X
X
X
X
X
Investment Company Securities
X
X
X
X
X
X
X
X
X
X
Exchange-Traded Funds
X
X
X
X
X
X
X
X
X
X
Real Estate Investing
X
X
X
X
X
X
X
X
X
X
—REITs
X
X
X
X
X
X
X
X
X
X
—Foreign Real Estate Companies
X
X
X
X
X
X
X
X
X
X
—Specialized Ownership Vehicles
X
X
X
X
X
X
X
X
X
X
Special Purpose Acquisition Companies
X
X
X
X
X
X
Fixed-Income Securities:
Investment Grade Securities
X
X
X
X
X
X
X
X
X
X
High Yield Securities
X
U.S. Government Securities
X
X
X
*
X
X
X
X
*
X
Agencies
X
X
X
*
X
X
X
X
*
X
Corporates
X
X
X
*
X
X
X
X
*
X
Money Market Instruments
X
X
X
X
X
X
X
X
X
X
Cash Equivalents
X
X
X
X
X
X
X
X
X
X
Chinese Fixed-Income Investments
Mortgage-Related Securities
X
X
X
X
X
X
X
Repurchase Agreements
X
X
X
X
X
X
X
X
X
X
Municipals
Asset-Backed Securities
Loan-Related Investments
Temporary Investments
X
X
X
X
X
X
X
X
X
X
Zero Coupons, Pay-In-Kind Securities or Deferred Payment Securities
X
X
X
X
X
X
X
X
Floaters
Inverse Floaters
Eurodollar and Yankee Dollar Obligations
X
X
X
X
X
X
X
X
X
X
Foreign Investment:
China Investments
X
X
X
X
X
X
X
X
X
X
Foreign Equity Securities
X
X
X
X
X
X
X
X
X
X
5 

 

Back To Table of Contents

GLOBAL AND INTERNATIONAL EQUITY FUNDS
Global Core
Counterpoint Global 
Global Endurance
Global Franchise
Global Opportunity
Global Permanence
Global Sustain
International Advantage
International Equity
International Opportunity
Foreign Government Fixed-Income Securities
X
X
X
X
X
X
X
X
Foreign Corporate Fixed-Income Securities
X
X
X
X
X
X
X
X
Emerging Market Securities
X
X
X
X
X
X
X
X
X
X
Foreign Currency Transactions
X
X
X
X
X
X
X
X
X
X
Brady Bonds
X
X
X
X
X
X
X
Investment Funds
X
X
X
X
X
X
X
X
X
X
Exchange-Listed Equities via Stock Connect Program
X
X
X
X
X
X
X
X
X
Investments in Saudi Arabia and the QFI Regime
Variable Interest Entities
X
X
X
X
X
Other Securities and Investment Strategies:
Loans of Portfolio Securities
X
X
X
X
X
X
X
X
X
X
Non-Publicly Traded Securities, Private Placements and Restricted Securities
X
X
X
X
X
X
X
X
X
X
When-Issued and Delayed Delivery Securities and Forward Commitments
X
X
X
X
X
X
X
X
X
X
Borrowing for Investment Purposes
Temporary Borrowing
X
X
X
X
X
X
X
X
X
X
Reverse Repurchase Agreements
Short Sales
Illiquid Investments
X
X
X
X
X
X
X
X
X
X
Bitcoin Exposure
X
X
X
X
X
Derivatives:
Currency Forwards
X
X
X
X
X
X
X
X
X
X
Futures Contracts
X
X
X
X
X
X
X
X
X
Options
X
X
X
X
X
X
X
X
X
Swaps
X
X
X
X
X
X
X
X
X
Contracts for Difference
X
X
X
X
X
X
X
X
X
Structured Investments
X
X
X
X
X
X
X
Combined Transactions
X
X
X
X
X
X
X
X
X
Commodity-Linked Investments
* This Fund may invest in certain U.S. Government Securities, Agencies and Corporates as described under Money Market Instruments and Temporary Investments.
6 

 

Back To Table of Contents

U.S. EQUITY FUNDS
Advantage
Growth
Inception
US Core
Permanence
Vitality
Equity Securities:
Common Stocks
X
X
X
X
X
X
Depositary Receipts
X
X
X
X
X
X
Preferred Stocks
X
X
X
X
X
X
Rights
X
X
X
X
X
X
Warrants
X
X
X
X
X
X
IPOs
X
X
X
X
X
X
Convertible Securities
X
X
X
X
X
X
Limited Partnership and Limited Liability Company Interests
X
X
X
X
X
X
Investment Company Securities
X
X
X
X
X
X
Exchange-Traded Funds
X
X
X
X
X
X
Real Estate Investing
X
X
X
X
X
X
—REITs
X
X
X
X
X
X
—Foreign Real Estate Companies
X
X
X
X
X
X
—Specialized Ownership Vehicles
X
X
X
X
X
X
Special Purpose Acquisition Companies
X
X
X
X
X
Fixed-Income Securities:
Investment Grade Securities
X
X
X
X
X
X
High Yield Securities
U.S. Government Securities
X
X
X
X
X
X
Agencies
X
X
X
X
X
X
Corporates
X
X
X
X
X
X
Money Market Instruments
X
X
X
X
X
X
Cash Equivalents
X
X
X
X
X
X
Chinese Fixed-Income Investments
Mortgage-Related Securities
X
X
Repurchase Agreements
X
X
X
X
X
X
Municipals
Asset-Backed Securities
Loan-Related Investments
Temporary Investments
X
X
X
X
X
X
Zero Coupons, Pay-In-Kind Securities or Deferred Payment Securities
X
X
X
X
X
X
Floaters
7 

 

Back To Table of Contents

U.S. EQUITY FUNDS
Advantage
Growth
Inception
US Core
Permanence
Vitality
Inverse Floaters
Eurodollar and Yankee Dollar Obligations
X
X
Foreign Investment:
Foreign Equity Securities
X
X
X
X
X
X
Foreign Government Fixed-Income Securities
X
X
Foreign Corporate Fixed-Income Securities
X
X
Emerging Market Securities
X
X
X
X
X
X
Foreign Currency Transactions
X
X
X
X
X
X
Brady Bonds
X
X
Investment Funds
X
X
X
X
X
X
Exchange-Listed Equities via Stock Connect Program
X
X
Investments in Saudi Arabia and the QFI Regime
Other Securities and Investment Strategies:
Loans of Portfolio Securities
X
X
X
X
X
X
Non-Publicly Traded Securities, Private Placements and Restricted Securities
X
X
X
X
X
X
When-Issued and Delayed Delivery Securities and Forward Commitments
X
X
X
X
X
X
Borrowing for Investment Purposes
Temporary Borrowing
X
X
X
X
X
X
Reverse Repurchase Agreements
X
X
X
Short Sales
Illiquid Investments
X
X
X
X
X
X
Bitcoin Exposure
X
X
X
X
Derivatives:
Currency Forwards
X
X
X
X
X
X
Futures Contracts
X
X
X
X
X
X
Options
X
X
X
X
X
X
Swaps
X
X
X
X
X
X
Contracts for Difference
X
X
X
X
X
X
Structured Investments
X
X
X
X
X
X
8 

 

Back To Table of Contents

U.S. EQUITY FUNDS
Advantage
Growth
Inception
US Core
Permanence
Vitality
Combined Transactions
X
X
X
X
X
X
Commodity-Linked Investments
9 

 

Back To Table of Contents

FIXED INCOME FUND
Emerging Markets Fixed Income Opportunities
Equity Securities:
Common Stocks
X
Depositary Receipts
X
Preferred Stocks
X
Rights
X
Warrants
X
IPOs
X
Convertible Securities
X
Limited Partnership and Limited Liability Company Interests
Investment Company Securities