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Effective February 25, 2013, Class C shares were renamed Class L shares.
These returns do not reflect any tax consequences from a sale of your shares at the end of each period, but they do reflect any applicable sales charges on such a sale.
Effective April 2005, Class B shares will generally convert to Class A shares approximately eight years after the end of the calendar month in which the shares were purchased. The "Past 10 Years" performance for Class B shares reflects this conversion.
Effective February 25, 2013, Class C shares were renamed Class L shares. The one year performance of Class L shares reflects the 1% CDSC in effect for Class C shares as of December 31, 2012. Class C shares held for less than one year were subject to a 1% CDSC. The CDSC on Class L shares was eliminated effective February 25, 2013.
The Russell 3000 Growth Index measures the performance of the broad growth segment of the U.S. equity universe. It includes those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. It is not possible to invest directly in an index.
The Lipper Multi-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Multi-Cap Growth Funds classification. There are currently 30 funds represented in this Index.
Investments that are not subject to any sales charges at the time of purchase are subject to a contingent deferred sales charge ("CDSC") of 1.00% that will be imposed if you sell your shares within 18 months after purchase, except for certain specific circumstances.
The Class B CDSC is scaled down to 1.00% during the sixth year, reaching zero thereafter. See "Share Class Arrangements" for a complete discussion of the CDSC.
The Board of Trustees approved an amendment to the Plan of Distribution reducing the distribution and shareholder services (12b-1) fee for the Fund's Class L shares from 1.00% to 0.75% of the average daily net assets of such Class, effective February 25, 2013. The Distribution and/or Shareholder Service (12b-1) Fee shown in the table above has been restated to reflect such change.
MORGAN STANLEY MULTI CAP GROWTH TRUST
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Morgan Stanley Multi Cap Growth Trust
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Principal Investment Strategies
<p style="margin:10.5pt 0pt 0pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">The Fund will normally invest at least 65% of its assets in a portfolio of common stocks of companies with market capitalizations, at the time of purchase, within the capitalization range of the companies comprising the Russell 3000® Growth Index, which as of December 31, 2012 was between $28 million and $500 billion. The Fund's "Adviser," Morgan Stanley Investment Management Inc., seeks long-term capital appreciation by investing primarily in established and emerging companies. The Adviser emphasizes a bottom-up stock selection process, seeking attractive investments on an individual company basis. In selecting securities for investment, the Adviser seeks to invest in high quality companies it believes have sustainable competitive advantages and the ability to redeploy capital at high rates of return. The Adviser typically favors companies with rising returns on invested capital, above average business visibility, strong free cash flow generation and an attractive risk/reward. The Fund's investments in equity securities may include convertible securities. The Fund may, but it is not required to, use derivative instruments as discussed herein. These derivative instruments will be counted toward the Fund's 65% policy discussed above to the extent they have economic characteristics similar to the securities included within that policy.</font> </p> <br/><p style="margin:0pt 0pt 6pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">The Fund may invest up to 25% of its net assets in foreign securities, including emerging market securities, and securities classified as American Depositary Receipts ("ADRs"), Global Depositary Receipts ("GDRs"), American Depositary Shares ("ADSs") or Global Depositary Shares ("GDSs"), foreign U.S. dollar-denominated securities that are traded on a U.S. exchange or local shares of non-U.S. issuers. The Fund may utilize foreign currency forward exchange contracts, which are derivatives, in connection with its investments in foreign securities. The Fund may invest in privately placed and restricted securities.</font> </p>
Investment Objective
<p style="margin:0pt 0pt 6pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">Morgan Stanley Multi Cap Growth Trust (the "Fund") seeks long-term capital appreciation.</font> </p>
Example
<p style="margin:0pt 0pt 6pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">The example below is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.</font> </p> <br/><p style="margin:0pt 0pt 6pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">The example assumes that you invest $10,000 in the Fund, your investment has a 5% return each year, and the Fund's operating expenses remain the same (except for the ten-year amounts for Class B shares which reflect the conversion to Class A shares eight years after the end of the calendar month in which the shares were purchased). Although your actual costs may be higher or lower, based on these assumptions your costs would be:</font> </p>
650
915
1200
2010
708
943
1303
2187
183
566
975
2116
107
334
579
1283
650
915
1200
2010
208
643
1103
2187
183
566
975
2116
107
334
579
1283
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If You SOLD Your Shares:
If You HELD Your Shares:
Principal Risks
<p style="margin:0pt 0pt 6pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">There is no assurance that the Fund will achieve its investment objective and you can lose money investing in this Fund. The principal risks of investing in the Fund include:</font> </p> <br/><p style="margin:0pt 0pt 4pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">•  </font><font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;"><b><i>Common Stock and Other Equity Securities.</i></b></font> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">In general, common stock and other equity security values fluctuate, and sometimes widely fluctuate, in response to activities specific to the issuer of the security as well as factors unrelated to the fundamental condition of the issuer, including general market, economic and political conditions. To the extent that the Fund invests in convertible securities, and the convertible security's investment value is greater than its conversion value, its price will be likely to increase when interest rates fall and decrease when interest rates rise. If the conversion value exceeds the investment value, the price of the convertible security will tend to fluctuate directly with the price of the underlying equity security.</font> </p> <br/><p style="margin:0pt 0pt 4pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">•  </font><font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;"><b><i>Small and Medium Capitalization Companies.</i></b></font> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">Investments in small and medium capitalization companies may involve greater risks than investments in larger, more established companies. The securities issued by small and medium capitalization companies may be less liquid, and such companies may have more limited markets, financial resources and product lines, and may lack the depth of management of larger companies.</font> </p> <br/><p style="margin: 0pt 0pt 4pt 0pt;" align="left"> <font style="font-size: 9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;"><font style="font-size: 9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">•  </font><font style="font-size: 9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;"><strong><em>Foreign and Emerging Market Securities.</em></strong></font> <font style="font-size: 9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">Investments in foreign markets entail special risks such as currency, political, economic and market risks. There also may be greater market volatility, less reliable financial information, higher transaction and custody costs, decreased market liquidity and less government and exchange regulation associated with investments in foreign markets. In addition, investments in certain foreign markets, which have historically been considered stable, may become more volatile and subject to increased risk due to ongoing developments and changing conditions in such markets. Moreover, the growing interconnectivity of global economies and financial markets has increased the probability that adverse developments and conditions in one country or region will affect the stability of economies and financial markets in other countries or regions. The risks of investing in emerging market countries are greater than risks associated with investments in foreign developed countries. In addition, the Fund's investments may be denominated in foreign currencies and therefore, to the extent unhedged, the value of the investment will fluctuate with the U.S. dollar exchange rates. To the extent hedged by use of foreign currency forward exchange contracts, the precise matching of foreign currency forward exchange contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. There is additional risk that such transactions reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken and that foreign currency forward exchange contracts create exposure to currencies in which the Fund's securities are not denominated. The use of foreign currency forward exchange contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract.</font></font> </p> <br/><p style="margin:0pt 0pt 4pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">•  </font><font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;"><b><i>Privately Placed and Restricted Securities.</i></b></font> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">The Fund's investments may also include privately placed securities, which are subject to resale restrictions. These securities will have the effect of increasing the level of Fund illiquidity to the extent the Fund may be unable to sell or transfer these securities due to restrictions on transfers or on the ability to find buyers interested in purchasing the securities. The illiquidity of the market, as well as the lack of publicly available information regarding these securities, may also adversely affect the ability to arrive at a fair value for certain securities at certain times.</font> </p> <br/><p style="margin:0pt 0pt 6pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">Shares of the Fund are not bank deposits and are not guaranteed or insured by the Federal Deposit Insurance Corporation or any other government agency.</font> </p>
There is no assurance that the Fund will achieve its investment objective and you can lose money investing in this Fund.
Shares of the Fund are not bank deposits and are not guaranteed or insured by the Federal Deposit Insurance Corporation or any other government agency.
Portfolio Turnover
<p style="margin:0pt 0pt 6pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Total Annual Fund Operating Expenses or in the Example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 43% of the average value of its portfolio.</font> </p>
0.43
Past Performance
<p style="margin:0pt 0pt 6pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">The bar chart and table below provide some indication of the risks of investing in the Fund by showing changes in the Fund's Class A shares' performance from year-to-year and by showing how the Fund's average annual returns for the one, five and 10 year periods compare with those of a broad measure of market performance, as well as an index that represents a group of similar mutual funds, over time. The performance of other Classes will differ because the Classes have different ongoing fees. The performance information in the bar chart does not reflect the deduction of sales charges; if these amounts were reflected, returns would be less than shown. The Fund's returns in the table include the maximum applicable sales charge for each Class and assume you sold your shares at the end of each period (unless otherwise noted). The Fund's past performance (before and after taxes) does not indicate how the Fund will perform in the future. Updated performance information is available online at www.morganstanley.com/im or by calling toll-free (800) 869-NEWS.</font> </p>
Annual Total Returns-Calendar Years*
0.4110
0.2243
0.2210
0.0721
0.1882
-0.4866
0.6996
0.2690
-0.0780
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High Quarter
0.2271
2009-06-30
Low Quarter
-0.3149
2008-12-31
<table style="width: 100%;" border="0" cellspacing="0" cellpadding="0"> <tr> <td style="padding: 0pt .7pt 0pt 0pt;" colspan="3" align="left" valign="bottom" width="65"> <p style="margin: 0pt 0pt 0pt 0pt;"> <font style="font-size: 8pt; font-family: Arial, Helvetica;"><strong>High Quarter</strong></font> </p> </td> <td colspan="1">   </td> <td style="padding: 0pt .7pt 0pt 0pt;" colspan="3" align="left" valign="bottom" width="54"> <p style="margin: 0pt 0pt 0pt 0pt;"> <font style="font-size: 9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">6/30/09</font> </p> </td> <td colspan="1">   </td> <td style="padding: 0pt .7pt 0pt 0pt;" colspan="1" valign="bottom" width="8">   </td> <td style="padding: 0pt .7pt 0pt 0pt;" colspan="1" align="right" valign="bottom" width="43"> <p style="margin: 0pt 0pt 0pt 0pt;"> <font style="font-size: 9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">22.71</font> </p> </td> <td style="padding: 0pt .7pt 0pt 0pt;" colspan="1" align="left" valign="bottom" width="24"> <p style="margin: 0pt 0pt 0pt 0pt; white-space: nowrap;"> <font style="font-size: 9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">%</font> </p> </td> <td colspan="1" width="8">   </td> </tr> <tr> <td style="padding: 0pt .7pt 6pt 0pt;" colspan="3" align="left" valign="bottom" width="65"> <p style="margin: 0pt 0pt 0pt 0pt;"> <font style="font-size: 8pt; font-family: Arial, Helvetica;"><strong>Low Quarter</strong></font> </p> </td> <td colspan="1">   </td> <td style="padding: 0pt .7pt 6pt 0pt;" colspan="3" align="left" valign="bottom" width="54"> <p style="margin: 0pt 0pt 0pt 0pt;"> <font style="font-size: 9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">12/31/08</font> </p> </td> <td colspan="1">   </td> <td style="padding: 0pt .7pt 6pt 0pt;" colspan="1" valign="bottom" width="8">   </td> <td style="padding: 0pt .7pt 6pt 0pt;" colspan="1" align="right" valign="bottom" width="43"> <p style="margin: 0pt 0pt 0pt 0pt;"> <font style="font-size: 9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">–31.49</font> </p> </td> <td style="padding: 0pt .7pt 6pt 0pt;" colspan="1" align="left" valign="bottom" width="24"> <p style="margin: 0pt 0pt 0pt 0pt; white-space: nowrap;"> <font style="font-size: 9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">%</font> </p> </td> <td colspan="1" width="8">   </td> </tr> </table>
<p> <font style="font-size: 8pt; font-family: Arial, Helvetica;"><em>*  The Fund previously disclosed the total return of Class B shares. However, Class B shares are closed to new investments. The bar chart now shows Class A shares which remain open to new investments.</em></font> </p>
0.0631
0.0165
0.1130
0.0440
0.0129
0.1110
0.0658
0.0141
0.1014
0.0657
0.0163
0.1121
0.1043
0.0199
0.1106
0.1253
0.0302
0.1217
0.1521
0.0315
0.0769
0.1588
0.0141
0.0806
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<p style="margin: 0pt 0pt 6pt 0pt;" align="left"> <font style="font-size: 9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;"><font style="font-size: 9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">The after-tax returns shown in the table above are calculated using the historical highest individual federal marginal income</font> tax rates during the period shown and do not reflect the impact of state and local taxes. After-tax returns for the Fund's other Classes will vary from the Class A shares' returns. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns may be higher than before-tax returns due to foreign tax credits and/or an assumed benefit from capital losses that would have been realized had Fund shares been sold at the end of the relevant periods, as applicable.</font> </p>
The Fund's returns in the table include the maximum applicable sales charge for each Class and assume you sold your shares at the end of each period (unless otherwise noted).
The after-tax returns shown in the table above are calculated using the historical highest individual federal marginal income tax rates during the period shown and do not reflect the impact of state and local taxes.
The Fund's past performance (before and after taxes) does not indicate how the Fund will perform in the future.
The Russell 3000 Growth Index measures the performance of the broad growth segment of the U.S. equity universe. It includes those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. It is not possible to invest directly in an index. The Lipper Multi-Cap Growth Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Multi-Cap Growth Funds classification. There are currently 30 funds represented in this Index.
The performance information in the bar chart does not reflect the deduction of sales charges; if these amounts were reflected, returns would be less than shown.
www.morganstanley.com/im
Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
The bar chart and table below provide some indication of the risks of investing in the Fund by showing changes in the Fund's Class A shares' performance from year-to-year and by showing how the Fund's average annual returns for the one, five and 10 year periods compare with those of a broad measure of market performance, as well as an index that represents a group of similar mutual funds, over time.
After-tax returns for the Fund's other Classes will vary from the Class A shares' returns.
(reflects no deduction for fees, expenses or taxes)
After-tax returns may be higher than before-tax returns due to foreign tax credits and/or an assumed benefit from capital losses that would have been realized had Fund shares been sold at the end of the relevant periods, as applicable.
(800) 869-NEWS
Average Annual Total Returns For Periods Ended December 31, 2012
The Fund previously disclosed the total return of Class B shares. However, Class B shares are closed to new investments. The bar chart now shows Class A shares which remain open to new investments.
Fees and Expenses
<p style="margin:0pt 0pt 6pt 0pt;" align="left"> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">The table below describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Morgan Stanley Funds. More information about these and other discounts is available from your financial advisor and in the "Share Class Arrangements" section beginning on page 25 of this</font> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;"><i>Prospectus</i></font> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">and in the "Purchase, Redemption and Pricing of Shares" section beginning on page 50 of the Fund's</font> <font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;"><i>Statement of Additional Information ("SAI")</i></font><font style="font-size:9pt; font-family: Times New Roman PS Std, Times New Roman PS, Times New Roman, Times;">.</font> </p>
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0.0000
0.0000
0.0000
0.0500
0.0000
0.0000
0.0067
0.0067
0.0067
0.0067
0.0025
0.0100
0.0075
0.0000
0.0038
0.0038
0.0038
0.0038
0.0130
0.0205
0.0180
0.0105
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You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Morgan Stanley Funds.
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
25000
Shareholder Fees (fees paid directly from your investment)