UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number			811-05624
Morgan Stanley Universal Institutional Fund, Inc.
(Exact name of registrant as specified in charter)
522 Fifth Avenue, New York, New York					10036
(Address of principal executive offices)					(Zip code)
John H. Gernon 522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)
Registrant’s telephone number, including area code:				212-296-0289
Date of fiscal year end:	December 31, 2014
Date of reporting period:		June 30, 2014

Item 1 - Report to Shareholders

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Core Plus Fixed Income Portfolio

The Portfolio is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Table of Contents

Expense Example		2
Investment Advisory Agreement Approval		3
Portfolio of Investments		5
Statement of Assets and Liabilities		15
Statement of Operations		16
Statements of Changes in Net Assets		17
Financial Highlights		18
Notes to Financial Statements		20
Director and Officer Information	Back Cover

1

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Expense Example (unaudited)

Core Plus Fixed Income Portfolio

As a shareholder of the Core Plus Fixed Income Portfolio (the "Portfolio"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, including advisory fees, administration fees, distribution (12b-1) fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2014 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/14		Actual Ending Account Value 6/30/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Core Plus Fixed Income Portfolio Class I	$	1,000.00	$	1,056.80	$	1,021.37	$	3.52	$	3.46		0.69	%
Core Plus Fixed Income Portfolio Class II		1,000.00		1,055.00		1,020.13		4.79		4.71		0.94

*  Expenses are calculated using each Portfolio Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Portfolio's Adviser under the administration agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Adviser's expense. (The advisory and administration agreements together are referred to as the "Management Agreement.") The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the administrative and advisory services to the Portfolio. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Portfolio and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Portfolio

The Board reviewed the performance, fees and expenses of the Portfolio compared to its peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Portfolio. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2013, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Portfolio's performance was better than its peer group average for the one- and three-year periods but below its peer group average for the five-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Portfolio relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Portfolio's total expense ratio. The Board noted that the Portfolio's management fee and total expense ratio were higher but close to its peer group averages. After discussion, the Board concluded that the Portfolio's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Portfolio and how that relates to the Portfolio's total expense ratio and particularly the Portfolio's management fee rate, which includes a breakpoint. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Portfolio and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of the Portfolio supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Portfolio and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

3

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other benefits to the Adviser and its affiliates derived from their relationship with the Portfolio and other funds advised by the Adviser. These benefits may include, among other things, research received by the Adviser generated from commission dollars spent on funds' portfolio trading, and fees for trading, distribution and/or shareholder servicing. The Board reviewed with the Adviser each of these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Portfolio and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Portfolio and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Portfolio's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Portfolio to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Portfolio's business.

General Conclusion

After considering and weighing all of the above factors, the Board concluded that it would be in the best interest of the Portfolio and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single factor referenced above. The Board considered these factors over the course of numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

4

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Fixed Income Securities (98.6%)
Agency Adjustable Rate Mortgage (0.3%)
Federal National Mortgage Association, Conventional Pool:
2.33%, 5/1/35	$	491	$	522
Agency Fixed Rate Mortgages (23.7%)
Federal Home Loan Mortgage Corporation, Gold Pools:
4.00%, 12/1/41		592		628
6.00%, 8/1/37 - 5/1/38		284		319
6.50%, 9/1/32		31		35
7.50%, 5/1/35		90		106
8.00%, 8/1/32		57		70
8.50%, 8/1/31		71		88
July TBA:
4.00%, 7/1/44 (a)		2,187		2,318
Federal National Mortgage Association, Conventional Pools:
3.50%, 12/1/42		2,503		2,559
4.00%, 11/1/41 - 7/1/43		2,829		3,011
4.50%, 8/1/40 - 7/1/41		1,242		1,346
5.00%, 7/1/40		473		526
6.00%, 12/1/38		727		819
6.50%, 11/1/27 - 10/1/38		111		125
7.00%, 6/1/29 - 2/1/33		55		58
7.50%, 8/1/37		159		189
8.00%, 4/1/33		120		144
8.50%, 10/1/32		111		134
9.50%, 4/1/30		30		35
July TBA:
2.50%, 7/1/29 (a)		2,602		2,644
3.00%, 7/1/29 (a)		1,272		1,322
3.50%, 7/1/29 - 7/1/44 (a)		5,175		5,366
4.00%, 7/1/44 (a)		3,375		3,583
4.50%, 7/1/44 (a)		1,907		2,066
5.00%, 7/1/44 (a)		7,336		8,148
Government National Mortgage Association,
July TBA:
3.50%, 7/20/44 (a)		2,062		2,148
4.50%, 7/20/44 (a)		2,340		2,556
Various Pools:
4.00%, 10/20/41		2,055		2,203
8.00%, 6/15/26		1		1
9.00%, 1/15/25		2		2
				42,549
Asset-Backed Securities (1.1%)
Citigroup Mortgage Loan Trust, Inc.
5.53%, 11/25/34		170		180
CVS Pass-Through Trust,
6.04%, 12/10/28		285		329
8.35%, 7/10/31 (b)		181		238
Ford Credit Floorplan Master Owner Trust
1.85%, 2/15/17 (b)(c)		125		126

	Face Amount (000)		Value (000)
GSAA Home Equity Trust
4.29%, 6/25/34 (c)	$	149	$	164
Santander Drive Auto Receivables Trust
3.06%, 11/15/17		362		368
Specialty Underwriting & Residential Finance Trust
0.69%, 5/25/35 (c)		64		59
U-Haul S Fleet LLC
4.90%, 10/25/23 (b)		506		528
				1,992
Collateralized Mortgage Obligations — Agency Collateral Series (3.2%)
Federal Home Loan Mortgage Corporation, IO
0.81%, 1/25/21 (c)		6,256		201
IO REMIC
5.85%, 11/15/43 (c)		3,007		448
5.90%, 4/15/39 (c)		1,969		352
IO STRIPS
7.50%, 12/1/29		9		2
8.00%, 1/1/28		7		2
REMIC
3.50%, 12/15/42		641		582
Federal National Mortgage Association, IO
6.24%, 9/25/20 (c)		4,769		1,136
IO REMIC
6.00%, 5/25/33 - 7/25/33		426		76
6.45%, 9/25/38 (c)		1,406		216
IO STRIPS
6.50%, 12/1/29 (c)		12		1
7.00%, 11/1/19 (c)		9		1
8.00%, 4/1/24		6		1
8.00%, 6/1/35 (c)		51		12
9.00%, 11/1/26		3		1
REMIC
7.00%, 9/25/32		80		92
9.30%, 10/25/41 (c)(d)		201		199
Government National Mortgage Association, IO
0.83%, 8/20/58 (c)		7,831		238
3.50%, 5/20/43		1,991		465
5.00%, 2/16/41		299		66
5.90%, 11/16/40 (c)		2,361		473
5.95%, 7/16/33 (c)		5,196		722
6.00%, 6/20/43 (c)		2,249		387
				5,673
Commercial Mortgage-Backed Securities (6.4%)
COMM Mortgage Trust,
4.92%, 10/10/46 (b)(c)		985		952
5.22%, 8/10/46 (b)(c)		740		735
IO
0.47%, 7/10/45 (c)		12,978		205
1.31%, 7/15/47 (c)		3,942		332

The accompanying notes are an integral part of the financial statements.
5

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Commercial Mortgage-Backed Securities (cont'd)
Commercial Mortgage Trust
5.48%, 3/10/39	$	400	$	432
DBUBS Mortgage Trust
5.62%, 7/10/44 (b)(c)		200		226
FREMF Mortgage Trust,
3.65%, 10/25/46 (b)(c)		755		732
4.64%, 6/25/47 (b)(c)		199		205
GS Mortgage Securities Corp. II
2.75%, 11/8/29 (b)(c)		390		398
GS Mortgage Securities Trust
4.93%, 8/10/46 (b)(c)		500		484
JP Morgan Chase Commercial Mortgage Securities Trust,
4.57%, 7/15/47 (b)(c)		1,030		948
5.46%, 12/12/43		600		636
IO
0.73%, 4/15/46 (c)		6,000		262
1.19%, 7/15/47 (c)		9,798		710
JPMBB Commercial Mortgage Securities Trust
4.84%, 4/15/47 (b)(c)		704		663
LB-UBS Commercial Mortgage Trust
6.46%, 9/15/45 (c)		500		533
NLY Commercial Mortgage Trust
2.75%, 11/15/30 (b)(c)		201		204
Wells Fargo Commercial Mortgage Trust
3.94%, 8/15/50 (b)		870		763
WF-RBS Commercial Mortgage Trust,
3.43%, 6/15/45		677		699
3.71%, 3/15/45 (c)		110		111
3.99%, 5/15/47 (b)		526		466
5.15%, 9/15/46 (b)(c)		735		727
				11,423
Corporate Bonds (35.0%)
Finance (14.9%)
Abbey National Treasury Services PLC
3.05%, 8/23/18 (e)		370		388
ABN Amro Bank N.V.
4.25%, 2/2/17 (b)		475		511
ACE INA Holdings, Inc.
3.35%, 5/15/24		350		354
Aegon N.V.
4.63%, 12/1/15		500		527
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust
3.75%, 5/15/19 (b)		360		363
Alexandria Real Estate Equities, Inc.
4.60%, 4/1/22		275		291
American Campus Communities Operating Partnership LP
3.75%, 4/15/23		200		198
American Financial Group, Inc.
9.88%, 6/15/19		75		98

	Face Amount (000)		Value (000)
American International Group, Inc.,
4.88%, 6/1/22	$	275	$	307
6.40%, 12/15/20		250		302
American Realty Capital Properties, Inc.
3.00%, 8/1/18 (e)		500		508
Banco de Credito del Peru
6.13%, 4/24/27 (b)(c)(e)		300		321
Bank of America Corp.,
4.00%, 4/1/24		570		583
5.00%, 1/21/44		200		213
6.11%, 1/29/37		100		116
Bank of New York Mellon Corp. (The)
3.65%, 2/4/24		350		362
Barclays Bank PLC
3.75%, 5/15/24		450		453
BNP Paribas SA
5.00%, 1/15/21		150		167
Boston Properties LP
3.80%, 2/1/24		145		147
BPCE SA
5.15%, 7/21/24 (b)(e)		350		370
Brookfield Asset Management, Inc.
5.80%, 4/25/17		135		150
Capital One Bank, USA NA
3.38%, 2/15/23		510		507
Citigroup, Inc.,
3.75%, 6/16/24		275		276
3.88%, 10/25/23 (e)		850		872
4.05%, 7/30/22		265		272
CNA Financial Corp.
5.75%, 8/15/21		565		658
Commonwealth Bank of Australia
5.00%, 3/19/20 (b)		250		283
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA,
3.88%, 2/8/22		25		27
3.95%, 11/9/22		625		637
Credit Agricole SA,
3.88%, 4/15/24 (b)		500		508
7.88%, 1/29/49 (b)(c)(f)		200		219
Credit Suisse
6.00%, 2/15/18		5		6
Credit Suisse AG
6.50%, 8/8/23 (b)		350		389
Discover Bank
7.00%, 4/15/20		320		385
General Electric Capital Corp.,
5.30%, 2/11/21		340		387
MTN
5.88%, 1/14/38		130		158
Series G
6.00%, 8/7/19		375		445
Genworth Holdings, Inc.
7.20%, 2/15/21 (e)		350		427

The accompanying notes are an integral part of the financial statements.
6

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Finance (cont'd)
Goldman Sachs Group, Inc. (The),
3.63%, 1/22/23	$	420	$	423
6.75%, 10/1/37		435		525
Goodman Funding Pty Ltd.
6.38%, 4/15/21 (b)		425		495
Hartford Financial Services Group, Inc.
5.50%, 3/30/20		365		418
HBOS PLC, Series G
6.75%, 5/21/18 (b)		565		652
Healthcare Trust of America Holdings LP
3.70%, 4/15/23		325		316
HSBC Finance Corp.
6.68%, 1/15/21		225		269
HSBC Holdings PLC
4.25%, 3/14/24 (e)		600		619
HSBC USA, Inc.
3.50%, 6/23/24		250		251
ING Bank N.V.
5.80%, 9/25/23 (b)		320		361
Intesa Sanpaolo SpA
5.25%, 1/12/24		300		329
Jefferies Finance LLC/JFIN Co-Issuer Corp.
7.38%, 4/1/20 (b)		495		522
Jefferies LoanCore LLC/JLC Finance Corp.
6.88%, 6/1/20 (b)		200		203
JPMorgan Chase & Co.,
3.20%, 1/25/23		860		855
3.88%, 2/1/24 (e)		240		248
4.50%, 1/24/22		175		192
4.63%, 5/10/21		65		72
Lloyds Bank PLC
6.50%, 9/14/20 (b)		370		435
Macquarie Bank Ltd.
6.63%, 4/7/21 (b)(e)		260		299
Nationwide Building Society
6.25%, 2/25/20 (b)		545		644
Nationwide Financial Services, Inc.
5.38%, 3/25/21 (b)		410		458
PHH Corp.
4.00%, 9/1/14		254		256
Piedmont Operating Partnership LP
3.40%, 6/1/23 (e)		375		357
Platinum Underwriters Finance, Inc., Series B
7.50%, 6/1/17		305		351
PNC Financial Services Group, Inc. (The)
3.90%, 4/29/24		190		194
Principal Financial Group, Inc.
1.85%, 11/15/17		450		453
Prudential Financial, Inc., MTN
6.63%, 12/1/37		165		213

	Face Amount (000)		Value (000)
QBE Capital Funding III Ltd.
7.25%, 5/24/41 (b)(c)	$	325	$	351
Realty Income Corp.
3.25%, 10/15/22		350		343
Santander Holdings USA, Inc.
3.45%, 8/27/18		130		138
Standard Chartered PLC
3.95%, 1/11/23 (b)(e)		235		234
Swedbank AB
2.38%, 2/27/19 (b)(e)		270		273
UnitedHealth Group, Inc.,
1.40%, 10/15/17		20		20
2.88%, 3/15/23 (e)		750		737
Voya Financial, Inc.
5.50%, 7/15/22 (e)		350		402
Wells Fargo & Co.,
4.13%, 8/15/23 (e)		170		177
Series M
3.45%, 2/13/23		245		244
Xilinx, Inc.
3.00%, 3/15/21		250		253
				26,767
Industrials (17.9%)
ABB Treasury Center USA, Inc.
2.50%, 6/15/16 (b)		580		598
Albea Beauty Holdings SA
8.38%, 11/1/19 (b)		400		437
Altria Group, Inc.,
2.85%, 8/9/22		25		24
5.38%, 1/31/44		260		286
American Gilsonite Co.
11.50%, 9/1/17 (b)		100		109
American Tower Corp.
3.50%, 1/31/23		415		408
Amgen, Inc.
5.15%, 11/15/41		174		187
Anadarko Petroleum Corp.
6.45%, 9/15/36		225		288
Anheuser-Busch InBev Finance, Inc.
3.70%, 2/1/24		425		437
Anheuser-Busch InBev Worldwide, Inc.
4.13%, 1/15/15		30		31
Apple, Inc.,
2.40%, 5/3/23 (e)		265		251
4.45%, 5/6/44		250		254
ArcelorMittal
10.35%, 6/1/19		205		263
AT&T, Inc.
6.30%, 1/15/38		305		370
Barrick Gold Corp.
4.10%, 5/1/23		235		234
BHP Billiton Finance USA Ltd.
3.85%, 9/30/23 (e)		350		368

The accompanying notes are an integral part of the financial statements.
7

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Industrials (cont'd)
Bombardier, Inc.
6.13%, 1/15/23 (b)(e)	$	404	$	418
BP Capital Markets PLC
3.25%, 5/6/22		425		431
Caterpillar, Inc.
3.40%, 5/15/24		550		557
CC Holdings GS V LLC/Crown Castle GS III Corp.
3.85%, 4/15/23		275		277
Cequel Communications Holdings I LLC/Cequel Capital Corp.
6.38%, 9/15/20 (b)		100		107
CEVA Group PLC
7.00%, 3/1/21 (b)(e)		335		346
Chrysler Group LLC/CG Co-Issuer, Inc.
8.00%, 6/15/19		350		382
CNOOC Finance 2013 Ltd.
3.00%, 5/9/23		420		397
Coca-Cola Co.
3.20%, 11/1/23 (e)		350		354
Continental Airlines Pass-Thru Certificates
6.13%, 4/29/18		150		161
Continental Resources, Inc.
4.90%, 6/1/44 (b)		450		467
CRH America, Inc.
6.00%, 9/30/16		405		450
Crown Castle International Corp.
5.25%, 1/15/23		280		293
CSC Holdings LLC
5.25%, 6/1/24 (b)		405		399
Daimler Finance North America LLC
2.25%, 7/31/19 (b)		465		469
DirecTV Holdings LLC/DirecTV Financing Co., Inc.
3.80%, 3/15/22		150		155
DryShips, Inc.
5.00%, 12/1/14		100		99
Eldorado Gold Corp.
6.13%, 12/15/20 (b)(e)		295		299
EMC Corp.
3.38%, 6/1/23		190		193
Eni SpA, Series GALP
0.25%, 11/30/15		200		282
Exide Technologies
8.63%, 2/1/18 (g)(h)		159		97
Experian Finance PLC
2.38%, 6/15/17 (b)		495		507
Fiserv, Inc.
3.13%, 6/15/16		230		239
Ford Motor Credit Co., LLC
5.00%, 5/15/18		400		445

	Face Amount (000)		Value (000)
Freeport-McMoRan Copper & Gold, Inc.
3.88%, 3/15/23 (e)	$	150	$	150
General Motors Co.
4.88%, 10/2/23 (b)		350		370
Gilead Sciences, Inc.
4.80%, 4/1/44		275		291
GlaxoSmithKline Capital PLC
2.85%, 5/8/22		326		322
Glencore Funding LLC
4.13%, 5/30/23 (b)		370		372
Goldcorp, Inc.
3.70%, 3/15/23		595		588
Harley-Davidson Funding Corp.
6.80%, 6/15/18 (b)		290		343
HCA, Inc.
4.75%, 5/1/23		340		340
Heathrow Funding Ltd.
4.88%, 7/15/21 (b)(e)		435		477
Hewlett-Packard Co.,
3.75%, 12/1/20		250		262
4.65%, 12/9/21 (e)		155		169
Home Depot, Inc.
5.88%, 12/16/36		350		434
Infor US, Inc.
9.38%, 4/1/19		150		168
Intel Corp.,
2.70%, 12/15/22		300		292
2.95%, 12/15/35 (e)		313		390
International Business Machines Corp.
1.88%, 5/15/19 (e)		450		450
JBS Investments GmbH
7.75%, 10/28/20 (b)		200		215
Johnson Controls, Inc.,
3.63%, 7/2/24		85		86
4.95%, 7/2/64		150		153
Juniper Networks, Inc.
4.50%, 3/15/24 (e)		175		183
Kraft Foods Group, Inc.
5.38%, 2/10/20		26		30
Lam Research Corp.
1.25%, 5/15/18 (e)		343		470
LVMH Moet Hennessy Louis Vuitton SA
1.63%, 6/29/17 (b)		75		76
Marathon Petroleum Corp.
5.13%, 3/1/21		30		34
McKesson Corp.
4.88%, 3/15/44		200		211
MDC Partners, Inc.
6.75%, 4/1/20 (b)		325		344
Medtronic, Inc.
3.63%, 3/15/24		340		349
Merck & Co., Inc.
2.80%, 5/18/23		300		294
NBC Universal Media LLC
5.95%, 4/1/41		375		462

The accompanying notes are an integral part of the financial statements.
8

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Industrials (cont'd)
NBCUniversal Enterprise, Inc.
1.97%, 4/15/19 (b)	$	100	$	99
NetApp, Inc.
2.00%, 12/15/17		150		152
Novartis Capital Corp.
3.40%, 5/6/24		520		528
Nuance Communications, Inc.
2.75%, 11/1/31 (e)		253		254
NVIDIA Corp.
1.00%, 12/1/18 (b)		350		388
Omega Healthcare Investors, Inc.
4.95%, 4/1/24 (b)		225		231
ON Semiconductor Corp., Series B
2.63%, 12/15/26 (e)		227		267
Orange SA
9.00%, 3/1/31		15		23
Packaging Corp. of America
4.50%, 11/1/23		260		279
PepsiCo, Inc.
3.60%, 3/1/24		425		439
PetroQuest Energy, Inc.
10.00%, 9/1/17		100		106
Philip Morris International, Inc.
2.50%, 8/22/22		365		354
Pioneer Natural Resources Co.
7.50%, 1/15/20		300		371
Qtel International Finance Ltd.
3.25%, 2/21/23 (b)(e)		350		337
QVC, Inc.
4.38%, 3/15/23		325		331
Resort at Summerlin LP, Series B
13.00%, 12/15/07 (g)(h)(i)(j)(k)		299		—
Rivers Pittsburgh Borrower LP/Rivers Pittsburgh Finance Corp.
9.50%, 6/15/19 (b)		109		119
Rowan Cos., Inc.
5.85%, 1/15/44		150		163
RR Donnelley & Sons Co.
7.88%, 3/15/21 (e)		300		346
RSI Home Products, Inc.
6.88%, 3/1/18 (b)		100		107
SanDisk Corp.
0.50%, 10/15/20 (b)		350		442
Schlumberger Norge AS
1.25%, 8/1/17 (b)		225		225
Sinopec Group Overseas Development 2012 Ltd.
3.90%, 5/17/22 (b)		400		407
SK Telecom Co., Ltd.
2.13%, 5/1/18 (b)		200		201
Target Corp.
3.50%, 7/1/24		300		304

	Face Amount (000)		Value (000)
Telefonica Europe BV
8.25%, 9/15/30	$	45	$	62
Teva Pharmaceutical Finance IV BV
3.65%, 11/10/21		420		432
Time Warner Cable, Inc.
4.50%, 9/15/42		175		171
Total Capital International SA
2.88%, 2/17/22		50		50
Transocean, Inc.
6.38%, 12/15/21		250		290
United Airlines Pass-Through Trust, Series A
4.00%, 4/11/26 (e)		600		608
United Technologies Corp.
4.50%, 6/1/42		100		105
Vale Overseas Ltd.,
5.63%, 9/15/19 (e)		50		56
6.88%, 11/10/39		5		6
Verizon Communications, Inc.
6.55%, 9/15/43		775		979
Viacom, Inc.
5.85%, 9/1/43		350		404
Volkswagen International Finance N.V.
2.38%, 3/22/17 (b)		360		372
Wal-Mart Stores, Inc.
5.25%, 9/1/35		35		41
Wesfarmers Ltd.
2.98%, 5/18/16 (b)		290		301
Wyndham Worldwide Corp.
4.25%, 3/1/22		515		530
Yahoo!, Inc.
Zero Coupon, 12/1/18 (b)(e)		425		425
Zimmer Holdings, Inc.
5.75%, 11/30/39		190		222
				32,221
Utilities (2.2%)
Boston Gas Co.
4.49%, 2/15/42 (b)(e)		275		283
CEZ AS
4.25%, 4/3/22 (b)		210		220
CMS Energy Corp.
5.05%, 3/15/22 (e)		50		57
DCP Midstream Operating LP
3.88%, 3/15/23		300		304
Enel Finance International N.V.
5.13%, 10/7/19 (b)		100		113
EnLink Midstream Partners LP
2.70%, 4/1/19		375		381
Exelon Generation Co., LLC
6.25%, 10/1/39		375		442
Jersey Central Power & Light Co.
4.70%, 4/1/24 (b)		575		616

The accompanying notes are an integral part of the financial statements.
9

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Utilities (cont'd)
Kinder Morgan Energy Partners LP
3.50%, 9/1/23	$	550	$	535
PPL WEM Holdings Ltd.
3.90%, 5/1/16 (b)		460		482
State Grid Overseas Investment 2013 Ltd.
3.13%, 5/22/23 (b)		410		400
TransAlta Corp.
4.50%, 11/15/22		50		51
				3,884
				62,872
Mortgages — Other (10.1%)
Alternative Loan Trust,
5.50%, 2/25/36 - 5/25/36		111		102
6.00%, 4/25/36 - 7/25/37		877		742
PAC
5.50%, 2/25/36		10		9
6.00%, 4/25/36		34		30
Banc of America Alternative Loan Trust,
0.80%, 7/25/46 (c)		454		305
5.50%, 10/25/35		2,086		1,938
5.86%, 10/25/36		605		441
5.91%, 10/25/36 (c)		1,226		891
6.00%, 4/25/36		466		483
Banc of America Funding Trust,
0.52%, 8/25/36 (c)		53		45
6.00%, 7/25/37		44		35
Chase Mortgage Finance Trust
6.00%, 10/25/36		491		438
Chaseflex Trust
6.00%, 2/25/37		746		643
Commercial Mortgage Pass-Through Certificates
5.07%, 4/10/47 (b)(c)		797		775
First Horizon Alternative Mortgage Securities Trust,
6.00%, 8/25/36		27		23
6.25%, 8/25/36		402		337
Freddie Mac Structured Agency Credit Risk Debt Notes
3.75%, 4/25/24 (c)		250		269
GSMSC Pass-Through Trust
7.50%, 9/25/36 (b)(c)		520		436
GSR Mortgage Loan Trust
5.75%, 1/25/37		507		502
Harborview Mortgage Loan Trust
0.35%, 1/19/38 (c)		312		271
Impac CMB Trust Series 2005-2
0.89%, 4/25/35 (c)		331		255
IndyMac Index Mortgage Loan Trust
2.40%, 11/25/35 (c)		662		567
JP Morgan Alternative Loan Trust,
6.00%, 12/25/35 - 8/25/36		282		266

	Face Amount (000)		Value (000)
JP Morgan Mortgage Trust,
2.77%, 6/25/37 (c)	$	157	$	145
6.00%, 6/25/37		192		192
Lehman Mortgage Trust,
5.50%, 11/25/35 - 2/25/36		910		907
6.50%, 9/25/37		1,601		1,413
Luminent Mortgage Trust
0.32%, 10/25/46 (c)		51		23
RALI Trust,
0.33%, 12/25/36 (c)		427		321
0.34%, 12/25/36 (c)		888		667
0.65%, 3/25/35 (c)		619		470
5.50%, 12/25/34		1,259		1,282
6.00%, 4/25/36 - 1/25/37		601		484
PAC
6.00%, 4/25/36		36		30
Residential Asset Securitization Trust
6.00%, 7/25/36		63		56
Springleaf Mortgage Loan Trust
3.56%, 12/25/59 (b)(c)		650		667
Structured Asset Mortgage Investments II Trust
0.38%, 8/25/36 (c)		581		141
Washington Mutual Mortgage Pass-Through Certificates Trust,
0.89%, 4/25/47 (c)		555		456
1.10%, 7/25/46 (c)		735		632
WFRBS Commercial Mortgage Trust
4.28%, 5/15/45 (b)(c)		385		362
				18,051
Municipal Bonds (1.0%)
City of Chicago, IL, O'Hare International Airport Revenue
6.40%, 1/1/40		115		147
City of New York, NY, Series G-1
5.97%, 3/1/36		245		300
Illinois State Toll Highway Authority, Highway Revenue, Build America Bonds
6.18%, 1/1/34		705		881
Municipal Electric Authority of Georgia
6.66%, 4/1/57		435		525
				1,853
Sovereign (5.2%)
Banco Nacional de Desenvolvimento, Economico e Social,
5.50%, 7/12/20 (b)		400		435
6.37%, 6/16/18 (b)		200		226
Brazilian Government International Bond,
4.25%, 1/7/25 (e)		200		203
5.63%, 1/7/41 (e)		580		626
7.13%, 1/20/37		10		13
Hellenic Republic Government Bond,
2.00%, 2/24/25 (l)	EUR	845		914

The accompanying notes are an integral part of the financial statements.
10

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

	Face Amount (000)		Value (000)
Sovereign (cont'd)
Hungary Government International Bond
5.38%, 3/25/24	$	182	$	195
KazMunayGas National Co., JSC,
6.38%, 4/9/21 (b)		600		671
9.13%, 7/2/18 (b)		100		121
Mexico Government International Bond
3.63%, 3/15/22		866		901
Peruvian Government International Bond,
7.13%, 3/30/19		40		49
7.35%, 7/21/25		10		13
8.75%, 11/21/33		16		24
Petroleos Mexicanos,
4.88%, 1/24/22		730		792
5.50%, 1/21/21		60		68
6.63%, 6/15/35 - 6/15/38		58		68
8.00%, 5/3/19		15		19
Poland Government International Bond
5.00%, 3/23/22		780		869
Portugal Obrigacoes do Tesouro OT
4.10%, 4/15/37 (b)		1,830		2,369
Spain Government International Bond
4.00%, 3/6/18 (b)		500		536
Turkey Government International Bond,
6.75%, 4/3/18		100		113
6.88%, 3/17/36		17		20
8.00%, 2/14/34		15		20
11.88%, 1/15/30		19		33
				9,298
U.S. Agency Security (1.7%)
Federal Home Loan Mortgage Corporation
1.25%, 10/2/19		3,200		3,109
U.S. Treasury Securities (10.9%)
U.S. Treasury Bonds,
2.75%, 11/15/42		4,350		3,884
3.13%, 2/15/43		850		819
U.S. Treasury Notes,
0.63%, 5/31/17		10,500		10,431
0.75%, 6/30/17		4,500		4,482
				19,616
Total Fixed Income Securities (Cost $170,088)				176,958
	Shares
Short-Term Investments (23.9%)
Securities held as Collateral on Loaned Securities (6.2%)
Investment Company (5.2%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H)		9,321,565		9,322

	Face Amount (000)		Value (000)
Repurchase Agreement (1.0%)
Barclays Capital, Inc., (0.07%, dated 6/30/14, due 7/1/14; proceeds $1,732; fully collateralized by a U.S. Government Obligation; 3.63% due 8/15/43; valued at $1,767)	$	1,732	$	1,732
Total Securities held as Collateral on Loaned Securities (Cost $11,054)				11,054
	Shares
Investment Company (17.6%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H) (Cost $31,574)		31,573,950		31,574
	Face Amount (000)
U.S. Treasury Securities (0.1%)
U.S. Treasury Bills,
0.02%, 8/21/14 (m)(n)	$	36		36
0.06%, 8/21/14 (m)(n)		73		73
Total U.S. Treasury Securities (Cost $109)				109
Total Short-Term Investments (Cost $42,737)				42,737
Total Investments (122.5%) (Cost $212,825) Including $11,070 of Securities Loaned (o)				219,695
Liabilities in Excess of Other Assets (-22.5%)				(40,328	)
Net Assets (100.0%)			$	179,367

(a)  Security is subject to delayed delivery.

(b)  144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(c)  Variable/Floating Rate Security — Interest rate changes on these instruments are based on changes in a designated base rate. The rates shown are those in effect on June 30, 2014.

(d)  Inverse Floating Rate Security — Interest rate fluctuates with an inverse relationship to an associated interest rate. Indicated rate is the effective rate at June 30, 2014.

(e)  All or a portion of this security was on loan at June 30, 2014.

(f)  Perpetual — One or more securities do not have a predetermined maturity date. Rates for these securities are fixed for a period of time, after which they revert to a floating rate. Interest rates in effect are as of June 30, 2014.

(g)  Issuer in bankruptcy.

(h)  Non-income producing security; bond in default.

(i)  Security has been deemed illiquid at June 30, 2014.

(j)  At June 30, 2014, the Portfolio held a fair valued security valued at $0, representing 0.0% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(k)  Acquired through exchange offer.

(l)  Multi-step coupon rate changes in predetermined increments to maturity. Rate disclosed is as of June 30, 2014. Maturity date disclosed is the ultimate maturity date.

(m)  Rate shown is the yield to maturity at June 30, 2014.

The accompanying notes are an integral part of the financial statements.
11

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

(n)  All or a portion of the security was pledged to cover margin requirements for swap agreements.

(o)  Securities are available for collateral in connection with securities purchased on a forward commitment basis, open foreign currency forward exchange contracts, futures contracts and swap agreements.

IO  Interest Only.

MTN  Medium Term Note.

PAC  Planned Amortization Class.

REMIC  Real Estate Mortgage Investment Conduit.

STRIPS  Separate Trading of Registered Interest and Principal of Securities.

TBA  To Be Announced.

Foreign Currency Forward Exchange Contracts:

The Portfolio had the following foreign currency forward exchange contracts open at June 30, 2014:

Counterparty	Currency to Deliver (000)		Value (000)		Settlement Date	In Exchange For (000)		Value (000)		Unrealized Depreciation (000)
Citibank NA	AUD	965	$	909	7/17/14	USD	903	$	903	$	(6	)
Citibank NA	CAD	2,780		2,604	7/17/14	USD	2,589		2,589		(15	)
Deutsche Bank AG	NZD	2,110		1,845	7/17/14	USD	1,837		1,837		(8	)
HSBC Bank PLC	MXN	92		7	7/17/14	USD	7		7		(—	@)
UBS AG	CHF	2,390		2,696	7/17/14	USD	2,683		2,683		(13	)
UBS AG	EUR	2,634		3,607	7/17/14	USD	3,593		3,593		(14	)
			$	11,668				$	11,612	$	(56	)

Futures Contracts:

The Portfolio had the following futures contracts open at June 30, 2014:

	Number of Contracts		Value (000)		Expiration Date	Unrealized Appreciation (Depreciation) (000)
Long:
U.S. Treasury 2 yr. Note		92	$	20,203	Sep-14	$	(20	)
U.S. Treasury Long Bond		36		4,939	Sep-14		(26	)
U.S. Treasury Ultra Long Bond		55		8,246	Sep-14		(55	)

Futures Contracts: (cont'd)

	Number of Contracts		Value (000)			Expiration Date	Unrealized Appreciation (Depreciation) (000)
Short:
U.S. Treasury 5 yr. Note		132	$	(15,769	)	Sep-14	$	41
U.S. Treasury 10 yr. Note		104		(13,018	)	Sep-14		29
							$	(31	)

The accompanying notes are an integral part of the financial statements.
12

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

Credit Default Swap Agreements:

The Portfolio had the following credit default swap agreements open at June 30, 2014:

Swap Counterparty  and Reference Obligation	Buy/Sell Protection	Notional Amount (000)		Pay/Receive Fixed Rate			Termination Date	Upfront Payment Paid (Received) (000)			Unrealized Appreciation (Depreciation) (000)			Value (000)			Credit Rating of Reference Obligation†
Barclays Bank PLC Yum! Brands, Inc.	Buy	$	900		1.00	%	12/20/18	$	(15	)	$	(11	)	$	(26	)	BBB
Barclays Bank PLC Quest Diagnostics, Inc.	Buy		895		1.00		3/20/19		17			(18	)		(1	)	BBB+
Morgan Stanley & Co., LLC* CDX.NA.IG.22	Buy		5,900		1.00		6/20/19		(121	)		3			(118	)	NR
		$	7,695					$	(119	)	$	(26	)	$	(145	)

Interest Rate Swap Agreements:

The Portfolio had the following interest rate swap agreements open at June 30, 2014:

Swap Counterparty	Floating Rate Index	Pay/Receive Floating Rate	Fixed Rate			Termination Date	Notional Amount (000)		Unrealized Appreciation (Depreciation) (000)
Bank of America NA	3 Month LIBOR	Receive		2.10	%	2/5/23	$	2,640	$	48
Deutsche Bank AG	3 Month LIBOR	Receive		2.80		5/1/43		2,325		215
Goldman Sachs International	3 Month CDOR	Pay		2.04		1/22/19	CAD	8,380		81
Goldman Sachs International	3 Month LIBOR	Receive		2.09		2/15/23	$	3,730		75
Goldman Sachs International	3 Month CDOR	Receive		2.95		1/22/24	CAD	4,560		(148	)
Goldman Sachs International	3 Month LIBOR	Receive		2.90		5/13/43	$	2,320		171
JPMorgan Chase Bank NA	3 Month LIBOR	Receive		2.09		2/15/23		480		10
JPMorgan Chase Bank NA	3 Month LIBOR	Receive		2.06		2/6/23		530		12
Morgan Stanley & Co., LLC*	3 Month LIBOR	Receive		1.79		1/24/19		8,970		(154	)
Morgan Stanley & Co., LLC*	3 Month LIBOR	Pay		2.96		1/24/24		4,890		231
Royal Bank of Canada	3 Month LIBOR	Receive		2.06		2/6/23		4,120		91
									$	632

@  Value is less than $500.

†  Credit rating as issued by Standard & Poor's.

*  Cleared swap agreement, the broker for which is Morgan Stanley & Co., LLC.

CDOR  Canadian Dealer Offered Rate.

LIBOR  London Interbank Offered Rate.

NR  Not Rated.

AUD  — Australian Dollar

CAD  — Canadian Dollar

CHF  — Swiss Franc

EUR  — Euro

MXN  — Mexican Peso

NZD  — New Zealand Dollar

USD  — United States Dollar

The accompanying notes are an integral part of the financial statements.
13

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Core Plus Fixed Income Portfolio

Portfolio Composition*

Classification	Percentage of Total Investments
Agency Fixed Rate Mortgages		20.4	%
Industrials		15.4
Short-Term Investments		15.2
Finance		12.8
Other**		12.6
U.S. Treasury Securities		9.4
Mortgages - Other		8.7
Commercial Mortgage-Backed Securities		5.5
Total Investments		100.0	%***

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2014.

**  Industries and/or investment types representing less than 5% of total investments.

***  Does not include open long/short futures contracts with an underlying face amount of approximately $62,175,000 with net unrealized depreciation of approximately $31,000. Does not include open foreign currency forward exchange contracts with total unrealized depreciation of approximately $56,000 and does not include open swap agreements with net unrealized appreciation of approximately $606,000.

The accompanying notes are an integral part of the financial statements.
14

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Core Plus Fixed Income Portfolio

Statement of Assets and Liabilities	June 30, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $171,929)	$	178,799
Investment in Security of Affiliated Issuer, at Value (Cost $40,896)		40,896
Total Investments in Securities, at Value (Cost $212,825)		219,695
Cash		225
Interest Receivable		1,098
Unrealized Appreciation on Swap Agreements		703
Receivable for Variation Margin on Futures Contracts		220
Receivable for Portfolio Shares Sold		115
Premium Paid on Open Swap Agreements		17
Receivable for Investments Sold		15
Receivable for Variation Margin on Swap Agreements		7
Tax Reclaim Receivable		5
Receivable from Affiliate		1
Other Assets		13
Total Assets		222,114
Liabilities:
Payable for Investments Purchased		29,905
Collateral on Securities Loaned, at Value		11,288
Due to Broker		800
Payable for Portfolio Shares Redeemed		229
Unrealized Depreciation on Swap Agreements		177
Payable for Advisory Fees		113
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		56
Payable for Reorganization Expense		46
Payable for Administration Fees		37
Payable for Professional Fees		29
Premium Received on Open Swap Agreements		15
Payable for Distribution Fees — Class II Shares		14
Payable for Custodian Fees		8
Payable for Directors' Fees and Expenses		3
Other Liabilities		27
Total Liabilities		42,747
NET ASSETS	$	179,367
Net Assets Consist of:
Paid-in-Capital	$	236,345
Accumulated Undistributed Net Investment Income		7,767
Accumulated Net Realized Loss		(72,134	)
Unrealized Appreciation (Depreciation) on:
Investments		6,870
Futures Contracts		(31	)
Swap Agreements		606
Foreign Currency Forward Exchange Contracts		(56	)
Foreign Currency Translations		—	@
Net Assets	$	179,367
CLASS I:
Net Assets	$	104,225
Net Asset Value, Offering and Redemption Price Per Share Applicable to 9,658,968 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	10.79
CLASS II:
Net Assets	$	75,142
Net Asset Value, Offering and Redemption Price Per Share Applicable to 6,986,485 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	10.76
(1) Including:
Securities on Loan, at Value:	$	11,070

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Core Plus Fixed Income Portfolio

Statement of Operations	Six Months Ended June 30, 2014 (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers	$	3,117
Income from Securities Loaned — Net		18
Dividends from Security of Affiliated Issuer (Note H)		4
Total Investment Income		3,139
Expenses:
Advisory Fees (Note B)		326
Administration Fees (Note C)		217
Distribution Fees — Class II Shares (Note D)		121
Professional Fees		52
Custodian Fees (Note F)		35
Pricing Fees		27
Shareholder Reporting Fees		24
Transfer Agency Fees (Note E)		7
Directors' Fees and Expenses		3
Other Expenses		10
Total Expenses		822
Waiver of Advisory Fees (Note B)		(92	)
Distribution Fees — Class II Shares Waived (Note D)		(35	)
Rebate from Morgan Stanley Affiliate (Note H)		(8	)
Net Expenses		687
Net Investment Income		2,452
Realized Gain (Loss):
Investments Sold		2,132
Foreign Currency Forward Exchange Contracts		(148	)
Foreign Currency Transactions		(5	)
Futures Contracts		875
Swap Agreements		(264	)
Net Realized Gain		2,590
Change in Unrealized Appreciation (Depreciation):
Investments		5,466
Foreign Currency Forward Exchange Contracts		(16	)
Foreign Currency Translations		(—	@)
Futures Contracts		253
Swap Agreements		(1,176	)
Net Change in Unrealized Appreciation (Depreciation)		4,527
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		7,117
Net Increase in Net Assets Resulting from Operations	$	9,569

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
16

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Core Plus Fixed Income Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2014 (unaudited) (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	2,452		$	4,477
Net Realized Gain		2,590			1,263
Net Change in Unrealized Appreciation (Depreciation)		4,527			(5,974	)
Net Increase (Decrease) in Net Assets Resulting from Operations		9,569			(234	)
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(4,149	)
Class II:
Net Investment Income		—			(1,714	)
Total Distributions		—			(5,863	)
Capital Share Transactions:(1)
Class I:
Subscribed		5,258			13,360
Issued due to a tax-free reorganization		—			8,957
Distributions Reinvested		—			4,149
Redeemed		(12,294	)		(37,534	)
Class II:
Subscribed		13,009			21,681
Issued due to a tax-free reorganization		—			9,982
Distributions Reinvested		—			1,714
Redeemed		(8,155	)		(17,123	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(2,182	)		5,186
Total Increase (Decrease) in Net Assets		7,387			(911	)
Net Assets:
Beginning of Period		171,980			172,891
End of Period (Including Accumulated Undistributed Net Investment Income of $7,767 and $5,315)	$	179,367		$	171,980
(1) Capital Share Transactions:
Class I:
Shares Subscribed		500			1,268
Shares Issued due to a tax-free reorganization		—			901
Shares Issued on Distributions Reinvested		—			412
Shares Redeemed		(1,165	)		(3,619	)
Net Decrease in Class I Shares Outstanding		(665	)		(1,038	)
Class II:
Shares Subscribed		1,232			2,113
Shares Issued due to a tax-free reorganization		—			1,005
Shares Issued on Distributions Reinvested		—			170
Shares Redeemed		(777	)		(1,652	)
Net Increase in Class II Shares Outstanding		455			1,636

The accompanying notes are an integral part of the financial statements.
17

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Core Plus Fixed Income Portfolio

	Class I
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	10.21		$	10.64		$	10.19		$	10.01		$	9.92		$	9.90
Income (Loss) from Investment Operations:
Net Investment Income†		0.15			0.29			0.33			0.39			0.34			0.33
Net Realized and Unrealized Gain (Loss)		0.43			(0.33	)		0.61			0.17			0.36			0.58
Total from Investment Operations		0.58			(0.04	)		0.94			0.56			0.70			0.91
Distributions from and/or in Excess of:
Net Investment Income		—			(0.39	)		(0.49	)		(0.38	)		(0.61	)		(0.89	)
Net Asset Value, End of Period	$	10.79		$	10.21		$	10.64		$	10.19		$	10.01		$	9.92
Total Return ++		5.68	%#		(0.32	)%		9.44	%		5.65	%		7.14	%		9.64	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	104,225		$	105,420		$	120,903		$	131,361		$	154,029		$	171,120
Ratio of Expenses to Average Net Assets(1)		0.69	%+††*		0.69	%+††		0.69	%+††		0.67	%+††		0.69	%+††		0.69	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.69	%+††		N/A
Ratio of Net Investment Income to Average Net Assets(1)		2.92	%+††*		2.75	%+††		3.18	%+††		3.89	%+††		3.44	%+††		3.34	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%††*		0.01	%††		0.01	%††		0.01	%††		0.01	%††		0.01	%
Portfolio Turnover Rate		129	%#		249	%		245	%		240	%		294	%		433	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		0.81	%††*		0.78	%††		0.75	%††		N/A			0.76	%+††		0.72	%+
Net Investment Income to Average Net Assets		2.80	%††*		2.66	%††		3.12	%††		N/A			3.38	%+††		3.31	%+

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
18

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Core Plus Fixed Income Portfolio

	Class II
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	10.19		$	10.62		$	10.17		$	9.99		$	9.84		$	9.81
Income (Loss) from Investment Operations:
Net Investment Income†		0.14			0.26			0.31			0.37			0.32			0.28
Net Realized and Unrealized Gain (Loss)		0.43			(0.33	)		0.61			0.16			0.35			0.59
Total from Investment Operations		0.57			(0.07	)		0.92			0.53			0.67			0.87
Distributions from and/or in Excess of:
Net Investment Income		—			(0.36	)		(0.47	)		(0.35	)		(0.52	)		(0.84	)
Net Asset Value, End of Period	$	10.76		$	10.19		$	10.62		$	10.17		$	9.99		$	9.84
Total Return ++		5.50	%#		(0.58	)%		9.19	%		5.40	%		6.86	%		9.38	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	75,142		$	66,560		$	51,988		$	48,855		$	48,234		$	44,105
Ratio of Expenses to Average Net Assets(1)		0.94	%+††*		0.94	%+††		0.94	%+††		0.92	%+††		0.94	%+††		0.94	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.94	%+††		N/A
Ratio of Net Investment Income to Average Net Assets(1)		2.67	%+††*		2.50	%+††		2.93	%+††		3.64	%+††		3.19	%+††		2.87	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.01	%††*		0.01	%††		0.01	%††		0.01	%††		0.01	%††		0.01	%
Portfolio Turnover Rate		129	%#		249	%		245	%		240	%		294	%		433	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.16	%††*		1.13	%††		1.10	%††		1.03	%††		1.11	%+††		1.07	%+
Net Investment Income to Average Net Assets		2.45	%††*		2.31	%††		2.77	%††		3.53	%††		3.03	%+††		2.74	%+

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
19

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements

The Universal Institutional Funds, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Fund is comprised of eleven separate active, diversified and non-diversified portfolios (individually referred to as a "Portfolio", collectively as the "Portfolios"). The Fund applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Core Plus Fixed Income Portfolio. The Portfolio seeks above-average total return over a market cycle of three to five years by investing primarily in a diversified portfolio of fixed income securities. The Portfolio invests primarily in a diversified mix of U.S. dollar denominated investment grade fixed income securities, particularly U.S. government, corporate, mortgage and asset-backed securities. The Portfolio offers two classes of shares – Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Fund is intended to be the funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

On September 9, 2013, the Portfolio acquired the net assets of Morgan Stanley Select Dimensions Flexible Income Portfolio ("Flexible Income Portfolio"), an open-end investment company, based on the respective valuations as of the close of business on September 6, 2013, pursuant to a Plan of Reorganization approved by the shareholders of Flexible Income Portfolio on August 1, 2013 ("Reorganization"). The purpose of the transaction was to combine two portfolios managed by Morgan Stanley Investment Management Inc. with comparable investment objectives and strategies. The acquisition was accomplished by a tax-free exchange of 901,099 Class I shares of the Portfolio at a net asset value of $9.94 per share for 1,566,416 Class X shares of Flexible Income Portfolio; 1,005,279 Class II shares of the Portfolio at a net asset value of $9.93 for 1,751,609 Class Y shares of Flexible Income Portfolio. The net assets of Flexible Income Portfolio before the Reorganization were approximately $18,939,000, including unrealized appreciation of approximately $121,000 at September 6, 2013. The investment portfolio of Flexible Income Portfolio, with a fair value of approximately $18,853,000 and identified cost of approximately $18,732,000 on September 6, 2013, was the principal asset acquired by the Portfolio. For financial reporting purposes, assets received and shares issued by the Portfolio were recorded at fair value; however, the cost basis of the investments received from Flexible Income Portfolio was carried forward to align ongoing reporting of the Portfolio's realized and unreal-

ized gains and losses with amounts distributable to shareholders for tax purposes. Immediately prior to the Reorganization, the net assets of the Portfolio were approximately $154,883,000. Immediately after the merger, the net assets of the Portfolio were approximately $173,822,000.

Upon closing of the Reorganization, shareholders of Flexible Income Portfolio received shares of the Portfolio as follows:

Flexible Income Portfolio	Core Plus Fixed Income Portfolio
Class X	Class I
Class Y	Class II

Assuming the acquisition had been completed on January 1, 2013, the beginning of the annual reporting period of the Portfolio, the Portfolio's pro forma results of operations for the period ended December 31, 2013, are as follows:

Net investment income(1)	$	5,564,000
Net loss realized and unrealized loss(2)	$	(4,115,000	)
Net increase in net assets resulting from operations	$	1,449,000

(1)Approximately $4,477,000 as reported, plus approximately $770,000 Flexible Income Portfolio premerger, plus approximately $317,000 of estimated pro-forma eliminated expenses.

(2)Approximately $(4,711,000) as reported, plus approximately $596,000 Flexible Income Portfolio premerger.

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of Flexible Income Portfolio that have been included in the Portfolio's Statement of Operations since September 9, 2013.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP 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: (1) Certain portfolio securities may be valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors"). The pricing service may utilize a matrix system or other model incorporating attributes such as security quality, maturity and coupon as the evaluation model parameters, and/or research evaluations by its staff, including review of broker-dealer market price quotations in determining what it believes is the fair valuation of the portfolios securities valued by such pricing service; (2) futures are valued at the latest price published by the commodities exchange on which they trade; (3) swaps are marked-to-market

20

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

daily based upon quotations from market makers; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term taxable debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such price does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser. Other taxable short-term debt securities with maturities of more than 60 days will be valued on a mark-to-market basis until such time as they reach a maturity of 60 days, whereupon they will be valued at amortized cost using their value on the 61st day unless the Adviser determines such price does not reflect the securities' fair value, in which case these securities will be valued at their fair market value as determined by the Adviser.

Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

•  Level 1 – unadjusted quoted prices in active markets for identical investments

21

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Portfolio's investments as of June 30, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Fixed Income Securities
Agency Adjustable Rate Mortgage	$	—	$	522	$	—		$	522
Agency Fixed Rate Mortgages		—		42,549		—			42,549
Asset-Backed Securities		—		1,992		—			1,992
Collateralized Mortgage Obligations - Agency Collateral Series		—		5,673		—			5,673
Commercial Mortgage- Backed Securities		—		11,423		—			11,423
Corporate Bonds		—		62,872		—	†		62,872	†
Mortgages - Other		—		18,051		—			18,051
Municipal Bonds		—		1,853		—			1,853
Sovereign		—		9,298		—			9,298
U.S. Agency Security		—		3,109		—			3,109
U.S. Treasury Securities		—		19,616		—			19,616
Total Fixed Income Securities		—		176,958		—	†		176,958	†
Short-Term Investments
Investment Company		40,896		—		—			40,896
Repurchase Agreement		—		1,732		—			1,732
U.S. Treasury Securities		—		109		—			109
Total Short-Term Investments		40,896		1,841		—			42,737

Investment Type	Level 1 Unadjusted quoted prices (000)			Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)			Total (000)
Assets: (cont'd)
Futures Contracts	$	70		$	—		$	—		$	70
Credit Default Swap Agreements		—			3			—			3
Interest Rate Swap Agreements		—			934			—			934
Total Assets		40,966			179,736			—	†		220,702	†
Liabilities:
Foreign Currency Forward Exchange Contracts		—			(56	)		—			(56	)
Futures Contracts		(101	)		—			—			(101	)
Credit Default Swap Agreements		—			(29	)		—			(29	)
Interest Rate Swap Agreements		—			(302	)		—			(302	)
Total Liabilities		(101	)		(387	)		—			(488	)
Total	$	40,865		$	179,349		$	—	†	$	220,214	†

†  Includes one security which is valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of June 30, 2014, the Portfolio did not have any investments transfer between investment levels.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Corporate Bond (000)
Beginning Balance	$	—	†
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Merger		—
Change in unrealized appreciation/depreciation		—
Realized gains (losses)		—
Ending Balance	$	—	†
Net change in unrealized appreciation/ depreciation from investments still held as of June 30, 2014	$	—

†  Includes one security which is valued at zero.

22

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate 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 Portfolio are presented at the foreign exchange rates and market values at the close of the period, the Portfolio 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 securities held at period end. Similarly, the Portfolio 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) on investments in securities 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 sales and maturities of foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (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 Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) on the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in 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, fluctuations of exchange

rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Portfolio may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Portfolio to liquidate portfolio positions when it may not be advantageous to do so to

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The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Portfolio to be more volatile than if the Portfolio had not been leveraged. Although the Adviser seeks to use derivatives to further the Portfolio's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Portfolio also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency 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. Furthermore, 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. There is additional risk to the extent that currency contracts create exposure to currencies in which the Portfolio's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Portfolio than if it had not entered into such contracts. The use of currency 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. A currency contract is marked-to-market daily and the change in market value is recorded by the Portfolio as unrealized gain or loss. The Portfolio records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

Futures: A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return, and the potential loss from futures contracts can exceed the Portfolio's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Portfolio of margin deposits in the event of bankruptcy of a broker with whom the Portfolio has open positions in the futures contract.

Swaps: The Portfolio may enter into over-the-counter ("OTC") swap contracts or cleared swap transactions. A swap contract is an agreement between two parties pursuant to which the parties exchange payments at specified dates on the basis of a specified notional amount, with the payments calculated by reference to specified securities, indices, reference rates, currencies or other instruments. Typically swap agreements provide that when the period payment dates for both parties are the same, the payments are made on a net basis (i.e., the two payment streams are netted out, with only the net amount paid by one party to the other). The Portfolio's obligations or rights under a swap contract entered into on a net basis will generally be equal only to the net amount to be paid or received under the agreement, based on the relative values of the positions held by each party. Cleared swap transactions may help reduce counterparty credit risk. In a cleared swap, the Portfolio's ultimate counterparty is a clearinghouse rather than a bank, dealer or other financial institution. OTC swap agreements are not entered into or traded on exchanges and often there is no central clearing or guaranty function for OTC swaps. These OTC swaps are often subject to credit risk or the risk of

24

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

default or non-performance by the counterparty. Both OTC and cleared swaps could result in losses if interest rates, foreign currency exchange rates or other factors are not correctly anticipated by the Portfolio or if the reference index, security or investments do not perform as expected.

The Portfolio's use of swaps during the period included those based on the credit of an underlying security commonly referred to as "credit default swaps". The Portfolio may be either the buyer or seller in a credit default swap. Where the Portfolio is the buyer of a credit default swap contract, it would typically be entitled to receive the par (or other agreed-upon) value of a referenced debt obligation from the counterparty to the contract only in the event of a default or similar event by the issuer of the debt obligation. If no default occurs, the Portfolio would have paid to the counterparty a periodic stream of payments over the term of the contract and received no benefit from the contract. When the Portfolio is the seller of a credit default swap contract, it typically receives the stream of payments but is obligated to pay an amount equal to the par (or other agreed-upon) value of a referenced debt obligation upon the default or similar event by the issuer of the referenced debt obligation. The use of credit default swaps could result in losses to the Portfolio if the Adviser fails to correctly evaluate the creditworthiness of the issuer of the referenced debt obligation. During the period swap agreements are open, payments are received from or made to the clearinghouse or counterparty based upon changes in the value of the contract (variation margin). The Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulatory developments require the clearing and exchange-trading of certain standardized swap transactions. Mandatory exchange-trading and clearing is occurring on a phased-in basis.

The current credit rating of each individual issuer is listed in the table following the Portfolio of Investments and serves as an indicator of the current status of the payment/performance risk of the credit derivative. Alternatively, for credit default swaps on an index of credits, the quoted market prices and current values serve as an indicator of the current status of the payment/performance risk of the credit derivative. Generally, lower credit ratings and increasing market values, in absolute terms, represent a deterioration of the credit and a greater likelihood of an adverse credit event of the issuer.

When the Portfolio has an unrealized loss on a swap agreement, the Portfolio has instructed the custodian to pledge cash or liquid securities as collateral with a value

approximately equal to the amount of the unrealized loss. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate. If applicable, cash collateral is included with "Due from (to) Broker" in the Statement of Assets and Liabilities.

Upfront payments received or paid by the Portfolio will be reflected as an asset or liability in the Statement of Assets and Liabilities.

FASB ASC 815, "Derivatives and Hedging: Overall" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Portfolio uses derivative instruments, how these derivative instruments are accounted for and their effects on the Portfolio's financial position and results of operations.

The following tables set forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of June 30, 2014.

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Futures Contracts	Variation Margin	Interest Rate Risk	$	70	(a)
Swap Agreements	Unrealized Appreciation on Swap Agreements	Interest Rate Risk		703
Swap Agreements	Variation Margin	Credit Risk		3	(a)
Swap Agreements	Variation Margin	Interest Rate Risk		231	(a)
Total			$1,007
	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Depreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	(56	)
Futures Contracts	Variation Margin	Interest Rate Risk		(101	)(a)
Swap Agreements	Unrealized Depreciation on Swap Agreements	Credit Risk		(29	)
Swap Agreements	Unrealized Depreciation on Swap Agreements	Interest Rate Risk		(148	)
Swap Agreements	Variation Margin	Interest Rate Risk		(154	)(a)
Total			$(488)

(a)  This amount represents the cumulative appreciation (depreciation) as reported in the Portfolio of Investments. The Statement of Assets and Liabilities only reflects the current day's net variation margin.

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The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

The following tables set forth by primary risk exposure the Portfolio's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2014 in accordance with ASC 815.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(148	)
Interest Rate Risk	Futures Contracts		875
Credit Risk	Swap Agreements		(57	)
Interest Rate Risk	Swap Agreements		(207	)
Total		$	463
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(16	)
Interest Rate Risk	Futures Contracts		253
Credit Risk	Swap Agreements		30
Interest Rate Risk	Swap Agreements		(1,206	)
Total		$	(939	)

At June 30, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives(b)	Assets(c) (000)		Liabilities(c) (000)
Foreign Currency Forward
Exchange Contracts	$	—	$	(56	)
Swap Agreements		703		(177	)
Total	$	703	$	(233	)

(b)  Excludes exchange traded derivatives.

(c)  Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Portfolio typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Portfolio typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potentially deterioration in the credit quality of the

counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability, may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Received(d) (000)			Net Amount (not less than $0) (000)
Bank of America NA	$	48	$	—		$	—		$	48
Deutsche Bank AG		215		—			(215	)		0
Goldman Sachs International		327		(148	)		(179	)		0
JPMorgan Chase Bank NA		22		—			—			22
Royal Bank of Canada		91		—			(91	)		0
Total	$	703	$	(148	)	$	(485	)	$	70

(d)  In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

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The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Pledged (000)		Net Amount (not less than $0) (000)
Barclays Bank PLC	$	29		$	—		$	—	$	29
Citibank NA		21			—			—		21
Deutsche Bank AG		8			—			—		8
Goldman Sachs International		148			(148	)		—		0
HSBC Bank PLC		(—	@)		—			—		(—	@)
UBS AG		27			—			—		27
Total	$	233		$	(148	)	$	—	$	85

@  Amount is less than $500.

For the six months ended June 30, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	25,847,000
Futures Contracts:
Average monthly original value	$	51,650,000
Swap Agreements:
Average monthly notional amount	$	44,596,000

5.  When-Issued/Delayed Delivery Securities: The Portfolio purchases and sells when-issued and delayed delivery securities. Securities purchased on a when-issued or delayed delivery basis are purchased for delivery beyond the normal settlement date at a stated price and yield, and no income accrues to the Portfolio on such securities prior to delivery date. Payment and delivery for when-issued and delayed delivery securities can take place a month or more after the date of the transaction. When the Portfolio enters into a purchase transaction on a when-issued or delayed delivery basis, securities are available for collateral in an amount at least equal in value to the Portfolio's commitments to purchase such securities. Purchasing securities on a when-issued or delayed delivery basis may involve a risk that the market price at the time of delivery may be lower than the agreed upon purchase price, in which case there could be an unrealized loss at the time of delivery. Purchasing investments on a when-issued or delayed delivery basis may be considered a form of leverage which may increase the impact that gains (losses) may have on the Portfolio.

6.  Securities Lending: The Portfolio lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Portfolio. The Portfolio would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily, by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned – Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	11,070	(e)	$	—	$	(11,070	)(f)(g)	$	0

(e)  Represents market value of loaned securities at period end.

(f)  The Portfolio received cash collateral of approximately $11,288,000, of which approximately $11,054,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2014 there was uninvested cash of approximately $234,000, which is not reflected in the Portfolio of Investments.

(g)  The actual collateral received is greater than the amount shown here due to overcollateralization.

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The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

7.  Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. 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 or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Portfolio holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Portfolio to further risk of loss in the event of a failure to complete the transaction by the counterparty.

9.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the average daily net assets as follows:

First $1 billion			Over $1 billion
	0.375	%		0.30	%

For the six months ended June 30, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.26% of the Portfolio's daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.70% for Class I shares and 0.95% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2014, approximately $92,000 of advisory fees were waived pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.25% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Portfolio and provides the Portfolio's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Portfolio is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.35% of the Portfolio's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.10% of the 0.35% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action appropriate. For the six months ended June 30, 2014, this waiver amounted to approximately $35,000.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian

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The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Agreement. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Federal Income Taxes: It is the Portfolio's intention to continue 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 based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, Income Taxes – Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2013, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2013 and 2012 was as follows:

2013 Distributions Paid From:				2012 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	5,863	$	—	$	8,080	$	—

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains

(losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, swap transactions, paydown adjustments, and merger adjustments, resulted in the following reclassifications among the components of net assets at December 31, 2013:

Accumulated Undistributed Net Investment Income (000)		Accumulated Net Realized Loss (000)			Paid-in- Capital (000)
$	817	$	(3,279	)	$	2,462

At December 31, 2013, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	5,248	$	—

At June 30, 2014, the aggregate cost for Federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $8,144,000 and the aggregate gross unrealized depreciation is approximately $1,274,000 resulting in net unrealized appreciation of approximately $6,870,000.

At December 31, 2013, the Portfolio had available for Federal income tax purposes unused short-term capital losses of approximately $593,000 that do not have an expiration date.

In addition, at December 31, 2013, the Portfolio had available for Federal income tax purposes unused capital losses, which will expire on the indicated dates:

Amount (000)		Expiration*
$	1,242	December 31, 2015
	41,603	December 31, 2016
	31,734	December 31, 2017

*  Includes capital losses acquired from Flexible Income Portfolio that may be subject to limitation under IRC section 382 in future years, reducing the total carryforward available. During the year ended December 31, 2013, capital loss carryforwards of approximately $12,027,000 were written off due to 382 limitations.

To the extent that capital loss carryforwards are used to offset any future capital gains realized during the carryover period as provided by U.S. Federal income tax regulations, no capital gains tax liability will be incurred by the Portfolio for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2014, purchases and sales of investment securities for the Portfolio,

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The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

other than long-term U.S. Government securities and short-term investments, were approximately $31,532,000 and $31,545,000, respectively. For the six months ended June 30, 2014, purchases and sales of long-term U.S. Government securities were approximately $193,183,000 and $188,525,000, respectively.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds – Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly, and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of advisory and administration fees paid by the Portfolio due to its investments in the Liquidity Funds. For the six months ended June 30, 2014, advisory fees paid were reduced by approximately $8,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Dividend Income (000)		Value June 30, 2014 (000)
$	19,513	$	56,233	$	34,850	$	4	$	40,896

I. Other: At June 30, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 50% and 86%, for Class I and Class II, respectively.

30

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The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

Michael E. Nugent
Chairperson of the Board and Director

John H. Gernon
President and Principal Executive Officer

Stefanie V. Chang Yu
Chief Compliance Officer

Joseph C. Benedetti
Vice President

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semi-annual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing the Public Reference Room of the SEC, Washington, DC 20549-0102.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Fund's Proxy Voting Policy and Procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Portfolio. For more detailed information about the Portfolio, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Portfolio, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Portfolio unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFCPFISAN
975788 EXP 08.31.15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Emerging Markets Debt Portfolio

The Portfolio is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Table of Contents

Expense Example		2
Investment Advisory Agreement Approval		3
Portfolio of Investments		5
Statement of Assets and Liabilities		9
Statement of Operations		10
Statements of Changes in Net Assets		11
Financial Highlights		12
Notes to Financial Statements		14
Director and Officer Information	Back Cover

1

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Expense Example (unaudited)

Emerging Markets Debt Portfolio

As a shareholder of the Emerging Markets Debt Portfolio (the "Portfolio"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, including advisory fees, administration fees, distribution (12b-1) fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2014 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/14		Actual Ending Account Value 6/30/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Debt Portfolio Class I	$	1,000.00	$	1,082.70	$	1,019.44	$	5.58	$	5.41		1.08	%
Emerging Markets Debt Portfolio Class II		1,000.00		1,083.20		1,019.19		5.84		5.66		1.13

*  Expenses are calculated using each Portfolio Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Portfolio's Adviser under the administration agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Adviser's expense. (The advisory and administration agreements together are referred to as the "Management Agreement.") The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the administrative and advisory services to the Portfolio. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Portfolio and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Portfolio

The Board reviewed the performance, fees and expenses of the Portfolio compared to its peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Portfolio. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2013, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Portfolio's performance was better than its peer group average for the three- and five-year periods but below its peer group average for the one-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Portfolio relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Portfolio's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Portfolio's management fee and total expense ratio were higher than its peer group average. After discussion, the Board concluded that the Portfolio's (i) performance was competitive with its peer group average, and (ii) management fee and total expense ratio were acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Portfolio and how that relates to the Portfolio's total expense ratio and particularly the Portfolio's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Portfolio and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of the Portfolio supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Portfolio and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

3

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other benefits to the Adviser and its affiliates derived from their relationship with the Portfolio and other funds advised by the Adviser. These benefits may include, among other things, research received by the Adviser generated from commission dollars spent on funds' portfolio trading, and fees for trading, distribution and/or shareholder servicing. The Board reviewed with the Adviser each of these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Portfolio and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Portfolio and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Portfolio's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Portfolio to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Portfolio's business.

General Conclusion

After considering and weighing all of the above factors, the Board concluded that it would be in the best interest of the Portfolio and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single factor referenced above. The Board considered these factors over the course of numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

4

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments

Emerging Markets Debt Portfolio

	Face Amount (000)		Value (000)
Fixed Income Securities (94.0%)
Brazil (7.9%)
Corporate Bonds (4.6%)
Banco do Brasil SA, 9.00%, 6/18/24 (a)(b)(c)(d)	$	2,870	$	2,845
Banco Safra SA, 6.75%, 1/27/21		870		971
6.75%, 1/27/21 (b)		1,280		1,429
BRF SA, 4.75%, 5/22/24 (b)		2,030		2,005
ESAL GmbH, 6.25%, 2/5/23		2,000		1,970
Minerva Luxembourg SA, 8.75%, 4/3/19 (a)(b)(c)(d)		1,400		1,477
Odebrecht Offshore Drilling Finance Ltd., 6.63%, 10/1/23 (b)(d)		712		762
6.75%, 10/1/22 (b)		2,015		2,162
				13,621
Sovereign (3.3%)
Banco Nacional de Desenvolvimento Economico e Social, 5.50%, 7/12/20		2,430		2,645
Brazil Minas SPE via State of Minas Gerais, 5.33%, 2/15/28 (b)		4,150		4,208
Brazilian Government International Bond, 7.13%, 1/20/37		2,334		2,964
				9,817
				23,438
Chile (2.4%)
Sovereign (2.4%)
Empresa Nacional del Petroleo, 4.75%, 12/6/21		3,600		3,838
5.25%, 8/10/20		3,000		3,295
				7,133
China (3.4%)
Corporate Bond (0.3%)
Baidu, Inc., 2.75%, 6/9/19		850		854
Sovereign (3.1%)
Sinopec Group Overseas Development 2013 Ltd., 4.38%, 10/17/23		8,770		9,201
				10,055
Colombia (2.9%)
Corporate Bonds (1.2%)
Ecopetrol SA, 5.88%, 5/28/45		628		653
Pacific Rubiales Energy Corp., 5.13%, 3/28/23		690		688
5.38%, 1/26/19 (b)		2,150		2,247
				3,588

	Face Amount (000)		Value (000)
Sovereign (1.7%)
Colombia Government International Bond, 4.38%, 7/12/21	$	1,500	$	1,613
7.38%, 3/18/19		1,040		1,272
11.75%, 2/25/20		1,550		2,251
				5,136
				8,724
Croatia (2.1%)
Sovereign (2.1%)
Croatia Government International Bond, 5.50%, 4/4/23		1,620		1,691
6.00%, 1/26/24 (b)		4,090		4,407
				6,098
Honduras (0.4%)
Sovereign (0.4%)
Republic of Honduras, 8.75%, 12/16/20		1,160		1,293
Hungary (3.6%)
Sovereign (3.6%)
Hungary Government International Bond, 5.38%, 3/25/24		2,502		2,683
5.75%, 11/22/23		6,140		6,800
6.38%, 3/29/21		1,110		1,271
				10,754
India (0.3%)
Corporate Bond (0.3%)
Vedanta Resources PLC, 7.13%, 5/31/23 (b)(d)		780		825
Indonesia (9.3%)
Corporate Bond (0.6%)
Pertamina Persero PT, 6.45%, 5/30/44 (b)(d)		1,870		1,861
Sovereign (8.7%)
Indonesia Government International Bond, 5.88%, 1/15/24 (b)		2,530		2,799
7.75%, 1/17/38		2,925		3,657
Majapahit Holding BV, 7.75%, 1/20/20		6,700		7,872
Pertamina Persero PT, 4.30%, 5/20/23		2,000		1,897
4.88%, 5/3/22		3,530		3,512
5.25%, 5/23/21		200		207
Perusahaan Listrik Negara PT, 5.50%, 11/22/21 (d)		5,320		5,613
				25,557
				27,418
Ivory Coast (0.6%)
Sovereign (0.6%)
Ivory Coast Government International Bond, 5.75%, 12/31/32		1,830		1,787

The accompanying notes are an integral part of the financial statements.
5

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Debt Portfolio

	Face Amount (000)		Value (000)
Kazakhstan (4.2%)
Sovereign (4.2%)
Development Bank of Kazakhstan JSC, 4.13%, 12/10/22 (b)	$	2,450	$	2,331
5.50%, 12/20/15		210		219
Intergas Finance BV, 6.38%, 5/14/17		200		216
KazAgro National Management Holding JSC, 4.63%, 5/24/23 (b)		4,120		4,007
KazMunayGas National Co., JSC, 6.38%, 4/9/21 (b)		1,390		1,555
9.13%, 7/2/18 (b)		360		435
9.13%, 7/2/18		3,030		3,662
				12,425
Kenya (0.7%)
Sovereign (0.7%)
Kenya Government International Bond, 6.88%, 6/24/24 (b)		1,830		1,907
Lithuania (1.3%)
Sovereign (1.3%)
Lithuania Government International Bond, 6.63%, 2/1/22		2,310		2,801
7.38%, 2/11/20		925		1,138
				3,939
Mexico (12.9%)
Corporate Bonds (2.9%)
Alfa SAB de CV, 5.25%, 3/25/24 (b)(d)		2,162		2,262
Fermaca Enterprises S de RL de CV, 6.38%, 3/30/38 (b)		2,634		2,759
Tenedora Nemak SA de CV, 5.50%, 2/28/23 (b)		1,560		1,591
5.50%, 2/28/23		2,000		2,040
				8,652
Sovereign (10.0%)
Mexico Government International Bond, 3.63%, 3/15/22		1,730		1,799
4.00%, 10/2/23		2,500		2,631
6.05%, 1/11/40		2,312		2,814
6.75%, 9/27/34		1,109		1,442
Petroleos Mexicanos, 4.88%, 1/24/22		3,560		3,860
5.50%, 1/21/21		5,520		6,224
6.38%, 1/23/45 (b)		2,860		3,328
6.50%, 6/2/41		2,330		2,720
6.63%, 6/15/38 (d)		1,176		1,382
8.00%, 5/3/19		1,176		1,463
8.63%, 12/1/23		1,350		1,733
				29,396
				38,048

	Face Amount (000)		Value (000)
Mozambique (0.4%)
Sovereign (0.4%)
EMATUM Via Mozambique EMATUM Finance 2020 BV, 6.31%, 9/11/20	$	1,100	$	1,117
Nigeria (0.5%)
Sovereign (0.5%)
Nigeria Government International Bond, 6.38%, 7/12/23 (d)		1,280		1,387
Pakistan (0.5%)
Sovereign (0.5%)
Pakistan Government International Bond, 7.25%, 4/15/19 (b)(d)		1,480		1,521
Panama (1.6%)
Sovereign (1.6%)
Panama Government International Bond, 5.20%, 1/30/20		2,680		3,004
8.88%, 9/30/27		1,183		1,701
				4,705
Peru (1.9%)
Corporate Bond (0.8%)
Banco de Credito del Peru, 6.13%, 4/24/27 (b)(c)(d)		2,280		2,440
Sovereign (1.1%)
Fondo MIVIVIENDA SA, 3.50%, 1/31/23 (b)(d)		707		677
Peruvian Government International Bond, 6.55%, 3/14/37 (d)		2,100		2,649
				3,326
				5,766
Philippines (4.2%)
Sovereign (4.2%)
Philippine Government International Bond, 4.00%, 1/15/21 (d)		4,632		4,927
8.38%, 6/17/19		546		699
9.50%, 2/2/30		4,391		6,883
				12,509
Poland (2.6%)
Sovereign (2.6%)
Poland Government International Bond, 3.00%, 3/17/23 (d)		6,950		6,769
4.00%, 1/22/24		650		678
5.00%, 3/23/22		250		278
				7,725
Romania (0.7%)
Sovereign (0.7%)
Romanian Government International Bond, 4.38%, 8/22/23 (b)		1,465		1,508
6.75%, 2/7/22		530		635
				2,143

The accompanying notes are an integral part of the financial statements.
6

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Debt Portfolio

	Face Amount (000)		Value (000)
Russia (9.0%)
Sovereign (9.0%)
Russian Foreign Bond — Eurobond, 5.63%, 4/4/42	$	4,600	$	4,830
7.50%, 3/31/30 (b)		88		102
7.50%, 3/31/30		18,770		21,776
				26,708
Serbia (0.9%)
Sovereign (0.9%)
Republic of Serbia, 4.88%, 2/25/20		850		863
7.25%, 9/28/21		1,500		1,715
				2,578
South Africa (2.3%)
Sovereign (2.3%)
Eskom Holdings SOC Ltd., 5.75%, 1/26/21 (b)		3,278		3,380
South Africa Government International Bond, 5.88%, 9/16/25 (d)		2,360		2,630
Transnet SOC Ltd., 4.00%, 7/26/22 (b)(d)		950		897
				6,907
Sri Lanka (0.5%)
Sovereign (0.5%)
Sri Lanka Government International Bond, 5.88%, 7/25/22 (b)(d)		580		603
6.25%, 10/4/20		139		148
6.25%, 10/4/20 (b)		510		544
				1,295
Turkey (5.6%)
Corporate Bond (0.8%)
Turk Telekomunikasyon AS, 4.88%, 6/19/24 (b)(d)		2,400		2,334
Sovereign (4.8%)
Export Credit Bank of Turkey, 5.88%, 4/24/19 (b)		3,210		3,412
Turkey Government International Bond, 3.25%, 3/23/23		740		685
5.63%, 3/30/21		8,000		8,760
6.88%, 3/17/36		1,200		1,418
				14,275
				16,609
Ukraine (1.1%)
Sovereign (1.1%)
Ukraine Government International Bond, 7.50%, 4/17/23		950		899
7.75%, 9/23/20 (d)		1,900		1,824
7.80%, 11/28/22		470		447
				3,170

	Face Amount (000)		Value (000)
Venezuela (9.5%)
Sovereign (9.5%)
Bolivarian Republic of Venezuela, 9.25%, 5/7/28	$	560	$	473
Petroleos de Venezuela SA, 6.00%, 11/15/26		19,540		12,701
8.50%, 11/2/17		5,775		5,416
9.00%, 11/17/21		3,400		2,906
Venezuela Government International Bond, 6.00%, 12/9/20		880		680
9.00%, 5/7/23		2,030		1,746
11.75%, 10/21/26		4,250		4,182
				28,104
Zambia (0.7%)
Sovereign (0.7%)
Zambia Government International Bond, 8.50%, 4/14/24 (b)		1,900		2,108
Total Fixed Income Securities (Cost $264,538)				278,196
	No. of Warrants
Warrants (0.1%)
Nigeria (0.1%)
Central Bank of Nigeria, expires 11/15/20 (c)(e)		750		123
Venezuela (0.0%)
Venezuela Government International Bond, Oil-Linked Payment Obligation, expires 4/15/20 (c)(e)		3,750		84
Total Warrants (Cost $—)				207
	Shares
Short-Term Investments (13.2%)
Securities held as Collateral on Loaned Securities (9.7%)
Investment Company (8.2%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H)		24,092,086		24,092
	Face Amount (000)
Repurchase Agreement (1.5%)
Barclays Capital, Inc., (0.07%, dated 6/30/14, due 7/1/14; proceeds $4,477; fully collateralized by a U.S. Government Obligation; 3.63% due 8/15/43; valued at $4,566)	$	4,477		4,477
Total Securities held as Collateral on Loaned Securities (Cost $28,569)				28,569

The accompanying notes are an integral part of the financial statements.
7

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Debt Portfolio

	Shares		Value (000)
Investment Company (3.5%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H) (Cost $10,271)		10,270,997	$	10,271
Total Short-Term Investments (Cost $38,840)				38,840
Total Investments (107.3%) (Cost $303,378) Including $28,609 of Securities Loaned (f)				317,243
Liabilities in Excess of Other Assets (-7.3%)				(21,562	)
Net Assets			$	295,681

(a)  Perpetual — One or more securities do not have a predetermined maturity date. Rates for these securities are fixed for a period of time, after which they revert to a floating rate. Interest rates in effect are as of June 30, 2014.

(b)  144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(c)  Variable/Floating Rate Security — Interest rate changes on these instruments are based on changes in a designated base rate. The rates shown are those in effect on June 30, 2014.

(d)  All or a portion of this security was on loan at June 30, 2014.

(e)  Security has been deemed illiquid at June 30, 2014.

(f)  Securities are available for collateral in connection with an open futures contract.

Futures Contracts:

The Portfolio had the following futures contracts open at June 30, 2014:

	Number of Contracts		Value (000)			Expiration Date	Unrealized Appreciation (000)
Short:
U.S. Treasury 5 yr. Note		141	$	(16,844	)	Sep-14	$	62

Portfolio Composition*

Classification	Percentage of Total Investments
Sovereign		84.5	%
Corporate Bonds		11.9
Other**		3.6
Total Investments		100.0	%***

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2014.

**  Industries and/or investment types representing less than 5% of total investments.

***  Does not include open short futures contracts with an underlying face amount of approximately $16,844,000 with unrealized appreciation of approximately $62,000.

The accompanying notes are an integral part of the financial statements.
8

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Emerging Markets Debt Portfolio

Statement of Assets and Liabilities	June 30, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $269,015)	$	282,880
Investment in Security of Affiliated Issuer, at Value (Cost $34,363)		34,363
Total Investments in Securities, at Value (Cost $303,378)		317,243
Foreign Currency, at Value (Cost $3)		3
Cash		1,807
Interest Receivable		4,323
Receivable for Investments Sold		2,200
Receivable for Variation Margin on Futures Contracts		124
Receivable for Portfolio Shares Sold		22
Receivable from Affiliate		—	@
Other Assets		11
Total Assets		325,733
Liabilities:
Collateral on Securities Loaned, at Value		29,175
Payable for Advisory Fees		538
Payable for Portfolio Shares Redeemed		230
Payable for Administration Fees		61
Payable for Professional Fees		19
Payable for Transfer Agent Fees		3
Payable for Directors' Fees and Expenses		1
Payable for Distribution Fees — Class II Shares		1
Other Liabilities		24
Total Liabilities		30,052
NET ASSETS	$	295,681
Net Assets Consist of:
Paid-in-Capital	$	266,458
Accumulated Undistributed Net Investment Income		22,249
Accumulated Net Realized Loss		(6,953	)
Unrealized Appreciation (Depreciation) on:
Investments		13,865
Futures Contracts		62
Foreign Currency Translations		(—	@)
Net Assets	$	295,681
CLASS I:
Net Assets	$	273,124
Net Asset Value, Offering and Redemption Price Per Share Applicable to 30,672,107 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	8.90
CLASS II:
Net Assets	$	22,557
Net Asset Value, Offering and Redemption Price Per Share Applicable to 2,548,971 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	8.85
(1) Including:
Securities on Loan, at Value:	$	28,609

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Emerging Markets Debt Portfolio

Statement of Operations	Six Months Ended June 30, 2014 (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers	$	8,104
Income from Securities Loaned — Net		31
Dividends from Securities of Unaffiliated Issuers		23
Dividends from Security of Affiliated Issuer (Note H)		2
Total Investment Income		8,160
Expenses:
Advisory Fees (Note B)		1,060
Administration Fees (Note C)		353
Professional Fees		49
Distribution Fees — Class II Shares (Note D)		36
Shareholder Reporting Fees		28
Transfer Agency Fees (Note E)		10
Custodian Fees (Note F)		8
Pricing Fees		8
Directors' Fees and Expenses		4
Other Expenses		11
Total Expenses		1,567
Distribution Fees — Class II Shares Waived (Note D)		(31	)
Rebate from Morgan Stanley Affiliate (Note H)		(5	)
Net Expenses		1,531
Net Investment Income		6,629
Realized Loss:
Investments Sold		(5,328	)
Foreign Currency Forward Exchange Contracts		(51	)
Foreign Currency Transactions		(10	)
Futures Contracts		(219	)
Net Realized Loss		(5,608	)
Change in Unrealized Appreciation (Depreciation):
Investments		21,611
Foreign Currency Translations		—	@
Futures Contracts		(44	)
Net Change in Unrealized Appreciation (Depreciation)		21,567
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		15,959
Net Increase in Net Assets Resulting from Operations	$	22,588

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
10

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Emerging Markets Debt Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2014 (unaudited) (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	6,629		$	16,644
Net Realized Loss		(5,608	)		(1,207	)
Net Change in Unrealized Appreciation (Depreciation)		21,567			(52,707	)
Net Increase (Decrease) in Net Assets Resulting from Operations		22,588			(37,270	)
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(13,835	)
Net Realized Gain		—			(4,240	)
Class II:
Net Investment Income		—			(916	)
Net Realized Gain		—			(285	)
Total Distributions		—			(19,276	)
Capital Share Transactions:(1)
Class I:
Subscribed		9,321			38,752
Distributions Reinvested		—			18,075
Redeemed		(29,364	)		(135,157	)
Class II:
Subscribed		3,529			4,098
Distributions Reinvested		—			1,201
Redeemed		(3,133	)		(9,195	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(19,647	)		(82,226	)
Total Increase (Decrease) in Net Assets		2,941			(138,772	)
Net Assets:
Beginning of Period		292,740			431,512
End of Period (Including Accumulated Undistributed Net Investment Income of $22,249 and $15,620)	$	295,681		$	292,740
(1) Capital Share Transactions:
Class I:
Shares Subscribed		1,084			4,170
Shares Issued on Distributions Reinvested		—			2,188
Shares Redeemed		(3,516	)		(15,671	)
Net Decrease in Class I Shares Outstanding		(2,432	)		(9,313	)
Class II:
Shares Subscribed		407			469
Shares Issued on Distributions Reinvested		—			146
Shares Redeemed		(371	)		(1,041	)
Net Increase (Decrease) in Class II Shares Outstanding		36			(426	)

The accompanying notes are an integral part of the financial statements.
11

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Emerging Markets Debt Portfolio

	Class I
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	8.22		$	9.52		$	8.31		$	8.14		$	7.75		$	6.47
Income (Loss) from Investment Operations:
Net Investment Income†		0.20			0.40			0.37			0.41			0.40			0.47
Net Realized and Unrealized Gain (Loss)		0.48			(1.23	)		1.10			0.15			0.33			1.41
Total from Investment Operations		0.68			(0.83	)		1.47			0.56			0.73			1.88
Distributions from and/or in Excess of:
Net Investment Income		—			(0.36	)		(0.26	)		(0.30	)		(0.34	)		(0.60	)
Net Realized Gain		—			(0.11	)		—			(0.09	)		—			—
Total Distributions		—			(0.47	)		(0.26	)		(0.39	)		(0.34	)		(0.60	)
Net Asset Value, End of Period	$	8.90		$	8.22		$	9.52		$	8.31		$	8.14		$	7.75
Total Return ++		8.27	%#		(8.75	)%		17.96	%		7.03	%		9.74	%		30.21	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	273,124		$	272,200		$	403,697		$	255,316		$	227,693		$	138,080
Ratio of Expenses to Average Net Assets		1.08	%+††*		1.06	%+††		1.04	%+††		1.04	%+††		1.07	%+††		1.08	%+
Ratio of Net Investment Income to Average Net Assets		4.69	%+††*		4.48	%+††		4.18	%+††		4.95	%+††		4.96	%+††		6.50	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%††§*		0.00	%††§		0.01	%††		0.01	%††		0.01	%††		0.00	%§
Portfolio Turnover Rate		60	%#		88	%		39	%		52	%		89	%		97	%

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
12

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Emerging Markets Debt Portfolio

	Class II
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	8.17		$	9.46		$	8.26		$	8.10		$	7.71		$	6.43
Income (Loss) from Investment Operations:
Net Investment Income†		0.19			0.39			0.37			0.40			0.39			0.46
Net Realized and Unrealized Gain (Loss)		0.49			(1.22	)		1.08			0.15			0.33			1.41
Total from Investment Operations		0.68			(0.83	)		1.45			0.55			0.72			1.87
Distributions from and/or in Excess of:
Net Investment Income		—			(0.35	)		(0.25	)		(0.30	)		(0.33	)		(0.59	)
Net Realized Gain		—			(0.11	)		—			(0.09	)		—			—
Total Distributions		—			(0.46	)		(0.25	)		(0.39	)		(0.33	)		(0.59	)
Net Asset Value, End of Period	$	8.85		$	8.17		$	9.46		$	8.26		$	8.10		$	7.71
Total Return ++		8.32	%#		(8.76	)%		17.88	%		6.88	%		9.74	%		30.11	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	22,557		$	20,540		$	27,815		$	30,852		$	31,360		$	36,299
Ratio of Expenses to Average Net Assets(1)		1.13	%+††*		1.11	%+††		1.09	%+††		1.09	%+††		1.12	%+††		1.13	%+
Ratio of Net Investment Income to Average Net Assets(1)		4.64	%+††*		4.43	%+††		4.13	%+††		4.90	%+††		4.91	%+††		6.48	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%††§*		0.00	%††§		0.01	%††		0.01	%††		0.01	%††		0.00	%§
Portfolio Turnover Rate		60	%#		88	%		39	%		52	%		89	%		97	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.43	%††*		1.41	%††		1.40	%††		1.40	%††		1.43	%+††		1.43	%+
Net Investment Income to Average Net Assets		4.34	%††*		4.13	%††		3.82	%††		4.59	%††		4.60	%+††		6.18	%+

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
13

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements

The Universal Institutional Funds, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Fund is comprised of eleven separate active, diversified and non-diversified portfolios (individually referred to as a "Portfolio", collectively as the "Portfolios"). The Fund applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Emerging Markets Debt Portfolio. The Portfolio seeks high total return by investing primarily in fixed income securities of government and government-related issuers and, to a lesser extent, of corporate issuers in emerging market countries. The Portfolio offers two classes of shares – Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Fund is intended to be the funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP 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: (1) Certain portfolio securities may be valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors"). The pricing service may utilize a matrix system or other model incorporating attributes such as security quality, maturity and coupon as the evaluation model parameters, and/or research evaluations by its staff, including review of broker-dealer market price quotations in determining what it believes is the fair valuation of the portfolios securities valued by such pricing service; (2) futures are valued at the latest price published by the commodities exchange on which they trade; (3) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and

other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ

14

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value

measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Portfolio's investments as of June 30, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Fixed Income Securities
Corporate Bonds	$	—	$	34,175	$	—	$	34,175
Sovereign		—		244,021		—		244,021
Total Fixed Income Securities		—		278,196		—		278,196
Warrants		—		207		—		207
Short-Term Investments
Investment Company		34,363		—		—		34,363
Repurchase Agreement		—		4,477		—		4,477
Total Short-Term Investments		34,363		4,477		—		38,840
Futures Contracts		62		—		—		62
Total Assets	$	34,425	$	282,880	$	—	$	317,305

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of June 30, 2014, the Portfolio did not have any investments transfer between investment levels.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate 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 Portfolio are presented at the foreign exchange rates and market values at the close of the period, the Portfolio 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 securities held at period end. Similarly, the Portfolio 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) on investments in securities

15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

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 forward exchange contracts, disposition of foreign currencies, currency gains (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 Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) on the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in 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, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Portfolio may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Portfolio to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Portfolio to be more volatile than if the Portfolio had not been leveraged. Although the Adviser seeks to use derivatives to further the Portfolio's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Portfolio also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated

16

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency 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. Furthermore, 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. There is additional risk to the extent that currency contracts create exposure to currencies in which the Portfolio's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Portfolio than if it had not entered into such contracts. The use of currency 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. A currency contract is marked-to-market daily and the change in market value is recorded by the Portfolio as unrealized gain or loss. The Portfolio records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

As of June 30, 2014, the Portfolio did not have any open currency contracts.

Futures: A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as

to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return, and the potential loss from futures contracts can exceed the Portfolio's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Portfolio of margin deposits in the event of bankruptcy of a broker with whom the Portfolio has open positions in the futures contract.

FASB ASC 815, "Derivatives and Hedging: Overall" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Portfolio uses derivative instruments, how these derivative instruments are accounted for and their effects on the Portfolio's financial position and results of operations.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of June 30, 2014.

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Futures Contracts	Variation Margin	Interest Rate Risk	$	62	(a)

(a)  This amount represents the cumulative appreciation (depreciation) as reported in the Portfolio of Investments. The Statement of Assets and Liabilities only reflects the current day's net variation margin.

The following tables set forth by primary risk exposure the Portfolio's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2014 in accordance with ASC 815.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(51	)
Interest Rate Risk	Futures Contracts		(219	)
Total		$	(270	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Interest Rate Risk	Futures Contracts	$	(44	)

17

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

For the six months ended June 30, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	1,188,000
Futures Contracts:
Average monthly original value	$	16,892,000

5.  Structured Investments: The Portfolio invested a portion of its assets in structured investments. A structured investment is a derivative security designed to offer a return linked to a particular underlying security, currency, commodity or market. Structured investments may come in various forms including notes (such as exchange-traded notes), warrants and options to purchase securities. The Portfolio will typically use structured investments to gain exposure to a permitted underlying security, currency, commodity or market when direct access to a market is limited or inefficient from a tax or cost standpoint. There can be no assurance that structured investments will trade at the same price or have the same value as the underlying security, currency, commodity or market. Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Portfolio is relying on the creditworthiness of such issuer or counterparty and has no rights with respect to the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Portfolio's illiquidity to the extent that the Portfolio, at a particular time, may be unable to find qualified buyers for these securities.

6.  Securities Lending: The Portfolio lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Portfolio. The Portfolio would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily, by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from

the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned – Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than 0) (000)
$	28,609	(b)	$	—	$	(28,609	)(c)(d)	$	0

(b)  Represents market value of loaned securities at period end.

(c)  The Portfolio received cash collateral of approximately $29,175,000, of which approximately $28,569,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2014 there was uninvested cash of approximately $606,000, which is not reflected in the Portfolio of Investments.

(d)  The actual collateral received is greater than the amount shown here due to overcollateralization.

7.  Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. 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 or other appropriate methods. Income, expenses (other than class specific

18

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Portfolio holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Portfolio to further risk of loss in the event of a failure to complete the transaction by the counterparty.

9.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the average daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2014, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.75% of the Portfolio's daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.30% for Class I shares and 1.35% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.25% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Fund.

For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Portfolio and provides the Portfolio's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Portfolio is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.35% of the Portfolio's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.30% of the 0.35% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action appropriate. For the six months ended June 30, 2014, this waiver amounted to approximately $31,000.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Federal Income Taxes: It is the Portfolio's intention to continue 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 based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, Income Taxes – Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax

19

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended At December 31, 2013, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2013 and 2012 was as follows:

2013 Distributions Paid From:				2012 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	15,086	$	4,190	$	9,727	$	—

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions and distribution redesignation, resulted in the following reclassifications among the components of net assets at December 31, 2013:

Accumulated Undistributed Net Investment Income			Accumulated Net Realized Loss (000)		Paid-in- Capital (000)
$	(956	)	$	956	$	—

At December 31, 2013, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	15,626	$	2,151

At June 30, 2014, the aggregate cost for Federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $15,667,000 and the aggregate gross unrealized depreciation

is approximately $1,802,000 resulting in net unrealized appreciation of approximately $13,865,000.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $165,277,000 and $172,285,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds – Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly, and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of advisory and administration fees paid by the Portfolio due to its investments in the Liquidity Funds. For the six months ended June 30, 2014, advisory fees paid were reduced by approximately $5,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Dividend Income (000)		Value June 30, 2014 (000)
$	45,666	$	109,909	$	121,212	$	2	$	34,363

I. Other: At June 30, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 79% and 73%, for Class I and Class II, respectively.

20

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

Michael E. Nugent
Chairperson of the Board and Director

John H. Gernon
President and Principal Executive Officer

Stefanie V. Chang Yu
Chief Compliance Officer

Joseph C. Benedetti
Vice President

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semi-annual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing the Public Reference Room of the SEC, Washington, DC 20549-0102.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Fund's Proxy Voting Policy and Procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Portfolio. For more detailed information about the Portfolio, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Portfolio, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Portfolio unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFEMDSAN
975304 EXP 08.31.15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Emerging Markets Equity Portfolio

The Portfolio is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Table of Contents

Expense Example		2
Investment Advisory Agreement Approval		3
Portfolio of Investments		5
Statement of Assets and Liabilities		8
Statement of Operations		9
Statements of Changes in Net Assets		10
Financial Highlights		11
Notes to Financial Statements		13
Director and Officer Information	Back Cover

1

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Expense Example (unaudited)

Emerging Markets Equity Portfolio

As a shareholder of the Emerging Markets Equity Portfolio (the "Portfolio"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, including advisory fees, administration fees, distribution (12b-1) fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2014 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/14		Actual Ending Account Value 6/30/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Equity Portfolio Class I	$	1,000.00	$	1,055.80	$	1,017.75	$	7.24	$	7.10		1.42	%
Emerging Markets Equity Portfolio Class II		1,000.00		1,055.30		1,017.50		7.49		7.35		1.47

*  Expenses are calculated using each Portfolio Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Advisers (as defined herein), to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Portfolio's Adviser under the administration agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Adviser's expense. (The Adviser and Sub-Advisers together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the administrative and advisory services to the Portfolio. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Portfolio and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Portfolio

The Board reviewed the performance, fees and expenses of the Portfolio compared to its peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Portfolio. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2013, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Portfolio's performance was better than its peer group average for the three- and five-year periods but below its peer group average for the one-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Portfolio relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Portfolio's total expense ratio. The Board noted that while the management fee was higher but close to its peer group average, the total expense ratio was lower than its peer group average. After discussion, the Board concluded that the Portfolio's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Portfolio and how that relates to the Portfolio's total expense ratio and particularly the Portfolio's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Portfolio and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of the Portfolio supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Portfolio and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

3

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other benefits to the Adviser and its affiliates derived from their relationship with the Portfolio and other funds advised by the Adviser. These benefits may include, among other things, research received by the Adviser generated from commission dollars spent on funds' portfolio trading, and fees for trading, distribution and/or shareholder servicing. The Board reviewed with the Adviser each of these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Portfolio and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Portfolio and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Portfolio's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Portfolio to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Portfolio's business.

General Conclusion

After considering and weighing all of the above factors, the Board concluded that it would be in the best interest of the Portfolio and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single factor referenced above. The Board considered these factors over the course of numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

4

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments

Emerging Markets Equity Portfolio

	Shares		Value (000)
Common Stocks (96.6%)
Argentina (0.6%)
YPF SA ADR		76,831	$	2,511
Austria (2.6%)
Erste Group Bank AG		133,906		4,331
Raiffeisen Bank International AG		70,713		2,257
Vienna Insurance Group AG Wiener Versicherung Gruppe		73,610		3,940
				10,528
Brazil (7.5%)
Banco Bradesco SA (Preference)		335,698		4,870
BRF SA		309,301		7,475
CCR SA		309,000		2,517
Itau Unibanco Holding SA (Preference)		271,520		3,929
Petroleo Brasileiro SA		304,054		2,235
Petroleo Brasileiro SA (Preference)		406,898		3,184
Petroleo Brasileiro SA ADR		48,037		703
Petroleo Brasileiro SA Sponsored ADR		80,769		1,263
Raia Drogasil SA		181,252		1,496
Ultrapar Participacoes SA		97,771		2,328
				30,000
Chile (0.6%)
SACI Falabella		272,515		2,469
China (12.3%)
Bank of China Ltd. H Shares (a)		17,720,000		7,934
Beijing Enterprises Holdings Ltd. (a)		156,500		1,481
China Construction Bank Corp. H Shares (a)(b)		6,524,230		4,933
China Life Insurance Co., Ltd. H Shares (a)		599,000		1,569
China Mengniu Dairy Co., Ltd. (a)		572,000		2,646
China Mobile Ltd. (a)		440,000		4,269
China Oilfield Services Ltd. H Shares (a)		1,492,000		3,588
China Overseas Land & Investment Ltd. (a)		580,000		1,407
China Pacific Insurance Group Co., Ltd. H Shares (a)		54,000		191
Chongqing Changan Automobile Co., Ltd. B Shares		272,300		538
Huadian Power International Corp. Ltd. (a)		566,000		343
iKang Healthcare Group, Inc. ADR (b)		2,409		42
JD.com, Inc. ADR (b)		17,694		504
Ping An Insurance Group Co. H Shares (a)		275,500		2,133
Qihoo 360 Technology Co., Ltd. ADR (b)		16,668		1,534
Sihuan Pharmaceutical Holdings Group Ltd. (a)		2,392,000		1,463
Sino Biopharmaceutical Ltd. (a)		1,224,000		992
TAL Education Group ADR (b)		20,559		565
Tencent Holdings Ltd. (a)		673,500		10,271
Tsingtao Brewery Co., Ltd. H Shares (a)		214,000		1,673
Uni-President China Holdings Ltd. (a)(c)		1,460,399		1,119
				49,195
Colombia (2.4%)
Banco Davivienda SA (Preference)		58,623		947
Bancolombia SA (Preference)		119,090		1,744
Bancolombia SA ADR		6,019		348

	Shares		Value (000)
Cementos Argos SA		211,040	$	1,329
Cemex Latam Holdings SA (b)		228,950		2,244
Grupo de Inversiones Suramericana SA		69,290		1,472
Grupo de Inversiones Suramericana SA (Preference)		68,500		1,452
				9,536
Czech Republic (0.8%)
Komercni Banka AS		14,098		3,243
Hong Kong (1.2%)
Samsonite International SA		1,455,600		4,799
Hungary (0.7%)
Richter Gedeon Nyrt		138,103		2,650
India (8.5%)
Ashok Leyland Ltd.		1,834,488		1,113
Bharat Petroleum Corp. Ltd.		202,844		2,025
Glenmark Pharmaceuticals Ltd.		244,050		2,313
HDFC Bank Ltd.		232,196		3,247
Hero MotoCorp Ltd.		57,757		2,530
ICICI Bank Ltd.		148,854		3,510
Idea Cellular Ltd.		600,415		1,322
IndusInd Bank Ltd.		299,221		2,875
Infosys Ltd.		36,812		1,993
ITC Ltd.		546,298		2,953
Oil & Natural Gas Corp. Ltd.		473,151		3,342
Shree Cement Ltd.		12,303		1,474
Sun Pharmaceutical Industries Ltd.		51,389		588
Tata Consultancy Services Ltd.		75,735		3,054
Zee Entertainment Enterprises Ltd.		356,495		1,739
				34,078
Indonesia (1.1%)
Indosat Tbk PT		265,100		83
Kalbe Farma Tbk PT		15,090,200		2,113
Matahari Department Store Tbk PT		1,696,000		1,974
XL Axiata Tbk PT		830,200		357
				4,527
Korea, Republic of (15.5%)
BGF retail Co., Ltd. (b)		12,303		762
Cheil Worldwide, Inc. (b)		26,755		603
Cosmax, Inc. (b)		16,745		1,576
Coway Co., Ltd.		40,536		3,393
GS Retail Co., Ltd.		3,097		76
Hana Financial Group, Inc.		75,232		2,788
Hotel Shilla Co., Ltd.		22,565		2,038
Hyundai Department Store Co., Ltd.		4,973		683
Hyundai Engineering & Construction Co., Ltd.		44,592		2,539
Hyundai Glovis Co., Ltd.		8,660		2,307
Hyundai Heavy Industries Co., Ltd.		6,280		1,099
Hyundai Mipo Dockyard		5,363		776
Hyundai Motor Co.		18,582		4,215
Korean Air Lines Co., Ltd. (b)		18,230		602
NAVER Corp.		5,038		4,158
NCSoft Corp.		11,348		2,047

The accompanying notes are an integral part of the financial statements.
5

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Equity Portfolio

	Shares		Value (000)
Korea, Republic of (cont'd)
Nexon Co., Ltd.		182,800	$	1,745
Orion Corp.		1,677		1,536
Paradise Co., Ltd.		19,325		714
Samsung Electronics Co., Ltd.		8,527		11,141
Samsung Electronics Co., Ltd. (Preference)		1,938		2,030
Samsung Life Insurance Co., Ltd.		17,466		1,761
Seoul Semiconductor Co., Ltd. (c)		61,726		2,324
Shinhan Financial Group Co., Ltd.		78,411		3,631
SK Hynix, Inc. (b)		105,313		5,053
SK Telecom Co., Ltd.		9,052		2,116
				61,713
Laos (0.3%)
Kolao Holdings (c)		48,214		1,094
Malaysia (2.3%)
Astro Malaysia Holdings Bhd		2,087,500		2,282
CIMB Group Holdings Bhd		1,360,648		3,102
IHH Healthcare Bhd		1,076,400		1,468
IJM Corp., Bhd		877,100		1,830
SapuraKencana Petroleum Bhd (b)		323,100		441
				9,123
Mexico (6.8%)
Alfa SAB de CV		1,648,356		4,561
America Movil SAB de CV, Class L ADR		234,591		4,868
Cemex SAB de CV ADR (b)		420,301		5,560
First Cash Financial Services, Inc. (b)		12,981		747
Fomento Economico Mexicano SAB de CV ADR		40,648		3,807
Grupo Financiero Banorte SAB de CV Series O		568,796		4,068
Grupo Financiero Inbursa SAB de CV		506,213		1,509
Grupo Financiero Santander Mexico SAB de CV ADR (c)		143,963		1,912
				27,032
Pakistan (0.6%)
United Bank Ltd.		1,471,300		2,520
Panama (0.5%)
Copa Holdings SA, Class A		13,930		1,986
Peru (1.1%)
Credicorp Ltd.		28,340		4,406
Philippines (3.6%)
BDO Unibank, Inc.		1,353,660		2,900
DMCI Holdings, Inc.		906,800		1,537
International Container Terminal Services, Inc.		620,150		1,577
LT Group, Inc.		3,396,100		1,148
Metro Pacific Investments Corp.		22,346,700		2,565
Metropolitan Bank & Trust		840,560		1,683
SM Investments Corp.		154,588		2,890
				14,300
Poland (4.1%)
Bank Pekao SA		70,423		4,031

	Shares		Value (000)
Bank Zachodni WBK SA		30,095	$	3,657
Jeronimo Martins SGPS SA (c)		234,169		3,853
Orange Polska SA		922,510		2,946
PKP Cargo SA		72,550		1,875
				16,362
Qatar (0.4%)
Ooredoo QSC		47,740		1,559
Russia (2.7%)
Mail.ru Group Ltd. GDR (b)		45,103		1,590
NovaTek OAO (Registered GDR)		27,945		3,476
Sistema JSFC GDR (b)		108,547		3,343
Yandex N.V., Class A (b)(c)		60,397		2,153
				10,562
South Africa (5.2%)
Life Healthcare Group Holdings Ltd.		348,880		1,361
Mondi PLC (c)		191,279		3,483
MTN Group Ltd.		222,865		4,694
Naspers Ltd., Class N		50,243		5,915
Pick n Pay Stores Ltd. (c)		335,846		1,839
Vodacom Group Ltd. (c)		265,602		3,283
				20,575
Spain (1.0%)
Telefonica SA		226,172		3,877
Switzerland (1.5%)
Coca-Cola HBC AG (b)		145,052		3,331
Swatch Group AG (The)		4,660		2,814
				6,145
Taiwan (7.9%)
Advanced Semiconductor Engineering, Inc.		916,000		1,192
Chailease Holding Co., Ltd.		948,550		2,386
China Life Insurance Co., Ltd.		529,630		489
Cleanaway Co., Ltd.		107,000		647
Delta Electronics, Inc.		270,000		1,967
Eclat Textile Co., Ltd.		142,620		1,729
Fubon Financial Holding Co., Ltd.		1,367,830		1,977
Ginko International Co., Ltd.		53,000		918
Hermes Microvision, Inc.		31,729		1,259
Largan Precision Co., Ltd.		26,000		2,072
MediaTek, Inc.		267,000		4,516
St. Shine Optical Co., Ltd.		37,000		914
Taiwan Semiconductor Manufacturing Co., Ltd.		2,290,000		9,702
Uni-President Enterprises Corp.		908,338		1,630
				31,398
Thailand (3.9%)
Advanced Info Service PCL (Foreign)		298,900		2,026
Bangkok Bank PCL NVDR		485,000		2,884
DKSH Holding AG		20,137		1,532
Indorama Ventures PCL (Foreign)		1,716,300		1,467
Kasikornbank PCL NVDR		274,400		1,725
Land and Houses PCL (Foreign)		6,122,760		1,858

The accompanying notes are an integral part of the financial statements.
6

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Equity Portfolio

	Shares		Value (000)
Thailand (cont'd)
Land and Houses PCL NVDR		1,155,760	$	351
Minor International PCL (Foreign)		1,280,700		1,154
Robinson Department Store PCL (Foreign)		818,500		1,438
Total Access Communication PCL (Foreign)		344,200		1,193
				15,628
United States (0.9%)
Yum! Brands, Inc. (c)		42,274		3,433
Total Common Stocks (Cost $314,653)				385,249
Investment Company (0.4%)
Thailand (0.4%)
BTS Rail Mass Transit Growth Infrastructure Fund (Foreign) (Units) (d) (Cost $2,117)		5,714,725		1,761
Preferred Stock (0.0%)
India (0.0%)
Zee Entertainment Enterprises Ltd. (Cost $2)		128,447		1
Short-Term Investments (6.1%)
Securities held as Collateral on Loaned Securities (3.5%)
Investment Company (3.0%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H)		11,764,628		11,765
	Face Amount (000)
Repurchase Agreement (0.5%)
Barclays Capital, Inc., (0.07%, dated 6/30/14, due 7/1/14; proceeds $2,186; fully collateralized by a U.S. Government Obligation; 3.63% due 8/15/43; valued at $2,230)	$	2,186		2,186
Total Securities held as Collateral on Loaned Securities (Cost $13,951)				13,951
	Shares
Investment Company (2.6%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H) (Cost $10,550)		10,549,875		10,550
Total Short-Term Investments (Cost $24,501)				24,501
Total Investments (103.1%) (Cost $341,273) Including $13,736 of Securities Loaned (e)				411,512
Liabilities in Excess of Other Assets (-3.1%)				(12,511	)
Net Assets (100.0%)			$	399,001

(a)  Security trades on the Hong Kong exchange.

(b)  Non-income producing security.

(c)  All or a portion of this security was on loan at June 30, 2014.

(d)  Consists of one or more classes of securities traded together as a unit; stocks with attached warrants.

(e)  Securities are available for collateral in connection with an open foreign currency forward exchange contract.

ADR  American Depositary Receipt.

GDR  Global Depositary Receipt.

NVDR  Non-Voting Depositary Receipt.

Foreign Currency Forward Exchange Contracts:

The Portfolio had the following foreign currency forward exchange contracts open at June 30, 2014:

Counterparty	Currency to Deliver (000)		Value (000)		Settlement Date	In Exchange For (000)		Value (000)		Unrealized Depreciation (000)
State Street Bank and Trust Co.	JPY	171,921	$	1,698	7/24/14	USD	1,688	$	1,688		(10	)

JPY  — Japanese Yen

USD  — United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		52.2	%
Banks		21.4
Semiconductors & Semiconductor Equipment		9.4
Wireless Telecommunication Services		6.8
Oil, Gas & Consumable Fuels		5.3
Internet Software & Services		4.9
Total Investments		100.0	%***

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2014.

**  Industries and/or investment types representing less than 5% of total investments.

***  Does not include open foreign currency forward exchange contracts with unrealized depreciation of approximately $10,000.

The accompanying notes are an integral part of the financial statements.
7

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Emerging Markets Equity Portfolio

Statement of Assets and Liabilities	June 30, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $318,958)	$	389,197
Investment in Security of Affiliated Issuer, at Value (Cost $22,315)		22,315
Total Investments in Securities, at Value (Cost $341,273)		411,512
Foreign Currency, at Value (Cost $981)		984
Cash		296
Receivable for Investments Sold		1,973
Receivable for Portfolio Shares Sold		1,570
Dividends Receivable		1,390
Tax Reclaim Receivable		33
Receivable from Affiliate		1
Other Assets		28
Total Assets		417,787
Liabilities:
Collateral on Securities Loaned, at Value		14,247
Payable for Investments Purchased		2,658
Payable for Advisory Fees		897
Deferred Capital Gain Country Tax		517
Payable for Portfolio Shares Redeemed		168
Payable for Custodian Fees		101
Payable for Administration Fees		80
Payable for Professional Fees		30
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		10
Payable for Directors' Fees and Expenses		4
Payable for Distribution Fees — Class II Shares		2
Other Liabilities		72
Total Liabilities		18,786
NET ASSETS	$	399,001
Net Assets Consist of:
Paid-in-Capital	$	351,251
Accumulated Undistributed Net Investment Income		642
Accumulated Net Realized Loss		(22,687	)
Unrealized Appreciation (Depreciation) on:
Investments (Net of $435 of Deferred Capital Gain Country Tax)		69,804
Foreign Currency Forward Exchange Contracts		(10	)
Foreign Currency Translations		1
Net Assets	$	399,001
CLASS I:
Net Assets	$	292,499
Net Asset Value, Offering and Redemption Price Per Share Applicable to 18,858,670 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	15.51
CLASS II:
Net Assets	$	106,502
Net Asset Value, Offering and Redemption Price Per Share Applicable to 6,891,792 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	15.45
(1) Including:
Securities on Loan, at Value:	$	13,736

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Emerging Markets Equity Portfolio

Statement of Operations	Six Months Ended June 30, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $599 of Foreign Taxes Withheld)	$	4,482
Income from Securities Loaned — Net		18
Dividends from Security of Affiliated Issuer (Note H)		2
Total Investment Income		4,502
Expenses:
Advisory Fees (Note B)		2,273
Administration Fees (Note C)		455
Custodian Fees (Note F)		282
Distribution Fees — Class II Shares (Note D)		175
Professional Fees		50
Shareholder Reporting Fees		31
Transfer Agency Fees (Note E)		9
Pricing Fees		7
Directors' Fees and Expenses		5
Other Expenses		10
Total Expenses		3,297
Waiver of Advisory Fees (Note B)		(540	)
Distribution Fees — Class II Shares Waived (Note D)		(150	)
Rebate from Morgan Stanley Affiliate (Note H)		(8	)
Net Expenses		2,599
Net Investment Income		1,903
Realized Gain (Loss):
Investments Sold (Net of $112 of Capital Gain Country Tax)		12,989
Investment in Affiliate		(1,195	)
Foreign Currency Forward Exchange Contracts		(10	)
Foreign Currency Transactions		(107	)
Net Realized Gain		11,677
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $124)		7,741
Investments in Affiliates		(1,254	)
Foreign Currency Forward Exchange Contracts		(50	)
Foreign Currency Translations		8
Net Change in Unrealized Appreciation (Depreciation)		6,445
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		18,122
Net Increase in Net Assets Resulting from Operations	$	20,025

The accompanying notes are an integral part of the financial statements.
9

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Emerging Markets Equity Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2014 (unaudited) (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,903		$	2,223
Net Realized Gain		11,677			11,689
Net Change in Unrealized Appreciation (Depreciation)		6,445			(18,171	)
Net Increase (Decrease) in Net Assets Resulting from Operations		20,025			(4,259	)
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(3,383	)
Class II:
Net Investment Income		—			(1,340	)
Total Distributions		—			(4,723	)
Capital Share Transactions:(1)
Class I:
Subscribed		33,494			29,712
Distributions Reinvested		—			3,383
Redeemed		(26,820	)		(57,648	)
Class II:
Subscribed		13,350			32,435
Distributions Reinvested		—			1,340
Redeemed		(14,148	)		(54,006	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		5,876			(44,784	)
Total Increase (Decrease) in Net Assets		25,901			(53,766	)
Net Assets:
Beginning of Period		373,100			426,866
End of Period (Including Accumulated Undistributed (Distributions in Excess of) Net Investment Income of $642 and $(1,261))	$	399,001		$	373,100
(1) Capital Share Transactions:
Class I:
Shares Subscribed		2,248			2,008
Shares Issued on Distributions Reinvested		—			242
Shares Redeemed		(1,851	)		(3,899	)
Net Increase (Decrease) in Class I Shares Outstanding		397			(1,649	)
Class II:
Shares Subscribed		913			2,226
Shares Issued on Distributions Reinvested		—			96
Shares Redeemed		(974	)		(3,685	)
Net Decrease in Class II Shares Outstanding		(61	)		(1,363	)

The accompanying notes are an integral part of the financial statements.
10

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Emerging Markets Equity Portfolio

	Class I
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	14.69		$	15.03		$	12.53		$	15.38		$	13.01		$	7.66
Income (Loss) from Investment Operations:
Net Investment Income†		0.08			0.08			0.08			0.11			0.04			0.04
Net Realized and Unrealized Gain (Loss)		0.74			(0.24	)		2.42			(2.90	)		2.37			5.31
Total from Investment Operations		0.82			(0.16	)		2.50			(2.79	)		2.41			5.35
Distributions from and/or in Excess of:
Net Investment Income		—			(0.18	)		—			(0.06	)		(0.08	)		—
Regulatory Settlement Proceeds		—			—			—			—			0.04	^^		—
Net Asset Value, End of Period	$	15.51		$	14.69		$	15.03		$	12.53		$	15.38		$	13.01
Total Return ++		5.58	%#		(1.02	)%		19.95	%		(18.22	)%		19.02	%		69.84	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	292,499		$	271,285		$	302,315		$	423,692		$	681,350		$	591,835
Ratio of Expenses to Average Net Assets(1)		1.42	%+††^*		1.41	%+††^		1.44	%+††^		1.56	%+††^		1.59	%+††		1.59	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			1.44	%+††		N/A			N/A			N/A
Ratio of Net Investment Income to Average Net Assets(1)		1.06	%+††*		0.57	%+††		0.56	%+††		0.80	%+††		0.30	%+††		0.41	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%††§*		0.01	%††		0.01	%††		0.01	%††		0.01	%††		0.01	%
Portfolio Turnover Rate		25	%#		48	%		46	%		57	%		63	%		64	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.72	%††*		1.71	%††		1.65	%††		1.60	%††		1.61	%+††		1.61	%+
Net Investment Income to Average Net Assets		0.76	%††*		0.27	%††		0.35	%††		0.76	%††		0.28	%+††		0.39	%+

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

^^  During the year ended December 31, 2010, the Portfolio received a regulatory settlement from an unaffiliated third party, which had an impact of 0.31% on total return. This was a one-time settlement, and as a result, the impact on the NAV and consequently the performance will not likely be repeated in the future. Had this settlement not occurred, the total return for Class I would have been approximately 18.71%.

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

^  Effective March 1, 2012, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.42% for Class I shares. Prior to March 1, 2012, the maximum ratio was 1.55% for Class I shares. Prior to July 1, 2011, the maximum ratio was 1.60% for Class I shares.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
11

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Emerging Markets Equity Portfolio

	Class II
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	14.64		$	14.98		$	12.50		$	15.34		$	12.98		$	7.63
Income (Loss) from Investment Operations:
Net Investment Income†		0.07			0.08			0.07			0.11			0.03			0.03
Net Realized and Unrealized Gain (Loss)		0.74			(0.25	)		2.41			(2.90	)		2.37			5.32
Total from Investment Operations		0.81			(0.17	)		2.48			(2.79	)		2.40			5.35
Distributions from and/or in Excess of:
Net Investment Income		—			(0.17	)		—			(0.05	)		(0.08	)		—
Regulatory Settlement Proceeds		—			—			—			—			0.04	^^		—
Net Asset Value, End of Period	$	15.45		$	14.64		$	14.98		$	12.50		$	15.34		$	12.98
Total Return ++		5.53	%#		(1.10	)%		19.84	%		(18.24	)%		18.94	%		70.12	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	106,502		$	101,815		$	124,551		$	360,059		$	493,497		$	407,865
Ratio of Expenses to Average Net Assets(1)		1.47	%+††^*		1.46	%+††^		1.49	%+††^		1.61	%+††^		1.64	%+††		1.64	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			1.49	%+††		N/A			N/A			N/A
Ratio of Net Investment Income to Average Net Assets(1)		1.01	%+††*		0.52	%+††		0.51	%+††		0.75	%+††		0.25	%+††		0.34	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%††§*		0.01	%††		0.01	%††		0.01	%††		0.01	%††		0.01	%
Portfolio Turnover Rate		25	%#		48	%		46	%		57	%		63	%		64	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.07	%††*		2.06	%††		2.00	%††		1.95	%††		1.96	%+††		1.96	%+
Net Investment Income (Loss) to Average Net Assets		0.41	%††*		(0.08	)%††		(0.00	)%††§		0.41	%††		(0.07	)%+††		0.02	%+

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

^^  During the year ended December 31, 2010, the Portfolio received a regulatory settlement from an unaffiliated third party, which had an impact of 0.31% on the total return. This was a one-time settlement, and as a result, the impact on the NAV and consequently the performance will not likely be repeated in the future. Had this settlement not occurred, the total return for Class II would have been approximately 18.63%.

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

^  Effective March 1, 2012, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.47% for Class-II shares. Prior to March 1, 2012, the maximum ratio was 1.60% for Class-II shares. Prior to July 1, 2011, the maximum ratio was 1.65% for Class II shares.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
12

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements

The Universal Institutional Funds, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Fund is comprised of eleven separate active, diversified and non-diversified portfolios (individually referred to as a "Portfolio", collectively as the "Portfolios"). The Fund applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Emerging Markets Equity Portfolio. The Portfolio's adviser, Morgan Stanley Investment Management Inc. (the "Adviser") and sub-advisers, Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), seek long-term capital appreciation by investing primarily in growth-oriented equity securities of issuers in emerging market countries. The Portfolio offers two classes of shares – Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Fund is intended to be the funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP 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: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) when market quotations are not readily available, including circumstances under which the Adviser or Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established

by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration

13

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the

significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Portfolio's investments as of June 30, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	2,307	$	—	$	—	$	2,307
Airlines		2,588		—		—		2,588
Automobiles		7,283		—		—		7,283
Banks		78,862		6,122		—		84,984
Beverages		9,959		—		—		9,959
Chemicals		—		1,467		—		1,467
Commercial Services & Supplies		647		—		—		647
Construction & Engineering		4,369		—		—		4,369
Construction Materials		10,607		—		—		10,607
Consumer Finance		747		—		—		747
Diversified Consumer Services		565		—		—		565
Diversified Financial Services		9,852		—		—		9,852
Diversified Telecommunication Services		8,739		—		—		8,739
Electronic Equipment, Instruments & Components		4,039		—		—		4,039
Energy Equipment & Services		4,029		—		—		4,029
Food & Staples Retailing		8,026		—		—		8,026
Food Products		14,406		—		—		14,406
Health Care Equipment & Supplies		1,832		—		—		1,832
Health Care Providers & Services		2,871		—		—		2,871
Hotels, Restaurants & Leisure		6,185		1,154		—		7,339
Household Durables		3,393		—		—		3,393
Independent Power Producers & Energy Traders		343		—		—		343
Industrial Conglomerates		10,469		—		—		10,469
Information Technology Services		5,047		—		—		5,047
Insurance		10,083		—		—		10,083
Internet & Catalog Retail		504		—		—		504
Internet Software & Services		19,706		—		—		19,706
Machinery		2,988		—		—		2,988

14

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Media	$	10,539	$	—		$	—	$	10,539
Multi-line Retail		5,126		1,438			—		6,564
Oil, Gas & Consumable Fuels		21,067		—			—		21,067
Paper & Forest Products		3,483		—			—		3,483
Personal Products		1,576		—			—		1,576
Pharmaceuticals		10,119		—			—		10,119
Professional Services		1,532		—			—		1,532
Real Estate Management & Development		1,758		1,858			—		3,616
Road & Rail		1,875		—			—		1,875
Semiconductors & Semiconductor Equipment		37,217		—			—		37,217
Software		3,792		—			—		3,792
Specialty Retail		1,094		—			—		1,094
Textiles, Apparel & Luxury Goods		9,342		—			—		9,342
Tobacco		2,953		—			—		2,953
Transportation Infrastructure		4,094		—			—		4,094
Wireless Telecommunication Services		23,978		3,219			—		27,197
Total Common Stocks		369,991		15,258			—		385,249
Investment Company		—		1,761			—		1,761
Preferred Stock		1		—			—		1
Short-Term Investments
Investment Company		22,315		—			—		22,315
Repurchase Agreement		—		2,186			—		2,186
Total Short-Term Investments		22,315		2,186			—		24,501
Total Assets		392,307		19,205			—		411,512
Liabilities:
Foreign Currency Forward Exchange Contracts		—		(10	)		—		(10	)
Total	$	392,307	$	19,195		$	—	$	411,502

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of June 30, 2014, securities with a total value of approximately $4,733,000 transferred from Level 1 to Level 2. Securities that were valued using unadjusted quoted prices at December 31, 2013 were valued using other significant observable inputs at June 30, 2014.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate 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 Portfolio are presented at the foreign exchange rates and market values at the close of the period, the Portfolio 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 securities held at period end. Similarly, the Portfolio 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) on investments in securities 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 forward exchange contracts, disposition of foreign currencies, currency gains (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 Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) on the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in 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, fluctuations of exchange

15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Portfolio may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Portfolio to liquidate portfolio positions when it may not be advantageous to do so to

satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Portfolio to be more volatile than if the Portfolio had not been leveraged. Although the Adviser and/or Sub-Advisers seek to use derivatives to further the Portfolio's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Portfolio also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. In addition, the Portfolio may use cross currency hedging or proxy hedging with respect to currencies in which the Portfolio has or expects to have portfolio or currency exposure. Cross currency hedges involve the sale of one currency against the positive exposure to a different currency and may be used for hedging purposes or to establish an active exposure to the exchange rate between any two currencies. To the extent hedged by the use of currency contracts, the precise matching of the currency 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. Furthermore, 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. There is additional risk to the extent that currency contracts create exposure to currencies in which the Portfolio's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Portfolio than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the

16

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Portfolio as unrealized gain or loss. The Portfolio records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

FASB ASC 815, "Derivatives and Hedging: Overall" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Portfolio uses derivative instruments, how these derivative instruments are accounted for and their effects on the Portfolio's financial position and results of operations.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of June 30, 2014.

	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Depreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	(10	)

The following tables set forth by primary risk exposure the Portfolio's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2014 in accordance with ASC 815.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk Foreign Currency	Forward Exchange Contracts	$	(10	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk Foreign Currency	Forward Exchange Contracts	$	(50	)

At June 30, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(a) (000)		Liabilities(a) (000)
Foreign Currency Forward Exchange Contracts	$	—	$	(10	)

(a)  Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Portfolio typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Portfolio typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potentially deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability, may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Pledged (000)		Net Amount (not less than $0) (000)
State Street Bank and Trust Co.	$	(10	)	$	—	$	—	$	(10	)

17

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

For the six months ended June 30, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	1,916,000

5.  Securities Lending: The Portfolio lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Portfolio. The Portfolio would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily, by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned – Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	13,736	(b)	$	—	$	(13,736	)(c)(d)	$	0

(b)  Represents market value of loaned securities at period end.

(c)  The Portfolio received cash collateral of approximately $14,247,000, of which approximately $13,951,000 was subsequently invested in a Repurchase Agreement and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2014 there was uninvested cash of approximately $296,000, which is not reflected in the Portfolio of Investments.

(d)  The actual collateral received is greater than the amount shown here due to overcollateralization.

6.  Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. 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 or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Portfolio holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Portfolio to further risk of loss in the event of a failure to complete the transaction by the counterparty.

8.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the average daily net assets as follows:

First $500 million			Next $500 million			Next $1.5 billion			Over $2.5 billion
	1.25	%		1.20	%		1.15	%		1.00	%

18

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

For the six months ended June 30, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.95% of the Portfolio's daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.42% for Class I shares and 1.47% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2014, approximately $540,000 of advisory fees were waived pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Advisers, each a wholly-owned subsidiary of Morgan Stanley. The Sub-Advisers provide the Portfolio with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Adviser receives from the Portfolio.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.25% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Portfolio and provides the Portfolio's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Portfolio is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.35% of the Portfolio's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.30% of the 0.35% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action appropriate. For the six months ended June 30, 2014, this waiver amounted to approximately $150,000.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Federal Income Taxes: It is the Portfolio's intention to continue 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 based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, Income Taxes – Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2013, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2013 and 2012 was as follows:

2013 Distributions Paid From:				2012 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	4,723	$	—	$	—	$	—

19

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions and on certain equity securities designated as issued by passive foreign investment companies and foreign capital gain tax, resulted in the following reclassifications among the components of net assets at December 31, 2013:

Distributions in Excess of Net Investment Income (000)		Accumulated Net Realized (Loss) (000)			Paid-in- Capital (000)
$	827	$	(827	)	$	—

At December 31, 2013, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	1,403	$	—

At June 30, 2014, the aggregate cost for Federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $83,986,000 and the aggregate gross unrealized depreciation is approximately $13,747,000 resulting in net unrealized appreciation of approximately $70,239,000.

At December 31, 2013, the Portfolio had available for Federal income tax purposes unused capital losses, which will expire on the indicated dates:

Amount (000)		Expiration
$	31,512	December 31, 2017

To the extent that capital loss carryforwards are used to offset any future capital gains realized during the carryover period as provided by U.S. Federal income tax regulations, no capital gains tax liability will be incurred by the Portfolio for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders. During the year ended December 31, 2013, the Portfolio utilized capital loss carryforwards for U.S. Federal income tax purposes of approximately $9,617,000.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $91,803,000 and $92,110,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2014.

The Portfolio invests in Morgan Stanley Growth Fund, an open-end management investment company advised by an affiliate of the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Morgan Stanley Growth Fund. For the six months ended June 30, 2014, advisory fees paid were reduced by approximately $3,000 relating to the Portfolio's investment in the Morgan Stanley Growth Fund.

A summary of the Portfolio's transactions in shares of the Morgan Stanley Growth Fund during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Realized Loss (000)			Dividend Income (000)		Value June 30, 2014 (000)
$	1,493	$	—	$	1,434	$	(1,195	)	$	—	$	—

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly, and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of advisory and administration fees paid by the Portfolio due to its investments in the Liquidity Funds. For the six months ended June 30, 2014, advisory fees paid were reduced by approximately $5,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Dividend Income (000)		Value June 30, 2014 (000)
$	7,640	$	55,235	$	40,560	$	2	$	22,315

During the six months ended June 30, 2014, the Portfolio incurred approximately $9,000 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser, Sub-Advisers, Administrator and Distributor, for portfolio transactions executed on behalf of the Portfolio.

20

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

I. Other: At June 30, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 52% and 72%, for Class I and Class II, respectively.

21

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Officers

Michael E. Nugent
Chairperson of the Board and Director

John H. Gernon
President and Principal Executive Officer

Stefanie V. Chang Yu
Chief Compliance Officer

Joseph C. Benedetti
Vice President

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semi-annual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing the Public Reference Room of the SEC, Washington, DC 20549-0102.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Fund's Proxy Voting Policy and Procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Portfolio. For more detailed information about the Portfolio, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Portfolio, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Portfolio unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFEMESAN
975297 EXP 08.31.15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Global Franchise Portfolio

The Portfolio is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Table of Contents

Expense Example		2
Investment Advisory Agreement Approval		3
Portfolio of Investments		5
Statement of Assets and Liabilities		6
Statement of Operations		7
Statements of Changes in Net Assets		8
Financial Highlights		9
Notes to Financial Statements		10
Director and Officer Information	Back Cover

1

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Expense Example (unaudited)

Global Franchise Portfolio

As a shareholder of the Global Franchise Portfolio (the "Portfolio"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, including advisory fees, administration fees, distribution (12b-1) fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2014 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/14		Actual Ending Account Value 6/30/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Franchise Portfolio Class II	$	1,000.00	$	1,053.50	$	1,018.84	$	6.11	$	6.01		1.20	%

*  Expenses are calculated using the Portfolio Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Advisers (as defined herein), to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Portfolio's Adviser under the administration agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Adviser's expense. (The Adviser and Sub-Advisers together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the administrative and advisory services to the Portfolio. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Portfolio and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Portfolio

The Board reviewed the performance, fees and expenses of the Portfolio compared to its peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Portfolio. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2013, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Portfolio's performance was better than its peer group average for the three-year period but below its peer group average for the one- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Portfolio relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Portfolio's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that while the management fee was higher than its peer group average, the total expense ratio was lower than its peer group average. After discussion, the Board concluded that the Portfolio's (i) performance was competitive with its peer group average, (ii) management fee was acceptable, and (iii) total expense ratio was competitive with its peer group average.

Economies of Scale

The Board considered the size and growth prospects of the Portfolio and how that relates to the Portfolio's total expense ratio and particularly the Portfolio's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Portfolio and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of the Portfolio supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Portfolio and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser

3

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited) (cont'd)

and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other benefits to the Adviser and its affiliates derived from their relationship with the Portfolio and other funds advised by the Adviser. These benefits may include, among other things, research received by the Adviser generated from commission dollars spent on funds' portfolio trading, and fees for trading, distribution and/or shareholder servicing. The Board reviewed with the Adviser each of these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Portfolio and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Portfolio and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Portfolio's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Portfolio to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Portfolio's business.

General Conclusion

After considering and weighing all of the above factors, the Board concluded that it would be in the best interest of the Portfolio and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single factor referenced above. The Board considered these factors over the course of numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

4

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments

Global Franchise Portfolio

	Shares		Value (000)
Common Stocks (97.6%)
France (11.6%)
LVMH Moet Hennessy Louis Vuitton SA		7,854	$	1,514
Pernod Ricard SA		13,237		1,590
Publicis Groupe SA		7,268		616
Sanofi		31,553		3,352
				7,072
Germany (4.2%)
SAP AG		32,837		2,536
Italy (1.1%)
Davide Campari-Milano SpA		76,415		661
Japan (0.6%)
Japan Tobacco, Inc.		10,900		398
Sweden (0.5%)
Swedish Match AB		8,725		303
Switzerland (9.2%)
Nestle SA (Registered)		72,219		5,595
United Kingdom (32.7%)
British American Tobacco PLC		99,311		5,911
Diageo PLC		88,904		2,839
Experian PLC		56,586		957
Imperial Tobacco Group PLC		22,518		1,013
Reckitt Benckiser Group PLC		48,850		4,264
Unilever PLC		108,615		4,928
				19,912
United States (37.7%)
3M Co.		13,016		1,864
Accenture PLC, Class A		34,327		2,775
Intuit, Inc.		7,696		620
Kraft Foods Group, Inc.		7,115		427
Mead Johnson Nutrition Co.		3,354		312
Microsoft Corp.		63,160		2,634
Mondelez International, Inc., Class A		66,986		2,519
Moody's Corp.		12,817		1,124
NIKE, Inc., Class B		12,502		970
Philip Morris International, Inc.		32,622		2,750
Procter & Gamble Co. (The)		34,920		2,744
Time Warner, Inc.		31,743		2,230
Visa, Inc., Class A		9,582		2,019
				22,988
Total Common Stocks (Cost $37,822)				59,465
Short-Term Investment (2.2%)
Investment Company (2.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note H) (Cost $1,333)		1,333,107		1,333
Total Investments (99.8%) (Cost $39,155)				60,798
Other Assets in Excess of Liabilities (0.2%)				146
Net Assets (100.0%)			$	60,944

Portfolio Composition

Classification	Percentage of Total Investments
Food Products		22.7	%
Other*		17.4
Tobacco		17.1
Household Products		11.5
Software		9.5
Beverages		8.4
Information Technology Services		7.9
Pharmaceuticals		5.5
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
5

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Global Franchise Portfolio

Statement of Assets and Liabilities	June 30, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $37,822)	$	59,465
Investment in Security of Affiliated Issuer, at Value (Cost $1,333)		1,333
Total Investments in Securities, at Value (Cost $39,155)		60,798
Foreign Currency, at Value (Cost $1)		1
Receivable for Portfolio Shares Sold		259
Receivable for Investments Sold		122
Tax Reclaim Receivable		116
Dividends Receivable		57
Receivable from Affiliate		—	@
Other Assets		8
Total Assets		61,361
Liabilities:
Payable for Investments Purchased		242
Payable for Advisory Fees		100
Payable for Professional Fees		28
Payable for Portfolio Shares Redeemed		21
Payable for Administration Fees		13
Payable for Custodian Fees		3
Payable for Distribution Fees — Class II Shares		3
Other Liabilities		7
Total Liabilities		417
NET ASSETS	$	60,944
Net Assets Consist of:
Paid-in-Capital	$	23,676
Accumulated Undistributed Net Investment Income		1,927
Accumulated Net Realized Gain		13,695
Unrealized Appreciation (Depreciation) on:
Investments		21,643
Foreign Currency Translations		3
Net Assets	$	60,944
CLASS II:
Net Asset Value, Offering and Redemption Price Per Share Applicable to 3,158,819 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	19.29

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
6

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Global Franchise Portfolio

Statement of Operations	Six Months Ended June 30, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $62 of Foreign Taxes Withheld)	$	1,076
Dividends from Security of Affiliated Issuer (Note H)		—	@
Total Investment Income		1,076
Expenses:
Advisory Fees (Note B)		248
Distribution Fees — Class II Shares (Note D)		109
Administration Fees (Note C)		78
Professional Fees		36
Custodian Fees (Note F)		22
Shareholder Reporting Fees		9
Pricing Fees		3
Transfer Agency Fees (Note E)		3
Directors' Fees and Expenses		1
Other Expenses		6
Total Expenses		515
Distribution Fees — Class II Shares Waived (Note D)		(93	)
Waiver of Advisory Fees (Note B)		(48	)
Rebate from Morgan Stanley Affiliate (Note H)		(1	)
Net Expenses		373
Net Investment Income		703
Realized Gain:
Investments Sold		5,091
Foreign Currency Transactions		1
Net Realized Gain		5,092
Change in Unrealized Appreciation (Depreciation):
Investments		(2,649	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		2,443
Net Increase in Net Assets Resulting from Operations	$	3,146

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Global Franchise Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2014 (unaudited) (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	703		$	1,199
Net Realized Gain		5,092			8,722
Net Change in Unrealized Appreciation (Depreciation)		(2,649	)		3,171
Net Increase in Net Assets Resulting from Operations		3,146			13,092
Distributions from and/or in Excess of:
Class II:
Net Investment Income		—			(1,880	)
Net Realized Gain		—			(6,126	)
Total Distributions		—			(8,006	)
Capital Share Transactions:(1)
Class II:
Subscribed		619			997
Distributions Reinvested		—			8,006
Redeemed		(10,030	)		(21,070	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(9,411	)		(12,067	)
Total Decrease in Net Assets		(6,265	)		(6,981	)
Net Assets:
Beginning of Period		67,209			74,190
End of Period (Including Accumulated Undistributed Net Investment Income of $1,927 and $1,224)	$	60,944		$	67,209
(1) Capital Share Transactions:
Class II:
Shares Subscribed		33			56
Shares Issued on Distributions Reinvested		—			481
Shares Redeemed		(544	)		(1,166	)
Net Decrease in Class II Shares Outstanding		(511	)		(629	)

The accompanying notes are an integral part of the financial statements.
8

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Global Franchise Portfolio

	Class II
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	18.31		$	17.26		$	15.78		$	14.93		$	13.17		$	11.81
Income from Investment Operations:
Net Investment Income†		0.21			0.25			0.38			0.30			0.26			0.19
Net Realized and Unrealized Gain		0.77			2.93			2.04			1.08			1.58			2.87
Total from Investment Operations		0.98			3.18			2.42			1.38			1.84			3.06
Distributions from and/or in Excess of:
Net Investment Income		—			(0.50	)		(0.38	)		(0.53	)		(0.08	)		(1.03	)
Net Realized Gain		—			(1.63	)		(0.56	)		—			—			(0.67	)
Total Distributions		—			(2.13	)		(0.94	)		(0.53	)		(0.08	)		(1.70	)
Net Asset Value, End of Period	$	19.29		$	18.31		$	17.26		$	15.78		$	14.93		$	13.17
Total Return ++		5.35	%#		19.66	%		15.59	%		9.05	%		14.05	%		29.56	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	60,944		$	67,209		$	74,190		$	83,564		$	99,791		$	109,933
Ratio of Expenses to Average Net Assets(1)		1.20	%+*		1.20	%+		1.20	%+		1.20	%+		1.20	%+		1.18	%+
Ratio of Net Investment Income to Average Net Assets(1)		2.27	%+*		1.66	%+		2.27	%+		1.91	%+		1.92	%+		1.65	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§*		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		11	%#		17	%		21	%		19	%		35	%		18	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.65	%*		1.63	%		1.57	%		1.54	%		1.50	%+		1.48	%+
Net Investment Income to Average Net Assets		1.82	%*		1.23	%		1.90	%		1.57	%		1.62	%+		1.35	%+

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
9

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements

The Universal Institutional Funds, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Fund is comprised of eleven separate active, diversified and non-diversified portfolios (individually referred to as a "Portfolio", collectively as the "Portfolios"). The Fund applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Franchise Portfolio. The Portfolio's adviser, Morgan Stanley Investment Management Inc. (the "Adviser") and sub-advisers, Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), seek long-term capital appreciation by investing primarily in equity securities of issuers located throughout the world that they believe have, among other things, resilient business franchises and growth potential. The Portfolio currently offers Class II shares only; although Class I shares may be offered in the future.

The Fund is intended to be the funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Effective as of close of business on November 29, 2013, the Portfolio suspended the offering of its shares to new investors and will continue to offer its shares to existing shareholders. The Fund may recommence offering Class II shares of the Portfolio to new investors in the future. Any such offerings of the Portfolio's Class II shares may be limited in amount and may commence and terminate without any prior notice.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP 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: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the

primary market; (3) when market quotations are not readily available, including circumstances under which the Adviser or Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based

10

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for

exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Portfolio's investments as of June 30, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Beverages	$	5,090	$	—	$	—	$	5,090
Diversified Financial Services		1,124		—		—		1,124
Food Products		13,781		—		—		13,781
Household Products		7,008		—		—		7,008
Industrial Conglomerates		1,864		—		—		1,864
Information Technology Services		4,794		—		—		4,794
Media		2,846		—		—		2,846
Pharmaceuticals		3,352		—		—		3,352
Professional Services		957		—		—		957
Software		5,790		—		—		5,790
Textiles, Apparel & Luxury Goods		2,484		—		—		2,484
Tobacco		10,375		—		—		10,375
Total Common Stocks		59,465		—		—		59,465
Short-Term Investment Investment Company		1,333		—		—		1,333
Total Assets	$	60,798	$	—	$	—	$	60,798

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of June 30, 2014, the Portfolio did not have any investments transfer between investment levels.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

11

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Portfolio are presented at the foreign exchange rates and market values at the close of the period, the Portfolio 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 securities held at period end. Similarly, the Portfolio 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) on investments in securities 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 forward exchange contracts, disposition of foreign currencies, currency gains (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 Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) on the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in 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, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain

circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

4.  Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

5.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. 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 or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Portfolio holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Portfolio to further risk of loss in the event of a failure to complete the transaction by the counterparty.

6.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually.

12

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Net realized capital gains, if any, are distributed at least annually.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the average daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.80	%		0.75	%		0.70	%

For the six months ended June 30, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.64% of the Portfolio's daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that the total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest, and other extraordinary expenses (including litigation), will not exceed 1.20% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2014, approximately $48,000 of advisory fees were waived pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Advisers, each a wholly-owned subsidiary of Morgan Stanley. The Sub-Advisers provide the Portfolio with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Adviser receives from the Portfolio.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.25% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Portfolio and provides the Portfolio's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance

with Rule 12b-1 under the Act. Under the Plan, the Portfolio is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.35% of the Portfolio's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.30% of the 0.35% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action appropriate. For the six months ended June 30, 2014, this waiver amounted to approximately $93,000.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Federal Income Taxes: It is the Portfolio's intention to continue 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 based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, Income Taxes – Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of

13

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

the tax years in the four-year period ended December 31, 2013, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2013 and 2012 was as follows:

2013 Distributions Paid From:				2012 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	1,880	$	6,126	$	1,784	$	2,590

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, resulted in the following reclassifications among the components of net assets at December 31, 2013:

Undistributed (Distributions in Excess of) Net Investment Income (Loss) (000)		Accumulated Undistributed Net Realized Gain (Loss) (000)			Paid-in- Capital (000)
$	28	$	(28	)	$	—

At December 31, 2013, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	1,365	$	8,542

At June 30, 2014, the aggregate cost for Federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $21,643,000 and the aggregate gross unrealized depreciation is $0 resulting in net unrealized appreciation of approximately $21,643,000.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $7,061,000 and $16,164,000, respectively. There were no purchases and sales

of long-term U.S. Government securities for the six months ended June 30, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds – Treasury Securities Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of advisory and administration fees paid by the Portfolio due to its investments in the Liquidity Funds. For the six months ended June 30, 2014, advisory fees paid were reduced by approximately $1,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Dividend Income (000)			Value June 30, 2014 (000)
$	727	$	7,247	$	6,641	$	—	@	$	1,333

@  Amount is less than $500.

During the six months ended June 30, 2014, the Portfolio incurred less than $500 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser, Sub-Advisers, Administrator and Distributor, for portfolio transactions executed on behalf of the Portfolio.

I. Other: At June 30, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 89% for Class II shares.

14

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Officers

Michael E. Nugent
Chairperson of the Board and Director

John H. Gernon
President and Principal Executive Officer

Stefanie V. Chang Yu
Chief Compliance Officer

Joseph C. Benedetti
Vice President

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semi-annual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing the Public Reference Room of the SEC, Washington, DC 20549-0102.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Fund's Proxy Voting Policy and Procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Portfolio. For more detailed information about the Portfolio, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Portfolio, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Portfolio unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFGFSAN
975288 EXP 08.31.15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Global Real Estate Portfolio

The Portfolio is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Table of Contents

Expense Example		2
Investment Advisory Agreement Approval		3
Portfolio of Investments		5
Statement of Assets and Liabilities		8
Statement of Operations		9
Statements of Changes in Net Assets		10
Financial Highlights		11
Notes to Financial Statements		12
Director and Officer Information	Back Cover

1

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Expense Example (unaudited)

Global Real Estate Portfolio

As a shareholder of the Global Real Estate Portfolio (the "Portfolio"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, including advisory fees, administration fees, distribution (12b-1) fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2014 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/14		Actual Ending Account Value 6/30/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Real Estate Portfolio Class II	$	1,000.00	$	1,112.30	$	1,017.85	$	7.33	$	7.00		1.40	%

*  Expenses are calculated using the Portfolio Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Advisers (as defined herein), to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Portfolio's Adviser under the administration agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Adviser's expense. (The Adviser and Sub-Advisers together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the administrative and advisory services to the Portfolio. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Portfolio and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Portfolio

The Board reviewed the performance, fees and expenses of the Portfolio compared to its peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Portfolio. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2013, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Portfolio's performance was below its peer group average for the one- and three-year periods but better than its peer group average for the five-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Portfolio relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Portfolio's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Portfolio's management fee was higher but close to its peer group average and the total expense ratio was higher than its peer group average. After discussion, the Board concluded that the Portfolio's (i) performance was acceptable, (ii) management fee was competitive with its peer group average, and (iii) total expense ratio was acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Portfolio and how that relates to the Portfolio's total expense ratio and particularly the Portfolio's management fee rate, which does not include breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Portfolio and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of the Portfolio supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Portfolio and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser

3

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited) (cont'd)

and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other benefits to the Adviser and its affiliates derived from their relationship with the Portfolio and other funds advised by the Adviser. These benefits may include, among other things, research received by the Adviser generated from commission dollars spent on funds' portfolio trading, and fees for trading, distribution and/or shareholder servicing. The Board reviewed with the Adviser each of these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Portfolio and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Portfolio and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Portfolio's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Portfolio to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Portfolio's business.

General Conclusion

After considering and weighing all of the above factors, the Board concluded that it would be in the best interest of the Portfolio and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single factor referenced above. The Board considered these factors over the course of numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

4

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments

Global Real Estate Portfolio

	Shares		Value (000)
Common Stocks (98.4%)
Australia (5.9%)
Dexus Property Group REIT		306,833	$	321
Federation Centres Ltd. REIT		143,703		337
Goodman Group REIT		169,057		805
GPT Group REIT		145,580		527
Mirvac Group REIT		366,133		616
Scentre Group REIT (a)		538,031		1,624
Stockland REIT		180,020		659
Westfield Corp. REIT		202,386		1,365
				6,254
Austria (0.2%)
Atrium European Real Estate Ltd. (a)		28,068		168
BUWOG AG (a)		2,061		40
				208
Belgium (0.1%)
Cofinimmo REIT		861		107
Brazil (0.6%)
BR Malls Participacoes SA		19,678		167
BR Properties SA		39,300		237
Iguatemi Empresa de Shopping Centers SA		28,347		286
				690
Canada (2.4%)
Boardwalk REIT		8,124		497
Brookfield Canada Office Properties REIT		9,258		239
Calloway REIT		4,168		104
Canadian Apartment Properties REIT		1,816		39
Crombie Real Estate Investment Trust REIT		11,590		146
Extendicare, Inc.		18,930		130
First Capital Realty, Inc.		19,242		336
RioCan REIT		39,429		1,009
				2,500
China (0.8%)
China Overseas Grand Oceans Group Ltd. (b)		71,000		44
China Overseas Land & Investment Ltd. (b)		74,000		180
China Resources Land Ltd. (b)		351,000		642
				866
Finland (0.3%)
Citycon Oyj		15,532		57
Sponda Oyj		43,284		231
				288
France (3.1%)
Altarea REIT		230		44
Fonciere Des Regions REIT		2,610		283
Gecina SA REIT		1,339		195
ICADE REIT		2,718		291
Klepierre REIT		6,270		320
Mercialys SA REIT		3,086		72
Unibail-Rodamco SE REIT		7,239		2,106
				3,311

	Shares		Value (000)
Germany (1.6%)
Alstria Office AG REIT (a)		6,974	$	92
Deutsche Annington Immobilien SE		9,114		268
Deutsche Euroshop AG		4,564		226
Deutsche Wohnen AG		17,273		373
GAGFAH SA (a)		3,980		72
LEG Immobilien AG (a)		7,574		510
Prime Office AG REIT (a)		23,969		112
				1,653
Hong Kong (11.2%)
Champion REIT		27,000		12
Hang Lung Properties Ltd.		96,000		296
Henderson Land Development Co., Ltd.		65,254		382
Hongkong Land Holdings Ltd.		261,500		1,744
Hysan Development Co., Ltd.		213,921		1,002
Kerry Properties Ltd.		65,699		230
Link REIT (The)		216,164		1,163
New World Development Co., Ltd.		699,137		796
Sino Land Co., Ltd.		121,085		199
Sun Hung Kai Properties Ltd.		293,910		4,031
Swire Properties Ltd.		217,500		636
Wharf Holdings Ltd.		191,816		1,381
				11,872
Italy (0.1%)
Beni Stabili SpA REIT		168,818		155
Japan (14.6%)
Activia Properties, Inc. REIT		35		308
Advance Residence Investment Corp. REIT		25		63
Daiwa House Investment Corp. REIT		13		57
GLP J REIT		91		102
Hulic Co., Ltd.		36,000		474
Industrial & Infrastructure Fund Investment Corp. REIT		7		63
Japan Real Estate Investment Corp. REIT		149		868
Japan Retail Fund Investment Corp. REIT		177		398
Kenedix Office Investment Corp. REIT		5		27
Mitsubishi Estate Co., Ltd.		157,000		3,876
Mitsui Fudosan Co., Ltd.		123,000		4,148
Nippon Building Fund, Inc. REIT		177		1,034
Nippon Prologis, Inc. REIT		108		252
Nomura Real Estate Holdings, Inc.		4,900		93
NTT Urban Development Corp.		6,100		69
Orix, Inc. J-REIT		188		263
Sumitomo Realty & Development Co., Ltd.		62,000		2,660
Tokyo Tatemono Co., Ltd.		48,000		444
United Urban Investment Corp. REIT		172		278
				15,477
Malta (0.0%)
BGP Holdings PLC (a)(c)(d)		5,886,464		—
Netherlands (0.8%)
Corio N.V. REIT		6,071		310
Eurocommercial Properties N.V. CVA REIT		5,514		272

The accompanying notes are an integral part of the financial statements.
5

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Real Estate Portfolio

	Shares		Value (000)
Netherlands (cont'd)
Vastned Retail N.V. REIT		886	$	45
Wereldhave N.V. REIT		2,059		192
				819
Norway (0.2%)
Norwegian Property ASA (a)		137,376		169
Singapore (2.5%)
Ascendas Real Estate Investment Trust REIT		87,000		161
CapitaCommercial Trust REIT		55,000		75
CapitaLand Ltd.		305,000		783
CapitaMall Trust REIT		170,000		269
City Developments Ltd.		31,000		254
Global Logistic Properties Ltd.		224,000		485
Keppel REIT Management Ltd		40,000		41
SPH REIT		200,000		164
UOL Group Ltd.		75,315		394
				2,626
Spain (0.1%)
Hispania Activos Inmobiliarios SAU (a)		5,800		80
Sweden (0.7%)
Atrium Ljungberg AB, Class B		11,279		184
Castellum AB		5,602		99
Fabege AB		5,044		72
Hufvudstaden AB, Class A		28,225		396
				751
Switzerland (0.8%)
Mobimo Holding AG (Registered) (a)		170		36
PSP Swiss Property AG (Registered) (a)		6,429		605
Swiss Prime Site AG (Registered) (a)		2,493		207
				848
United Kingdom (6.7%)
British Land Co., PLC REIT		111,975		1,346
Capital & Counties Properties PLC		36,347		203
Capital & Regional PLC		188,538		148
Derwent London PLC REIT		9,635		442
Grainger PLC		48,881		176
Great Portland Estates PLC REIT		36,843		406
Hammerson PLC REIT		90,546		899
Intu Properties PLC REIT		68,902		367
Land Securities Group PLC REIT		81,198		1,440
LXB Retail Properties PLC (a)		169,987		364
Quintain Estates & Development PLC (a)		144,075		218
Safestore Holdings PLC REIT		72,519		270
Segro PLC REIT		27,710		164
Shaftesbury PLC REIT		17,350		195
ST Modwen Properties PLC		22,663		139
Unite Group PLC		24,094		162
Urban & Civic PLC (a)		27,289		113
				7,052
United States (45.7%)
Acadia Realty Trust REIT		8,911		250
Alexandria Real Estate Equities, Inc. REIT		6,140		477

	Shares		Value (000)
AvalonBay Communities, Inc. REIT		20,073	$	2,854
Boston Properties, Inc. REIT		14,150		1,672
Camden Property Trust REIT		13,639		970
Chesapeake Lodging Trust		5,094		154
Cousins Properties, Inc. REIT		28,523		355
DCT Industrial Trust, Inc. REIT		47,380		389
DDR Corp. REIT		5,520		97
Duke Realty Corp. REIT		51,120		928
Equity Lifestyle Properties, Inc. REIT		15,970		705
Equity Residential REIT		62,099		3,912
Essex Property Trust, Inc. REIT		2,868		530
Federal Realty Investment Trust REIT		2,671		323
Forest City Enterprises, Inc., Class A (a)		29,313		583
General Growth Properties, Inc. REIT		85,725		2,020
HCP, Inc. REIT		16,842		697
Health Care REIT, Inc.		5,390		338
Healthcare Realty Trust, Inc. REIT		23,747		604
Hilton Worldwide Holdings, Inc. (a)		17,631		411
Host Hotels & Resorts, Inc. REIT		184,014		4,050
Hudson Pacific Properties, Inc. REIT		18,750		475
Lexington Realty Trust REIT		3,740		41
Liberty Property Trust REIT		8,000		303
Macerich Co. (The) REIT		22,161		1,479
Mack-Cali Realty Corp. REIT		31,003		666
Mid-America Apartment Communities, Inc. REIT		7,643		558
National Retail Properties, Inc. REIT		23,790		885
ProLogis, Inc. REIT		30,389		1,249
PS Business Parks, Inc. REIT		3,218		269
Public Storage REIT		14,076		2,412
Realty Income Corp. REIT		4,459		198
Regency Centers Corp. REIT		33,809		1,883
Rexford Industrial Realty, Inc. REIT		4,610		66
Senior Housing Properties Trust REIT		50,384		1,224
Simon Property Group, Inc. REIT		36,618		6,089
Sovran Self Storage, Inc. REIT		2,550		197
Starwood Hotels & Resorts Worldwide, Inc.		18,876		1,526
Summit Hotel Properties, Inc. REIT		20,559		218
Sunstone Hotel Investors, Inc. REIT		13,220		197
Tanger Factory Outlet Centers, Inc. REIT		18,850		659
Taubman Centers, Inc. REIT		5,647		428
Ventas, Inc. REIT		20,169		1,293
Vornado Realty Trust REIT		32,074		3,423
Washington Prime Group, Inc. REIT (a)		9,293		174
				48,231
Total Common Stocks (Cost $74,000)				103,957
	No. of Rights
Rights (0.0%)
Finland (0.0%)
Citycon Oyj (a)		4,184		—
United Kingdom (0.0%)
Capital & Regional PLC		151,402		—
Total Rights (Cost $—)				—

The accompanying notes are an integral part of the financial statements.
6

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Real Estate Portfolio

	No. of Warrants		Value (000)
Warrants (0.0%)
Hong Kong (0.0%)
Sun Hung Kai Properties Ltd. (a) (Cost $—)		24,983	$	32
	Shares
Short-Term Investment (1.0%)
Investment Company (1.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note H) (Cost $1,013)		1,012,733		1,013
Total Investments (99.4%) (Cost $75,013)				105,002
Other Assets in Excess of Liabilities (0.6%)				604
Net Assets (100.0%)			$	105,606

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  Security has been deemed illiquid at June 30, 2014.

(d)  At June 30, 2014, the Portfolio held a fair valued security valued at $0, representing 0.0% of net assets. This security has been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

CVA  Certificaten Van Aandelen.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Diversified		32.9	%
Retail		26.3
Other*		13.0
Residential		11.8
Office		9.8
Lodging/Resorts		6.2
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
7

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Global Real Estate Portfolio

Statement of Assets and Liabilities	June 30, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $74,000)	$	103,989
Investment in Security of Affiliated Issuer, at Value (Cost $1,013)		1,013
Total Investments in Securities, at Value (Cost $75,013)		105,002
Foreign Currency, at Value (Cost $488)		492
Dividends Receivable		416
Receivable for Investments Sold		153
Receivable for Portfolio Shares Sold		27
Tax Reclaim Receivable		7
Receivable from Affiliate		—	@
Other Assets		12
Total Assets		106,109
Liabilities:
Payable for Portfolio Shares Redeemed		170
Payable for Advisory Fees		161
Payable for Investments Purchased		80
Payable for Administration Fees		22
Payable for Distribution Fees — Class II Shares		22
Payable for Custodian Fees		15
Payable for Professional Fees		14
Other Liabilities		19
Total Liabilities		503
NET ASSETS	$	105,606
Net Assets Consist of:
Paid-in-Capital	$	182,022
Accumulated Undistributed Net Investment Income		814
Accumulated Net Realized Loss		(107,225	)
Unrealized Appreciation (Depreciation) on:
Investments		29,989
Foreign Currency Translations		6
Net Assets	$	105,606
CLASS II:
Net Asset Value, Offering and Redemption Price Per Share Applicable to 10,154,646 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	10.40

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Global Real Estate Portfolio

Statement of Operations	Six Months Ended June 30, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $110 of Foreign Taxes Withheld)	$	1,936
Dividends from Security of Affiliated Issuer (Note H)		—	@
Total Investment Income		1,936
Expenses:
Advisory Fees (Note B)		421
Distribution Fees — Class II Shares (Note D)		173
Administration Fees (Note C)		124
Custodian Fees (Note F)		61
Professional Fees		42
Shareholder Reporting Fees		11
Pricing Fees		7
Transfer Agency Fees (Note E)		3
Directors' Fees and Expenses		2
Other Expenses		6
Total Expenses		850
Waiver of Advisory Fees (Note B)		(108	)
Distribution Fees — Class II Shares Waived (Note D)		(50	)
Rebate from Morgan Stanley Affiliate (Note H)		(—	@)
Net Expenses		692
Net Investment Income		1,244
Realized Gain (Loss):
Investments Sold		1,314
Foreign Currency Transactions		(6	)
Net Realized Gain		1,308
Change in Unrealized Appreciation (Depreciation):
Investments		8,116
Foreign Currency Translations		6
Net Change in Unrealized Appreciation (Depreciation)		8,122
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		9,430
Net Increase in Net Assets Resulting from Operations	$	10,674

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Global Real Estate Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2014 (unaudited) (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,244		$	1,365
Net Realized Gain		1,308			4,410
Net Change in Unrealized Appreciation (Depreciation)		8,122			(3,191	)
Net Increase in Net Assets Resulting from Operations		10,674			2,584
Distributions from and/or in Excess of:
Class II:
Net Investment Income		—			(3,649	)
Capital Share Transactions:(1)
Class II:
Subscribed		7,097			14,184
Distributions Reinvested		—			3,649
Redeemed		(8,882	)		(16,965	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(1,785	)		868
Total Increase (Decrease) in Net Assets		8,889			(197	)
Net Assets:
Beginning of Period		96,717			96,914
End of Period (Including Accumulated Undistributed (Distributions in Excess of) Net Investment Income of $814 and $(430))	$	105,606		$	96,717
(1) Capital Share Transactions:
Class II:
Shares Subscribed		724			1,475
Shares Issued on Distributions Reinvested		—			393
Shares Redeemed		(908	)		(1,770	)
Net Increase (Decrease) in Class II Shares Outstanding		(184	)		98

The accompanying notes are an integral part of the financial statements.
10

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Global Real Estate Portfolio

	Class II
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	9.35		$	9.46		$	7.32		$	8.40		$	7.72		$	5.46
Income (Loss) from Investment Operations:
Net Investment Income†		0.12			0.13			0.13			0.10			0.16			0.12
Net Realized and Unrealized Gain (Loss)		0.93			0.12			2.06			(0.91	)		1.36			2.14
Total from Investment Operations		1.05			0.25			2.19			(0.81	)		1.52			2.26
Distributions from and/or in Excess of:
Net Investment Income		—			(0.36	)		(0.05	)		(0.27	)		(0.84	)		(0.00	)‡
Net Asset Value, End of Period	$	10.40		$	9.35		$	9.46		$	7.32		$	8.40		$	7.72
Total Return ++		11.23	%#		2.63	%		29.94	%		(10.15	)%		22.32	%		41.42	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	105,606		$	96,717		$	96,914		$	79,317		$	91,324		$	346,514
Ratio of Expenses to Average Net Assets(1)		1.40	%+*		1.40	%+		1.40	%+		1.40	%+		1.40	%+††		1.40	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.40	%+††		N/A
Ratio of Net Investment Income to Average Net Assets(1)		2.51	%+*		1.36	%+		1.56	%+		1.19	%+		1.81	%+††		2.03	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§*		0.00	%§		0.00	%§		0.00	%§		0.00	%††§		0.00	%§
Portfolio Turnover Rate		16	%#		30	%		29	%		24	%		31	%		64	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.72	%*		1.69	%		1.71	%		1.67	%		1.63	%+††		1.56	%+
Net Investment Income to Average Net Assets		2.19	%*		1.07	%		1.24	%		0.92	%		1.58	%+††		1.87	%+

†  Per share amount is based on average shares outstanding.

‡  Amount is less than $0.005 per share.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
11

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements

The Universal Institutional Funds, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Fund is comprised of eleven separate active, diversified and non-diversified portfolios (individually referred to as a "Portfolio", collectively as the "Portfolios"). The Fund applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Real Estate Portfolio. The Portfolio's adviser, Morgan Stanley Investment Management Inc. (the "Adviser") and sub-advisers, Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), seek to provide current income and capital appreciation by investing primarily in equity securities of companies in the real estate industry located throughout the world, including real estate operating companies ("REOCs"), real estate investment trusts ("REITs") and similar entities established outside of the U.S. (foreign real estate companies). The Portfolio currently offers Class II shares only, although Class I shares may be offered in the future.

The Fund is intended to be the funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP 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: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) when market quotations are not readily available, including circumstances under which the Adviser or Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's

market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in

12

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

The Portfolio invests a significant portion of its assets in securities of REITs. The market's perception of prospective declines in private real estate values and other financial assets may result in increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Portfolio.

2.Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer,

analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Portfolio's investments as of June 30, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)			Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Common Stocks
Diversified	$	34,535		$	—	$	—	†	$	34,535	†
Health Care		4,287			—		—			4,287
Industrial		3,735			—		—			3,735
Lodging/Resorts		6,556			—		—			6,556
Mixed Industrial/Office		1,737			—		—			1,737
Office		10,238			—		—			10,238
Residential		12,389			—		—			12,389
Retail		27,600			—		—			27,600
Self Storage		2,880			—		—			2,880
Total Common Stocks		103,957			—		—	†		103,957	†
Rights		—	†		—		—			—	†
Warrants		32			—		—			32
Short-Term Investments
Investment Company		1,013			—		—			1,013
Total Assets	$	105,002	†	$	—	$	—	†	$	105,002	†

†  Includes one or more securities which are valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of June 30, 2014, the Portfolio did not have any investments transfer between investment levels.

13

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stock (000)
Beginning Balance	$	—	††
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Change in unrealized appreciation/depreciation		—
Realized gains (losses)		—
Ending Balance	$	—	††
Net change in unrealized appreciation/ depreciation from investments still held as of June 30, 2014	$	—

††  Includes one security which is valued at zero.

3.Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate 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 Portfolio are presented at the foreign exchange rates and market values at the close of the period, the Portfolio 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 securities held at period end. Similarly, the Portfolio 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) on investments in securities 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 forward exchange contracts, disposition

of foreign currencies, currency gains (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 Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) on the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in 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, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

4.Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

5.Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. Most expenses of the Fund can be directly attributed

14

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

to a particular Portfolio. Expenses which cannot be directly attributed are apportioned among the Portfolios based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Portfolio owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Portfolio holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Portfolio to further risk of loss in the event of a failure to complete the transaction by the counterparty.

6.Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 0.85% of the average daily net assets of the Portfolio.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that the total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest, and other extraordinary expenses (including litigation), will not exceed 1.40% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2014, approximately $108,000 of advisory fees were waived pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Advisers, each a wholly-owned subsidiary of Morgan Stanley. The Sub-Advisers provide the Portfolio with advisory services subject to the overall supervision of the Adviser and

the Fund's Officers and Directors. The Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Adviser receives from the Portfolio.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.25% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Portfolio and provides the Portfolio's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Portfolio is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.35% of the Portfolio's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.10% of the 0.35% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action appropriate. For the six months ended June 30, 2014, this waiver amounted to approximately $50,000.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Federal Income Taxes: It is the Portfolio's intention to continue 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.

15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

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 based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, Income Taxes – Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2013, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2013 and 2012 was as follows:

2013 Distributions Paid From:				2012 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	3,649	$	—	$	486	$	—

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, gains and basis adjustments on certain equity securities designated as issued by passive foreign investment companies and securities sold with return of capital basis adjustment, resulted in

the following reclassifications among the components of net assets at December 31, 2013:

Distributions in Excess of Net Investment Income (000)		Accumulated Net Realized Loss (000)			Paid-in- Capital (000)
$	662	$	(677	)	$	15

At December 31, 2013, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	747	$	—

At June 30, 2014, the aggregate cost for Federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $30,608,000 and the aggregate gross unrealized depreciation is approximately $619,000 resulting in net unrealized appreciation of approximately $29,989,000.

At December 31, 2013, the Portfolio had available for Federal income tax purposes unused capital losses, which will expire on the indicated dates:

Amount (000)		Expiration
$	100,802	December 31, 2017

To the extent that capital loss carryforwards are used to offset any future capital gains realized during the carryover period as provided by U.S. Federal income tax regulations, no capital gains tax liability will be incurred by the Portfolio for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders. During the year ended December 31, 2013, the Portfolio utilized capital loss carryforwards for U.S. Federal income tax purposes of approximately $2,484,000.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $15,729,000 and $17,042,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the six months ended June 30,

16

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

2014, advisory fees paid were reduced by less than $500 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Dividend Income (000)			Value June 30, 2014 (000)
$	439	$	6,561	$	5,987	$	—	@	$	1,013

@  Amount is less than $500.

During the six months ended June 30, 2014, the Portfolio incurred less than $500 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser, Sub-Advisers, Administrator and Distributor, for portfolio transactions executed on behalf of the Portfolio.

I. Other: At June 30, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 83% for Class II shares.

17

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Officers

Michael E. Nugent
Chairperson of the Board and Director

John H. Gernon
President and Principal Executive Officer

Stefanie V. Chang Yu
Chief Compliance Officer

Joseph C. Benedetti
Vice President

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semi-annual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing the Public Reference Room of the SEC, Washington, DC 20549-0102.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Fund's Proxy Voting Policy and Procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Portfolio. For more detailed information about the Portfolio, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Portfolio, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Portfolio unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFGRESAN
975285 EXP 08.31.15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Global Tactical Asset Allocation Portfolio

The Portfolio is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Semi-Annual Report – June 30, 2014

The Universal Institutional Funds, Inc.

Table of Contents

Expense Example		2
Investment Advisory Agreement Approval		3
Portfolio of Investments		5
Statement of Assets and Liabilities		26
Statement of Operations		27
Statements of Changes in Net Assets		28
Financial Highlights		29
Notes to Financial Statements		31
Director and Officer Information	Back Cover

1

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Expense Example (unaudited)

Global Tactical Asset Allocation Portfolio

As a shareholder of the Global Tactical Asset Allocation Portfolio (the "Portfolio"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, including advisory fees, administration fees, distribution (12b-1) fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2014 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/14		Actual Ending Account Value 6/30/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Tactical Asset Allocation Portfolio Class I	$	1,000.00	$	1,047.90	$	1,021.97	$	2.89	$	2.86		0.57	%
Global Tactical Asset Allocation Portfolio Class II		1,000.00		1,047.10		1,021.47		3.40		3.36		0.67

*  Expenses are calculated using each Portfolio Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Portfolio's Adviser under the administration agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Adviser's expense. (The advisory and administration agreements together are referred to as the "Management Agreement.") The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the administrative and advisory services to the Portfolio. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Portfolio and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Portfolio

The Board reviewed the performance, fees and expenses of the Portfolio compared to its peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Portfolio. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2013, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Portfolio's performance was better than its peer group average for the one- and three-year periods but below its peer group average for the five-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Portfolio relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Portfolio's total expense ratio. The Board noted that the Portfolio's management fee and total expense ratio were lower than its peer group average. After discussion, the Board concluded that the Portfolio's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Portfolio and how that relates to the Portfolio's total expense ratio and particularly the Portfolio's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Portfolio and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of the Portfolio supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Portfolio and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

3

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other benefits to the Adviser and its affiliates derived from their relationship with the Portfolio and other funds advised by the Adviser. These benefits may include, among other things, research received by the Adviser generated from commission dollars spent on funds' portfolio trading, and fees for trading, distribution and/or shareholder servicing. The Board reviewed with the Adviser each of these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Portfolio and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Portfolio and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Portfolio's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Portfolio to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Portfolio's business.

General Conclusion

After considering and weighing all of the above factors, the Board concluded that it would be in the best interest of the Portfolio and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single factor referenced above. The Board considered these factors over the course of numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

4

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments

Global Tactical Asset Allocation Portfolio

	Face Amount (000)			Value (000)
Fixed Income Securities (28.4%)
Agency Fixed Rate Mortgages (2.6%)
United States (2.6%)
Federal Home Loan Mortgage Corporation, Gold Pool 6.50%, 5/1/29	$	—	@	$	—	@
July TBA: 4.00%, 7/1/44 (a)		186			197
Federal National Mortgage Association, Conventional Pools: 4.00%, 11/1/41 - 7/1/43		522			555
5.00%, 1/1/41 - 3/1/41		246			276
5.50%, 2/1/38		68			77
6.00%, 1/1/38		66			74
6.50%, 8/1/38		11			12
July TBA: 2.50%, 7/1/29 (a)		373			379
3.00%, 7/1/29 (a)		184			191
3.50%, 7/1/29 - 7/1/44 (a)		666			692
4.00%, 7/1/44 (a)		791			840
4.50%, 7/1/44 (a)		66			71
5.00%, 7/1/44 (a)		892			991
Government National Mortgage Association, July TBA: 3.50%, 7/20/44 (a)		235			244
4.00%, 7/20/44 (a)		218			233
4.50%, 7/20/44 (a)		170			186
Various Pool 4.50%, 8/15/39		54			58
Total Agency Fixed Rate Mortgages (Cost $5,015)					5,076
Asset-Backed Securities (0.4%)
United States (0.4%)
Brazos Student Finance Corp., 1.13%, 6/25/35 (b)		23			24
CVS Pass-Through Trust, 6.04%, 12/10/28		190			219
Louisiana Public Facilities Authority, Zero Coupon, 4/26/27 (b)		160			161
North Carolina State Education Assistance Authority, 1.03%, 7/25/25 (b)		100			101
PFS Financing Corp., 1.65%, 10/17/16 (b)(c)		180			180
Total Asset-Backed Securities (Cost $650)					685
Collateralized Mortgage Obligations — Agency Collateral Series (0.2%)
United States (0.2%)
Federal Home Loan Mortgage Corporation, 2.36%, 7/25/22		99			97
2.40%, 6/25/22		245			242
Total Collateralized Mortgage Obligations — Agency Collateral Series (Cost $351)					339

	Face Amount (000)		Value (000)
Commercial Mortgage-Backed Securities (0.8%)
United States (0.8%)
CGBAM Commercial Mortgage Trust, 1.25%, 5/15/30 (b)(c)	$	114	$	114
COMM Mortgage Trust, 2.85%, 10/15/45		100		99
3.28%, 1/10/46		45		45
4.74%, 7/15/47 (b)(c)		100		92
Commercial Mortgage Pass-Through Certificates, 4.24%, 2/10/47 (b)		77		83
3.96%, 3/10/47		144		152
2.82%, 10/15/45		57		56
Extended Stay America Trust, 2.96%, 12/5/31 (c)		100		102
NLY Commercial Mortgage Trust, 1.35%, 11/15/30 (b)(c)		132		132
UBS-Barclays Commercial Mortgage Trust, 3.53%, 5/10/63		40		41
Wells Fargo Commercial Mortgage Trust, 2.92%, 10/15/45		62		62
3.94%, 8/15/50 (c)		245		215
1.18%, 2/15/27 (b)(c)		199		200
WF-RBS Commercial Mortgage Trust, 3.99%, 5/15/47 (c)		150		133
Total Commercial Mortgage-Backed Securities (Cost $1,513)				1,526
Corporate Bonds (7.0%)
Australia (0.5%)
Australia & New Zealand Banking Group Ltd., 4.88%, 1/12/21 (c)		100		113
5.13%, 9/10/19	EUR	100		160
BHP Billiton Finance USA Ltd., 3.85%, 9/30/23	$	70		74
Commonwealth Bank of Australia, 5.00%, 3/19/20 (c)		50		57
Macquarie Bank Ltd., 6.63%, 4/7/21 (c)		85		98
Macquarie Group Ltd., 6.00%, 1/14/20 (c)		105		119
Origin Energy Finance Ltd., 3.50%, 10/9/18 (c)		200		208
Wesfarmers Ltd., 1.87%, 3/20/18 (c)		25		25
2.98%, 5/18/16 (c)		75		78
				932
Belgium (0.1%)
Anheuser-Busch InBev Finance, Inc., 3.70%, 2/1/24		125		128
Brazil (0.1%)
Petrobras International Finance Co., 5.75%, 1/20/20		50		53
Vale Overseas Ltd., 5.63%, 9/15/19		145		164
				217

The accompanying notes are an integral part of the financial statements.
5

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Face Amount (000)		Value (000)
Canada (0.1%)
Barrick Gold Corp., 4.10%, 5/1/23	$	25	$	25
Brookfield Asset Management, Inc., 5.80%, 4/25/17		35		39
Goldcorp, Inc., 3.70%, 3/15/23		100		99
				163
Chile (0.1%)
ENTEL Chile SA, 4.88%, 10/30/24 (c)		200		209
China (0.2%)
Baidu, Inc., 3.25%, 8/6/18		225		233
Want Want China Finance Ltd., 1.88%, 5/14/18 (c)		200		197
				430
Colombia (0.1%)
Ecopetrol SA, 5.88%, 9/18/23		110		124
France (0.4%)
Banque Federative du Credit Mutuel SA, 2.00%, 9/19/19	EUR	100		142
BNP Paribas SA, 5.00%, 1/15/21	$	85		95
BPCE SA, 5.15%, 7/21/24 (c)		200		212
Credit Agricole SA, 3.90%, 4/19/21	EUR	50		76
5.88%, 6/11/19		50		82
LVMH Moet Hennessy Louis Vuitton SA, 1.63%, 6/29/17 (c)	$	75		76
Veolia Environnement SA, 6.75%, 4/24/19	EUR	50		86
				769
Germany (0.1%)
Volkswagen International Finance N.V., 2.38%, 3/22/17 (c)	$	100		103
Ireland (0.1%)
CRH America, Inc., 6.00%, 9/30/16		130		144
Israel (0.1%)
Teva Pharmaceutical Finance IV BV, 3.65%, 11/10/21		95		98
Italy (0.1%)
Intesa Sanpaolo SpA, 6.50%, 2/24/21 (c)		100		118
Telecom Italia Finance SA, 7.75%, 1/24/33	EUR	30		53
UniCredit SpA, 4.25%, 7/29/16		50		74
				245
Korea, Republic of (0.1%)
Export-Import Bank of Korea, 4.00%, 1/14/24	$	200		213

	Face Amount (000)		Value (000)
Netherlands (0.3%)
ABN Amro Bank N.V., 2.50%, 10/30/18 (c)	$	200	$	203
3.63%, 10/6/17	EUR	50		75
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, 3.88%, 2/8/22	$	50		53
Series G 3.75%, 11/9/20	EUR	50		75
ING Bank N.V., 5.25%, 6/5/18		50		81
5.80%, 9/25/23 (c)	$	200		226
				713
Spain (0.2%)
Banco Bilbao Vizcaya Argentaria SA, 3.63%, 1/18/17	EUR	50		74
Telefonica Emisiones SAU, 4.71%, 1/20/20		200		319
				393
Sweden (0.1%)
Nordea Bank AB, 4.00%, 3/29/21		70		108
Switzerland (0.3%)
ABB Treasury Center USA, Inc., 2.50%, 6/15/16 (c)	$	125		129
4.00%, 6/15/21 (c)		50		53
Credit Suisse, 6.00%, 2/15/18		25		28
Glencore Funding LLC, 4.13%, 5/30/23 (c)		100		101
Novartis Capital Corp., 3.40%, 5/6/24		150		152
UBS AG, 7.50%, 7/15/25		150		190
				653
Thailand (0.1%)
PTT Exploration & Production PCL, 3.71%, 9/16/18 (c)		200		209
United Kingdom (0.8%)
Abbey National Treasury Services PLC, 3.63%, 10/14/17	EUR	100		147
4.00%, 3/13/24	$	50		52
Bank of Scotland PLC, 4.63%, 6/8/17	EUR	50		77
Barclays Bank PLC, 6.00%, 1/23/18		50		79
BAT International Finance PLC, 5.38%, 6/29/17		50		78
GlaxoSmithKline Capital PLC, 2.85%, 5/8/22	$	98		97
Heathrow Funding Ltd., 4.60%, 2/15/20	EUR	50		77
4.88%, 7/15/23 (c)	$	100		110
HSBC Holdings PLC, 4.25%, 3/14/24		200		206
6.25%, 3/19/18	EUR	50		80

The accompanying notes are an integral part of the financial statements.
6

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Face Amount (000)		Value (000)
United Kingdom (cont'd)
Imperial Tobacco Finance PLC, 8.38%, 2/17/16	EUR	50	$	77
Lloyds Bank PLC, 6.50%, 9/14/20 (c)	$	100		118
Nationwide Building Society, 6.25%, 2/25/20 (c)		270		319
				1,517
United States (3.1%)
Agilent Technologies, Inc., 5.50%, 9/14/15		30		32
Altria Group, Inc., 2.85%, 8/9/22		30		29
5.38%, 1/31/44		55		60
American International Group, Inc., 4.88%, 6/1/22		50		56
8.25%, 8/15/18		100		124
Amgen, Inc., 5.15%, 11/15/41		50		54
Apple, Inc., 2.40%, 5/3/23		100		95
4.45%, 5/6/44		75		76
AT&T, Inc., 6.30%, 1/15/38		75		91
AvalonBay Communities, Inc., 2.95%, 9/15/22		50		49
Bank of America Corp., 4.00%, 4/1/24		120		123
5.00%, 1/21/44		70		75
5.70%, 1/24/22		50		58
Boston Properties LP, 3.85%, 2/1/23		75		77
Citigroup, Inc., 3.75%, 6/16/24		175		176
3.88%, 10/25/23		100		103
6.13%, 5/15/18		22		25
6.68%, 9/13/43		20		25
8.50%, 5/22/19		5		6
CNA Financial Corp., 5.75%, 8/15/21		95		111
Coca-Cola Co., 3.20%, 11/1/23		100		101
Comcast Corp., 6.40%, 5/15/38		25		32
DirecTV Holdings LLC/DirecTV Financing Co., Inc., 4.60%, 2/15/21		10		11
Enterprise Products Operating LLC, 3.35%, 3/15/23		50		50
5.25%, 1/31/20		35		40
Five Corners Funding Trust, 4.42%, 11/15/23 (c)		200		211
Ford Motor Credit Co., LLC, 4.21%, 4/15/16		100		106
Freeport-McMoRan Copper & Gold, Inc., 3.88%, 3/15/23		50		50

	Face Amount (000)		Value (000)
General Electric Capital Corp., 5.30%, 2/11/21	$	100	$	114
MTN 5.88%, 1/14/38		25		30
Series G 6.00%, 8/7/19		145		172
Genworth Holdings, Inc., 7.20%, 2/15/21		125		152
Gilead Sciences, Inc., 4.80%, 4/1/44		75		79
Goldman Sachs Group, Inc. (The), 3.63%, 1/22/23		75		75
4.38%, 3/16/17	EUR	50		75
6.75%, 10/1/37	$	125		151
Hewlett-Packard Co., 3.75%, 12/1/20		100		105
4.65%, 12/9/21		35		38
Home Depot, Inc., 5.88%, 12/16/36		50		62
HSBC Finance Corp., 6.68%, 1/15/21		50		60
HSBC USA, Inc., 3.50%, 6/23/24		100		100
International Business Machines Corp., 1.95%, 2/12/19		100		101
Johnson Controls, Inc., 3.63%, 7/2/24		25		25
JPMorgan Chase & Co., 3.20%, 1/25/23		25		25
3.88%, 2/1/24		70		72
4.25%, 10/15/20		50		54
4.63%, 5/10/21		140		155
Kinder Morgan Energy Partners LP, 4.15%, 2/1/24		50		51
L-3 Communications Corp., 4.75%, 7/15/20		80		88
4.95%, 2/15/21		75		83
Marathon Petroleum Corp., 5.13%, 3/1/21		35		40
Medtronic, Inc., 3.63%, 3/15/24		100		103
Merck & Co., Inc., 2.80%, 5/18/23		100		98
Monongahela Power Co., 5.40%, 12/15/43 (c)		50		57
Nationwide Financial Services, Inc., 5.38%, 3/25/21 (c)		50		56
NBC Universal Media LLC, 4.38%, 4/1/21		130		144
5.95%, 4/1/41		25		31
NetApp, Inc., 2.00%, 12/15/17		25		25
Ohio Power Co., 5.38%, 10/1/21		75		88
Omnicom Group, Inc., 3.63%, 5/1/22		30		31
Oncor Electric Delivery Co., LLC, 6.80%, 9/1/18		80		95

The accompanying notes are an integral part of the financial statements.
7

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Face Amount (000)		Value (000)
United States (cont'd)
Oracle Corp., 3.40%, 7/8/24	$	75	$	75
PepsiCo, Inc., 3.60%, 3/1/24		100		103
Plains All American Pipeline LP/PAA Finance Corp., 6.70%, 5/15/36		60		77
8.75%, 5/1/19		110		142
Platinum Underwriters Finance, Inc., 7.50%, 6/1/17		60		69
PPL WEM Holdings Ltd., 3.90%, 5/1/16 (c)		60		63
Principal Financial Group, Inc., 8.88%, 5/15/19		50		65
Prudential Financial, Inc., 6.63%, 12/1/37		40		52
Santander Holdings USA, Inc., 3.45%, 8/27/18		40		42
Spectra Energy Capital LLC, 7.50%, 9/15/38		50		65
Target Corp., 3.50%, 7/1/24		75		76
Time Warner, Inc., 7.70%, 5/1/32		25		35
UnitedHealth Group, Inc., 1.40%, 10/15/17		25		25
4.25%, 3/15/43		25		24
Verizon Communications, Inc., 6.55%, 9/15/43		125		158
Viacom, Inc., 5.85%, 9/1/43		75		86
Voya Financial, Inc., 5.50%, 7/15/22		75		86
Wells Fargo & Co., 4.13%, 8/15/23		40		42
Series M 3.45%, 2/13/23		100		100
Zimmer Holdings, Inc., 5.75%, 11/30/39		50		58
				6,124
Total Corporate Bonds (Cost $12,635)				13,492
Mortgage — Other (0.1%)
United States (0.1%)
Banc of America Funding Trust, 0.55%, 5/25/37 (b) (Cost $268)		362		256
Sovereign (14.9%)
Belgium (0.2%)
Belgium Government Bond, 1.25%, 6/22/18	EUR	200		283
Bermuda (0.1%)
Bermuda Government International Bond,
4.85%, 2/6/24 (c)	$	200		212
Canada (1.0%)
Canadian Government Bond, 3.25%, 6/1/21	CAD	1,900		1,944

	Face Amount (000)		Value (000)
France (0.4%)
Credit Mutuel - CIC Home Loan SFH, 1.50%, 11/16/17 (c)	$	200	$	201
France Government Bond OAT, 5.50%, 4/25/29	EUR	235		458
				659
Germany (0.6%)
Bundesrepublik Deutschland, 4.25%, 7/4/39		370		713
4.75%, 7/4/34		240		474
				1,187
Greece (0.7%)
Hellenic Republic Government Bond, 2.00%, 2/24/23 - 2/24/42 (d)		1,346		1,388
Hungary (0.2%)
Hungary Government International Bond, 5.38%, 3/25/24	$	52		56
5.75%, 11/22/23		310		343
				399
Indonesia (0.1%)
Indonesia Government International Bond, 5.88%, 1/15/24 (c)		200		221
Ireland (0.8%)
Ireland Government Bond, 3.40%, 3/18/24	EUR	490		731
3.90%, 3/20/23		475		744
				1,475
Italy (1.2%)
Italy Buoni Poliennali Del Tesoro, 4.00%, 9/1/20		350		541
5.50%, 11/1/22		1,100		1,848
				2,389
Japan (1.6%)
Japan Government Ten Year Bond, 1.10%, 3/20/21	JPY	90,000		938
Japan Government Thirty Year Bond, 1.70%, 6/20/33		170,000		1,778
2.00%, 9/20/40		36,000		385
				3,101
Kazakhstan (0.2%)
KazMunayGas National Co., JSC, 6.38%, 4/9/21	$	400		447
Korea, Republic of (0.1%)
Korea Development Bank (The), 3.88%, 5/4/17		200		213
Mexico (0.8%)
Mexican Bonos, 7.50%, 6/3/27	MXN	6,300		552
10.00%, 12/5/24		5,500		567
Petroleos Mexicanos, 4.88%, 1/24/22	$	390		423
				1,542

The accompanying notes are an integral part of the financial statements.
8

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Face Amount (000)		Value (000)
Netherlands (0.9%)
Bank Nederlandse Gemeenten, 0.88%, 2/21/17 (c)	$	350	$	350
Netherlands Government Bond, 4.00%, 7/15/19 (c)	EUR	900		1,447
				1,797
New Zealand (0.5%)
New Zealand Government Bond, 3.00%, 4/15/20	NZD	1,200		988
Norway (0.2%)
Norway Government Bond, 3.75%, 5/25/21	NOK	1,750		316
Poland (0.5%)
Poland Government Bond, 5.75%, 10/25/21	PLN	2,000		764
Poland Government International Bond, 5.00%, 3/23/22	$	180		200
				964
Portugal (1.9%)
Portugal Obrigacoes do Tesouro OT, 4.20%, 10/15/16 (c)	EUR	418		612
5.65%, 2/15/24 (c)		1,873		2,983
				3,595
Qatar (0.1%)
Qatar Government International Bond, 4.00%, 1/20/15 (c)	$	150		153
South Africa (0.1%)
South Africa Government Bond, 7.75%, 2/28/23	ZAR	1,700		156
Spain (1.1%)
Spain Government Bond, 4.20%, 1/31/37	EUR	175		259
4.40%, 10/31/23 (c)		800		1,259
5.85%, 1/31/22		390		673
				2,191
Sweden (0.9%)
Sweden Government Bond, 1.50%, 11/13/23	SEK	9,300		1,368
4.25%, 3/12/19		2,600		448
				1,816
United Kingdom (0.7%)
United Kingdom Gilt, 4.25%, 6/7/32 - 9/7/39	GBP	700		1,370
Total Sovereign (Cost $26,964)				28,806
U.S. Treasury Securities (2.4%)
United States (2.4%)
U.S. Treasury Bond, 3.50%, 2/15/39	$	1,000		1,044

	Face Amount (000)		Value (000)
U.S. Treasury Notes, 1.50%, 6/30/16	$	1,450	$	1,480
2.38%, 6/30/18		2,000		2,085
Total U.S. Treasury Securities (Cost $4,467)				4,609
Total Fixed Income Securities (Cost $51,863)				54,789
	Shares
Common Stocks (46.5%)
Australia (0.7%)
AGL Energy Ltd.		677		10
Alumina Ltd. (e)		6,719		8
AMP Ltd.		5,422		27
ASX Ltd.		375		13
Australia & New Zealand Banking Group Ltd.		4,252		134
BHP Billiton Ltd.		4,416		149
Brambles Ltd.		2,286		20
Coca-Cola Amatil Ltd.		403		4
Commonwealth Bank of Australia		1,913		146
CSL Ltd.		753		47
Echo Entertainment Group Ltd.		278		1
Fortescue Metals Group Ltd.		2,175		9
GPT Group REIT		5,677		20
Incitec Pivot Ltd.		3,211		9
Insurance Australia Group Ltd.		3,794		21
Leighton Holdings Ltd.		311		6
Macquarie Group Ltd.		530		30
National Australia Bank Ltd.		3,145		97
Newcrest Mining Ltd. (e)		987		10
Orica Ltd.		817		15
Origin Energy Ltd.		1,806		25
Orora Ltd.		2,089		3
QBE Insurance Group Ltd.		2,540		26
Recall Holdings Ltd. (e)		457		2
Rio Tinto Ltd.		594		33
Santos Ltd.		1,398		19
Scentre Group REIT (e)		7,640		23
Shopping Centres Australasia Property Group REIT		320		1
Stockland REIT		6,279		23
Suncorp Group Ltd.		2,222		28
Sydney Airport		562		2
TABCORP Holdings Ltd.		285		1
Telstra Corp., Ltd.		5,482		27
Transurban Group		2,557		18
Treasury Wine Estates Ltd.		1,224		6
Wesfarmers Ltd.		1,504		59
Westfield Corp. REIT		3,501		24
Westpac Banking Corp.		3,768		120
Woodside Petroleum Ltd.		832		32
Woolworths Ltd.		1,601		53
				1,301

The accompanying notes are an integral part of the financial statements.
9

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Shares		Value (000)
Austria (0.0%)
BUWOG AG (e)		47	$	1
Erste Group Bank AG		537		17
Immofinanz AG (e)		955		3
Verbund AG, Class A		128		3
Voestalpine AG		270		13
				37
Belgium (0.1%)
Ageas		374		15
Anheuser-Busch InBev N.V.		1,713		197
Colruyt SA		199		10
Delhaize Group SA		105		7
Groupe Bruxelles Lambert SA		202		21
KBC Groep N.V. (e)		151		8
Solvay SA, Class A		98		17
Umicore SA		216		10
Viohalco SA/NV (e)		557		3
				288
Canada (0.9%)
Agnico-Eagle Mines Ltd.		200		8
Agrium, Inc.		200		18
Bank of Montreal		500		37
Bank of Nova Scotia		800		53
Barrick Gold Corp.		37,100		679
BCE, Inc.		1,000		45
Blackberry Ltd. (e)		500		5
Brookfield Asset Management, Inc., Class A		700		31
Cameco Corp.		500		10
Canadian Imperial Bank of Commerce		500		46
Canadian National Railway Co.		1,000		65
Canadian Natural Resources Ltd.		1,000		46
Canadian Pacific Railway Ltd.		200		36
Cenovus Energy, Inc.		800		26
Crescent Point Energy Corp.		300		13
Eldorado Gold Corp.		600		5
Enbridge, Inc.		900		43
Encana Corp.		900		21
Goldcorp, Inc.		800		22
Imperial Oil Ltd.		100		5
Kinross Gold Corp. (e)		1,200		5
Loblaw Cos. Ltd.		129		6
Magna International, Inc.		300		32
Manulife Financial Corp.		2,900		58
National Bank of Canada		400		17
Penn West Petroleum Ltd.		500		5
Potash Corp. of Saskatchewan, Inc.		900		34
Power Corp. of Canada		600		17
Rogers Communications, Inc., Class B		400		16
Royal Bank of Canada		1,200		86
Silver Wheaton Corp.		400		11
Sun Life Financial, Inc.		800		29
Suncor Energy, Inc.		1,600		68
Talisman Energy, Inc.		1,000		11

	Shares		Value (000)
Teck Resources Ltd., Class B		500	$	11
Thomson Reuters Corp.		500		18
Toronto-Dominion Bank (The)		1,800		93
TransCanada Corp.		600		29
Yamana Gold, Inc.		900		7
				1,767
Chile (0.0%)
Antofagasta PLC		2,119		28
China (0.0%)
Wynn Macau Ltd. (f)		2,800		11
Denmark (0.2%)
AP Moeller - Maersk A/S		5		12
AP Moeller - Maersk A/S Series B		10		25
Carlsberg A/S Series B		111		12
Danske Bank A/S		684		19
DSV A/S		376		12
Novo Nordisk A/S		4,075		188
Novozymes A/S Series B		330		17
Vestas Wind Systems A/S (e)		387		19
				304
Finland (0.1%)
Elisa Oyj		277		9
Fortum Oyj		651		18
Kesko Oyj, Class B		66		3
Kone Oyj, Class B		584		24
Metso Oyj		204		8
Nokia Oyj		5,675		43
Nokian Renkaat Oyj		240		9
Sampo, Class A		605		31
Stora Enso Oyj, Class R		1,002		10
UPM-Kymmene Oyj		554		9
Valmet OYJ		204		2
Wartsila Oyj		291		14
				180
France (1.0%)
Aeroports de Paris (ADP)		55		7
Air Liquide SA		517		70
Airbus Group N.V.		675		45
Alcatel-Lucent (e)		7,434		27
Alstom SA		406		15
AXA SA		3,059		73
BNP Paribas SA		1,979		134
Bouygues SA		355		15
Cap Gemini SA		333		24
Carrefour SA		1,347		50
Casino Guichard Perrachon SA		58		8
CGG SA (e)		292		4
Christian Dior SA		127		25
Cie de St-Gobain		696		39
Cie Generale des Etablissements Michelin Series B		364		44
Credit Agricole SA		2,594		37

The accompanying notes are an integral part of the financial statements.
10

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Shares		Value (000)
France (cont'd)
Danone SA		1,328	$	99
Electricite de France SA		431		14
Essilor International SA		303		32
Fonciere Des Regions REIT		53		6
GDF Suez		1,973		54
Gecina SA REIT		37		5
Groupe Eurotunnel SA		949		13
Klepierre REIT		187		10
L'Oreal SA		665		115
Lafarge SA		345		30
Legrand SA		195		12
LVMH Moet Hennessy Louis Vuitton SA		315		61
Orange SA		2,874		45
Pernod Ricard SA		567		68
Peugeot SA (e)		386		6
Publicis Groupe SA		312		26
Remy Cointreau SA		26		2
Renault SA		330		30
Safran SA		251		16
Sanofi		776		82
Schneider Electric SE		782		74
SES SA		614		23
Societe Generale SA		1,480		78
Sodexo		272		29
Technip SA		158		17
Thales SA		156		9
Total SA		2,225		161
Unibail-Rodamco SE REIT		89		26
Vallourec SA		167		7
Veolia Environnement SA		586		11
Vinci SA		830		62
Vivendi SA (e)		1,756		43
				1,883
Germany (0.6%)
Adidas AG		215		22
Allianz SE (Registered)		484		81
BASF SE		710		83
Bayer AG (Registered)		802		113
Bayerische Motoren Werke AG		433		55
Beiersdorf AG		103		10
Commerzbank AG (e)		93		1
Continental AG		103		24
Daimler AG (Registered)		829		78
Deutsche Bank AG (Registered)		1,070		38
Deutsche Boerse AG		187		14
Deutsche Lufthansa AG (Registered)		220		5
Deutsche Post AG (Registered)		738		27
Deutsche Telekom AG (Registered)		2,616		46
E.ON SE		1,804		37
Esprit Holdings Ltd. (f)		2,880		4
Fraport AG Frankfurt Airport Services Worldwide		43		3

	Shares		Value (000)
Fresenius Medical Care AG & Co., KGaA		226	$	15
Fresenius SE & Co., KGaA		165		25
HeidelbergCement AG		75		6
Henkel AG & Co., KGaA		328		33
Henkel AG & Co., KGaA (Preference)		360		42
Infineon Technologies AG		1,553		19
K&S AG (Registered)		108		4
Lanxess AG		64		4
Linde AG		186		40
Merck KGaA		236		20
Metro AG (e)		342		15
Muenchener Rueckversicherungs AG (Registered)		249		55
Osram Licht AG (e)		69		3
Porsche Automobil Holding SE (Preference)		320		33
QIAGEN N.V. (e)		570		14
RWE AG		589		25
Salzgitter AG		88		4
SAP AG		960		74
Siemens AG (Registered)		696		92
Suedzucker AG		84		2
ThyssenKrupp AG (e)		249		7
Volkswagen AG		44		11
Volkswagen AG (Preference)		182		48
				1,232
Greece (0.1%)
Aegean Airlines SA (e)		45		1
Alpha Bank AE (e)		13,876		13
Athens Water Supply & Sewage Co., SA (The)		167		2
Diagnostic & Therapeutic Center of Athens Hygeia SA (e)		530		—	@
Ellaktor SA (e)		690		4
Elval — Hellenic Aluminium Industry SA		91		—	@
Folli Follie SA (e)		353		14
Fourlis Holdings SA (e)		332		3
Frigoglass SA (e)		162		1
GEK Terna Holding Real Estate Construction SA (e)		1,253		6
Hellenic Exchanges — Athens Stock Exchange SA Holding (e)		831		10
Hellenic Petroleum SA		347		3
Hellenic Telecommunications Organization SA (e)		2,767		41
Intracom Holdings SA (Registered) (e)		1,206		1
Intralot SA-Integrated Lottery Systems & Services (e)		2,167		6
JUMBO SA (e)		415		7
Marfin Investment Group Holdings SA (e)		6,179		4
Metka SA		287		5
MLS Multimedia SA (e)		101		1
Motor Oil Hellas Corinth Refineries SA		451		5
Mytilineos Holdings SA (e)		759		6
National Bank of Greece SA (e)		3,806		14

The accompanying notes are an integral part of the financial statements.
11

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Shares		Value (000)
Greece (cont'd)
OPAP SA		2,369	$	42
Piraeus Bank SA (e)		10,535		23
Piraeus Port Authority		55		1
Public Power Corp. SA		1,512		23
Sidenor Steel Products Manufacturing Co., SA (e)		396		1
Terna Energy SA		431		2
Thessaloniki Port Authority SA		17		1
Titan Cement Co., SA		628		20
				260
Hong Kong (0.2%)
Bank of East Asia Ltd.		3,315		14
BOC Hong Kong Holdings Ltd.		4,500		13
Cheung Kong Holdings Ltd.		2,000		36
CLP Holdings Ltd.		2,700		22
Hang Lung Group Ltd.		1,000		5
Hang Lung Properties Ltd.		4,000		12
Hang Seng Bank Ltd.		1,700		28
Henderson Land Development Co., Ltd.		2,728		16
Hong Kong & China Gas Co., Ltd.		6,425		14
Hong Kong Exchanges and Clearing Ltd.		1,343		25
Hutchison Whampoa Ltd.		3,000		41
Kerry Logistics Network Ltd.		750		1
Kerry Properties Ltd.		1,500		5
Link REIT (The)		2,754		15
MTR Corp., Ltd.		3,088		12
New World Development Co., Ltd.		6,794		8
Power Assets Holdings Ltd.		2,000		18
Sands China Ltd.		3,200		24
Sino Land Co., Ltd.		5,629		9
Sun Hung Kai Properties Ltd.		2,338		32
Swire Pacific Ltd., Class A		1,000		12
Swire Properties Ltd.		950		3
Wharf Holdings Ltd.		1,400		10
				375
Ireland (0.0%)
CRH PLC		832		21
Kerry Group PLC, Class A		153		12
				33
Italy (0.2%)
Assicurazioni Generali SpA		1,305		28
Atlantia SpA		346		10
Banco Popolare SC (e)		367		6
Enel Green Power SpA		1,917		5
Enel SpA		6,864		40
Eni SpA		2,182		60
Exor SpA		94		4
Fiat SpA (e)		1,034		10
Finmeccanica SpA (e)		598		6
Intesa Sanpaolo SpA		11,216		35
Luxottica Group SpA		117		7
Mediobanca SpA (e)		766		8

	Shares		Value (000)
Prysmian SpA		198	$	4
Saipem SpA (e)		257		7
Snam SpA		1,686		10
Telecom Italia SpA (e)		9,102		11
Telecom Italia SpA		3,838		4
Terna Rete Elettrica Nazionale SpA		1,572		8
UniCredit SpA		3,298		28
Unione di Banche Italiane SCPA		803		7
				298
Japan (2.1%)
Aeon Co., Ltd.		2,900		36
Aisin Seiki Co., Ltd.		400		16
Ajinomoto Co., Inc.		3,000		47
Asahi Glass Co., Ltd.		2,000		12
Asahi Group Holdings Ltd.		1,500		47
Asahi Kasei Corp.		3,000		23
Astellas Pharma, Inc.		2,500		33
Bank of Yokohama Ltd. (The)		5,000		29
Bridgestone Corp.		1,200		42
Calbee, Inc.		100		3
Canon, Inc.		1,300		42
Central Japan Railway Co.		234		33
Chubu Electric Power Co., Inc. (e)		1,100		14
Chugoku Electric Power Co., Inc. (The)		700		10
Coca-Cola West Co., Ltd.		100		2
Dai Nippon Printing Co., Ltd.		1,000		10
Dai-ichi Life Insurance Co., Ltd. (The)		1,700		25
Daiichi Sankyo Co., Ltd.		1,000		19
Daikin Industries Ltd.		400		25
Daiwa House Industry Co., Ltd.		2,000		41
Daiwa Securities Group, Inc.		5,000		43
Denso Corp.		700		33
East Japan Railway Co.		500		39
Eisai Co., Ltd.		600		25
FamilyMart Co., Ltd.		100		4
FANUC Corp.		300		52
Fast Retailing Co., Ltd.		100		33
FUJIFILM Holdings Corp.		1,000		28
Fujitsu Ltd.		4,000		30
Hankyu Hanshin Holdings, Inc.		5,000		29
Hitachi Ltd.		5,000		37
Honda Motor Co., Ltd.		1,900		66
Hoya Corp.		900		30
Inpex Corp.		1,200		18
ITOCHU Corp.		2,200		28
Japan Tobacco, Inc.		3,046		111
JFE Holdings, Inc.		900		19
JX Holdings, Inc.		4,300		23
Kansai Electric Power Co., Inc. (The) (e)		1,200		11
Kao Corp.		1,600		63
KDDI Corp.		623		38
Keyence Corp.		200		87
Kintetsu Corp.		6,000		22

The accompanying notes are an integral part of the financial statements.
12

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Shares		Value (000)
Japan (cont'd)
Kirin Holdings Co., Ltd.		3,000	$	43
Kobe Steel Ltd.		8,000		12
Komatsu Ltd.		1,600		37
Konica Minolta, Inc.		1,500		15
Kubota Corp.		3,000		43
Kuraray Co., Ltd.		1,000		13
Kyocera Corp.		600		28
Kyushu Electric Power Co., Inc. (e)		800		9
Lawson, Inc.		100		7
LIXIL Group Corp.		1,100		30
Marubeni Corp.		3,000		22
MEIJI Holdings Co., Ltd.		100		7
Mitsubishi Chemical Holdings Corp.		3,500		16
Mitsubishi Corp.		1,800		37
Mitsubishi Electric Corp.		3,000		37
Mitsubishi Estate Co., Ltd.		2,000		49
Mitsubishi Heavy Industries Ltd.		7,000		44
Mitsui & Co., Ltd.		2,200		35
Mitsui Fudosan Co., Ltd.		2,000		67
Mitsui OSK Lines Ltd.		3,000		11
Mizuho Financial Group, Inc.		28,900		59
MS&AD Insurance Group Holdings, Inc.		1,100		27
Murata Manufacturing Co., Ltd.		300		28
NEC Corp.		8,000		25
NGK Insulators Ltd.		1,000		23
Nidec Corp.		400		25
Nikon Corp.		800		13
Nintendo Co., Ltd.		100		12
Nippon Building Fund, Inc. REIT		4		23
Nippon Steel Sumitomo Metal Corp.		10,000		32
Nippon Telegraph & Telephone Corp.		700		44
Nippon Yusen KK		3,000		9
Nissan Motor Co., Ltd.		3,000		28
Nisshin Seifun Group, Inc.		300		4
Nissin Foods Holdings Co., Ltd.		100		5
Nitto Denko Corp.		300		14
NKSJ Holdings, Inc.		1,000		27
Nomura Holdings, Inc.		5,300		38
NTT DoCoMo, Inc.		2,100		36
Odakyu Electric Railway Co., Ltd.		3,000		29
Olympus Corp. (e)		500		17
Omron Corp.		700		29
Oriental Land Co., Ltd.		200		34
ORIX Corp.		1,710		28
Osaka Gas Co., Ltd.		5,000		21
Panasonic Corp.		2,800		34
Rakuten, Inc.		2,000		26
Ricoh Co., Ltd.		2,000		24
Rohm Co., Ltd.		300		17
Secom Co., Ltd.		500		31
Sekisui House Ltd.		2,000		27
Seven & I Holdings Co., Ltd.		2,400		101

	Shares		Value (000)
Sharp Corp. (e)		2,000	$	6
Shikoku Electric Power Co., Inc. (e)		500		7
Shin-Etsu Chemical Co., Ltd.		500		30
Shionogi & Co., Ltd.		1,200		25
Shiseido Co., Ltd.		1,400		26
Shizuoka Bank Ltd. (The)		3,000		32
SMC Corp.		200		54
Softbank Corp.		1,100		82
Sony Corp.		1,300		22
Sumitomo Chemical Co., Ltd.		3,000		11
Sumitomo Corp.		1,900		26
Sumitomo Electric Industries Ltd.		1,200		17
Sumitomo Metal Mining Co., Ltd.		1,000		16
Sumitomo Mitsui Financial Group, Inc.		1,900		80
Sumitomo Mitsui Trust Holdings, Inc.		5,000		23
Sumitomo Realty & Development Co., Ltd.		1,000		43
Suntory Beverage & Food Ltd.		200		8
Suzuki Motor Corp.		700		22
T&D Holdings, Inc.		1,700		23
Takeda Pharmaceutical Co., Ltd.		900		42
TDK Corp.		400		19
Terumo Corp.		1,000		22
Tohoku Electric Power Co., Inc.		1,000		12
Tokio Marine Holdings, Inc.		1,100		36
Tokyo Electric Power Co., Inc. (e)		3,400		14
Tokyo Electron Ltd.		500		34
Tokyo Gas Co., Ltd.		4,000		23
Tokyu Corp.		3,000		21
Toray Industries, Inc.		3,000		20
Toshiba Corp.		5,000		23
Toyota Industries Corp.		800		41
Toyota Motor Corp.		3,400		204
Unicharm Corp.		200		12
West Japan Railway Co.		400		18
Yahoo! Japan Corp.		4,700		22
Yakult Honsha Co., Ltd.		100		5
Yamada Denki Co., Ltd.		2,500		9
Yamato Holdings Co., Ltd.		400		8
				3,968
Kazakhstan (0.0%)
Kazakhmys PLC (e)		1,579		8
Netherlands (0.3%)
Akzo Nobel N.V.		388		29
ArcelorMittal		1,340		20
ASML Holding N.V.		509		47
CNH Industrial N.V.		777		8
Corio N.V. REIT		116		6
Fugro N.V. CVA		96		6
Heineken Holding N.V.		103		7
Heineken N.V.		850		61
ING Groep N.V. CVA (e)		5,653		79
Koninklijke Ahold N.V.		2,556		48
Koninklijke KPN N.V. (e)		1,823		7

The accompanying notes are an integral part of the financial statements.
13

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Shares		Value (000)
Netherlands (cont'd)
Koninklijke Philips N.V.		1,872	$	59
Koninklijke Vopak N.V.		116		6
PostNL N.V. (e)		656		3
TNT Express N.V.		586		5
Unilever N.V. CVA		3,619		158
				549
Norway (0.1%)
Aker Solutions ASA		246		4
DnB ASA		2,312		42
Kvaerner ASA		246		1
Norsk Hydro ASA		1,778		9
Orkla ASA		1,990		18
REC Silicon ASA (e)		1,171		1
Statoil ASA		2,284		70
Subsea 7 SA		420		8
Telenor ASA		995		23
Yara International ASA		352		17
				193
Poland (0.0%)
Jeronimo Martins SGPS SA		2,594		43
Portugal (0.1%)
Altri SGPS SA		849		2
Banco BPI SA (e)		4,657		10
Banco Comercial Portugues SA (e)		198,689		52
Banco Espirito Santo SA (Registered) (e)		29,001		24
EDP — Energias de Portugal SA		17,512		88
Galp Energia SGPS SA		2,980		55
Mota-Engil SGPS SA		515		4
Portucel SA		656		3
Portugal Telecom SGPS SA (Registered)		9,777		36
Sonae		2,879		5
Sonaecom — SGPS SA (e)		1,314		3
Zon Optimus SGPS SA		645		4
				286
South Africa (0.2%)
SABMiller PLC		5,455		316
Spain (0.3%)
Abertis Infraestructuras SA		497		12
ACS Actividades de Construccion y Servicios SA		323		15
Amadeus IT Holding SA, Class A		300		12
Banco Bilbao Vizcaya Argentaria SA		6,136		78
Banco de Sabadell SA		7,319		25
Banco Popular Espanol SA		1,018		7
Banco Santander SA		10,935		114
CaixaBank SA		1,402		9
Distribuidora Internacional de Alimentacion SA		1,566		14
EDP Renovaveis SA		2,930		22
Enagas SA		359		12
Ferrovial SA		526		12

	Shares		Value (000)
Gas Natural SDG SA		327	$	10
Grifols SA		139		8
Grifols SA, Class B		19		1
Iberdrola SA		4,724		36
Inditex SA		281		43
International Consolidated Airlines Group SA (e)		1,797		11
Red Electrica Corp., SA		144		13
Repsol SA		1,442		38
Telefonica SA		4,272		73
				565
Sweden (0.8%)
Alfa Laval AB		1,433		37
Assa Abloy AB, Class B		1,134		58
Atlas Copco AB, Class A		2,752		80
Atlas Copco AB, Class B		1,447		39
Boliden AB		904		13
Electrolux AB, Class B		644		16
Hennes & Mauritz AB, Class B		3,058		134
Hexagon AB, Class B		800		26
Husqvarna AB, Class B		486		4
Investment AB Kinnevik		376		16
Investor AB, Class B		1,472		55
Millicom International Cellular SA SDR		268		25
Nordea Bank AB		10,414		147
Ratos AB, Class B		242		2
Sandvik AB		3,965		54
Skandinaviska Enskilda Banken AB		7,682		103
Skanska AB, Class B		815		19
SKF AB, Class B		1,216		31
Svenska Cellulosa AB SCA, Class B		2,542		66
Svenska Handelsbanken AB, Class A		2,527		124
Swedbank AB, Class A		1,753		46
Swedish Match AB		1,654		57
Tele2 AB, Class B		1,116		13
Telefonaktiebolaget LM Ericsson, Class B		10,055		121
TeliaSonera AB		14,846		108
Volvo AB, Class B		5,564		77
				1,471
Switzerland (2.4%)
ABB Ltd. (Registered) (e)		9,136		210
Actelion Ltd. (Registered) (e)		826		105
Adecco SA (Registered) (e)		856		70
Aryzta AG (e)		88		8
Baloise Holding AG (Registered)		328		39
Barry Callebaut AG (Registered) (e)		2		3
Cie Financiere Richemont SA (Registered)		1,741		183
Coca-Cola HBC AG (e)		727		17
Credit Suisse Group AG (Registered) (e)		4,492		128
GAM Holding AG (e)		1,136		22
Geberit AG (Registered)		272		95
Givaudan SA (Registered) (e)		43		72
Holcim Ltd. (Registered) (e)		803		71

The accompanying notes are an integral part of the financial statements.
14

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Shares		Value (000)
Switzerland (cont'd)
Julius Baer Group Ltd. (e)		872	$	36
Kuehne & Nagel International AG (Registered)		257		34
Lindt & Spruengli AG		1		5
Lonza Group AG (Registered) (e)		409		45
Nestle SA (Registered)		13,749		1,065
Novartis AG (Registered)		4,021		364
Roche Holding AG (Genusschein)		3,741		1,116
Schindler Holding AG		292		44
SGS SA (Registered)		41		98
Sonova Holding AG (Registered)		429		65
Swatch Group AG (The)		117		71
Swiss Life Holding AG (Registered) (e)		132		31
Swiss Re AG (e)		487		43
Syngenta AG (Registered)		460		171
UBS AG (Registered) (e)		13,619		250
Zurich Insurance Group AG (e)		679		205
				4,666
United Kingdom (5.4%)
3i Group PLC		4,963		34
Admiral Group PLC		1,371		36
AMEC PLC		1,662		35
Anglo American PLC		4,826		118
ARM Holdings PLC		9,016		136
Associated British Foods PLC		363		19
AstraZeneca PLC		3,073		228
Aviva PLC		14,316		125
BAE Systems PLC		18,477		137
Barclays PLC		82,361		300
BG Group PLC		11,049		233
BHP Billiton PLC		7,996		259
BP PLC		42,651		376
British American Tobacco PLC		8,605		512
British Land Co., PLC REIT		5,003		60
British Sky Broadcasting Group PLC		7,459		115
BT Group PLC		49,753		328
Burberry Group PLC		1,622		41
Cairn Energy PLC (e)		2,702		9
Capita PLC		4,187		82
Centrica PLC		23,157		124
Compass Group PLC		10,623		185
Diageo PLC		11,431		365
Experian PLC		5,734		97
Friends Life Group Ltd.		7,959		43
G4S PLC		13,331		58
GlaxoSmithKline PLC		9,930		266
Glencore PLC (e)		29,369		164
Hammerson PLC REIT		3,958		39
HSBC Holdings PLC		28,958		294
ICAP PLC		2,393		16
Imperial Tobacco Group PLC		5,073		228
Inmarsat PLC		860		11
Intu Properties PLC REIT		3,113		17

	Shares		Value (000)
Investec PLC		2,907	$	27
J Sainsbury PLC		1,255		7
Johnson Matthey PLC		960		51
Land Securities Group PLC REIT		4,269		76
Legal & General Group PLC		23,729		91
Lloyds Banking Group PLC (e)		97,907		124
Man Group PLC		8,436		15
Marks & Spencer Group PLC		5,352		39
National Grid PLC		13,973		201
Next PLC		1,228		136
Old Mutual PLC		19,436		66
Petrofac Ltd.		1,454		30
Prudential PLC		13,665		314
Randgold Resources Ltd.		323		27
Reckitt Benckiser Group PLC		3,636		317
Reed Elsevier PLC		7,017		113
Rexam PLC		3,426		31
Rio Tinto PLC		5,060		269
Rolls-Royce Holdings PLC (e)		12,280		225
Royal Bank of Scotland Group PLC (e)		12,080		68
Royal Dutch Shell PLC, Class A		11,092		459
Royal Dutch Shell PLC, Class B		8,887		387
RSA Insurance Group PLC		3,934		32
Schroders PLC		497		21
Segro PLC REIT		4,169		25
Severn Trent PLC		1,079		36
Shire PLC		4,249		332
Signet Jewelers Ltd.		173		19
Smith & Nephew PLC		5,772		103
Smiths Group PLC		2,245		50
SSE PLC		4,267		114
Standard Chartered PLC		5,472		112
Standard Life PLC		10,449		67
Tate & Lyle PLC		471		5
Tesco PLC		34,831		169
Tullow Oil PLC		4,038		59
Unilever PLC		5,941		270
United Utilities Group PLC		3,293		50
Vodafone Group PLC		128,350		428
Weir Group PLC (The)		985		44
WM Morrison Supermarkets PLC		13,224		41
Wolseley PLC		1,199		66
WPP PLC		12,234		267
				10,473
United States (30.7%)
3M Co.		4,129		591
AAON, Inc.		348		12
Aaron's, Inc.		538		19
Abbott Laboratories		5,682		232
AbbVie, Inc.		4,882		276
Accenture PLC, Class A		2,786		225
Actuant Corp., Class A		557		19
Acuity Brands, Inc.		141		20

The accompanying notes are an integral part of the financial statements.
15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Shares		Value (000)
United States (cont'd)
Adobe Systems, Inc. (e)		974	$	70
ADT Corp. (The)		13		—	@
Advance Auto Parts, Inc.		145		20
AES Corp.		374		6
Aetna, Inc.		385		31
Agilent Technologies, Inc.		203		12
Alexander & Baldwin, Inc.		456		19
Alexion Pharmaceuticals, Inc. (e)		221		35
Allegion PLC		326		18
Allergan, Inc.		758		128
Alpha Natural Resources, Inc. (e)		109		—	@
Altera Corp.		401		14
Altria Group, Inc.		10,529		442
Amazon.com, Inc. (e)		1,483		482
Amcor Ltd.		2,089		21
Ameren Corp.		189		8
American Electric Power Co., Inc.		752		42
American Express Co.		15,874		1,506
American International Group, Inc.		8,100		442
American Tower Corp. REIT		558		50
Ameriprise Financial, Inc.		201		24
AmerisourceBergen Corp.		454		33
AMETEK, Inc.		352		18
Amgen, Inc.		2,768		328
Amphenol Corp., Class A		484		47
Anadarko Petroleum Corp.		4,083		447
Analog Devices, Inc.		152		8
Analogic Corp.		176		14
Annaly Capital Management, Inc. REIT		1,117		13
Apache Corp.		229		23
Apple, Inc.		21,385		1,987
ArcBest Corp.		446		19
Arch Coal, Inc.		5,074		19
Archer-Daniels-Midland Co.		596		26
AT&T, Inc.		17,038		602
Automatic Data Processing, Inc.		411		33
Avery Dennison Corp.		471		24
Avon Products, Inc.		388		6
Baker Hughes, Inc.		741		55
Balchem Corp.		285		15
Bank of America Corp.		48,416		744
Bank of New York Mellon Corp. (The)		1,149		43
Baxter International, Inc.		3,758		272
BB&T Corp.		1,116		44
Becton Dickinson and Co.		363		43
Bed Bath & Beyond, Inc. (e)		391		22
Belden, Inc.		251		20
Berkshire Hathaway, Inc., Class B (e)		4,000		506
Biogen Idec, Inc. (e)		1,250		394
Blackhawk Network Holdings, Inc. (e)		35		1
BlackRock, Inc.		1,249		399
Boeing Co. (The)		2,731		347

	Shares		Value (000)
Boston Properties, Inc. REIT		158	$	19
Boston Scientific Corp. (e)		786		10
Bristol-Myers Squibb Co.		9,568		464
Broadcom Corp., Class A		437		16
Brookfield Property Partners LP		40		1
Brown-Forman Corp., Class B		112		11
Bunge Ltd.		134		10
C.H. Robinson Worldwide, Inc.		209		13
Cablevision Systems Corp.		688		12
Cabot Oil & Gas Corp.		535		18
Callaway Golf Co.		1,605		13
Cameron International Corp. (e)		80		5
Campbell Soup Co.		186		9
Cantel Medical Corp.		226		8
Capital One Financial Corp.		201		17
Cardinal Health, Inc.		164		11
CareFusion Corp. (e)		496		22
Carnival Corp.		2		—	@
Cash America International, Inc.		426		19
Caterpillar, Inc.		3,832		416
CBS Corp., Class B		911		57
Celgene Corp. (e)		3,444		296
CenterPoint Energy, Inc.		158		4
CenturyLink, Inc.		908		33
Cerner Corp. (e)		770		40
CF Industries Holdings, Inc.		7		2
Charles Schwab Corp. (The)		1,957		53
Chesapeake Energy Corp.		223		7
Chevron Corp.		7,032		918
Chipotle Mexican Grill, Inc. (e)		40		24
Church & Dwight Co., Inc.		124		9
Cigna Corp.		600		55
Cimarex Energy Co.		132		19
Cintas Corp.		169		11
CIRCOR International, Inc.		157		12
Cisco Systems, Inc.		20,077		499
CIT Group, Inc.		544		25
Citigroup, Inc.		13,461		634
Citrix Systems, Inc. (e)		333		21
Cliffs Natural Resources, Inc.		15		—	@
Clorox Co. (The)		118		11
CME Group, Inc.		191		14
Coach, Inc.		422		14
Coca-Cola Co.		7,537		319
Coca-Cola Enterprises, Inc.		338		16
Cognizant Technology Solutions Corp., Class A (e)		726		36
Colgate-Palmolive Co.		11,836		807
Comcast Corp., Class A		9,888		531
Comcast Corp. Special Class A		806		43
Comerica, Inc.		201		10
ConAgra Foods, Inc.		379		11
Concho Resources, Inc. (e)		109		16

The accompanying notes are an integral part of the financial statements.
16

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Shares		Value (000)
United States (cont'd)
ConocoPhillips		7,057	$	605
CONSOL Energy, Inc.		914		42
Consolidated Edison, Inc.		416		24
Constellation Brands, Inc., Class A (e)		148		13
Cooper Cos., Inc. (The)		139		19
Costco Wholesale Corp.		3,002		346
Covidien PLC		213		19
CR Bard, Inc.		245		35
Crown Castle International Corp.		635		47
CST Brands, Inc.		620		21
CSX Corp.		850		26
Cubic Corp.		428		19
Cummins, Inc.		9		1
CVS Caremark Corp.		12,852		969
Cytec Industries, Inc.		182		19
D.R. Horton, Inc.		793		19
Danaher Corp.		5,867		462
DaVita HealthCare Partners, Inc. (e)		282		20
Deere & Co.		22		2
Delta Air Lines, Inc.		487		19
Deltic Timber Corp.		116		7
DENTSPLY International, Inc.		399		19
Devon Energy Corp.		456		36
DIRECTV, Class A (e)		612		52
Discover Financial Services		705		44
Discovery Communications, Inc., Class A (e)		605		45
Discovery Communications, Inc., Class C (e)		605		44
Dominion Resources, Inc.		454		32
Dow Chemical Co. (The)		6,600		340
Dr. Pepper Snapple Group, Inc.		185		11
DTE Energy Co.		363		28
Duke Energy Corp.		3,155		234
Dun & Bradstreet Corp. (The)		144		16
Eagle Materials, Inc.		198		19
Eaton Corp., PLC		27		2
eBay, Inc. (e)		6,559		328
Ecolab, Inc.		29		3
Edison International		548		32
Edwards Lifesciences Corp. (e)		147		13
EI du Pont de Nemours & Co.		4,800		314
Eli Lilly & Co.		4,232		263
EMC Corp.		15,015		396
EMCOR Group, Inc.		425		19
Emerson Electric Co.		3,934		261
Encore Wire Corp.		138		7
Energen Corp.		211		19
Energizer Holdings, Inc.		56		7
EnerSys		269		19
Entergy Corp.		365		30
EOG Resources, Inc.		1,171		137
EQT Corp.		174		19
Equity Residential REIT		437		28

	Shares		Value (000)
Estee Lauder Cos., Inc. (The), Class A		684	$	51
Exelon Corp.		799		29
Express Scripts Holding Co. (e)		2,660		184
Exxon Mobil Corp.		14,674		1,477
Facebook, Inc., Class A (e)		5,300		357
Fair Isaac Corp.		307		20
Fastenal Co.		14		1
FedEx Corp.		546		83
FEI Co.		213		19
Fifth Third Bancorp		1,665		36
Financial Engines, Inc.		389		18
FirstEnergy Corp.		491		17
Fluor Corp.		41		3
FMC Technologies, Inc. (e)		89		5
Ford Motor Co.		19,894		343
Franklin Resources, Inc.		401		23
Freeport-McMoRan Copper & Gold, Inc.		34,800		1,270
Frontier Communications Corp.		723		4
General Dynamics Corp.		66		8
General Electric Co.		21,808		573
General Growth Properties, Inc. REIT		1,205		28
General Mills, Inc.		1,529		80
Gilead Sciences, Inc. (e)		4,673		387
Global Payments, Inc.		264		19
Goldman Sachs Group, Inc. (The)		2,125		356
Google, Inc., Class A (e)		758		443
Google, Inc., Class C (e)		758		436
Green Plains, Inc.		579		19
Halliburton Co.		32,630		2,317
HCP, Inc. REIT		398		16
Health Care, Inc. REIT		437		27
Heartland Express, Inc.		873		19
Henry Schein, Inc. (e)		149		18
Herbalife Ltd.		80		5
Hershey Co. (The)		291		28
Hess Corp.		209		21
Hewlett-Packard Co.		4,706		159
Home Depot, Inc.		6,600		534
Honeywell International, Inc.		6,241		580
Hormel Foods Corp.		132		7
Hudson City Bancorp, Inc.		170		2
Humana, Inc.		118		15
Illinois Tool Works, Inc.		26		2
Intel Corp.		11,863		367
Intercontinental Exchange, Inc.		115		22
Interface, Inc.		896		17
International Business Machines Corp.		3,546		643
International Speedway Corp., Class A		236		8
Interpublic Group of Cos., Inc. (The)		1,560		30
Intuit, Inc.		405		33
Intuitive Surgical, Inc. (e)		43		18
Invacare Corp.		306		6
Invesco Ltd.		752		28

The accompanying notes are an integral part of the financial statements.
17

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Shares		Value (000)
United States (cont'd)
Iron Mountain, Inc.		561	$	20
JM Smucker Co. (The)		98		10
Johnson & Johnson		10,320		1,080
Johnson Controls, Inc.		688		34
Jones Lang LaSalle, Inc.		151		19
Joy Global, Inc.		41		3
JPMorgan Chase & Co.		18,638		1,074
Juniper Networks, Inc. (e)		1,098		27
KB Home		1,080		20
Kellogg Co.		838		55
Keurig Green Mountain, Inc.		125		16
KeyCorp		1,279		18
Kimberly-Clark Corp.		3,344		372
Kimco Realty Corp. REIT		926		21
Kohl's Corp.		382		20
Kraft Foods Group, Inc.		637		38
Kroger Co. (The)		1,406		70
L Brands, Inc.		450		26
Laboratory Corp. of America Holdings (e)		155		16
Landstar System, Inc.		297		19
Las Vegas Sands Corp.		147		11
Lennar Corp., Class A		462		19
Li & Fung Ltd. (f)		8,000		12
Liberty Global PLC, Class A (e)		339		15
Liberty Global PLC Series C (e)		1,299		55
Liberty Property Trust REIT		542		21
Lithia Motors, Inc., Class A		203		19
Lockheed Martin Corp.		14		2
Loews Corp.		433		19
Lorillard, Inc.		343		21
Lowe's Cos., Inc.		7,042		338
M&T Bank Corp.		181		22
Macerich Co. (The) REIT		437		29
Mallinckrodt PLC (e)		26		2
Manpowergroup, Inc.		99		8
Marathon Oil Corp.		586		23
Marathon Petroleum Corp.		419		33
Marriott International, Inc., Class A		2		—	@
Mastercard, Inc., Class A		8,165		600
MAXIMUS, Inc.		446		19
McCormick & Co., Inc.		109		8
McDonald's Corp.		4,074		410
McGraw Hill Financial, Inc.		496		41
McKesson Corp.		484		90
Mead Johnson Nutrition Co.		420		39
Medtronic, Inc.		7,145		456
Merck & Co., Inc.		7,922		458
Microsoft Corp.		24,114		1,006
Minerals Technologies, Inc.		290		19
Molson Coors Brewing Co., Class B		136		10
Mondelez International, Inc., Class A		4,264		160
Monsanto Co.		1,048		131

	Shares		Value (000)
Monster Beverage Corp. (e)		128	$	9
Mosaic Co. (The)		26		1
Murphy Oil Corp.		416		28
Murphy USA, Inc. (e)		129		6
Nabors Industries Ltd.		672		20
NASDAQ OMX Group, Inc. (The)		170		7
National Oilwell Varco, Inc.		597		49
NetApp, Inc.		1,014		37
New York Community Bancorp, Inc.		170		3
Newfield Exploration Co. (e)		534		24
Newmont Mining Corp.		25,744		655
News Corp., Class A (e)		1,494		27
News Corp., Class B (e)		256		4
NextEra Energy, Inc.		399		41
NII Holdings, Inc. (e)		90		—	@
NIKE, Inc., Class B		6,402		496
Noble Corp. PLC		201		7
Noble Energy, Inc.		595		46
Nordstrom, Inc.		124		8
Norfolk Southern Corp.		787		81
Northrop Grumman Corp.		17		2
NOW, Inc. (e)		149		5
O'Reilly Automotive, Inc. (e)		229		34
Occidental Petroleum Corp.		3,503		360
Olympic Steel, Inc.		59		1
Omnicom Group, Inc.		359		26
ONE Gas, Inc.		102		4
ONEOK, Inc.		408		28
Oracle Corp.		14,707		596
PACCAR, Inc.		20		1
Peabody Energy Corp.		703		12
Pentair PLC		6		—	@
People's United Financial, Inc.		170		3
PepsiCo, Inc.		6,986		624
PerkinElmer, Inc.		402		19
Perrigo Co., PLC		132		19
Pfizer, Inc.		17,312		514
PG&E Corp.		544		26
Philip Morris International, Inc.		6,662		562
Phillips 66		2,437		196
Pioneer Natural Resources Co.		463		106
Pitney Bowes, Inc.		184		5
Plum Creek Timber Co., Inc. REIT		542		24
PNC Financial Services Group, Inc. (The)		2,010		179
Power Integrations, Inc.		324		19
PPL Corp.		571		20
Praxair, Inc.		26		3
Precision Castparts Corp.		77		19
Priceline Group, Inc. (e)		48		58
PrivateBancorp, Inc.		646		19
Procter & Gamble Co. (The)		13,042		1,025
ProLogis, Inc. REIT		397		16
Public Service Enterprise Group, Inc.		671		27

The accompanying notes are an integral part of the financial statements.
18

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Shares		Value (000)
United States (cont'd)
Public Storage REIT		151	$	26
PVH Corp.		165		19
QEP Resources, Inc.		555		19
Qualcomm, Inc.		9,876		782
Quest Diagnostics, Inc.		232		14
Range Resources Corp.		345		30
Rayonier Advanced Materials (e)		153		6
Rayonier, Inc. REIT		460		16
Raytheon Co.		20		2
Regions Financial Corp.		1,787		19
Republic Services, Inc.		596		23
Reynolds American, Inc.		299		18
Robert Half International, Inc.		201		10
Rockwell Automation, Inc.		9		1
Roper Industries, Inc.		128		19
Ross Stores, Inc.		416		28
Rouse Properties, Inc. REIT		44		1
Royal Caribbean Cruises Ltd.		2		—	@
Ryland Group, Inc. (The)		490		19
Safeway, Inc.		219		8
Salesforce.com, Inc. (e)		549		32
SanDisk Corp.		382		40
Schlumberger Ltd.		5,019		592
Scripps Networks Interactive, Inc., Class A		143		12
Sempra Energy		431		45
Simon Property Group, Inc. REIT		1,488		247
SM Energy Co.		230		19
Sonic Automotive, Inc., Class A		730		19
Southern Co. (The)		666		30
Southwest Airlines Co.		705		19
Southwestern Energy Co. (e)		672		31
Spectra Energy Corp.		805		34
Sprint Corp. (e)		3,916		33
St. Jude Medical, Inc.		444		31
Standex International Corp.		115		9
Staples, Inc.		425		5
Starbucks Corp.		4,097		317
State Street Corp.		432		29
Stericycle, Inc. (e)		235		28
Stewart Information Services Corp.		467		14
Stryker Corp.		405		34
SunTrust Banks, Inc.		631		25
Symantec Corp.		918		21
Sysco Corp.		1,428		53
T. Rowe Price Group, Inc.		362		31
Target Corp.		3,847		223
TE Connectivity Ltd.		167		10
Tenaris SA		473		11
Terex Corp.		468		19
Texas Instruments, Inc.		11,124		532
Textron, Inc.		483		19
Thermo Fisher Scientific, Inc.		645		76

	Shares		Value (000)
Time Warner Cable, Inc.		448	$	66
Time Warner, Inc.		2,356		166
Time, Inc. (e)		294		7
Titan International, Inc.		1,175		20
TJX Cos., Inc.		1,969		105
Towers Watson & Co., Class A		180		19
Trinity Industries, Inc.		448		20
Triumph Group, Inc.		265		19
Twenty-First Century Fox, Inc.		6,251		219
Tyco International Ltd.		27		1
Tyson Foods, Inc., Class A		255		10
Ultra Petroleum Corp. (e)		130		4
UniFirst Corp.		185		20
Union Pacific Corp.		6,312		630
United Parcel Service, Inc., Class B		7,570		777
United Technologies Corp.		11,544		1,333
UnitedHealth Group, Inc.		6,491		531
Universal Health Services, Inc., Class B		192		18
US Bancorp		5,159		223
UTi Worldwide, Inc.		1,893		20
Valero Energy Corp.		746		37
Valmont Industries, Inc.		117		18
Varian Medical Systems, Inc. (e)		357		30
Ventas, Inc. REIT		437		28
Verisk Analytics, Inc., Class A (e)		152		9
Verizon Communications, Inc.		13,490		660
VF Corp.		424		27
Viacom, Inc., Class B		373		32
Visa, Inc., Class A		2,593		546
Vornado Realty Trust REIT		118		13
Vulcan Materials Co.		289		18
Wabtec Corp.		227		19
Wal-Mart Stores, Inc.		13,085		982
Walgreen Co.		1,921		142
Walt Disney Co. (The)		7,082		607
Washington Prime Group, Inc. REIT (e)		744		14
Waste Management, Inc.		610		27
Weatherford International PLC (e)		1,834		42
WellPoint, Inc.		422		45
Wells Fargo & Co.		13,701		720
Western Union Co. (The)		80		1
Weyerhaeuser Co. REIT		736		24
Whole Foods Market, Inc.		1,075		42
Williams Cos., Inc. (The)		1,063		62
Wisconsin Energy Corp.		199		9
Woodward, Inc.		380		19
World Fuel Services Corp.		396		20
WPX Energy, Inc. (e)		374		9
WW Grainger, Inc.		3		1
Wynn Resorts Ltd.		103		21
Xcel Energy, Inc.		476		15
Xerox Corp.		2,250		28
Xylem, Inc.		121		5

The accompanying notes are an integral part of the financial statements.
19

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

	Shares		Value (000)
United States (cont'd)
Yahoo!, Inc. (e)		1,106	$	39
Yum! Brands, Inc.		492		40
Zimmer Holdings, Inc.		235		24
Zions Bancorporation		631		19
Zoetis, Inc.		4,288		138
				59,314
Total Common Stocks (Cost $73,443)				89,849
	No. of Rights
Rights (0.0%)
Portugal (0.0%)
Mota Engil SGPS (Portugal) (e)(g) (Cost $—)		846		1
	No. of Warrants
Warrants (0.0%)
France (0.0%)
Peugeot SA (e)		386		1
Hong Kong (0.0%)
Sun Hung Kai Properties Ltd. (e)		192		—	@
Total Warrants (Cost $—@)				1
	Shares
Investment Companies (5.4%)
United Kingdom (0.2%)
ETFS Daily Short Copper (e)		13,880		423
United States (5.2%)
Morgan Stanley Institutional Fund, Inc. — Emerging Markets Portfolio (See Note H)		110,893		2,884
SPDR S&P 500 ETF Trust		35,000		6,850
iShares MSCI Emerging Markets Index Fund		7,100		307
				10,041
Total Investment Companies (Cost $8,788)				10,464
Short-Term Investments (19.3%)
Investment Company (19.0%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H) (Cost $36,788)		36,787,990		36,788
	Face Amount (000)
U.S. Treasury Securities (0.3%)
U.S. Treasury Bills, 0.04%, 8/21/14 (h)(i)	$	308		308
0.05%, 8/21/14 (h)(i)		365		365
Total U.S. Treasury Securities (Cost $673)				673
Total Short-Term Investments (Cost $37,461)				37,461
Total Investments (99.6%) (Cost $171,555) (j)				192,565
Other Assets in Excess of Liabilities (0.4%)				740
Net Assets (100.0%)			$	193,305

(a)  Security is subject to delayed delivery.

(b)  Variable/Floating Rate Security — Interest rate changes on these instruments are based on changes in a designated base rate. The rates shown are those in effect on June 30, 2014.

(c)  144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(d)  Multi-step coupon rate changes in predetermined increments to maturity. Rate disclosed is as of June 30, 2014. Maturity date disclosed is the ultimate maturity date.

(e)  Non-income producing security.

(f)  Security trades on the Hong Kong exchange.

(g)  Security has been deemed illiquid at June 30, 2014.

(h)  Rate shown is the yield to maturity at June 30, 2014.

(i)  All or a portion of the security was pledged to cover margin requirements for swap agreements.

(j)  Securities are available for collateral in connection with securities purchased on a forward commitment basis, open foreign currency forward exchange contracts, futures contracts and swap agreements.

@  Value is less than $500.

CVA  Certificaten Van Aandelen.

MTN  Medium Term Note.

OAT  Obligations Assimilables du Trésor (French Treasury Obligation).

REIT  Real Estate Investment Trust.

SDR  Swedish Depositary Receipt.

SPDR  Standard & Poor's Depository Receipt.

TBA  To Be Announced.

The accompanying notes are an integral part of the financial statements.
20

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

Foreign Currency Forward Exchange Contracts:

The Portfolio had the following foreign currency forward exchange contracts open at June 30, 2014:

Counterparty	Currency to Deliver (000)		Value (000)		Settlement Date	In Exchange For (000)		Value (000)		Unrealized Appreciation (Depreciation) (000)
Bank of America NA	CHF	871	$	982	7/17/14	USD	968	$	968	$	(14	)
Bank of America NA	USD	200		200	7/17/14	GBP	118		202		2
Bank of America NA	USD	239		239	7/17/14	RUB	8,267		243		4
Bank of Montreal	TRY	568		267	7/17/14	USD	262		262		(5	)
Bank of New York Mellon	EUR	1,360		1,862	7/17/14	USD	1,842		1,842		(20	)
Bank of New York Mellon	USD	1,934		1,934	7/17/14	HKD	14,988		1,934		(—	@)
Barclays Bank PLC	AUD	1,563		1,473	7/17/14	USD	1,457		1,457		(16	)
Barclays Bank PLC	CLP	783,233		1,414	7/17/14	USD	1,409		1,409		(5	)
Barclays Bank PLC	EUR	399		547	7/17/14	USD	541		541		(6	)
Barclays Bank PLC	USD	280		280	7/17/14	KRW	285,632		283		3
Citibank NA	CAD	1,660		1,555	7/17/14	USD	1,546		1,546		(9	)
Citibank NA	EUR	637		872	7/17/14	USD	863		863		(9	)
Citibank NA	JPY	13,724		136	7/17/14	USD	135		135		(1	)
Citibank NA	MXN	5,569		428	7/17/14	USD	427		427		(1	)
Citibank NA	USD	430		430	7/17/14	AUD	460		433		3
Citibank NA	USD	3,642		3,642	7/17/14	JPY	371,994		3,673		31
Citibank NA	USD	179		179	7/17/14	JPY	18,161		179		—	@
Citibank NA	ZAR	2,016		189	7/17/14	USD	190		190		1
Commonwealth Bank of Australia	AUD	3,053		2,876	7/17/14	USD	2,845		2,845		(31	)
Commonwealth Bank of Australia	USD	837		837	7/17/14	AUD	887		836		(1	)
Credit Suisse International	GBP	646		1,105	7/17/14	USD	1,096		1,096		(9	)
Deutsche Bank AG	AUD	869		819	7/17/14	USD	810		810		(9	)
Deutsche Bank AG	CHF	793		894	7/17/14	USD	881		881		(13	)
Deutsche Bank AG	EUR	180		247	7/17/14	PLN	750		247		(—	@)
Deutsche Bank AG	GBP	895		1,531	7/17/14	USD	1,518		1,518		(13	)
Deutsche Bank AG	NZD	1,635		1,429	7/17/14	USD	1,423		1,423		(6	)
Deutsche Bank AG	PLN	652		214	7/17/14	USD	213		213		(1	)
Deutsche Bank AG	PLN	1,131		372	7/17/14	USD	371		371		(1	)
Deutsche Bank AG	SEK	10,083		1,508	7/17/14	USD	1,498		1,498		(10	)
Deutsche Bank AG	USD	529		529	7/17/14	DKK	2,914		535		6
Deutsche Bank AG	USD	4,829		4,829	7/17/14	JPY	491,129		4,849		20
Deutsche Bank AG	USD	1,427		1,427	7/17/14	SEK	9,480		1,419		(8	)
Deutsche Bank AG	USD	542		542	7/17/14	SGD	679		545		3
Deutsche Bank AG	USD	189		189	7/17/14	TRY	408		192		3
Goldman Sachs International	AUD	1,563		1,473	7/17/14	USD	1,457		1,457		(16	)
Goldman Sachs International	EUR	624		854	7/17/14	USD	845		845		(9	)
Goldman Sachs International	USD	195		195	7/17/14	CAD	211		198		3
Goldman Sachs International	USD	843		843	7/17/14	EUR	620		850		7
HSBC Bank PLC	MXN	2,837		219	7/17/14	USD	218		218		(1	)
HSBC Bank PLC	USD	31		31	7/17/14	EUR	22		31		—	@
HSBC Bank PLC	USD	1,976		1,976	7/17/14	GBP	1,163		1,990		14
HSBC Bank PLC	USD	151		151	7/17/14	ZAR	1,606		150		(1	)
JPMorgan Chase Bank NA	NZD	3,304		2,889	7/17/14	USD	2,852		2,852		(37	)
JPMorgan Chase Bank NA	USD	565		565	7/17/14	NZD	646		565		(—	@)
JPMorgan Chase Bank NA	USD	230		230	7/17/14	TWD	6,885		231		1
JPMorgan Chase Bank NA	ZAR	2,851		267	7/17/14	USD	262		262		(5	)
Northern Trust Company	EUR	1,531		2,097	7/17/14	USD	2,074		2,074		(23	)
Royal Bank of Scotland PLC	EUR	1,897		2,597	7/17/14	USD	2,569		2,569		(28	)
Royal Bank of Scotland PLC	USD	228		228	7/17/14	BRL	515		232		4
Royal Bank of Scotland PLC	USD	5,155		5,155	7/17/14	JPY	526,596		5,198		43
State Street Bank and Trust Co.	SEK	9,414		1,409	7/17/14	USD	1,417		1,417		8
State Street Bank and Trust Co.	USD	207		207	7/17/14	BRL	467		210		3

The accompanying notes are an integral part of the financial statements.
21

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

Foreign Currency Forward Exchange Contracts: (cont'd)

Counterparty	Currency to Deliver (000)		Value (000)		Settlement Date	In Exchange For (000)		Value (000)		Unrealized Appreciation (Depreciation) (000)
State Street Bank and Trust Co.	USD	2,613	$	2,613	7/17/14	CHF	2,351	$	2,651	$	38
State Street Bank and Trust Co.	USD	2,259		2,259	7/17/14	EUR	1,657		2,270		11
UBS AG	CHF	624		703	7/17/14	USD	693		693		(10	)
UBS AG	CHF	453		511	7/17/14	USD	511		511		(—	@)
UBS AG	EUR	791		1,084	7/17/14	USD	1,072		1,072		(12	)
UBS AG	EUR	709		970	7/17/14	USD	970		970		(—	@)
UBS AG	NOK	1,440		234	7/17/14	EUR	172		235		1
UBS AG	NOK	214		35	7/17/14	USD	35		35		(—	@)
UBS AG	USD	3,888		3,888	7/17/14	CAD	4,225		3,956		68
UBS AG	USD	177		177	7/17/14	CHF	158		178		1
UBS AG	USD	404		404	7/17/14	EUR	298		407		3
UBS AG	USD	122		122	7/17/14	EUR	90		123		1
UBS AG	USD	262		262	7/17/14	EUR	193		263		1
UBS AG	USD	2,370		2,370	7/17/14	EUR	1,737		2,379		9
UBS AG	USD	1,410		1,410	7/17/14	GBP	831		1,422		12
UBS AG	USD	2,768		2,768	7/17/14	JPY	282,728		2,792		24
UBS AG	USD	534		534	7/17/14	KRW	544,466		538		4
UBS AG	USD	101		101	7/17/14	MYR	324		101		—	@
UBS AG	USD	478		478	7/17/14	NOK	2,872		468		(10	)
UBS AG	USD	53		53	7/17/14	SEK	352		53		(—	@)
UBS AG	USD	197		197	7/17/14	SGD	247		198		1
UBS AG	USD	125		125	7/17/14	THB	4,054		125		—	@
UBS AG	USD	275		275	7/17/14	TRY	596		280		5
UBS AG	USD	376		376	7/17/14	ZAR	4,094		384		8
			$	79,312				$	79,318	$	6

Futures Contracts:

The Portfolio had the following futures contracts open at June 30, 2014:

	Number of Contracts		Value (000)		Expiration Date	Unrealized Appreciation (Depreciation) (000)
Long:
CAC 40 Index (France)		1	$	61	Jul-14	$	(2	)
DAX Index (Germany)		1		338	Sep-14		(3	)
Euro Stoxx 50 Index (Germany)		291		12,878	Sep-14		(177	)
FTSE MIB Index (Italy)		11		1,604	Sep-14		(51	)
IBEX 35 Index (Spain)		13		1,932	Jul-14		(18	)
MSCI Emerging Market E Mini (United States)		137		7,129	Sep-14		(37	)
MSCI Singapore Free Index (Singapore)		12		713	Jul-14		2
NIKKEI 225 Index (United States)		100		7,485	Sep-14		34
S&P 500 E MINI Index (United States)		85		8,298	Sep-14		26
S+P TSE 60 Index (Canada)		17		2,752	Sep-14		66
SPI 200 Index (Australia)		16		2,019	Sep-14		(14	)
U.S. Treasury 2 yr. Note (United States)		4		878	Sep-14		(1	)
U.S. Treasury Ultra Long Bond (United States)		20		2,999	Sep-14		11

	Number of Contracts		Value (000)			Expiration Date	Unrealized Appreciation (Depreciation) (000)
Short:
Copper High Grade Index (United States)		44	$	(3,524	)	Sep-14	$	(65	)
FTSE 100 Index (United Kingdom)		14		(1,608	)	Sep-14		2
FTSE 100 Index (Hong Kong)		4		(596	)	Jul-14		(9	)
German Euro Bund (Germany)		61		(12,279	)	Sep-14		(133	)
Hang Seng Index (Hong Kong)		66		(4,361	)	Jul-14		(49	)
U.S. Treasury 10 yr. Note (United States)		136		(17,023	)	Sep-14		(25	)
U.S. Treasury 5 yr. Note (United States)		14		(1,673	)	Sep-14		6
							$	(437	)

The accompanying notes are an integral part of the financial statements.
22

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

Credit Default Swap Agreements:

The Portfolio had the following credit default swap agreements open at June 30, 2014:

Swap Counterparty and Reference Obligation	Buy/Sell Protection	Notional Amount (000)		Pay/Receive Fixed Rate			Termination Date	Upfront Payment (Received) (000)			Unrealized Appreciation (Depreciation) (000)			Value (000)			Credit Rating of Reference Obligation†
Bank of America NA People's Republic of China	Buy	$	109		1.00	%	9/20/19	$	(1	)	$	(—	@)	$	(1	)	AA-
Bank of America NA People's Republic of China	Buy		87		1.00		9/20/19		(1	)		(—	@)		(1	)	AA-
Barclays Bank PLC People's Republic of China	Buy		159		1.00		9/20/19		(1	)		(1	)		(2	)	AA-
Barclays Bank PLC People's Republic of China	Buy		546		1.00		9/20/19		(5	)		(2	)		(7	)	AA-
Deutsche Bank AG Australian Government	Buy		102		1.00		2/5/19		(3	)		(—	@)		(3	)	AAA
Deutsche Bank AG People's Republic of China	Buy		774		1.00		9/20/19		(10	)		1			(9	)	AA-
Deutsche Bank AG Australian Government	Buy		1,277		1.00		9/20/19		(42	)		(3	)		(45	)	AAA
Deutsche Bank AG Australian Government	Buy		120		1.00		9/20/19		(4	)		(—	@)		(4	)	AAA
Deutsche Bank AG People's Republic of China	Buy		65		1.00		9/20/19		(1	)		(—	@)		(1	)	AA-
Deutsche Bank AG Australian Government	Buy		148		1.00		9/20/19		(5	)		(—	@)		(5	)	AAA
Deutsche Bank AG Australian Government	Buy		655		1.00		9/20/19		(21	)		(2	)		(23	)	AAA
Goldman Sachs International People's Republic of China	Buy		438		1.00		9/20/19		(4	)		(1	)		(5	)	AA-
Goldman Sachs International Australian Government	Buy		33		1.00		9/20/19		(1	)		(—	@)		(1	)	AAA
Goldman Sachs International People's Republic of China	Buy		88		1.00		9/20/19		(1	)		(—	@)		(1	)	AA-
Goldman Sachs International Australian Government	Buy		146		1.00		9/20/19		(5	)		(1	)		(6	)	AAA
JPMorgan Chase Bank NA People's Republic of China	Buy		958		1.00		9/20/19		(10	)		(2	)		(12	)	AA-
		$	5,705					$	(115	)	$	(11	)	$	(126	)

Interest Rate Swap Agreements:

The Portfolio had the following interest rate swap agreements open at June 30, 2014:

Swap Counterparty	Floating Rate Index	Pay/Receive Floating Rate	Fixed Rate			Termination Date	Notional Amount (000)		Unrealized Appreciation (Depreciation) (000)
Bank of America NA	3 Month LIBOR	Receive		2.04	%	2/13/23	$	680	$	16
Barclays Bank PLC	3 Month LIBOR	Receive		2.04		2/13/23		460		11
Goldman Sachs International	3 Month LIBOR	Pay		2.04		1/22/19	CAD	2,340		23
Goldman Sachs International	3 Month LIBOR	Receive		2.09		2/15/23	$	1,380		28
Goldman Sachs International	3 Month LIBOR	Receive		2.95		1/22/24	CAD	1,270		(41	)
Goldman Sachs International	3 Month LIBOR	Receive		2.80		5/1/43	$	540		50
Goldman Sachs International	3 Month LIBOR	Receive		2.90		5/13/43		600		44
JPMorgan Chase Bank NA	3 Month LIBOR	Receive		2.06		2/6/23		660		14
Morgan Stanley & Co., LLC *	3 Month LIBOR	Receive		0.51		4/16/16		14,320		(9	)
Morgan Stanley & Co., LLC *	3 Month LIBOR	Receive		0.57		5/7/16		14,410		(20	)
Morgan Stanley & Co., LLC *	6 Month LIBOR	Pay		1.10		5/23/16	GBP	17,090		(85	)
Morgan Stanley & Co., LLC *	3 Month LIBOR	Receive		0.50		5/28/16	$	28,780		18
Morgan Stanley & Co., LLC *	3 Month LIBOR	Receive		1.79		1/24/19		2,510		(43	)
Morgan Stanley & Co., LLC *	3 Month LIBOR	Pay		2.96		1/24/24		1,370		65
									$	71

The accompanying notes are an integral part of the financial statements.
23

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

Total Return Swap Agreements:

The Portfolio had the following total return swap agreements open at June 30, 2014:

Swap Counterparty	Index	Notional Amount (000)		Floating Rate	Pay/Receive Total Return of Referenced Index	Maturity Date	Unrealized Depreciation (000)
Bank of America NA	MSCI World/Energy Equipment Index	$	1,987	3 Month USD LIBOR minus 0.35%	Pay	5/5/15	$	(202	)
Bank of America NA	MSCI World/Energy Equipment Index		868	3 Month USD LIBOR minus 0.35%	Pay	5/5/15		(41	)
Barclays Bank PLC	Barclays Custom International Retail Basket		2,690	3 Month USD LIBOR minus 0.65%	Pay	10/23/14		6
Barclays Bank PLC	Barclays Custom International Retail Basket		317	3 Month USD LIBOR minus 0.65%	Pay	10/23/14		1
Barclays Bank PLC	Barclays Custom International Retail Basket		1,224	3 Month USD LIBOR minus 0.25%	Pay	2/4/15		32
Barclays Bank PLC	MSCI U.S. REIT Index		2,854	3 Month USD LIBOR plus 0.05%	Pay	6/15/15		(23	)
Deutsche Bank AG	MSCI China Banks Index	HKD	4,430	3 Month HKD HIBOR minus 0.35%	Pay	2/16/15		(55	)
Goldman Sachs International	Goldman Sachs Custom Client Basket	$	1,753	3 Month USD LIBOR minus 0.23%	Pay	6/30/15		(13	)
Goldman Sachs International	Goldman Sachs Custom Miners Index		1,436	3 Month USD LIBOR minus 0.51%	Pay	6/10/15		(39	)
Goldman Sachs International	Goldman Sachs Custom Mortgage REIT Index		3,123	3 Month USD LIBOR minus 0.28%	Pay	8/21/14		(57	)
Goldman Sachs International	Goldman Sachs Custom Mortgage REIT Index		305	3 Month USD LIBOR minus 0.28%	Pay	8/21/14		(5	)
Goldman Sachs International	Goldman Sachs Custom U.K. Real Estate Index	GBP	601	3 Month GBP LIBOR minus 0.18%	Pay	5/4/15		25
JPMorgan Chase Bank NA	MSCI China Banks Index	HKD	4,973	3 Month HKD HIBOR minus 0.25%	Pay	11/26/14		(39	)
JPMorgan Chase Bank NA	MSCI China Banks Index		6,360	3 Month HKD HIBOR minus 0.30%	Pay	11/26/14		(50	)
JPMorgan Chase Bank NA	JPMorgan Chase Custom Aerospace Manufacturing Index	$	2,908	3 Month USD LIBOR minus 0.26%	Pay	6/29/15		42
JPMorgan Chase Bank NA	JPMorgan Chase Custom Aerospace Manufacturing Index		1,749	3 Month USD LIBOR minus 0.26%	Pay	6/29/15		(14	)
JPMorgan Chase Bank NA	JPMorgan Chase Custom Airline Index		580	3 Month USD LIBOR minus 0.29%	Pay	7/3/15		2
JPMorgan Chase Bank NA	JPMorgan Chase Custom China Real Estate Index	HKD	851	3 Month HKD HIBOR minus 0.40%	Pay	4/28/15		5
JPMorgan Chase Bank NA	JPMorgan Chase Custom China Real Estate Index		4	3 Month HKD HIBOR minus 0.40%	Pay	4/28/15		—	@
							$	(425	)

The accompanying notes are an integral part of the financial statements.
24

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Tactical Asset Allocation Portfolio

@  Amount is less than $500.

†  Credit rating as issued by Standard & Poor's.

*  Cleared swap agreement, the broker for which is Morgan Stanley & Co., LLC.

LIBOR  London Interbank Offered Rate.

HIBOR  Hong Kong Interbank Offered Rate.

AUD  — Australian Dollar

BRL  — Brazilian Real

CAD  — Canadian Dollar

CHF  — Swiss Franc

CLP  — Chilean Peso

DKK  — Danish Krone

EUR  — Euro

GBP  — British Pound

HKD  — Hong Kong Dollar

JPY  — Japanese Yen

KRW  — South Korean Won

MXN  — Mexican Peso

MYR  — Malaysian Ringgit

NOK  — Norwegian Krone

NZD  — New Zealand Dollar

PLN  — Polish Zloty

RUB  — Russian Ruble

SEK  — Swedish Krona

SGD  — Singapore Dollar

THB  — Thai Baht

TRY  — Turkish Lira

TWD  — Taiwan Dollar

USD  — United States Dollar

ZAR  — South African Rand

Portfolio Composition

Classification	Percentage of Total Investments
Common Stocks		46.7	%
Fixed Income Securities		28.4
Short-Term Investments		19.5
Investment Companies		5.4
Other**		0.0	@
Total Investments		100.0	%*

*  Does not include open long/short futures contracts with an underlying face amount of approximately $90,150,000 with net unrealized depreciation of approximately $437,000. Does not include open foreign currency forward exchange contracts with net unrealized appreciation of approximately $6,000 and does not include open swap agreements with net unrealized depreciation of approximately $365,000.

**  Industries and investment types representing less than 5% of total investments.

@  Amount is less than 0.05%.

The accompanying notes are an integral part of the financial statements.
25

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Global Tactical Asset Allocation Portfolio

Statement of Assets and Liabilities	June 30, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $131,841)	$	152,893
Investments in Securities of Affiliated Issuers, at Value (Cost $39,714)		39,672
Total Investments in Securities, at Value (Cost $171,555)		192,565
Foreign Currency, at Value (Cost $698)		705
Receivable for Variation Margin on Futures Contracts		3,757
Interest Receivable		566
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		346
Unrealized Appreciation on Swap Agreements		300
Dividends Receivable		165
Receivable for Investments Sold		154
Receivable for Portfolio Shares Sold		91
Tax Reclaim Receivable		51
Due from Adviser		31
Receivable from Affiliate		2
Other Assets		23
Total Assets		198,756
Liabilities:
Payable for Investments Purchased		4,209
Unrealized Depreciation on Swap Agreements		591
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		340
Premium Received on Open Swap Agreements		115
Payable for Portfolio Shares Redeemed		51
Payable for Professional Fees		51
Payable for Administration Fees		40
Payable for Variation Margin on Swap Agreements		17
Payable for Distribution Fees — Class II Shares		3
Payable for Directors' Fees and Expenses		2
Payable for Transfer Agent Fees		—	@
Other Liabilities		32
Total Liabilities		5,451
NET ASSETS	$	193,305
Net Assets Consist of:
Paid-in-Capital	$	158,062
Accumulated Undistributed Net Investment Income		4,419
Accumulated Net Realized Gain		10,603
Unrealized Appreciation (Depreciation) on:
Investments		21,052
Investments in Affiliates		(42	)
Futures Contracts		(437	)
Swap Agreements		(365	)
Foreign Currency Forward Exchange Contracts		6
Foreign Currency Translations		7
Net Assets	$	193,305
CLASS I:
Net Assets	$	160,665
Net Asset Value, Offering and Redemption Price Per Share Applicable to 13,855,865 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	11.60
CLASS II:
Net Assets	$	32,640
Net Asset Value, Offering and Redemption Price Per Share Applicable to 2,826,054 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	11.55

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
26

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Global Tactical Asset Allocation Portfolio

Statement of Operations	Six Months Ended June 30, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $64 of Foreign Taxes Withheld)	$	1,721
Interest from Securities of Unaffiliated Issuers		952
Dividends from Security of Affiliated Issuer (Note H)		9
Total Investment Income		2,682
Expenses:
Advisory Fees (Note B)		709
Administration Fees (Note C)		236
Custodian Fees (Note F)		130
Professional Fees		84
Pricing Fees		61
Distribution Fees — Class II Shares (Note D)		58
Shareholder Reporting Fees		16
Transfer Agency Fees (Note E)		8
Directors' Fees and Expenses		3
Other Expenses		12
Total Expenses		1,317
Waiver of Advisory Fees (Note B)		(690	)
Distribution Fees — Class II Shares Waived (Note D)		(41	)
Rebate from Morgan Stanley Affiliate (Note H)		(31	)
Net Expenses		555
Net Investment Income		2,127
Realized Gain (Loss):
Investments Sold		3,848
Foreign Currency Forward Exchange Contracts		(215	)
Foreign Currency Transactions		(10	)
Futures Contracts		2,113
Swap Agreements		(1,737	)
Net Realized Gain		3,999
Change in Unrealized Appreciation (Depreciation):
Investments		4,598
Investments in Affiliates		152
Foreign Currency Forward Exchange Contracts		316
Foreign Currency Translations		(4	)
Futures Contracts		(2,040	)
Swap Agreements		(218	)
Net Change in Unrealized Appreciation (Depreciation)		2,804
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		6,803
Net Increase in Net Assets Resulting from Operations	$	8,930

The accompanying notes are an integral part of the financial statements.
27

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Global Tactical Asset Allocation Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2014 (unaudited) (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	2,127		$	2,468
Net Realized Gain		3,999			17,283
Net Change in Unrealized Appreciation (Depreciation)		2,804			1,697
Net Increase in Net Assets Resulting from Operations		8,930			21,448
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(171	)
Class II:
Net Investment Income		—			(39	)
Total Distributions		—			(210	)
Capital Share Transactions:(1)
Class I:
Subscribed		8,130			10,862
Issued due to a tax-free reorganization		—			87,334
Distributions Reinvested		—			171
Redeemed		(11,918	)		(22,447	)
Class II:
Subscribed		460			3,466
Issued due to a tax-free reorganization		—			34,602
Distributions Reinvested		—			39
Redeemed		(3,344	)		(7,664	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(6,672	)		106,363
Total Increase in Net Assets		2,258			127,601
Net Assets:
Beginning of Period		191,047			63,446
End of Period (Including Accumulated Undistributed Net Investment Income of $4,419 and $2,292)	$	193,305		$	191,047
(1) Capital Share Transactions:
Class I:
Shares Subscribed		720			1,049
Shares Issued due to a tax-free reorganization		—			8,690
Shares Issued on Distributions Reinvested		—			17
Shares Redeemed		(1,060	)		(2,179	)
Net Increase (Decrease) in Class I Shares Outstanding		(340	)		7,577
Class II:
Shares Subscribed		41			352
Shares Issued due to a tax-free reorganization		—			3,453
Shares Issued on Distributions Reinvested		—			4
Shares Redeemed		(298	)		(751	)
Net Increase (Decrease) in Class II Shares Outstanding		(257	)		3,058

The accompanying notes are an integral part of the financial statements.
28

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Global Tactical Asset Allocation Portfolio

	Class I
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	11.06		$	9.55		$	8.58		$	9.02		$	8.81		$	6.86
Income (Loss) from Investment Operations:
Net Investment Income†		0.13			0.18			0.14			0.13			0.11			0.13
Net Realized and Unrealized Gain (Loss)		0.41			1.34			1.00			(0.45	)		0.34			2.05
Total from Investment Operations		0.54			1.52			1.14			(0.32	)		0.45			2.18
Distributions from and/or in Excess of:
Net Investment Income		—			(0.01	)		(0.19	)		(0.12	)		(0.25	)		(0.23	)
Regulatory Settlement Proceeds		—			—			0.02	r		—			0.01	^^		—
Net Asset Value, End of Period	$	11.60		$	11.06		$	9.55		$	8.58		$	9.02		$	8.81
Total Return ++		4.79	%#		15.95	%		13.84	%		(3.68	)%		5.68	%		32.53	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	160,655		$	157,059		$	63,205		$	64,668		$	85,752		$	98,707
Ratio of Expenses to Average Net Assets(1)		0.57	%+††*		0.62	%+††^^^		0.94	%+††		0.96	%+^		1.03	%+		1.04	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			0.94	%+††		N/A			1.03	%+		N/A
Ratio of Net Investment Income to Average Net Assets(1)		2.27	%+††*		1.69	%+††		1.53	%+††		1.42	%+		1.35	%+		1.75	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.03	%††*		0.04	%††		0.06	%††		0.06	%		0.02	%		0.01	%
Portfolio Turnover Rate		34	%#		168	%		105	%		109	%		183	%		30	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.33	%††*		1.32	%††		1.72	%††		1.76	%		1.45	%+		1.21	%+
Net Investment Income to Average Net Assets		1.51	%††*		0.99	%††		0.75	%††		0.62	%		0.93	%+		1.58	%+

†  Per share amount is based on average shares outstanding.

r  During the year ended December 31, 2012, the Portfolio received a regulatory settlement from an unaffiliated third party, which had an impact of approximately 0.23% on the total return. This was a one-time settlement, and as a result, the impact on the NAV and consequently the performance will not likely be repeated in the future. Had this settlement not occurred, the total return for Class I would have been approximately 13.61%.

^^  During the year ended December 31, 2010, the Portfolio received a regulatory settlement from an unaffiliated third party, which had an impact of 0.11% on total return. This was a one-time settlement, and as a result, the impact on the NAV and consequently the performance will not likely be repeated in the future. Had this settlement not occurred, the total return for Class I would have been approximately 5.57%.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

^^^  Effective April 29, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.60% for Class I shares. Prior to April 29, 2013, the maximum ratio was 1.00% for Class I shares.

^  Effective July 1, 2011, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% for Class I shares. Prior to July 1, 2011, the maximum ratio was 1.05% for Class I shares.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
29

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Global Tactical Asset Allocation Portfolio

	Class II
	Six Months Ended June 30,2014			Year Ended December 31,						Period from March 15, 2011^ to
Selected Per Share Data and Ratios	(unaudited)			2013			2012			December 31, 2011
Net Asset Value, Beginning of Period	$	11.03		$	9.54		$	8.57		$	9.04
Income (Loss) from Investment Operations:
Net Investment Income†		0.12			0.17			0.13			0.11
Net Realized and Unrealized Gain (Loss)		0.40			1.33			1.01			(0.46	)
Total from Investment Operations		0.52			1.50			1.14			(0.35	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.01	)		(0.19	)		(0.12	)
Regulatory Settlement Proceeds		—			—			0.02	r		—
Net Asset Value, End of Period	$	11.55		$	11.03		$	9.54		$	8.57
Total Return ++		4.71	%#		15.75	%		13.70	%		(4.00	)%#
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	32,640		$	33,988		$	241		$	65
Ratio of Expenses to Average Net Assets(1)		0.67	%+††*		0.72	%+††^^^		1.04	%+††		1.06	%+*^^
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			1.04	%+††		N/A
Ratio of Net Investment Income to Average Net Assets(1)		2.17	%+††*		1.59	%+††		1.43	%+††		1.32	%+*
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.03	%††*		0.04	%††		0.06	%††		0.06	%*
Portfolio Turnover Rate		34	%#		168	%		105	%		109	%#
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.68	%††*		1.67	%††		2.07	%††		2.11	%*
Net Investment Income to Average Net Assets		1.16	%††*		0.64	%††		0.40	%††		0.27	%*

^  Commencement of Operations.

†  Per share amount is based on average shares outstanding.

r  During the year ended December 31, 2012, the Portfolio received a regulatory settlement from an unaffiliated third party, which had an impact of 0.24% on total return. This was a one-time settlement, and as a result, the impact on the NAV and consequently the performance will not likely be repeated in the future. Had this settlement not occurred, the total return for Class II would have been approximately 13.46%.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

^^^  Effective April 29, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.70% for Class II shares. Prior to April 29, 2013, the maximum ratio was 1.10% for Class II shares.

^^  Effective July 1, 2011, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.10% for Class II shares. Prior to July 1, 2011, the maximum ratio was 1.15% for Class II shares.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
30

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements

The Universal Institutional Funds, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Fund is comprised of eleven separate active, diversified and non-diversified portfolios (individually referred to as a "Portfolio", collectively as the "Portfolios"). The Fund applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Tactical Asset Allocation Portfolio. The Portfolio seeks total return by investing in a blend of equity and fixed income securities of U.S. and non-U.S. issuers. In seeking to achieve this investment objective, the Portfolio will implement a global tactical approach to achieving total return, and to control risk and volatility. The Portfolio offers two classes of shares – Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Fund is intended to be the funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

On April 29, 2013, the Portfolio acquired the net assets of Morgan Stanley Variable Investment Series Strategist Portfolio ("Strategist Portfolio"), an open-end investment company, based on the respective valuations as of the close of business on April 26, 2013, pursuant to a Plan of Reorganization approved by the shareholders of Strategist Portfolio on February 21, 2013 ("Reorganization"). The purpose of the transaction was to combine two portfolios managed by the Adviser with comparable investment objectives and strategies. The Reorganization was accomplished by a tax-free exchange of 8,690,002 Class I shares of the Portfolio at a net asset value of $10.05 per share for 7,821,609 Class X shares of Strategist Portfolio; 3,453,252 Class II shares of the Portfolio at a net asset value of $10.02 for 3,100,667 Class Y shares of Strategist Portfolio. The net assets of Strategist Portfolio before the Reorganization were approximately $121,936,000, including unrealized appreciation of approximately $13,510,000 at April 26, 2013. The investment portfolio of Strategist Portfolio, with a fair value of approximately $121,662,000 and identified cost of approximately $108,151,000 on April 26, 2013, was the principal asset acquired by the Portfolio. For financial reporting purposes, assets received and shares issued by the Portfolio were recorded at fair value; however, the cost basis of the investments received from Strategist Portfolio was carried forward to align ongoing reporting of the Portfolio's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. Immediately prior to the Reorganization, the net assets of the Portfolio were

approximately $65,474,000. Immediately after the Reorganization, the net assets of the Portfolio were approximately $187,410,000.

Upon closing of the Reorganization, shareholders of Strategist Portfolio received shares of the Portfolio as follows:

Strategist
Portfolio Global Tactical
Asset Allocation
Portfolio

Class X	Class I
Class Y	Class II

Assuming the acquisition had been completed on January 1, 2013, the beginning of the annual reporting period of the Portfolio, the Portfolio's pro forma results of operations for the period ended December 31, 2013, are as follows:

Net investment income(1)	$	3,771,000
Net gain realized and unrealized gain(2)	$	19,296,000
Net increase (decrease) in net assets resulting from operations	$	23,067,000

(1)Approximately $2,468,000 as reported, plus approximately $962,000 Strategist Portfolio premerger, plus approximately $341,000 of estimated pro-forma eliminated expenses.

(2)Approximately $18,980,000 as reported, plus approximately $316,000 Strategist Portfolio premerger.

Because the combined investment portfolios have been managed as a single integrated portfolio since the Reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of Strategist Portfolio that have been included in the Portfolio's Statement of Operations since April 29, 2013.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP 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: (1) Certain portfolio securities may be valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors"). The pricing service may utilize a matrix system or other model incorporating attributes such as security quality, maturity and coupon as the evaluation model parameters, and/or research evaluations by its staff, including review of broker-dealer market price quotations in determining what it believes is the fair valuation of the portfolios securities valued by such pricing service; (2) an equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if

31

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (3) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (4) futures are valued at the latest price published by the commodities exchange on which they trade; (5) swaps are marked-to-market daily based upon quotations from market makers; (6) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (7) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (8) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (9) short-term taxable debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such price does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser. Other taxable short-term debt securities with maturities of more than 60 days will be valued on a mark-to-market basis until such time as they reach a maturity of 60 days, whereupon they will be valued at amortized cost using their value on the 61st day unless the Adviser determines such price does not reflect the securities' fair value, in which case these securities will be valued at their fair market value as determined by the Adviser.

Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information

32

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Portfolio's investments as of June 30, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Fixed Income Securities
Agency Fixed Rate Mortgages	$	—	$	5,076	$	—	$	5,076
Asset-Backed Securities		—		685		—		685
Collateralized Mortgage Obligations - Agency Collateral Series		—		339		—		339
Commercial Mortgage- Backed Securities		—		1,526		—		1,526
Corporate Bonds		—		13,492		—		13,492
Mortgage - Other		—		256		—		256
Sovereign		—		28,806		—		28,806
U.S. Treasury Securities		—		4,609		—		4,609
Total Fixed Income Securities		—		54,789		—		54,789

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks
Aerospace & Defense	$	2,788	$	—	$	—	$	2,788
Air Freight & Logistics		937		—		—		937
Airlines		55		—		—		55
Auto Components		275		—		—		275
Automobiles		934		—		—		934
Banks		7,017		—		—		7,017
Beverages		2,168		—		—		2,168
Biotechnology		1,601		—		—		1,601
Building Products		289		—		—		289
Capital Markets		1,712		—		—		1,712
Chemicals		1,641		—		—		1,641
Commercial Services & Supplies		273		—		—		273
Communications Equipment		1,456		—		—		1,456
Construction & Engineering		165		—		—		165
Construction Materials		185		—		—		185
Consumer Finance		1,586		—		—		1,586
Containers & Packaging		79		—		—		79
Diversified Financial Services		859		—		—		859
Diversified Telecommunication Services		2,200		—		—		2,200
Electric Utilities		964		—		—		964
Electrical Equipment		744		—		—		744
Electronic Equipment, Instruments & Components		408		—		—		408
Energy Equipment & Services		3,215		—		—		3,215
Food & Staples Retailing		3,298		—		—		3,298
Food Products		2,242		—		—		2,242
Gas Utilities		94		—		—		94
Health Care Equipment & Supplies		1,544		—		—		1,544
Health Care Providers & Services		1,121		—		—		1,121
Health Care Technology		40		—		—		40
Hotels, Restaurants & Leisure		1,164		—		—		1,164
Household Durables		199		—		—		199
Household Products		2,701		—		—		2,701
Independent Power Producers & Energy Traders		35		—		—		35
Industrial Conglomerates		1,911		—		—		1,911
Information Technology Services		2,217		—		—		2,217

33

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Insurance	$	2,194	$	—	$	—	$	2,194
Internet & Catalog Retail		566		—		—		566
Internet Software & Services		1,625		—		—		1,625
Leisure Products		13		—		—		13
Life Sciences Tools & Services		166		—		—		166
Machinery		1,313		—		—		1,313
Marine		91		—		—		91
Media		2,616		—		—		2,616
Metals & Mining		3,911		—		—		3,911
Multi-Utilities		665		—		—		665
Multi-line Retail		426		—		—		426
Oil, Gas & Consumable Fuels		7,278		—		—		7,278
Paper & Forest Products		31		—		—		31
Personal Products		276		—		—		276
Pharmaceuticals		6,195		—		—		6,195
Professional Services		409		—		—		409
Real Estate Investment Trusts (REITs)		1,107		—		—		1,107
Real Estate Management & Development		422		—		—		422
Road & Rail		1,110		—		—		1,110
Semiconductors & Semiconductor Equipment		1,210		—		—		1,210
Software		1,886		—		—		1,886
Specialty Retail		1,462		—		—		1,462
Tech Hardware, Storage & Peripherals		2,773		—		—		2,773
Textiles, Apparel & Luxury Goods		978		—		—		978
Thrifts & Mortgage Finance		8		—		—		8
Tobacco		1,951		—		—		1,951
Trading Companies & Distributors		221		—		—		221
Transportation Infrastructure		67		—		—		67
Water Utilities		88		—		—		88
Wireless Telecommunication Services		674		—		—		674
Total Common Stocks		89,849		—		—		89,849

Investment Type	Level 1 Unadjusted quoted prices (000)			Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Rights	$	—		$	1		$	—	$	1
Warrants		1			—			—		1
Investment Companies		10,464			—			—		10,464
Short-Term Investments
Investment Company		36,788			—			—		36,788
U.S. Treasury Securities		—			673			—		673
Total Short-Term Investments		36,788			673			—		37,461
Foreign Currency Forward Exchange Contracts		—			346			—		346
Futures Contracts		147			—			—		147
Interest Rate Swap Agreements		—			269			—		269
Credit Default Swap Agreements		—			1			—		1
Total Return Swap Agreements		—			113			—		113
Total Assets		137,249			56,192			—		193,441
Liabilities:
Foreign Currency Forward Exchange Contracts		—			(340	)		—		(340	)
Futures Contracts		(584	)		—			—		(584	)
Interest Rate Swap Agreements		—			(198	)		—		(198	)
Credit Default Swap Agreements		—			(12	)		—		(12	)
Total Return Swap Agreements		—			(538	)		—		(538	)
Total Liabilities		(584	)		(1,088	)		—		(1,672	)
Total	$	136,665		$	55,104		$	—	$	191,769

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of June 30, 2014, the Portfolio did not have any investments transfer between investment levels.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

—  investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

34

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Although the net assets of the Portfolio are presented at the foreign exchange rates and market values at the close of the period, the Portfolio 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 securities held at period end. Similarly, the Portfolio 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) on investments in securities 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 forward exchange contracts, disposition of foreign currencies, currency gains (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 Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) on the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in 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, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to

prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Portfolio may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Portfolio to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Portfolio to be more volatile than if the Portfolio had not been leveraged. Although the Adviser seeks to use derivatives to further the Portfolio's investment objectives, there is no assurance that the use of derivatives will achieve this result.

35

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Portfolio also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. In addition, the Portfolio may use cross currency hedging or proxy hedging with respect to currencies in which the Portfolio has or expects to have portfolio or currency exposure. Cross currency hedges involve the sale of one currency against the positive exposure to a different currency and may be used for hedging purposes or to establish an active exposure to the exchange rate between any two currencies. To the extent hedged by the use of currency contracts, the precise matching of the currency 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. Furthermore, 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. There is additional risk to the extent that currency contracts create exposure to currencies in which the Portfolio's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Portfolio than if it had not entered into such contracts. The use of currency 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. A currency contract is marked-to-market daily and the change in market value is recorded by the Portfolio as unrealized gain or loss. The Portfolio records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

Futures: A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return, and the potential loss from futures contracts can exceed the Portfolio's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Portfolio of margin deposits in the event of bankruptcy of a broker with whom the Portfolio has open positions in the futures contract.

Swaps: The Portfolio may enter into OTC swap contracts or cleared swap transactions. A swap contract is an agreement between two parties pursuant to which the parties exchange payments at specified dates on the basis of a specified notional amount, with the payments calculated by reference to specified securities, indices, reference rates, currencies or other instruments. Typically swap agreements provide that when the period payment dates for both parties are the same, the payments are made on a net basis (i.e., the two payment streams are netted out, with only the net amount paid by one party to the other). The Portfolio's obligations or rights under a swap contract entered into on a net basis will generally be equal only to the net amount to be paid or received under the agreement, based on the relative values of the positions held by each party. Cleared swap transactions may help reduce counterparty credit risk. In a cleared swap, the Portfolio's ultimate counterparty is a clearinghouse rather than a bank, dealer or other financial institution. OTC swap agreements are not entered into or traded on exchanges and often there is no central clearing or guaranty function for OTC swaps. These OTC swaps are often subject to credit risk or the risk of default or non-performance by the counterparty.

36

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Both OTC and cleared swaps could result in losses if interest rates, foreign currency exchange rates or other factors are not correctly anticipated by the Portfolio or if the reference index, security or investments do not perform as expected.

The Portfolio's use of swaps during the period included those based on the credit of an underlying security commonly referred to as "credit default swaps". The Portfolio may be either the buyer or seller in a credit default swap. Where the Portfolio is the buyer of a credit default swap contract, it would typically be entitled to receive the par (or other agreed-upon) value of a referenced debt obligation from the counterparty to the contract only in the event of a default or similar event by the issuer of the debt obligation. If no default occurs, the Portfolio would have paid to the counterparty a periodic stream of payments over the term of the contract and received no benefit from the contract. When the Portfolio is the seller of a credit default swap contract, it typically receives the stream of payments but is obligated to pay an amount equal to the par (or other agreed-upon) value of a referenced debt obligation upon the default or similar event by the issuer of the referenced debt obligation. The use of credit default swaps could result in losses to the Portfolio if the Adviser fails to correctly evaluate the creditworthiness of the issuer of the referenced debt obligation. During the period swap agreements are open, payments are received from or made to the clearinghouse or counterparty based upon changes in the value of the contract (variation margin). The Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulatory developments require the clearing and exchange-trading of certain standardized swap transactions. Mandatory exchange-trading and clearing is occurring on a phased-in basis.

The current credit rating of each individual issuer is listed in the table following the Portfolio of Investments and serves as an indicator of the current status of the payment/performance risk of the credit derivative. Alternatively, for credit default swaps on an index of credits, the quoted market prices and current values serve as an indicator of the current status of the payment/performance risk of the credit derivative. Generally, lower credit ratings and increasing market values, in absolute terms, represent a deterioration of the credit and a greater likelihood of an adverse credit event of the issuer.

When the Portfolio has an unrealized loss on a swap agreement, the Portfolio has instructed the custodian to pledge cash or liquid securities as collateral with a value approximately equal to the amount of the unrealized loss.

Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate. If applicable, cash collateral is included with "Due from (to) Broker" in the Statement of Assets and Liabilities.

Upfront payments received or paid by the Portfolio will be reflected as an asset or liability in the Statement of Assets and Liabilities.

FASB ASC 815, "Derivatives and Hedging: Overall" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Portfolio uses derivative instruments, how these derivative instruments are accounted for and their effects on the Portfolio's financial position and results of operations.

The following tables set forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of June 30, 2014.

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Appreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	346
Futures Contracts	Variation Margin	Equity Risk		130	(a)
Futures Contracts	Variation Margin	Interest Rate Risk		17	(a)
Swap Agreements	Unrealized Appreciation on Swap Agreements	Credit Risk		1
Swap Agreements	Unrealized Appreciation on Swap Agreements	Equity Risk		113
Swap Agreements	Unrealized Appreciation on Swap Agreements	Interest Rate Risk		186
Swap Agreements	Variation Margin	Interest Rate Risk		83	(a)
Total			$	876
	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contracts	Unrealized Depreciation on Foreign Currency Forward Exchange Contracts	Currency Risk	$	(340	)
Futures Contracts	Variation Margin	Commodity Risk		(65	)(a)
Futures Contracts	Variation Margin	Equity Risk		(360	)(a)
Futures Contracts	Variation Margin	Interest Rate Risk		(159	)(a)
Swap Agreements	Unrealized Depreciation on Swap Agreements	Credit Risk		(12	)
Swap Agreements	Unrealized Depreciation on Swap Agreements	Equity Risk		(538	)
Swap Agreements	Unrealized Depreciation on Swap Agreements	Interest Rate Risk		(41	)
Swap Agreements	Variation Margin	Interest Rate Risk		(157	)(a)
Total			$	(1,672	)

(a)  This amount represents the cumulative appreciation (depreciation) as reported in the Portfolio of Investments. The Statement of Assets and Liabilities only reflects the current day's net variation margin.

37

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

The following tables set forth by primary risk exposure the Portfolio's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2014 in accordance with ASC 815.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(215	)
Commodity Risk	Futures Contracts		(94	)
Equity Risk	Futures Contracts		2,498
Interest Rate Risk	Futures Contracts		(291	)
Credit Risk	Swap Agreements		(113	)
Equity Risk	Swap Agreements		(1,569	)
Interest Rate Risk	Swap Agreements		(55	)
Total		$	161
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	316
Commodity Risk	Futures Contracts		(65	)
Equity Risk	Futures Contracts		(1,825	)
Interest Rate Risk	Futures Contracts		(150	)
Credit Risk	Swap Agreements		(11	)
Equity Risk	Swap Agreements		207
Interest Rate Risk	Swap Agreements		(414	)
Total		$	(1,942	)

At June 30, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives(b)	Assets(c) (000)		Liabilities(c) (000)
Foreign Currency Forward Exchange Contracts	$	346	$	(340	)
Swap Agreements		300		(591	)
Total	$	646	$	(931	)

(b)  Excludes exchange traded derivatives.

(c)  Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Portfolio typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Portfolio typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables

with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potentially deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability, may be delayed or denied.

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Received (000)		Net Amount (not less than $0) (000)
Bank of America NA	$	22	$	(22	)	$	—	$	0
Barclays Bank PLC		53		(29	)		—		24
Citibank NA		35		(20	)		—		15
Deutsche Bank AG		33		(33	)		—		0
Goldman Sachs International		180		(167	)		—		13
HSBC Bank PLC		14		(2	)		—		12
JPMorgan Chase Bank NA		64		(64	)		—		0
Royal Bank of Scotland PLC		47		(28	)		—		19
State Street Bank and Trust Co.		60		—			—		60
UBS AG		138		(32	)		—		106
Total	$	646	$	(397	)	$	—	$	249

38

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Pledged (000)			Net Amount (not less than $0) (000)
Bank of America NA	$	257	$	(22	)	$	—		$	235
Bank of Montreal		5		—			—			5
Bank of New York Mellon		20		—			—			20
Barclays Bank PLC		53		(29	)		—			24
Citibank NA		20		(20	)		—			0
Commonwealth Bank of Australia		32		—			—			32
Credit Suisse International		9		—			—			9
Deutsche Bank AG		121		(33	)		—			88
Goldman Sachs International		182		(167	)		—			15
HSBC Bank PLC		2		(2	)		—			0
JPMorgan Chase Bank NA		147		(64	)		(35	)		48
Northern Trust Company		23		—			—			23
Royal Bank of Scotland PLC		28		(28	)		—			0
UBS AG		32		(32	)		—			0
Total	$	931	$	(397	)	$	(35	)	$	499

For the six months ended June 30, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	103,194,000
Futures Contracts:
Average monthly original value	$	87,111,000
Swap Agreements:
Average monthly notional amount	$	86,853,000

5.  When-Issued/Delayed Delivery Securities: The Portfolio purchases and sells when-issued and delayed delivery securities. Securities purchased on a when-issued or delayed delivery basis are purchased for delivery beyond the normal settlement date at a stated price and yield, and no income accrues to the Portfolio on such securities prior to delivery date. Payment and delivery for when-issued and delayed delivery securities can take place a month or more after the date of the transaction. When the Portfolio enters into a purchase transaction on a when-issued or delayed delivery basis, securities are available for collateral in an amount at least equal in value to the Portfolio's commitments to purchase such securities. Purchasing securities on a when-issued or delayed delivery basis may involve a risk that the market price at the time of delivery may be lower than the agreed upon purchase price, in

which case there could be an unrealized loss at the time of delivery. Purchasing investments on a when-issued or delayed delivery basis may be considered a form of leverage which may increase the impact that gains (losses) may have on the Portfolio.

6.  Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. 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 or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Portfolio owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Portfolio holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Portfolio to further risk of loss in the event of a failure to complete the transaction by the counterparty.

8.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

39

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the average daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.00% of the Portfolio's daily net assets.

Pursuant to the Reorganization, the Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that the total annual operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.60% for Class I shares and 0.70% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least two years from the date of the Reorganization or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2014, approximately $690,000 of advisory fees were waived pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.25% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Portfolio and provides the Portfolio's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Portfolio is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.35% of the Portfolio's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.25% of the 0.35% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action appropriate. For the six months ended June 30, 2014, this waiver amounted to approximately $41,000.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Federal Income Taxes: It is the Portfolio's intention to continue 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 based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, Income Taxes – Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2013, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2013 and 2012 was as follows:

2013 Distributions Paid From:				2012 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	210	$	—	$	1,343	$	—

40

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions and on certain equity securities designated as issued by passive foreign investment companies, swap transactions, paydown adjustments and merger adjustments, resulted in the following reclassifications among the components of net assets at December 31, 2013:

Accumulated Undistributed Net Investment Income (000)			Accumulated Undistributed Net Realized Gain (000)		Paid-in- Capital (000)
$	(284	)	$	6,660	$	(6,376	)

At December 31, 2013, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	1,551	$	15,925

At June 30, 2014, the aggregate cost for Federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $24,120,000 and the aggregate gross unrealized depreciation is approximately $3,110,000 resulting in net unrealized appreciation of approximately $21,010,000.

At December 31, 2013, the Portfolio had available for Federal income tax purposes unused capital losses, which will expire on the indicated dates:

Amount (000)		Expiration*
$	7,254	December 31, 2017

*  Includes capital losses acquired from Strategist Portfolio that may be subject to limitation under IRC section 382 in future years, reducing the total carryforward available. During the year ended December 31, 2013, capital loss carryforwards of approximately $7,972,000 were written off due to 382 limitations.

To the extent that capital loss carryforwards are used to offset any future capital gains realized during the carryover period as provided by U.S. Federal income tax regulations, no capital gains tax liability will be incurred by the Portfolio for gains realized and not distributed. To the extent that capital gains are

offset, such gains will not be distributed to the shareholders. During the year ended December 31, 2013, the Portfolio utilized capital loss carryforwards for U.S. Federal income tax purposes of approximately $2,586,000.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $25,106,000 and $45,240,000, respectively. For the six months ended June 30, 2014, purchases and sales of long-term U.S. Government securities were approximately $30,128,000 and $30,857,000, respectively.

The Portfolio invests in Morgan Stanley Institutional Fund, Inc. – Emerging Markets Portfolio ("Emerging Markets Portfolio"), an open-end management investment company advised by an affiliate of the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Emerging Markets Portfolio. For the six months ended June 30, 2014, advisory fees paid were reduced by approximately $14,000 relating to the Portfolio's investment in the Emerging Markets Portfolio. The Emerging Markets Portfolio has a cost basis of approximately $2,926,000 at June 30, 2014.

A summary of the Portfolio's transactions in shares of the Emerging Markets Portfolio during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Realized Gain (000)		Dividend Income (000)		Value June 30, 2014 (000)
$	2,732	$	—	$	—	$	—	$	—	$	2,884

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds – Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of advisory and administration fees paid by the Portfolio due to its investments in the Liquidity Funds. For the six months ended June 30, 2014, advisory fees paid were reduced by approximately $17,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Dividend Income (000)		Value June 30, 2014 (000)
$	20,548	$	37,470	$	21,230	$	9	$	36,788

41

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

I. Other: At June 30, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 76% and 92%, for Class I and Class II, respectively.

42

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

Michael E. Nugent
Chairperson of the Board and Director

John H. Gernon
President and Principal Executive Officer

Stefanie V. Chang Yu
Chief Compliance Officer

Joseph C. Benedetti
Vice President

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semi-annual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing the Public Reference Room of the SEC, Washington, DC 20549-0102.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Fund's Proxy Voting Policy and Procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Portfolio. For more detailed information about the Portfolio, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Portfolio, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Portfolio unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFIMSAN
975269 EXP 08.31.15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Mid Cap Growth Portfolio

The Portfolio is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Table of Contents

Expense Example		2
Investment Advisory Agreement Approval		3
Portfolio of Investments		5
Statement of Assets and Liabilities		8
Statement of Operations		9
Statements of Changes in Net Assets		10
Financial Highlights		11
Notes to Financial Statements		13
Director and Officer Information	Back Cover

1

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Expense Example (unaudited)

Mid Cap Growth Portfolio

As a shareholder of the Mid Cap Growth Portfolio (the "Portfolio"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, including advisory fees, administration fees, distribution (12b-1) fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2014 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/14		Actual Ending Account Value 6/30/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Mid Cap Growth Portfolio Class I	$	1,000.00	$	1,004.90	$	1,019.59	$	5.22	$	5.26		1.05	%
Mid Cap Growth Portfolio Class II		1,000.00		1,004.20		1,019.09		5.71		5.76		1.15

*  Expenses are calculated using each Portfolio Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Portfolio's Adviser under the administration agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Adviser's expense. (The advisory and administration agreements together are referred to as the "Management Agreement.") The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the administrative and advisory services to the Portfolio. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Portfolio and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Portfolio

The Board reviewed the performance, fees and expenses of the Portfolio compared to its peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Portfolio. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2013, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Portfolio's performance was better than its peer group average for the one- and five-year periods but below its peer group average for the three-year period. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Portfolio relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Portfolio's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that while the Portfolio's management fee was higher than its peer group average, the total expense ratio was lower than its peer group average. After discussion, the Board concluded that the Portfolio's (i) performance was competitive with its peer group average, (ii) management fee was acceptable, and (iii) total expense ratio was competitive with its peer group average.

Economies of Scale

The Board considered the size and growth prospects of the Portfolio and how that relates to the Portfolio's total expense ratio and particularly the Portfolio's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Portfolio and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of the Portfolio supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Portfolio and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

3

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other benefits to the Adviser and its affiliates derived from their relationship with the Portfolio and other funds advised by the Adviser. These benefits may include, among other things, research received by the Adviser generated from commission dollars spent on funds' portfolio trading, and fees for trading, distribution and/or shareholder servicing. The Board reviewed with the Adviser each of these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Portfolio and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Portfolio and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Portfolio's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Portfolio to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Portfolio's business.

General Conclusion

After considering and weighing all of the above factors, the Board concluded that it would be in the best interest of the Portfolio and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single factor referenced above. The Board considered these factors over the course of numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

4

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments

Mid Cap Growth Portfolio

	Shares		Value (000)
Common Stocks (98.1%)
Aerospace & Defense (2.1%)
TransDigm Group, Inc.		27,685	$	4,631
Automobiles (3.7%)
Tesla Motors, Inc. (a)		33,129		7,953
Biotechnology (1.5%)
Alnylam Pharmaceuticals, Inc. (a)		10,320		652
Intercept Pharmaceuticals, Inc. (a)		888		210
Ironwood Pharmaceuticals, Inc. (a)		94,267		1,445
Pharmacyclics, Inc. (a)(b)		5,307		476
Seattle Genetics, Inc. (a)		11,888		455
				3,238
Commercial Services & Supplies (3.6%)
Edenred (France)		180,585		5,476
Stericycle, Inc. (a)		19,920		2,359
				7,835
Communications Equipment (2.9%)
Motorola Solutions, Inc.		74,914		4,987
Palo Alto Networks, Inc. (a)		16,549		1,388
				6,375
Diversified Financial Services (2.5%)
MSCI, Inc. (a)		119,549		5,481
Electrical Equipment (0.4%)
SolarCity Corp. (a)(b)		13,602		960
Food Products (6.3%)
Keurig Green Mountain, Inc.		18,371		2,289
McCormick & Co., Inc.		58,991		4,223
Mead Johnson Nutrition Co.		76,276		7,107
				13,619
Health Care Equipment & Supplies (3.7%)
Intuitive Surgical, Inc. (a)		19,259		7,931
Health Care Providers & Services (0.9%)
Qualicorp SA (Brazil) (a)		163,546		1,932
Health Care Technology (2.9%)
athenahealth, Inc. (a)		50,103		6,269
Hotels, Restaurants & Leisure (2.8%)
Dunkin' Brands Group, Inc.		45,366		2,078
Panera Bread Co., Class A (a)		25,983		3,893
				5,971
Information Technology Services (4.8%)
FleetCor Technologies, Inc. (a)		40,843		5,383
Gartner, Inc. (a)		70,846		4,996
				10,379
Insurance (3.9%)
Arch Capital Group Ltd. (a)		73,429		4,218
Progressive Corp. (The)		167,113		4,238
				8,456

	Shares		Value (000)
Internet & Catalog Retail (4.0%)
ASOS PLC (United Kingdom) (a)		13,374	$	677
Ctrip.com International Ltd. ADR (China) (a)		36,689		2,350
Groupon, Inc. (a)		170,905		1,131
TripAdvisor, Inc. (a)		20,134		2,188
zulily, Inc., Class A (a)		58,993		2,416
				8,762
Internet Software & Services (12.6%)
Dropbox, Inc. (a)(c)(d)(e) (acquisition cost — $1,380; acquired 5/1/12)		152,532		2,808
LinkedIn Corp., Class A (a)		45,002		7,717
MercadoLibre, Inc. (Brazil) (b)		11,886		1,134
Pandora Media, Inc. (a)		87,301		2,575
Qihoo 360 Technology Co., Ltd. ADR (China) (a)		24,206		2,228
Twitter, Inc. (a)		207,206		8,489
Youku Tudou, Inc. ADR (China) (a)		94,027		2,243
				27,194
Life Sciences Tools & Services (6.1%)
Illumina, Inc. (a)		73,425		13,109
Machinery (2.4%)
Colfax Corp. (a)		69,171		5,156
Media (1.7%)
Aimia, Inc. (Canada)		112,487		1,969
Legend Pictures LLC Ltd. (a)(c)(d)(e) (acquisition cost — $1,604; acquired 3/8/12)		1,500		1,771
				3,740
Multi-line Retail (2.1%)
Dollar Tree, Inc. (a)		83,241		4,533
Oil, Gas & Consumable Fuels (1.0%)
Range Resources Corp.		24,000		2,087
Pharmaceuticals (2.5%)
Endo International PLC (a)		75,827		5,309
Professional Services (5.2%)
IHS, Inc., Class A (a)		41,106		5,577
Verisk Analytics, Inc., Class A (a)		94,813		5,690
				11,267
Software (13.4%)
FireEye, Inc. (a)		113,768		4,613
NetSuite, Inc. (a)		18,098		1,573
ServiceNow, Inc. (a)		42,331		2,623
Solera Holdings, Inc.		98,692		6,627
Splunk, Inc. (a)		106,307		5,882
Tableau Software, Inc., Class A (a)		5,593		399
Workday, Inc., Class A (a)		71,611		6,435
Zynga, Inc., Class A (a)		266,676		856
				29,008
Tech Hardware, Storage & Peripherals (1.1%)
3D Systems Corp. (a)(b)		18,807		1,125
Stratasys Ltd. (a)		10,208		1,160
				2,285

The accompanying notes are an integral part of the financial statements.
5

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Mid Cap Growth Portfolio

	Shares		Value (000)
Textiles, Apparel & Luxury Goods (4.0%)
Carter's, Inc.		65,074	$	4,486
Michael Kors Holdings Ltd. (a)		22,110		1,960
Moncler SpA (Italy)		132,131		2,191
				8,637
Total Common Stocks (Cost $163,363)				212,117
Preferred Stocks (1.5%)
Internet & Catalog Retail (0.9%)
Airbnb, Inc. Series D (a)(c)(d)(e) (acquisition cost — $1,370; acquired 4/16/14)		11,212		1,369
Flipkart Online Services Pvt Ltd. Series D (a)(c)(d)(e) (acquisition cost — $385; acquired 10/4/13)		16,789		658
				2,027
Software (0.6%)
Palantir Technologies, Inc. Series G (a)(c)(d)(e) (acquisition cost — $455; acquired 7/19/12)		148,616		911
Palantir Technologies, Inc. Series H (a)(c)(d)(e) (acquisition cost — $102; acquired 10/25/13)		29,092		179
Palantir Technologies, Inc. Series H1 (a)(c)(d)(e) (acquisition cost — $102; acquired 10/25/13)		29,092		178
				1,268
Total Preferred Stocks (Cost $2,414)				3,295
Convertible Preferred Stocks (0.1%)
Internet & Catalog Retail (0.0%)
Peixe Urbano, Inc. (Brazil) (a)(c)(d)(e) (acquisition cost — $787; acquired 12/2/11)		23,881		—	@
Internet Software & Services (0.1%)
Dropbox, Inc. Series A (a)(c)(d)(e) (acquisition cost — $132; acquired 5/25/12)		14,641		270
Total Convertible Preferred Stocks (Cost $919)				270
	Notional Amount
Call Options Purchased (0.0%)
Foreign Currency Options (0.0%)
USD/CNY December 2014 @ CNY 6.50		2,432,633		1
USD/CNY December 2014 @ CNY 6.50		30,172,403		14
USD/CNY December 2014 @ CNY 6.50		33,986,522		16
USD/CNY June 2015 @ CNY 6.62		38,858,122		62
Total Call Options Purchased (Cost $318)				93
	Shares
Short-Term Investments (1.8%)
Securities held as Collateral on Loaned Securities (1.3%)
Investment Company (1.0%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H)		2,219,651		2,220

	Face Amount (000)		Value (000)
Repurchase Agreements (0.3%)
Barclays Capital, Inc., (0.08%, dated 6/30/14, due 7/1/14; proceeds $230; fully collateralized by various U.S. Government agency securities; 3.50% – 4.50% due 9/1/33 – 6/20/44; valued at $235)	$	230	$	230
BNP Paribas Securities Corp., (0.11%, dated 6/30/14, due 7/1/14; proceeds $288; fully collateralized by a U.S. Government agency security; 4.00% due 6/20/44; valued at $295)		288		288
				518
Total Securities held as Collateral on Loaned Securities (Cost $2,738)				2,738
	Shares
Investment Company (0.5%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H) (Cost $1,034)		1,033,632		1,034
Total Short-Term Investments (Cost $3,772)				3,772
Total Investments (101.5%) (Cost $170,786) Including $3,343 of Securities Loaned				219,547
Liabilities in Excess of Other Assets (-1.5%)				(3,333	)
Net Assets (100.0%)			$	216,214

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2014.

(c)  At June 30, 2014, the Portfolio held fair valued securities valued at approximately $8,144,000, representing 3.8% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(d)  Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Portfolio has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at June 30, 2014 amounts to approximately $8,144,000 and represents 3.8% of net assets.

(e)  Security has been deemed illiquid at June 30, 2014.

@  Amount is less than $500.

ADR  American Depositary Receipt.

CNY  — Chinese Yuan Renminbi

USD  — United States Dollar

The accompanying notes are an integral part of the financial statements.
6

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Mid Cap Growth Portfolio

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		50.8	%
Software		14.0
Internet Software & Services		12.7
Food Products		6.3
Life Sciences Tools & Services		6.0
Professional Services		5.2
Internet & Catalog Retail		5.0
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2014.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
7

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Mid Cap Growth Portfolio

Statement of Assets and Liabilities	June 30, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $167,532)	$	216,293
Investment in Security of Affiliated Issuer, at Value (Cost $3,254)		3,254
Total Investments in Securities, at Value (Cost $170,786)		219,547
Foreign Currency, at Value (Cost $16)		16
Cash		173
Receivable for Portfolio Shares Sold		303
Dividends Receivable		54
Tax Reclaim Receivable		33
Receivable from Affiliate		—	@
Other Assets		13
Total Assets		220,139
Liabilities:
Collateral on Securities Loaned, at Value		2,911
Payable for Advisory Fees		361
Payable for Portfolio Shares Redeemed		292
Due to Broker		260
Payable for Administration Fees		43
Payable for Professional Fees		17
Payable for Distribution Fees — Class II Shares		12
Payable for Custodian Fees		3
Payable for Transfer Agent Fees		1
Payable for Directors' Fees and Expenses		—	@
Other Liabilities		25
Total Liabilities		3,925
NET ASSETS	$	216,214
Net Assets Consist of:
Paid-in-Capital	$	122,118
Accumulated Undistributed Net Investment Income		292
Accumulated Net Realized Gain		45,042
Unrealized Appreciation (Depreciation) on:
Investments		48,761
Foreign Currency Translations		1
Net Assets	$	216,214
CLASS I:
Net Assets	$	72,041
Net Asset Value, Offering and Redemption Price Per Share Applicable to 4,973,976 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	14.48
CLASS II:
Net Assets	$	144,173
Net Asset Value, Offering and Redemption Price Per Share Applicable to 10,073,133 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	14.31
(1) Including:
Securities on Loan, at Value:	$	3,343

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Mid Cap Growth Portfolio

Statement of Operations	Six Months Ended June 30, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $38 of Foreign Taxes Withheld)	$	1,435
Income from Securities Loaned — Net		140
Dividends from Security of Affiliated Issuer (Note H)		2
Total Investment Income		1,577
Expenses:
Advisory Fees (Note B)		810
Administration Fees (Note C)		270
Distribution Fees — Class II Shares (Note D)		255
Professional Fees		49
Shareholder Reporting Fees		22
Custodian Fees (Note F)		17
Transfer Agency Fees (Note E)		8
Directors' Fees and Expenses		3
Pricing Fees		3
Other Expenses		8
Total Expenses		1,445
Distribution Fees — Class II Shares Waived (Note D)		(182	)
Waiver of Advisory Fees (Note B)		(56	)
Rebate from Morgan Stanley Affiliate (Note H)		(5	)
Net Expenses		1,202
Net Investment Income		375
Realized Gain (Loss):
Investments Sold		16,417
Foreign Currency Transactions		(4	)
Net Realized Gain		16,413
Change in Unrealized Appreciation (Depreciation):
Investments		(16,313	)
Foreign Currency Translations		1
Net Change in Unrealized Appreciation (Depreciation)		(16,312	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		101
Net Increase in Net Assets Resulting from Operations	$	476

The accompanying notes are an integral part of the financial statements.
9

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Mid Cap Growth Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2014 (unaudited) (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	375		$	(989	)
Net Realized Gain		16,413			30,951
Net Change in Unrealized Appreciation (Depreciation)		(16,312	)		39,780
Net Increase in Net Assets Resulting from Operations		476			69,742
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(239	)
Net Realized Gain		—			(1,481	)
Class II:
Net Investment Income		—			(371	)
Net Realized Gain		—			(3,506	)
Total Distributions		—			(5,597	)
Capital Share Transactions:(1)
Class I:
Subscribed		7,729			10,822
Distributions Reinvested		—			1,720
Redeemed		(8,235	)		(21,369	)
Class II:
Subscribed		10,559			7,644
Distributions Reinvested		—			3,877
Redeemed		(17,744	)		(62,861	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(7,691	)		(60,167	)
Total Increase (Decrease) in Net Assets		(7,215	)		3,978
Net Assets:
Beginning of Period		223,429			219,451
End of Period (Including Accumulated Undistributed (Distributions in Excess of) Net Investment Income of $292 and $(83))	$	216,214		$	223,429
(1) Capital Share Transactions:
Class I:
Shares Subscribed		548			875
Shares Issued on Distributions Reinvested		—			143
Shares Redeemed		(578	)		(1,731	)
Net Decrease in Class I Shares Outstanding		(30	)		(713	)
Class II:
Shares Subscribed		723			604
Shares Issued on Distributions Reinvested		—			325
Shares Redeemed		(1,271	)		(5,142	)
Net Decrease in Class II Shares Outstanding		(548	)		(4,213	)

The accompanying notes are an integral part of the financial statements.
10

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Mid Cap Growth Portfolio

	Class I
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	14.41		$	10.77		$	11.22		$	12.12		$	9.16		$	5.81
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.03			(0.05	)		0.04			(0.05	)		0.01			(0.01	)
Net Realized and Unrealized Gain (Loss)		0.04			4.03			0.91			(0.80	)		2.95			3.36
Total from Investment Operations		0.07			3.98			0.95			(0.85	)		2.96			3.35
Distributions from and/or in Excess of:
Net Investment Income		—			(0.05	)		—			(0.04	)		—			—
Net Realized Gain		—			(0.29	)		(1.40	)		(0.01	)		—			—
Total Distributions		—			(0.34	)		(1.40	)		(0.05	)		—			—
Net Asset Value, End of Period	$	14.48		$	14.41		$	10.77		$	11.22		$	12.12		$	9.16
Total Return ++		0.49	%#		37.49	%		8.69	%		(7.12	)%		32.31	%		57.66	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	72,041		$	72,112		$	61,552		$	64,323		$	70,122		$	55,559
Ratio of Expenses to Average Net Assets(1)		1.05	%+††*		1.05	%+††		1.05	%+††		1.05	%+††		1.05	%+††		1.04	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.05	%+††		N/A
Ratio of Net Investment Income (Loss) to Average Net Assets(1)		0.41	%+††*		(0.39	)%+††		0.33	%+††		(0.42	)%+††		0.10	%+††		(0.12	)%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%††§*		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%††§		0.01	%
Portfolio Turnover Rate		23	%#		49	%		29	%		32	%		43	%		41	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.10	%††*		1.09	%††		1.06	%††		1.05	%††		1.06	%+††		1.06	%+
Net Investment Income (Loss) to Average Net Assets		0.36	%††*		(0.43	)%††		0.32	%††		(0.42	)%††		0.09	%+††		(0.14	)%+

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income (Loss) reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
11

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Mid Cap Growth Portfolio

	Class II
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	14.25		$	10.64		$	11.12		$	12.01		$	9.09		$	5.77
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.02			(0.06	)		0.03			(0.06	)		0.00	‡		(0.01	)
Net Realized and Unrealized Gain (Loss)		0.04			3.99			0.89			(0.79	)		2.92			3.33
Total from Investment Operations		0.06			3.93			0.92			(0.85	)		2.92			3.32
Distributions from and/or in Excess of:
Net Investment Income		—			(0.03	)		—			(0.03	)		—			—
Net Realized Gain		—			(0.29	)		(1.40	)		(0.01	)		—			—
Total Distributions		—			(0.32	)		(1.40	)		(0.04	)		—			—
Net Asset Value, End of Period	$	14.31		$	14.25		$	10.64		$	11.12		$	12.01		$	9.09
Total Return ++		0.42	%#		37.48	%		8.49	%		(7.17	)%		32.27	%		57.37	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	144,173		$	151,317		$	157,899		$	200,502		$	227,378		$	183,047
Ratio of Expenses to Average Net Assets(1)		1.15	%+††*		1.15	%+††		1.15	%+††		1.15	%+††		1.15	%+††		1.14	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.15	%+††		N/A
Ratio of Net Investment Income (Loss) to Average Net Assets(1)		0.31	%+††*		(0.49	)%+††		0.23	%+††		(0.52	)%+††		0.00	%††§		(0.20	)%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%††§*		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%††§		0.01	%
Portfolio Turnover Rate		23	%#		49	%		29	%		32	%		43	%		41	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.45	%††*		1.44	%††		1.41	%††		1.40	%††		1.41	%+††		1.41	%+
Net Investment Income (Loss) to Average Net Assets		0.01	%††*		(0.78	)%††		(0.03	)%††		(0.77	)%††		(0.26	)%+††		(0.47	)%+

†  Per share amount is based on average shares outstanding.

‡  Amount is less than $0.005 per share.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income (Loss) reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
12

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements

The Universal Institutional Funds, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Fund is comprised of eleven separate active, diversified and non-diversified portfolios (individually referred to as a "Portfolio", collectively as the "Portfolios"). The Fund applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Mid Cap Growth Portfolio. The Portfolio seeks long-term capital growth by investing primarily in common stocks and other equity securities. The Portfolio offers two classes of shares – Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Fund is intended to be the funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Effective at the close of business on May 30, 2014, the Portfolio suspended offering Class I shares and Class II shares of the Portfolio to new investors. The Portfolio will continue to offer Class I shares and Class II shares of the Portfolio to existing shareholders. The Portfolio may recommence offering Class I shares and Class II shares of the Portfolio to new investors in the future. Any such offerings of the Portfolio's Class I shares and Class II shares may be limited in amount and may commence and terminate without any prior notice.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP 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: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) listed options are valued at the last reported sales price on the exchange on which they are

listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between their latest bid and asked price. Unlisted options are valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors") or quotes from a broker or dealer; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

13

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Portfolio's investments as of June 30, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Aerospace & Defense	$	4,631	$	—	$	—	$	4,631
Automobiles		7,953		—		—		7,953
Biotechnology		3,238		—		—		3,238
Commercial Services & Supplies		7,835		—		—		7,835
Communications Equipment		6,375		—		—		6,375
Diversified Financial Services		5,481		—		—		5,481
Electrical Equipment		960		—		—		960
Food Products		13,619		—		—		13,619
Health Care Equipment & Supplies		7,931		—		—		7,931
Health Care Providers & Services		1,932		—		—		1,932
Health Care Technology		6,269		—		—		6,269
Hotels, Restaurants & Leisure		5,971		—		—		5,971
Information Technology Services		10,379		—		—		10,379
Insurance		8,456		—		—		8,456
Internet & Catalog Retail		8,762		—		—		8,762
Internet Software & Services		24,386		—		2,808		27,194

14

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Life Sciences Tools & Services	$	13,109	$	—	$	—	$	13,109
Machinery		5,156		—		—		5,156
Media		1,969		—		1,771		3,740
Multi-line Retail		4,533		—		—		4,533
Oil, Gas & Consumable Fuels		2,087		—		—		2,087
Pharmaceuticals		5,309		—		—		5,309
Professional Services		11,267		—		—		11,267
Software		29,008		—		—		29,008
Tech Hardware, Storage & Peripherals		2,285		—		—		2,285
Textiles, Apparel & Luxury Goods		8,637		—		—		8,637
Total Common Stocks		207,538		—		4,579		212,117
Preferred Stocks		—		—		3,295		3,295
Convertible Preferred Stocks		—		—		270		270
Call Options Purchased		—		93		—		93
Short-Term Investments
Investment Company		3,254		—		—		3,254
Repurchase Agreements		—		518		—		518
Total Short-Term Investments		3,254		518		—		3,772
Total Assets	$	210,792	$	611	$	8,144	$	219,547

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of June 30, 2014, the Portfolio did not have any investments transfer between investment levels.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stocks (000)		Preferred Stocks (000)		Convertible Preferred Stocks (000)
Beginning Balance	$	4,071	$	1,124	$	230
Purchases		—		1,369		—
Sales		—		—		—
Amortization of discount		—		—		—
Transfers in		—		—		—
Transfers out		—		—		—
Corporate action		—		—		—
Change in unrealized appreciation/depreciation		508		802		40
Realized gains (losses)		—		—		—
Ending Balance	$	4,579	$	3,295	$	270
Net change in unrealized appreciation/ depreciation from investments still held as of June 30, 2014	$	508	$	802	$	40

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2014.

	Fair Value at June 30, 2014 (000)		Valuation Technique	Unobservable Input	Range						Selected Value			Valuation from an Increase in Input
Internet & Catalog Retail
Preferred Stocks	$	1,369	Market Transaction Method	Precedent Transaction of Preferred Stock	$	122.1391		$	122.1391		$	122.1391		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		16.5	%		18.5	%		17.5	%	Decrease
				Perpetual Growth Rate		3.0	%		4.0	%		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		11.5	x		17.1	x		15.5	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease

15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

	Fair Value at June 30, 2014 (000)		Valuation Technique	Unobservable Input	Range						Weighted Average/ Selected Value			Valuation from an Increase in Input
	$	658	Market Transaction Method	Precedent Transaction of Preferred Stock	$	39.191		$	39.191		$	39.191		Increase
			Discounted cash flow	Weighted Average Cost of Capital		16.5	%		18.5	%		17.5	%	Decrease
				Perpetual Growth Rate		3.5	%		4.5	%		4.0	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		1.7	x		2.5	x		2.1	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
Internet Software & Services
Common Stock	$	2,808	Market Transaction Method	Precedent Transaction of Preferred Stock	$	19.1012		$	19.1012		$	19.1012		Increase
Convertible Preferred Stock		$270	Discounted Cash Flow	Weighted Average Cost of Capital		16.0	%		18.0	%		17.0	%	Decrease
				Perpetual Growth Rate		2.5	%		3.5	%		3.0	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		6.7	x		16.7	x		12.3	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
Media
Common Stock	$	1,771	Discounted cash flow	Weighted Average Cost of Capital		15.0	%		16.0	%		15.6	%	Decrease
				Perpetual Growth Rate		3.5	%		4.5	%		4.0	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		2.4	x		11.0	x		4.3	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
Software
Preferred Stocks	$	1,268	Market Transaction Method	Precedent Transaction of Preferred Stock	$	6.13		$	6.13		$	6.13		Increase

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate 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 Portfolio are presented at the foreign exchange rates and market values at the close of the period, the Portfolio 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 securities held at period end. Similarly, the Portfolio 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) on investments in securities 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 forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment

16

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

income and foreign withholding taxes recorded on the Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) on the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in 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, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Portfolio may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from,

and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Portfolio to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Portfolio to be more volatile than if the Portfolio had not been leveraged. Although the Adviser seeks to use derivatives to further the Portfolio's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Options: In respect to options, the Portfolio is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Portfolio buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or futures contract on the underlying instrument, at an agreed-upon price typically in exchange for a premium paid by the Portfolio. The Portfolio may purchase and/or sell put and call options. Purchasing call options tends to increase the Portfolio's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Portfolio's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Portfolio bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Portfolio may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments" on the Statement of Assets and Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Portfolio sells an option, it sells to another party the right to buy from or sell to the Portfolio a specific amount of the underlying instrument or futures contract on the

17

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

underlying instrument at an agreed-upon price typically in exchange for a premium received by the Portfolio. When options are purchased OTC, the Portfolio bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Portfolio may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging: Overall" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Portfolio uses derivative instruments, how these derivative instruments are accounted for and their effects on the Portfolio's financial position and results of operations.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of June 30, 2014.

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Options Purchased	Investments, at Value (Options Purchased)	Currency Risk	$	93	(a)

(a)  Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following table sets forth by primary risk exposure the Portfolio's change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2014 in accordance with ASC 815.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Options Purchased)	$	(127	)(b)

(b)  Amounts are included in Investments in the Statement of Operations.

At June 30, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets (c) (000)		Liabilities (c) (000)
Options Purchased	$	93	$	—

(c)  Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Portfolio typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Portfolio typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potentially deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability, may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received(d) (000)			Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	93	$	—	$	(93	)	$	0

(d)  In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

18

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

For the six months ended June 30, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Options Purchased:
Average monthly notional amount	73,068,000

5.  Securities Lending: The Portfolio lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Portfolio. The Portfolio would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily, by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned – Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	3,343	(e)	$	—	$	(3,343	)(f)(g)	$	0

(e)  Represents market value of loaned securities at period end.

(f)  The Portfolio received cash collateral of approximately $2,911,000, of which approximately $2,738,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30,

2014 there was uninvested cash of approximately $173,000, which is not reflected in the Portfolio of Investments. In addition, the Portfolio received non-cash collateral of approximately $479,000 in the form of U.S. Government agency securities, which the Portfolio cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(g)  The actual collateral received is greater than the amount shown here due to overcollateralization.

6.  Restricted Securities: The Portfolio invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Portfolio may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Portfolio, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Portfolio could sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of the securities. The Portfolio would, in either case, bear market risks during that period. Restricted Securities are identified in the Portfolio of Investments.

7.  Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. 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 or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

19

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

9.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the average daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.69% of the Portfolio's daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.05% for Class I shares and 1.15% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2014, approximately $56,000 of advisory fees were waived pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.25% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Portfolio and provides the Portfolio's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Portfolio is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.35% of the Portfolio's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.25% of the

0.35% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action appropriate. For the six months ended June 30, 2014, this waiver amounted to approximately $182,000.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Federal Income Taxes: It is the Portfolio's intention to continue 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 based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, Income Taxes – Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2013, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as

20

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2013 and 2012 was as follows:

2013 Distributions Paid From:				2012 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	610	$	4,987	$	86	$	30,764

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, distribution redesignations and a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2013:

Undistributed (Distributions in Excess of) Net Investment Income (Loss) (000)		Accumulated Undistributed Net Realized Gain (Loss) (000)			Paid-in- Capital (000)
$	834	$	(926	)	$	92

At December 31, 2013, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	4,356	$	24,928

At June 30, 2014, the aggregate cost for Federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $58,345,000 and the aggregate gross unrealized depreciation is approximately $9,584,000 resulting in net unrealized appreciation of approximately $48,761,000.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $54,488,000 and $49,136,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds – Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly, and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of advisory and administration fees paid by the Portfolio due to its investments in the Liquidity Funds. For the six months ended June 30, 2014, advisory fees paid were reduced by approximately $5,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Dividend Income (000)		Value June 30, 2014 (000)
$	23,866	$	30,112	$	50,724	$	2	$	3,254

I. Other: At June 30, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 83% and 75%, for Class I and Class II, respectively.

21

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

Michael E. Nugent
Chairperson of the Board and Director

John H. Gernon
President and Principal Executive Officer

Stefanie V. Chang Yu
Chief Compliance Officer

Joseph C. Benedetti
Vice President

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semi-annual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing the Public Reference Room of the SEC, Washington, DC 20549-0102.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Fund's Proxy Voting Policy and Procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Portfolio. For more detailed information about the Portfolio, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Portfolio, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Portfolio unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFMCGSAN
975278 EXP 08.31.15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

U.S. Real Estate Portfolio

The Portfolio is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Table of Contents

Expense Example		2
Investment Advisory Agreement Approval		3
Portfolio of Investments		5
Statement of Assets and Liabilities		7
Statement of Operations		8
Statements of Changes in Net Assets		9
Financial Highlights		10
Notes to Financial Statements		12
Director and Officer Information	Back Cover

1

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Expense Example (unaudited)

U.S. Real Estate Portfolio

As a shareholder of the U.S. Real Estate Portfolio (the "Portfolio"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, including advisory fees, administration fees, distribution (12b-1) fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2014 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/14		Actual Ending Account Value 6/30/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
U.S. Real Estate Portfolio Class I	$	1,000.00	$	1,171.50	$	1,019.34	$	5.92	$	5.51		1.10	%
U.S. Real Estate Portfolio Class II		1,000.00		1,170.50		1,018.10		7.27		6.76		1.35

*  Expenses are calculated using each Portfolio Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Portfolio's Adviser under the administration agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Adviser's expense. (The advisory and administration agreements together are referred to as the "Management Agreement.") The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the administrative and advisory services to the Portfolio. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Portfolio and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Portfolio

The Board reviewed the performance, fees and expenses of the Portfolio compared to its peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Portfolio. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2013, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Portfolio's performance was better than its peer group average for the one-year period but below its peer group average for the three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Portfolio relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Portfolio's total expense ratio. When a fund's management fee and/or its total expense ratio are higher than its peers, the Board and the Adviser discuss the reasons for this and, where appropriate, they discuss possible waivers and/or caps. The Board noted that the Portfolio's management fee and total expense ratio were higher than its peer group average. After discussion, the Board concluded that the Portfolio's performance, management fee and total expense ratio were acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Portfolio and how that relates to the Portfolio's total expense ratio and particularly the Portfolio's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Portfolio and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of the Portfolio supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Portfolio and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

3

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other benefits to the Adviser and its affiliates derived from their relationship with the Portfolio and other funds advised by the Adviser. These benefits may include, among other things, research received by the Adviser generated from commission dollars spent on funds' portfolio trading, and fees for trading, distribution and/or shareholder servicing. The Board reviewed with the Adviser each of these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Portfolio and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Portfolio and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Portfolio's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Portfolio to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Portfolio's business.

General Conclusion

After considering and weighing all of the above factors, the Board concluded that it would be in the best interest of the Portfolio and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single factor referenced above. The Board considered these factors over the course of numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

4

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments

U.S. Real Estate Portfolio

	Shares		Value (000)
Common Stocks (95.9%)
Apartments (16.6%)
AvalonBay Communities, Inc. REIT		147,014	$	20,904
Camden Property Trust REIT		100,478		7,149
Equity Residential REIT		556,957		35,088
Essex Property Trust, Inc. REIT		26,850		4,965
Mid-America Apartment Communities, Inc. REIT		59,474		4,345
				72,451
Diversified (7.4%)
Forest City Enterprises, Inc., Class A (a)		135,461		2,692
Lexington Realty Trust REIT		25,211		278
Vornado Realty Trust REIT		273,301		29,169
				32,139
Health Care (8.5%)
HCP, Inc. REIT		214,490		8,876
Health Care, Inc. REIT		44,243		2,773
Healthcare Realty Trust, Inc. REIT		190,495		4,842
Senior Housing Properties Trust REIT		380,285		9,237
Ventas, Inc. REIT		178,329		11,431
				37,159
Industrial (5.7%)
Cabot Industrial Value Fund II, LP REIT (a)(b)(c)(d)		11,760		5,407
DCT Industrial Trust, Inc. REIT		399,452		3,279
Keystone Industrial Fund, LP REIT (a)(b)(c)(d)		6,362,376		6,216
ProLogis, Inc. REIT		225,226		9,255
Rexford Industrial Realty, Inc. REIT		38,598		550
				24,707
Lodging/Resorts (12.4%)
Chesapeake Lodging Trust REIT		43,064		1,302
Hilton Worldwide Holdings, Inc. (a)		147,760		3,443
Host Hotels & Resorts, Inc. REIT		1,710,348		37,645
Starwood Hotels & Resorts Worldwide, Inc.		100,777		8,145
Summit Hotel Properties, Inc. REIT		158,835		1,683
Sunstone Hotel Investors, Inc. REIT		111,557		1,665
				53,883
Manufactured Homes (1.5%)
Equity Lifestyle Properties, Inc. REIT		144,550		6,383
Mixed Industrial/Office (2.2%)
Duke Realty Corp. REIT		331,617		6,022
Liberty Property Trust REIT		36,615		1,389
PS Business Parks, Inc. REIT		28,222		2,356
				9,767
Office (8.3%)
Alexandria Real Estate Equities, Inc. REIT		50,986		3,959
Boston Properties, Inc. REIT		113,175		13,375
BRCP REIT I, LP (a)(b)(c)(d)		2,928,671		454
BRCP REIT II, LP (a)(b)(c)(d)		7,155,500		3,878
Cousins Properties, Inc. REIT		265,680		3,308
Hudson Pacific Properties, Inc. REIT		215,000		5,448
Mack-Cali Realty Corp. REIT		261,835		5,624
				36,046

	Shares		Value (000)
Regional Malls (20.0%)
General Growth Properties, Inc. REIT		705,943	$	16,632
Macerich Co. (The) REIT		122,585		8,182
Simon Property Group, Inc. REIT		341,417		56,771
Taubman Centers, Inc. REIT		45,469		3,447
Washington Prime Group, Inc. REIT (a)		95,190		1,784
				86,816
Retail Free Standing (1.9%)
National Retail Properties, Inc. REIT		173,270		6,444
Realty Income Corp. REIT		40,510		1,799
				8,243
Self Storage (5.0%)
Public Storage REIT		117,576		20,147
Sovran Self Storage, Inc. REIT		20,780		1,605
				21,752
Shopping Centers (6.4%)
Acadia Realty Trust REIT		78,841		2,215
DDR Corp. REIT		427		7
Federal Realty Investment Trust REIT		34,698		4,196
Regency Centers Corp. REIT		288,775		16,079
Tanger Factory Outlet Centers, Inc. REIT		148,860		5,205
				27,702
Total Common Stocks (Cost $238,634)				417,048
Short-Term Investment (4.5%)
Investment Company (4.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note H) (Cost $19,543)		19,543,014		19,543
Total Investments (100.4%) (Cost $258,177)				436,591
Liabilities in Excess of Other Assets (-0.4%)				(1,580	)
Net Assets (100.0%)			$	435,011

(a)  Non-income producing security.

(b)  At June 30, 2014, the Portfolio held fair valued securities valued at approximately $15,955,000, representing 3.7% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(c)  Security has been deemed illiquid at June 30, 2014.

(d)  Restricted security valued at fair value and not registered under the Securities Act of 1933, BRCP REIT I, LLC was acquired between 12/04 - 5/08 and has a current cost basis of approximately $314,000. BRCP REIT II, LLC was acquired between 1/07 - 4/11 and has a current cost basis of approximately $7,155,000. Cabot Industrial Value Fund II, LP was acquired between 3/07 - 5/09 and has a current cost basis of approximately $5,880,000, Keystone Industrial Fund LP was acquired between 3/07 - 6/11 and has a current cost basis of approximately $4,123,000. At June 30, 2014, these securities had an aggregate market value of approximately $15,955,000 representing 3.7% of net assets.

REIT  Real Estate Investment Trust.

The accompanying notes are an integral part of the financial statements.
5

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

U.S. Real Estate Portfolio

Portfolio Composition

Classification	Percentage of Total Investments
Regional Malls		19.9	%
Apartments		16.6
Lodging/Resorts		12.3
Health Care		8.5
Office		8.2
Diversified		7.4
Shopping Centers		6.3
Industrial		5.7
Self Storage		5.0
Other*		10.1
Total Investments		100.0	%

*  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
6

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

U.S. Real Estate Portfolio

Statement of Assets and Liabilities	June 30, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $238,634)	$	417,048
Investment in Security of Affiliated Issuer, at Value (Cost $19,543)		19,543
Total Investments in Securities, at Value (Cost $258,177)		436,591
Foreign Currency, at Value (Cost $ —@)		—	@
Dividends Receivable		1,062
Receivable for Portfolio Shares Sold		413
Receivable from Affiliate		—	@
Other Assets		19
Total Assets		438,085
Liabilities:
Payable for Portfolio Shares Redeemed		1,974
Payable for Advisory Fees		904
Payable for Administration Fees		89
Payable for Distribution Fees — Class II Shares		48
Payable for Professional Fees		18
Payable for Directors' Fees and Expenses		5
Payable for Custodian Fees		3
Other Liabilities		33
Total Liabilities		3,074
NET ASSETS	$	435,011
Net Assets Consist of:
Paid-in-Capital	$	406,959
Accumulated Undistributed Net Investment Income		10,647
Accumulated Net Realized Loss		(161,009	)
Unrealized Appreciation (Depreciation) on:
Investments		178,414
Foreign Currency Translations		(—	@)
Net Assets	$	435,011
CLASS I:
Net Assets	$	198,420
Net Asset Value, Offering and Redemption Price Per Share Applicable to 10,760,801 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	18.44
CLASS II:
Net Assets	$	236,591
Net Asset Value, Offering and Redemption Price Per Share Applicable to 12,909,726 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	18.33

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

U.S. Real Estate Portfolio

Statement of Operations	Six Months Ended June 30, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers	$	7,510
Dividends from Security of Affiliated Issuer (Note H)		2
Total Investment Income		7,512
Expenses:
Advisory Fees (Note B)		1,894
Administration Fees (Note C)		592
Distribution Fees — Class II Shares (Note D)		365
Professional Fees		40
Shareholder Reporting Fees		25
Custodian Fees (Note F)		11
Transfer Agency Fees (Note E)		9
Directors' Fees and Expenses		6
Pricing Fees		2
Other Expenses		10
Expenses Before Non Operating Expenses		2,954
Investment Related Expenses		32
Total Expenses		2,986
Distribution Fees — Class II Shares Waived (Note D)		(104	)
Rebate from Morgan Stanley Affiliate (Note H)		(8	)
Net Expenses		2,874
Net Investment Income		4,638
Realized Gain:
Investments Sold		42,757
Change in Unrealized Appreciation (Depreciation):
Investments		28,137
Foreign Currency Translations		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		28,137
Realized Gain and Change in Unrealized Appreciation (Depreciation)		70,894
Net Increase in Net Assets Resulting from Operations	$	75,532

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

U.S. Real Estate Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2014 (unaudited) (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	4,638		$	6,344
Net Realized Gain		42,757			15,696
Net Change in Unrealized Appreciation (Depreciation)		28,137			(12,776	)
Net Increase in Net Assets Resulting from Operations		75,532			9,264
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(3,449	)
Class II:
Net Investment Income		—			(1,580	)
Total Distributions		—			(5,029	)
Capital Share Transactions:(1)
Class I:
Subscribed		19,465			49,592
Distributions Reinvested		—			3,449
Redeemed		(154,137	)		(71,228	)
Class II:
Subscribed		44,092			45,406
Distributions Reinvested		—			1,580
Redeemed		(25,814	)		(39,618	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(116,394	)		(10,819	)
Total Decrease in Net Assets		(40,862	)		(6,584	)
Net Assets:
Beginning of Period		475,873			482,457
End of Period (Including Accumulated Undistributed Net Investment Income of $10,647 and $6,009)	$	435,011		$	475,873
(1) Capital Share Transactions:
Class I:
Shares Subscribed		1,138			3,025
Shares Issued on Distributions Reinvested		—			211
Shares Redeemed		(8,798	)		(4,385	)
Net Decrease in Class I Shares Outstanding		(7,660	)		(1,149	)
Class II:
Shares Subscribed		2,529			2,800
Shares Issued on Distributions Reinvested		—			97
Shares Redeemed		(1,496	)		(2,450	)
Net Increase in Class II Shares Outstanding		1,033			447

The accompanying notes are an integral part of the financial statements.
9

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

U.S. Real Estate Portfolio

	Class I
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	15.74		$	15.59		$	13.57		$	12.91		$	10.15		$	8.20
Income from Investment Operations:
Net Investment Income†		0.18			0.22			0.18			0.08			0.14			0.17
Net Realized and Unrealized Gain (Loss)		2.52			0.11			1.97			0.69			2.87			2.04
Total from Investment Operations		2.70			0.33			2.15			0.77			3.01			2.21
Distributions from and/or in Excess of:
Net Investment Income		—			(0.18	)		(0.13	)		(0.11	)		(0.25	)		(0.26	)
Net Asset Value, End of Period	$	18.44		$	15.74		$	15.59		$	13.57		$	12.91		$	10.15
Total Return ++		17.15	%#		2.05	%		15.84	%		5.92	%		29.96	%		28.36	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	198,420		$	289,874		$	305,099		$	277,481		$	288,516		$	244,866
Ratio of Expenses to Average Net Assets(1)		1.10	%+††*		1.10	%+††		1.10	%+††		1.09	%+††		1.11	%+††		1.13	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		1.09	%+††*		1.08	%+††		1.08	%+††		1.07	%+††		1.10	%+††		1.10	%+
Ratio of Net Investment Income to Average Net Assets(1)		2.07	%+††*		1.36	%+††		1.19	%+††		0.64	%+††		1.20	%+††		2.25	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%††§*		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%§
Portfolio Turnover Rate		12	%#		17	%		17	%		18	%		22	%		36	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		N/A			N/A			N/A			N/A			1.12	%+††		1.14	%+
Net Investment Income to Average Net Assets		N/A			N/A			N/A			N/A			1.19	%+††		2.24	%+

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
10

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

U.S. Real Estate Portfolio

	Class II
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	15.66		$	15.52		$	13.50		$	12.84		$	10.11		$	8.16
Income from Investment Operations:
Net Investment Income†		0.16			0.18			0.14			0.05			0.11			0.14
Net Realized and Unrealized Gain (Loss)		2.51			0.10			1.97			0.68			2.84			2.05
Total from Investment Operations		2.67			0.28			2.11			0.73			2.95			2.19
Distributions from and/or in Excess of:
Net Investment Income		—			(0.14	)		(0.09	)		(0.07	)		(0.22	)		(0.24	)
Net Asset Value, End of Period	$	18.33		$	15.66		$	15.52		$	13.50		$	12.84		$	10.11
Total Return ++		17.05	%#		1.75	%		15.62	%		5.66	%		29.53	%		28.49	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	236,591		$	185,999		$	177,358		$	178,082		$	198,500		$	258,106
Ratio of Expenses to Average Net Assets(1)		1.35	%+††*		1.35	%+††		1.35	%+††		1.34	%+††		1.36	%+††		1.38	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		1.34	%+††*		1.33	%+††		1.33	%+††		1.32	%+††		1.35	%+††		1.35	%+
Ratio of Net Investment Income to Average Net Assets(1)		1.82	%+††*		1.11	%+††		0.94	%+††		0.39	%+††		0.95	%+††		1.83	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%††§*		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%§
Portfolio Turnover Rate		12	%#		17	%		17	%		18	%		22	%		36	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.44	%††*		1.45	%††		1.45	%††		1.44	%††		1.47	%+††		1.49	%+
Net Investment Income to Average Net Assets		1.73	%††*		1.01	%††		0.84	%††		0.29	%††		0.84	%+††		1.72	%+

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
11

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements

The Universal Institutional Funds, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Fund is comprised of eleven separate active, diversified and non-diversified portfolios (individually referred to as a "Portfolio", collectively as the "Portfolios"). The Fund applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the U.S. Real Estate Portfolio. The Portfolio seeks to provide above average current income and long-term capital appreciation by investing primarily in equity securities of companies in the U.S. real estate industry, including real estate investment trusts ("REITs"). The Portfolio offers two classes of shares – Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Fund is intended to be the funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP 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: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities

and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (5) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and

12

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

The Portfolio invests a significant portion of its assets in securities of REITs. The market's perception of prospective declines in private real estate values and other financial assets may result in increased volatility of market prices that can negatively impact the valuation of certain issuers held by the Portfolio.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value

measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Portfolio's investments as of June 30, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Apartments	$	72,451	$	—	$	—	$	72,451
Diversified		32,139		—		—		32,139
Health Care		37,159		—		—		37,159
Industrial		13,084		—		11,623		24,707
Lodging/Resorts		53,883		—		—		53,883
Manufactured Homes		6,383		—		—		6,383
Mixed Industrial/Office		9,767		—		—		9,767
Office		31,714		—		4,332		36,046
Regional Malls		86,816		—		—		86,816
Retail Free Standing		8,243		—		—		8,243
Self Storage		21,752		—		—		21,752
Shopping Centers		27,702		—		—		27,702
Total Common Stocks		401,093		—		15,955		417,048
Short-Term Investment Investment Company		19,543		—		—		19,543
Total Assets	$	420,636	$	—	$	15,955	$	436,591

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of June 30, 2014, the Portfolio did not have any investments transfer between investment levels.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stocks (000)
Beginning Balance	$	16,132
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate Action		(772	)
Change in unrealized appreciation/depreciation		595
Realized gains (losses)		—
Ending Balance	$	15,955
Net change in unrealized appreciation/depreciation from investments still held as of June 30, 2014	$	595

13

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2014.

	Fair Value at June 30, 2014 (000)		Valuation Technique	Unobservable Input
Industrial
Common Stocks	$	11,623	Reported Capital Balance, Adjusted for Subsequent Capital Calls and Return of Capital, as applicable	Adjusted Capital Balance
Office
Common Stocks	$	4,332	Reported Capital Balance, Adjusted for Subsequent Capital Calls and Return of Capital, as applicable	Adjusted Capital Balance

3.  Unfunded Commitments: Subject to the terms of a Subscription Agreement between the Portfolio and BRCP REIT I, LLC, the Portfolio has made a subscription commitment of $3,360,000 for which it will receive 3,360,000 shares of common stock. As of June 30, 2014, BRCP REIT I, LLC has drawn down approximately $2,929,000 which represents 87.2% of the commitment.

Subject to the terms of a Subscription Agreement between the Portfolio and BRCP REIT II, LLC, the Portfolio has made a subscription commitment of $7,700,000 for which it will receive 7,700,000 shares of common stock. As of June 30, 2014, BRCP REIT II, LLC has drawn down approximately $7,155,000, which represents 92.9% of the commitment.

Subject to the terms of a Subscription Agreement between the Portfolio and Keystone Industrial Fund, LP, the Portfolio has made a subscription commitment of $6,675,000 for which it will receive 6,675,000 shares of common stock. As of June 30, 2014, Keystone Industrial Fund, LP has drawn down approximately $6,362,000, which represents 95.3% of the commitment.

Subject to the terms of a Subscription Agreement between the Portfolio and Cabot Industrial Value Fund, LP, the Portfolio has made a subscription commitment of $6,300,000 for which it will receive 12,600 shares of common stock. As of June 30, 2014, Cabot Industrial Value Fund, LP has drawn down approximately $5,880,000 which represents 93.3% of the commitment.

4.  Restricted Securities: The Portfolio invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Portfolio may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Portfolio, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Portfolio could sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of the securities. The Portfolio would, in either case, bear market risks during that period. Restricted Securities are identified in the Portfolio of Investments.

5.  Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. 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 or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Portfolio owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

14

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

7.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the average daily net assets as follows:

First $500 million			Next $500 million			Over $1 billion
	0.80	%		0.75	%		0.70	%

For the six months ended June 30, 2014, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.80% of the Portfolio's daily net assets.

The Adviser had agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.10% for Class I shares and 1.35% for Class II shares. Effective July 1, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.00% and 1.25% for Class I and Class II shares, respectively. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.25% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Portfolio and provides the Portfolio's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Portfolio is authorized to pay the Distributor a distribution fee, which is

accrued daily and paid monthly, at an annual rate of 0.35% of the Portfolio's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.10% of the 0.35% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action appropriate. For the six months ended June 30, 2014, this waiver amounted to approximately $104,000.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Federal Income Taxes: It is the Portfolio's intention to continue 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 based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, Income Taxes – Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2013, remains subject to examination by taxing authorities.

15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2013 and 2012 was as follows:

2013 Distributions Paid From:				2012 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	5,029	$	—	$	3,645	$	—

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to REIT basis adjustments, securities sold with return of capital basis adjustment, partnership basis adjustments and nondeductible expenses, resulted in the following reclassifications among the components of net assets at December 31, 2013:

Accumulated Undistributed Net Investment Income (000)			Accumulated Net Realized Loss (000)		Paid-in- Capital (000)
$	(285	)	$	76	$	209

At December 31, 2013, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	5,698	$	—

At June 30, 2014, the aggregate cost for Federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $182,410,000 and the aggregate gross unrealized depreciation is approximately $3,996,000 resulting in net unrealized appreciation of approximately $178,414,000.

At December 31, 2013, the Portfolio had available for Federal income tax purposes unused capital losses, which will expire on the indicated dates:

Amount (000)		Expiration
$	183,187	December 31, 2017

To the extent that capital loss carryforwards are used to offset any future capital gains realized during the carryover period as provided by U.S. Federal income tax regulations, no capital gains tax liability will be incurred by the Portfolio for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders. During the year ended December 31, 2013, the Portfolio utilized capital loss carryforwards for U.S. Federal income tax purposes of approximately $15,931,000.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $55,180,000 and $63,582,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the six months ended June 30, 2014, advisory fees paid were reduced by approximately $8,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Dividend Income (000)		Value June 30, 2014 (000)
$	7,048	$	40,799	$	28,304	$	2	$	19,543

I. Other: At June 30, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 19% and 86%, for Class I and Class II, respectively.

16

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

Michael E. Nugent
Chairperson of the Board and Director

John H. Gernon
President and Principal Executive Officer

Stefanie V. Chang Yu
Chief Compliance Officer

Joseph C. Benedetti
Vice President

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semi-annual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing the Public Reference Room of the SEC, Washington, DC 20549-0102.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Fund's Proxy Voting Policy and Procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Portfolio. For more detailed information about the Portfolio, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Portfolio, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Portfolio unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFREISAN
975312 EXP 08.31.15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Small Company Growth Portfolio

The Portfolio is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Table of Contents

Expense Example		2
Investment Advisory Agreement Approval		3
Portfolio of Investments		5
Statement of Assets and Liabilities		8
Statement of Operations		9
Statements of Changes in Net Assets		10
Financial Highlights		11
Notes to Financial Statements		12
Director and Officer Information	Back Cover

1

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Expense Example (unaudited)

Small Company Growth Portfolio

As a shareholder of the Small Company Growth Portfolio (the "Portfolio"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, including advisory fees, administration fees, distribution (12b-1) fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2014 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/14		Actual Ending Account Value 6/30/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expense Paid During Period*		Net Expenses Ratio During Period**
Small Company Growth Portfolio Class II	$	1,000.00	$	869.90	$	1,018.60	$	5.80	$	6.26		1.25	%

*  Expenses are calculated using the Portfolio Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Portfolio's Adviser under the administration agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Adviser's expense. (The advisory and administration agreements together are referred to as the "Management Agreement.") The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the administrative and advisory services to the Portfolio. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Portfolio and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Portfolio

The Board reviewed the performance, fees and expenses of the Portfolio compared to its peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Portfolio. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2013, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Portfolio's performance was better than its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Portfolio relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Portfolio's total expense ratio. The Board noted that while the Portfolio's management fee was lower than its peer group average, the total expense ratio was higher but close to its peer group average. After discussion, the Board concluded that the Portfolio's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Portfolio and how that relates to the Portfolio's total expense ratio and particularly the Portfolio's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Portfolio and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of the Portfolio supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Portfolio and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

3

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other benefits to the Adviser and its affiliates derived from their relationship with the Portfolio and other funds advised by the Adviser. These benefits may include, among other things, research received by the Adviser generated from commission dollars spent on funds' portfolio trading, and fees for trading, distribution and/or shareholder servicing. The Board reviewed with the Adviser each of these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Portfolio and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Portfolio and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Portfolio's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Portfolio to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Portfolio's business.

General Conclusion

After considering and weighing all of the above factors, the Board concluded that it would be in the best interest of the Portfolio and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single factor referenced above. The Board considered these factors over the course of numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

4

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments

Small Company Growth Portfolio

	Shares		Value (000)
Common Stocks (95.2%)
Air Freight & Logistics (1.1%)
XPO Logistics, Inc. (a)		6,790	$	194
Auto Components (1.2%)
Fox Factory Holding Corp. (a)		12,076		212
Beverages (0.4%)
Crimson Wine Group Ltd. (a)		7,721		70
Biotechnology (1.6%)
Agios Pharmaceuticals, Inc. (a)(b)		1,179		54
Alnylam Pharmaceuticals, Inc. (a)		733		47
Intrexon Corp. (a)(b)		2,118		53
Ironwood Pharmaceuticals, Inc. (a)		8,083		124
				278
Capital Markets (8.4%)
Capitol Acquisition Corp. II (Units) (a)(c)		6,345		65
Financial Engines, Inc.		10,578		479
Greenhill & Co., Inc. (b)		6,930		341
ICG Group, Inc. (a)		4,858		101
WisdomTree Investments, Inc. (a)		40,149		496
				1,482
Construction & Engineering (0.7%)
Louis XIII Holdings Ltd. (Hong Kong) (a)		154,700		117
Construction Materials (1.2%)
Eagle Materials, Inc.		2,217		209
Diversified Financial Services (2.7%)
Eurazeo SA (France)		5,842		486
Diversified Telecommunication Services (0.4%)
magicJack VocalTec Ltd. (a)(b)		5,359		81
Electric Utilities (0.0%)
AET&D Holdings No. 1 Ltd. (Australia) (a)(d)(e)		113,183		—
Electronic Equipment, Instruments & Components (0.5%)
Universal Display Corp. (a)		2,933		94
Food & Staples Retailing (0.3%)
Fairway Group Holdings Corp. (a)(b)		8,892		59
Health Care Technology (9.2%)
athenahealth, Inc. (a)		4,928		617
Castlight Health, Inc., Class B (a)(b)		7,258		110
HMS Holdings Corp. (a)		14,024		286
Medidata Solutions, Inc. (a)		11,657		499
Veeva Systems, Inc., Class A (a)(b)		4,376		112
				1,624
Hotels, Restaurants & Leisure (7.3%)
BJ's Restaurants, Inc. (a)		5,529		193
Fiesta Restaurant Group, Inc. (a)		14,145		657
Krispy Kreme Doughnuts, Inc. (a)		12,542		201
Papa Murphy's Holdings, Inc. (a)(b)		6,908		66
Potbelly Corp. (a)		10,991		175
				1,292

	Shares		Value (000)
Household Durables (1.4%)
iRobot Corp. (a)(b)		2,421	$	99
SodaStream International Ltd. (Israel) (a)(b)		4,444		149
				248
Internet & Catalog Retail (7.5%)
Blue Nile, Inc. (a)		9,126		256
Coupons.com, Inc. (a)(b)		3,904		103
Groupon, Inc. (a)		13,940		92
Jumei International Holding Ltd. ADR (a)(b)		7,360		200
MakeMyTrip Ltd. (India) (a)		7,830		275
Ocado Group PLC (United Kingdom) (a)		49,145		312
Qunar Cayman Islands Ltd. ADR (China) (a)(b)		3,071		88
				1,326
Internet Software & Services (24.1%)
Angie's List, Inc. (a)		12,124		145
Autohome, Inc. ADR (China) (a)(b)		5,481		189
Benefitfocus, Inc. (a)		7,841		362
Criteo SA ADR (France) (a)		15,720		531
Dealertrack Technologies, Inc. (a)		10,054		456
Everday Health, Inc. (a)		7,141		132
GrubHub, Inc. (a)(b)		13,187		467
Just Eat PLC (United Kingdom) (a)		122,356		534
Marketo, Inc. (a)		3,128		91
OpenTable, Inc. (a)		1,683		174
OPOWER, Inc. (a)		7,937		150
Twitter, Inc. (a)		18,470		757
Youku Tudou, Inc. ADR (China) (a)		5,637		134
Zillow, Inc., Class A (a)		1,011		144
				4,266
Media (2.9%)
Aimia, Inc. (Canada)		29,336		514
Multi-line Retail (0.9%)
Poundland Group PLC (United Kingdom) (a)		30,964		168
Oil, Gas & Consumable Fuels (0.8%)
Gulfport Energy Corp. (a)		2,371		149
Professional Services (10.4%)
Advisory Board Co. (The) (a)		12,319		638
Corporate Executive Board Co. (The)		10,098		689
WageWorks, Inc. (a)		10,653		514
				1,841
Semiconductors & Semiconductor Equipment (1.0%)
Tessera Technologies, Inc.		8,130		180
Software (5.6%)
Ellie Mae, Inc. (a)		3,165		98
FireEye, Inc. (a)(b)		2,472		100
FleetMatics Group PLC (Ireland) (a)		3,058		99
Guidewire Software, Inc. (a)		3,676		149
RealPage, Inc. (a)		4,076		92
Solera Holdings, Inc.		6,754		454
				992

The accompanying notes are an integral part of the financial statements.
5

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Small Company Growth Portfolio

	Shares		Value (000)
Specialty Retail (4.5%)
Citi Trends, Inc. (a)		5,466	$	117
Five Below, Inc. (a)		6,948		277
Lumber Liquidators Holdings, Inc. (a)		2,191		166
Restoration Hardware Holdings, Inc. (a)		2,616		244
				804
Tech Hardware, Storage & Peripherals (0.5%)
Nimble Storage, Inc. (a)(b)		2,694		83
Transportation Infrastructure (0.6%)
Prumo Logistica SA (Brazil) (a)		205,483		100
Total Common Stocks (Cost $13,262)				16,869
Preferred Stocks (2.8%)
Health Care Technology (2.6%)
Castlight Health, Inc. (a)(d) (acquisition cost — $132; acquired 6/4/10)		32,177		465
Internet Software & Services (0.2%)
Mode Media Corporation Series M-1 (a)(d)(e)(f) (acquisition cost — $142; acquired 3/19/08)		9,428		27
Mode Media Corporation Escrow Series M-1 (a)(d)(e)(f) (acquisition cost — $14; acquired 3/19/08)		1,346		2
				29
Total Preferred Stocks (Cost $288)				494
Convertible Preferred Stocks (0.0%)
Internet Software & Services (0.0%)
Youku Tudou, Inc., Class A (a)(d)(e)(f) (acquisition cost — $—@; acquired 9/16/10) (Cost $—@)		17		—	@
	Face Amount (000)
Promissory Notes (0.1%)
Internet Software & Services (0.1%)
Mode Media Corporation 9.00%, 12/3/19 (a)(d)(e)(f) (acquisition cost — $60; acquired 3/19/08)	$	21		18
Mode Media Corporation Escrow 9.00%, 12/3/19 (a)(d)(e)(f) (acquisition cost — $1; acquired 3/19/08)		1		1
Total Promissory Notes (Cost $61)				19
	Shares
Short-Term Investments (12.5%)
Securities held as Collateral on Loaned Securities (10.3%)
Investment Company (8.4%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H)		1,485,338		1,485

	Face Amount (000)		Value (000)
Repurchase Agreements (1.9%)
Barclays Capital, Inc., (0.08%, dated 6/30/14, due 7/1/14; proceeds $154; fully collateralized by various U.S. Government agency securities; 3.50% – 4.50% due 9/1/33 – 6/20/44; valued at $157)	$	154	$	154
BNP Paribas Securities Corp., (0.11%, dated 6/30/14, due 7/1/14; proceeds $193; fully collateralized by a U.S. Government agency security; 4.00% due 6/20/44; valued at $197)		193		193
				347
Total Securities held as Collateral on Loaned Securities (Cost $1,832)				1,832
Investment Company (2.2%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H) (Cost $392)		392,240		392
Total Short-Term Investments (Cost $2,224)				2,224
Total Investments (110.6%) (Cost $15,835) Including $2,284 of Securities Loaned				19,606
Liabilities in Excess of Other Assets (-10.6%)				(1,879	)
Net Assets (100.0%)			$	17,727

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2014.

(c)  Consists of one or more classes of securities traded together as a unit; stocks with attached warrants.

(d)  Security has been deemed illiquid at June 30, 2014.

(e)  At June 30, 2014, the Portfolio held fair valued securities valued at approximately $48,000, representing 0.3% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(f)  Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Portfolio has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at June 30, 2014 amounts to approximately $48,000 and represents 0.3% of net assets.

@  Value is less than $500.

ADR  American Depositary Receipt.

The accompanying notes are an integral part of the financial statements.
6

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Small Company Growth Portfolio

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		24.9	%
Internet Software & Services		24.3
Health Care Technology		11.7
Professional Services		10.4
Capital Markets		8.3
Internet & Catalog Retail		7.5
Hotels, Restaurants & Leisure		7.3
Software		5.6
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2014.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
7

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Small Company Growth Portfolio

Statement of Assets and Liabilities	June 30, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $13,958)	$	17,729
Investment in Security of Affiliated Issuer, at Value (Cost $1,877)		1,877
Total Investments in Securities, at Value (Cost $15,835)		19,606
Foreign Currency, at Value (Cost $5)		5
Cash		116
Receivable for Portfolio Shares Sold		43
Receivable for Investments Sold		25
Dividends Receivable		1
Interest Receivable		—	@
Receivable from Affiliate		—	@
Other Assets		2
Total Assets		19,798
Liabilities:
Collateral on Securities Loaned, at Value		1,948
Payable for Investments Purchased		92
Payable for Professional Fees		15
Payable for Administration Fees		4
Payable for Advisory Fees		3
Payable for Custodian Fees		2
Payable for Portfolio Shares Redeemed		1
Payable for Distribution Fees — Class II Shares		1
Other Liabilities		5
Total Liabilities		2,071
NET ASSETS	$	17,727
Net Assets Consist of:
Paid-in-Capital	$	5,180
Accumulated Net Investment Loss		(67	)
Accumulated Net Realized Gain		8,843
Unrealized Appreciation (Depreciation) on:
Investments		3,771
Foreign Currency Translations		(—	@)
Net Assets	$	17,727
CLASS II:
Net Asset Value, Offering and Redemption Price Per Share Applicable to 742,657 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	23.87
(1) Including:
Securities on Loan, at Value:	$	2,284

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Small Company Growth Portfolio

Statement of Operations	Six Months Ended June 30, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $3 of Foreign Taxes Withheld)	$	39
Income from Securities Loaned — Net		19
Dividends from Security of Affiliated Issuer (Note H)		—	@
Interest from Securities of Unaffiliated Issuers		—	@
Total Investment Income		58
Expenses:
Advisory Fees (Note B)		90
Professional Fees		46
Distribution Fees — Class II Shares (Note D)		34
Administration Fees (Note C)		25
Custodian Fees (Note F)		11
Shareholder Reporting Fees		8
Pricing Fees		3
Transfer Agency Fees (Note E)		2
Directors' Fees and Expenses		1
Other Expenses		3
Total Expenses		223
Waiver of Advisory Fees (Note B)		(70	)
Distribution Fees — Class II Shares Waived (Note D)		(29	)
Rebate from Morgan Stanley Affiliate (Note H)		(—	@)
Net Expenses		124
Net Investment Loss		(66	)
Realized Gain (Loss):
Investments Sold		3,521
Foreign Currency Transactions		(—	@)
Net Realized Gain		3,521
Change in Unrealized Appreciation (Depreciation):
Investments		(6,306	)
Foreign Currency Translations		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		(6,306	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(2,785	)
Net Decrease in Net Assets Resulting from Operations	$	(2,851	)

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
9

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Small Company Growth Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2014 (unaudited) (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(66	)	$	(146	)
Net Realized Gain		3,521			5,571
Net Change in Unrealized Appreciation (Depreciation)		(6,306	)		5,826
Net Increase (Decrease) in Net Assets Resulting from Operations		(2,851	)		11,251
Distributions from and/or in Excess of:
Class II:
Net Realized Gain		—			(809	)
Capital Share Transactions:(1)
Class II:
Subscribed		764			723
Distributions Reinvested		—			809
Redeemed		(3,561	)		(7,370	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(2,797	)		(5,838	)
Total Increase (Decrease) in Net Assets		(5,648	)		4,604
Net Assets:
Beginning of Period		23,375			18,771
End of Period (Including Accumulated Net Investment Losses of $(67) and $(1))	$	17,727		$	23,375
(1) Capital Share Transactions:
Class II:
Shares Subscribed		30			34
Shares Issued on Distributions Reinvested		—			40
Shares Redeemed		(139	)		(348	)
Net Decrease in Class II Shares Outstanding		(109	)		(274	)

The accompanying notes are an integral part of the financial statements.
10

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Small Company Growth Portfolio

	Class II
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	27.44		$	16.67		$	14.81		$	16.87		$	13.33		$	9.09
Income (Loss) from Investment Operations:
Net Investment Loss†		(0.08	)		(0.15	)		(0.07	)		(0.08	)		(0.02	)		(0.05	)
Net Realized and Unrealized Gain (Loss)		(3.49	)		11.74			2.24			(1.30	)		3.56			4.29
Total from Investment Operations		(3.57	)		11.59			2.17			(1.38	)		3.54			4.24
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.68	)		—			—
Net Realized Gain		—			(0.82	)		(0.31	)		—			—			—
Total Distributions		—			(0.82	)		(0.31	)		(0.68	)		—			—
Net Asset Value, End of Period	$	23.87		$	27.44		$	16.67		$	14.81		$	16.87		$	13.33
Total Return ++		(13.01	)%#		71.33	%		14.71	%		(8.71	)%		26.56	%		46.64	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	17,727		$	23,375		$	18,771		$	21,696		$	30,178		$	33,495
Ratio of Expenses to Average Net Assets(1)		1.25	%+*		1.25	%+		1.25	%+		1.25	%+		1.25	%+		1.25	%+
Ratio of Net Investment Loss to Average Net Assets(1)		(0.65	)%+*		(0.70	)%+		(0.43	)%+		(0.51	)%+		(0.17	)%+		(0.49	)%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§*		0.00	%§		0.00	%§		0.00	%§		0.00	%§		0.00	%§
Portfolio Turnover Rate		31	%#		46	%		22	%		26	%		25	%		30	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		2.26	%*		2.25	%		2.05	%		1.92	%		1.81	%+		1.70	%+
Net Investment Loss to Average Net Assets		(1.66	)%*		(1.70	)%		(1.23	)%		(1.18	)%		(0.73	)%+		(0.94	)%+

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Loss reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
11

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements

The Universal Institutional Funds, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Fund is comprised of eleven separate active, diversified and non-diversified portfolios (individually referred to as a "Portfolio", collectively as the "Portfolios"). The Fund applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Small Company Growth Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of small companies. The Portfolio currently offers Class II shares only; although Class I shares may be offered in the future.

The Fund is intended to be the funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Effective at the close of business on May 30, 2014, the Portfolio suspended offering Class II shares of the Portfolio to new investors. The Portfolio will continue to offer Class II shares of the Portfolio to existing shareholders. The Portfolio may recommence offering Class II shares of the Portfolio to new investors in the future. Any such offerings of the Portfolio's Class II shares may be limited in amount and may commence and terminate without any prior notice.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP 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: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value,

portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair

12

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Portfolio's investments as of June 30, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Assets:
Common Stocks
Air Freight & Logistics	$	194	$	—	$	—		$	194
Auto Components		212		—		—			212
Beverages		70		—		—			70
Biotechnology		278		—		—			278
Capital Markets		1,417		65		—			1,482
Construction & Engineering		117		—		—			117
Construction Materials		209		—		—			209
Diversified Financial Services		486		—		—			486
Diversified Telecommunication Services		81		—		—			81
Electric Utilities		—		—		—	†		—	†
Electronic Equipment, Instruments & Components		94		—		—			94
Food & Staples Retailing		59		—		—			59
Health Care Technology		1,624		—		—			1,624
Hotels, Restaurants & Leisure		1,292		—		—			1,292
Household Durables		248		—		—			248
Internet & Catalog Retail		1,326		—		—			1,326
Internet Software & Services		4,266		—		—			4,266
Media		514		—		—			514
Multi-line Retail		168		—		—			168
Oil, Gas & Consumable Fuels		149		—		—			149
Professional Services		1,841		—		—			1,841
Semiconductors & Semiconductor Equipment		180		—		—			180
Software		992		—		—			992
Specialty Retail		804		—		—			804
Tech Hardware, Storage & Peripherals		83		—		—			83
Transportation Infrastructure		100		—		—			100
Total Common Stocks		16,804		65		—	†		16,869	†

13

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)			Total (000)
Preferred Stocks	$	—	$	465	$	29		$	494
Convertible Preferred Stock		—		—		—	@		—	@
Promissory Notes		—		—		19			19
Short-Term Investments
Investment Company		1,877		—		—			1,877
Repurchase Agreements		—		347		—			347
Total Short-Term Investments		1,877		347		—			2,224
Total Assets	$	18,681	$	877	$	48	†	$	19,606	†

@  Value is less than $500.

†  Includes one security which is valued at zero.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of June 30, 2014, a security with a total value of approximately $465,000 transferred from Level 3 to Level 2. The security that was valued using significant

unobservable inputs at December 31, 2013 was valued using other significant observable inputs at June 30, 2014.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

	Common Stock (000)			Preferred Stocks (000)			Convertible Preferred Stock (000)			Promissory Notes (000)
Beginning Balance	$	—	†	$	249		$	—	@	$	19
Purchases		—			—			—			—
Sales		—			—			—			—
Amortization of discount		—			—			—			—
Transfers in		—			—			—			—
Transfers out		—		$	(465	)		—			—
Change in unrealized appreciation/depreciation		—			245			—	@		—
Realized gains (losses)		—			—			—			—
Ending Balance	$	—	†	$	29		$	—	@	$	19
Net change in unrealized appreciation/depreciation from investments still held as of June 30, 2014	$	—		$	(1	)	$	—	@	$	—

†  Includes one security which was valued at zero.

@  Value is less than $500.

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2014.

	Fair Value at June 30, 2014 (000)		Valuation Technique	Unobservable Input	Range						Weighted Average			Valuation from an Increase in Input
Internet Software & Services
Preferred Stock Market Transaction	$	27	Method	Precedent Transaction	$	4.18		$	4.18		$	4.18		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		14.0	%		16.0	%		15.0	%	Decrease
				Perpetual Growth Rate		2.0	%		3.0	%		2.5	%	Increase
			Market Comparable Companies	Enterprise Value/ Revenue		2.8	x		11.2	x		6.0	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
Preferred Stock — Escrow	$	2		Discount for Escrow		42.7	%		42.7	%		42.7	%	Decrease
Promissory Note	$	18	Market Transaction	Valuation at Issuance as a Percentage of Principal	$	100.00		$	100.00		$	100.00		Increase
				Cost of Debt		12.2	%		12.2	%		12.2	%	Decrease
				Valuation as a Percentage of Principal		88.4	%		88.4	%		88.4	%	Increase
Promissory Note — Escrow	$	1	Market Transaction	Valuation as a Percentage of Principal		45.7	%		45.7	%		45.7	%	Increase

14

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate 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 Portfolio are presented at the foreign exchange rates and market values at the close of the period, the Portfolio 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 securities held at period end. Similarly, the Portfolio 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) on investments in securities 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 forward exchange contracts, disposition of foreign currencies, currency gains (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 Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) on the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in 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, fluctuations of exchange

rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

4.  Securities Lending: The Portfolio lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Portfolio. The Portfolio would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily, by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned – Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	2,284	(a)	$	—	$	(2,284	)(b)(c)	$	0

(a)  Represents market value of loaned securities at period end.

(b)  The Portfolio received cash collateral of approximately $1,948,000, of which approximately $1,832,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2014 there was uninvested cash of approximately $116,000, which is not reflected in the Portfolio of Investments. In addition, the Portfolio received non-cash collateral of approximately $341,000 in the form of U.S. Government agency securities and obligations, which the Portfolio cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(c)  The actual collateral received is greater than the amount shown here due to overcollateralization.

5.  Restricted Securities: The Portfolio invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Portfolio may have difficulty disposing of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Portfolio, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Portfolio could sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of the securities. The Portfolio would, in either case, bear market risks during that period. Restricted Securities are identified in the Portfolio of Investments.

6.  Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. 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 or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

8.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the average daily net assets as follows:

First $1 billion			Next $500 milion			Over $1.5 billion
	0.92	%		0.85	%		0.80	%

For the six months ended June 30, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.20% of the Portfolio's daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that the total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest, and other extraordinary expenses (including litigation), will not exceed 1.25% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least one year or until such time that the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2014, approximately $70,000 of advisory fees were waived pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.25% of the Portfolio's

16

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Portfolio and provides the Portfolio's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Portfolio is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.35% of the Portfolio's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.30% of the 0.35% distribution fee that it may receive. This fee waiver will continue for at least one year or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action appropriate. For the six months ended June 30, 2014, this waiver amounted to approximately $29,000.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Federal Income Taxes: It is the Portfolio's intention to continue 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 based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, Income Taxes – Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2013, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2013 and 2012 was as follows:

2013 Distributions Paid From:				2012 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	24	$	785	$	—	$	403

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions and a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2013:

Accumulated Net Investment Loss (000)		Accumulated Undistributed Net Realized Gain (000)			Paid-in- Capital (000)
$	145	$	(145	)	$	—

At December 31, 2013, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	190	$	5,238

17

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

At June 30, 2014, the aggregate cost for Federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $4,933,000 and the aggregate gross unrealized depreciation is approximately $1,162,000 resulting in net unrealized appreciation of approximately $3,771,000.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $6,019,000 and $8,865,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds – Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly, and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the six months ended June 30, 2014, advisory fees paid were reduced by less than $500 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Dividend Income (000)			Value June 30, 2014 (000)
$	1,611	$	7,386	$	7,120	$	—	@	$	1,877

@ Amount is less than $500.

I. Other: At June 30, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 90% for Class II shares.

18

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

Michael E. Nugent
Chairperson of the Board and Director

John H. Gernon
President and Principal Executive Officer

Stefanie V. Chang Yu
Chief Compliance Officer

Joseph C. Benedetti
Vice President

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semi-annual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing the Public Reference Room of the SEC, Washington, DC 20549-0102.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Fund's Proxy Voting Policy and Procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Portfolio. For more detailed information about the Portfolio, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Portfolio, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Portfolio unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFSCGSAN
975322 EXP 08.31.15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Growth Portfolio

The Portfolio is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Semi-Annual Report – June 30, 2014

The Universal Institutional Funds, Inc.

Table of Contents

Expense Example		2
Investment Advisory Agreement Approval		3
Portfolio of Investments		5
Statement of Assets and Liabilities		7
Statement of Operations		8
Statements of Changes in Net Assets		9
Financial Highlights		10
Notes to Financial Statements		12
Director and Officer Information	Back Cover

1

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Expense Example (unaudited)

Growth Portfolio

As a shareholder of the Growth Portfolio (the "Portfolio"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, including advisory fees, administration fees, distribution (12b-1) fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2014 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/14		Actual Ending Account Value 6/30/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Growth Portfolio Class I	$	1,000.00	$	1,030.60	$	1,020.83	$	4.03	$	4.01		0.80	%
Growth Portfolio Class II		1,000.00		1,029.30		1,019.59		5.28		5.26		1.05

*  Expenses are calculated using each Portfolio Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Portfolio's Adviser under the administration agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Adviser's expense. (The advisory and administration agreements together are referred to as the "Management Agreement.") The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the administrative and advisory services to the Portfolio. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Portfolio and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Portfolio

The Board reviewed the performance, fees and expenses of the Portfolio compared to its peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Portfolio. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2013, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Portfolio's performance was better than its peer group average for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Portfolio relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Portfolio's total expense ratio. The Board noted that the Portfolio's management fee and total expense ratio were higher but close to its peer group average. After discussion, the Board concluded that the Portfolio's performance, management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Portfolio and how that relates to the Portfolio's total expense ratio and particularly the Portfolio's management fee rate, which includes breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Portfolio and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board has determined that its review of the actual and potential economies of scale of the Portfolio supports its decision to approve the Management Agreement.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Portfolio and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

3

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited) (cont'd)

Other Benefits of the Relationship

The Board considered other benefits to the Adviser and its affiliates derived from their relationship with the Portfolio and other funds advised by the Adviser. These benefits may include, among other things, research received by the Adviser generated from commission dollars spent on funds' portfolio trading, and fees for trading, distribution and/or shareholder servicing. The Board reviewed with the Adviser each of these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Portfolio and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Portfolio and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Portfolio's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Portfolio to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Portfolio's business.

General Conclusion

After considering and weighing all of the above factors, the Board concluded that it would be in the best interest of the Portfolio and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single factor referenced above. The Board considered these factors over the course of numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

4

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments

Growth Portfolio

	Shares		Value (000)
Common Stocks (98.5%)
Automobiles (3.7%)
Tesla Motors, Inc. (a)		33,238	$	7,979
Biotechnology (2.5%)
Alexion Pharmaceuticals, Inc. (a)		6,883		1,075
Gilead Sciences, Inc. (a)		39,093		3,241
Regeneron Pharmaceuticals, Inc. (a)(b)		3,503		990
				5,306
Capital Markets (1.5%)
BlackRock, Inc.		10,213		3,264
Chemicals (2.1%)
Monsanto Co.		36,811		4,592
Commercial Services & Supplies (2.2%)
Edenred (France)		154,415		4,682
Communications Equipment (2.3%)
Motorola Solutions, Inc.		75,440		5,022
Diversified Financial Services (2.7%)
McGraw Hill Financial, Inc.		41,972		3,485
MSCI, Inc. (a)		50,467		2,314
				5,799
Electrical Equipment (0.5%)
SolarCity Corp. (a)(b)		14,428		1,019
Food Products (3.8%)
Keurig Green Mountain, Inc.		18,478		2,302
Mead Johnson Nutrition Co.		62,098		5,786
				8,088
Health Care Equipment & Supplies (3.7%)
Intuitive Surgical, Inc. (a)		19,413		7,994
Health Care Technology (1.0%)
athenahealth, Inc. (a)		16,775		2,099
Hotels, Restaurants & Leisure (2.1%)
Starbucks Corp.		57,275		4,432
Information Technology Services (5.7%)
Mastercard, Inc., Class A		83,875		6,162
Visa, Inc., Class A		29,119		6,136
				12,298
Insurance (3.0%)
Arch Capital Group Ltd. (a)		37,044		2,128
Progressive Corp. (The)		166,777		4,229
				6,357
Internet & Catalog Retail (13.5%)
Amazon.com, Inc. (a)		51,503		16,727
JD.com, Inc. ADR (China) (a)		44,329		1,264
NetFlix, Inc. (a)		6,155		2,712
Priceline Group, Inc. (a)		6,896		8,296
				28,999

	Shares		Value (000)
Internet Software & Services (22.4%)
Facebook, Inc., Class A (a)		267,566	$	18,005
Google, Inc., Class A (a)		12,007		7,020
Google, Inc., Class C (a)		15,594		8,971
LinkedIn Corp., Class A (a)		32,401		5,556
Twitter, Inc. (a)		208,864		8,557
				48,109
Life Sciences Tools & Services (5.3%)
Illumina, Inc. (a)		63,722		11,377
Media (1.6%)
Naspers Ltd., Class N (South Africa)		29,124		3,429
Oil, Gas & Consumable Fuels (1.0%)
Range Resources Corp.		24,354		2,118
Pharmaceuticals (2.8%)
Valeant Pharmaceuticals International, Inc. (Canada) (a)		48,456		6,111
Professional Services (1.0%)
Verisk Analytics, Inc., Class A (a)		37,010		2,221
Semiconductors & Semiconductor Equipment (0.9%)
ARM Holdings PLC ADR (United Kingdom)		43,070		1,948
Software (6.9%)
FireEye, Inc. (a)(b)		44,642		1,810
Salesforce.com, Inc. (a)		119,323		6,930
Splunk, Inc. (a)		41,259		2,283
Workday, Inc., Class A (a)		41,621		3,740
				14,763
Tech Hardware, Storage & Peripherals (2.9%)
Apple, Inc.		68,240		6,342
Textiles, Apparel & Luxury Goods (3.4%)
Christian Dior SA (France)		27,243		5,420
Michael Kors Holdings Ltd. (a)		22,401		1,986
				7,406
Total Common Stocks (Cost $116,243)				211,754
Preferred Stocks (0.8%)
Internet & Catalog Retail (0.6%)
Airbnb, Inc. Series D (c)(d)(e) (acquisition cost — $1,335; acquired 4/16/14)		10,928		1,335
Internet Software & Services (0.2%)
Dropbox, Inc. Series C (c)(d)(e) (acquisition cost — $485; acquired 1/30/14)		25,401		467
Total Preferred Stocks (Cost $1,820)				1,802

The accompanying notes are an integral part of the financial statements.
5

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Growth Portfolio

	Notional Amount		Value (000)
Call Options Purchased (0.1%)
Foreign Currency Options (0.1%)
USD/CNY December 2014 @ CNY 6.50		2,393,430	$	1
USD/CNY December 2014 @ CNY 6.50		29,820,860		14
USD/CNY December 2014 @ CNY 6.50		33,628,628		16
USD/CNY June 2015 @ CNY 6.62		39,043,224		62
Total Call Options Purchased (Cost $316)				93
	Shares
Short-Term Investments (1.9%)
Securities held as Collateral on Loaned Securities (0.9%)
Investment Company (0.7%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H)		1,571,557		1,572
	Face Amount (000)
Repurchase Agreements (0.2%)
Barclays Capital, Inc., (0.08%, dated 6/30/14, due 7/1/14; proceeds $163; fully collateralized by various U.S. Government agency securities; 3.50% – 4.50% due 9/1/33 – 6/20/44; valued at $166)	$	163		163
BNP Paribas Securities Corp., (0.11%, dated 6/30/14, due 7/1/14; proceeds $204; fully collateralized by a U.S. Government agency security; 4.00% due 6/20/44; valued at $209)		204		204
				367
Total Securities held as Collateral on Loaned Securities (Cost $1,939)				1,939
	Shares
Investment Company (1.0%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H) (Cost $2,122)		2,122,100		2,122
Total Short-Term Investments (Cost $4,061)				4,061
Total Investments (101.3%) (Cost $122,440) Including $3,044 of Securities Loaned				217,710
Liabilities in Excess of Other Assets (-1.3%)				(2,807	)
Net Assets (100.0%)			$	214,903

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2014.

(c)  At June 30, 2014, the Portfolio held fair valued securities valued at approximately $1,802,000, representing 0.8% of net assets. These securities have been fair valued as determined in good faith under procedures established by and under the general supervision of the Fund's Directors.

(d)  Security cannot be offered for public resale without first being registered under the Securities Act of 1933 and related rules ("restricted security"). Acquisition date represents the day on which an enforceable right to acquire such security is obtained and is presented along with related cost in the security description. The Portfolio has registration rights for certain restricted securities. Any costs related to such registration are borne by the issuer. The aggregate value of restricted securities (excluding 144A holdings) at June 30, 2014 amounts to approximately $1,802,000 and represents 0.8% of net assets.

(e)  Security has been deemed illiquid at June 30, 2014.

ADR  American Depositary Receipt.

CNY  — Chinese Yuan Renminbi

USD  — United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		45.6	%
Internet Software & Services		22.5
Internet & Catalog Retail		14.1
Software		6.8
Information Technology Services		5.7
Life Sciences Tools & Services		5.3
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2014.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
6

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Growth Portfolio

Statement of Assets and Liabilities	June 30, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $118,746)	$	214,016
Investment in Security of Affiliated Issuer, at Value (Cost $3,694)		3,694
Total Investments in Securities, at Value (Cost $122,440)		217,710
Cash		122
Dividends Receivable		47
Receivable for Portfolio Shares Sold		15
Tax Reclaim Receivable		11
Receivable from Affiliate		—	@
Other Assets		13
Total Assets		217,918
Liabilities:
Collateral on Securities Loaned, at Value		2,061
Payable for Portfolio Shares Redeemed		305
Due to Broker		260
Payable for Advisory Fees		236
Payable for Reorganization Expense		69
Payable for Administration Fees		43
Payable for Distribution Fees — Class II Shares		17
Payable for Professional Fees		8
Payable for Custodian Fees		4
Payable for Directors' Fees and Expenses		3
Other Liabilities		9
Total Liabilities		3,015
NET ASSETS	$	214,903
Net Assets Consist of:
Paid-in-Capital	$	93,335
Accumulated Net Investment Loss		(47	)
Accumulated Net Realized Gain		26,345
Unrealized Appreciation (Depreciation) on:
Investments		95,270
Foreign Currency Translations		—	@
Net Assets	$	214,903
CLASS I:
Net Assets	$	130,137
Net Asset Value, Offering and Redemption Price Per Share Applicable to 4,069,704 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	31.98
CLASS II:
Net Assets	$	84,766
Net Asset Value, Offering and Redemption Price Per Share Applicable to 2,710,109 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	31.28
(1) Including:
Securities on Loan, at Value:	$	3,044

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Growth Portfolio

Statement of Operations	Six Months Ended June 30, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $61 of Foreign Taxes Withheld)	$	809
Income from Securities Loaned — Net		104
Dividends from Security of Affiliated Issuer (Note H)		2
Total Investment Income		915
Expenses:
Advisory Fees (Note B)		536
Administration Fees (Note C)		268
Distribution Fees — Class II Shares (Note D)		142
Professional Fees		46
Shareholder Reporting Fees		15
Custodian Fees (Note F)		8
Transfer Agency Fees (Note E)		7
Directors' Fees and Expenses		3
Pricing Fees		2
Other Expenses		8
Total Expenses		1,035
Distribution Fees — Class II Shares Waived (Note D)		(41	)
Waiver of Advisory Fees (Note B)		(36	)
Rebate from Morgan Stanley Affiliate (Note H)		(4	)
Net Expenses		954
Net Investment Loss		(39	)
Realized Gain (Loss):
Investments Sold		11,963
Foreign Currency Transactions		(4	)
Net Realized Gain		11,959
Change in Unrealized Appreciation (Depreciation):
Investments		(6,088	)
Foreign Currency Translations		—	@
Net Change in Unrealized Appreciation (Depreciation)		(6,088	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		5,871
Net Increase in Net Assets Resulting from Operations	$	5,832

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Growth Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2014 (unaudited) (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(39	)	$	(255	)
Net Realized Gain		11,959			16,098
Net Change in Unrealized Appreciation (Depreciation)		(6,088	)		38,529
Net Increase in Net Assets Resulting from Operations		5,832			54,372
Distributions from and/or in Excess of:
Class I:
Net Investment Income		—			(244	)
Net Realized Gain		—			(2,038	)
Class II:
Net Investment Income		—			(71	)
Net Realized Gain		—			(1,308	)
Total Distributions		—			(3,661	)
Capital Share Transactions:(1)
Class I:
Subscribed		1,348			3,165
Issued due to a tax-free reorganization		—			74,535
Distributions Reinvested		—			2,282
Redeemed		(17,078	)		(21,279	)
Class II:
Subscribed		17,145			10,517
Issued due to a tax-free reorganization		—			34,680
Distributions Reinvested		—			1,379
Redeemed		(12,897	)		(18,363	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(11,482	)		86,916
Total Increase (Decrease) in Net Assets		(5,650	)		137,627
Net Assets:
Beginning of Period		220,553			82,926
End of Period (Including Accumulated Net Investment Loss and Distribution in Excess of Net Investment Income of $(47) and $(8))	$	214,903		$	220,553
(1) Capital Share Transactions:
Class I:
Shares Subscribed		42			118
Shares Issued due to a tax-free reorganization		—			2,847
Shares Issued on Distributions Reinvested		—			96
Shares Redeemed		(550	)		(810	)
Net Increase (Decrease) in Class I Shares Outstanding		(508	)		2,251
Class II:
Shares Subscribed		555			405
Shares Issued due to a tax-free reorganization		—			1,352
Shares Issued on Distributions Reinvested		—			59
Shares Redeemed		(428	)		(716	)
Net Increase in Class II Shares Outstanding		127			1,100

The accompanying notes are an integral part of the financial statements.
9

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Growth Portfolio

	Class I
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	31.03		$	21.94		$	20.10		$	20.70		$	16.87		$	10.19
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		0.01			(0.03	)		0.10			(0.02	)		0.03			0.02
Net Realized and Unrealized Gain (Loss)		0.94			10.23			2.76			(0.56	)		3.82			6.66
Total from Investment Operations		0.95			10.20			2.86			(0.58	)		3.85			6.68
Distributions from and/or in Excess of:
Net Investment Income		—			(0.12	)		—			(0.02	)		(0.02	)		—
Net Realized Gain		—			(0.99	)		(1.02	)		—			—			—
Total Distributions		—			(1.11	)		(1.02	)		(0.02	)		(0.02	)		—
Net Asset Value, End of Period	$	31.98		$	31.03		$	21.94		$	20.10		$	20.70		$	16.87
Total Return ++		3.06	%#		48.07	%		14.38	%		(2.80	)%		22.86	%		65.55	%**
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	130,137		$	142,052		$	51,043		$	52,279		$	65,186		$	64,501
Ratio of Expenses to Average Net Assets(1)		0.80	%+††*		0.82	%+††^		0.85	%+††		0.85	%+††		0.85	%+††		0.85	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			0.85	%+††		N/A
Ratio of Net Investment Income (Loss) to Average Net Assets(1)		0.05	%+††*		(0.11	)%+††		0.45	%+††		(0.11	)%+††		0.16	%+††		0.16	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%††§*		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%§
Portfolio Turnover Rate		17	%#		32	%		48	%		30	%		35	%		19	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		0.83	%††*		0.90	%††		0.88	%††		0.88	%††		0.87	%+††		0.90	%+
Net Investment Income (Loss) to Average Net Assets		0.02	%††*		(0.19	)%††		0.42	%††		(0.14	)%††		0.14	%+††		0.11	%+

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

**  Performance was positively impacted by approximately 0.19% due to the receipt of proceeds from the settlements of class action suits involving primarily one of the Portfolio's past holdings. This was a one-time settlement, and as a result, the impact on the NAV and consequently the performance will not likely be repeated in the future. Had these settlements not occurred, the total return for Class I would have been approximately 65.36%.

+  The Ratios of Expenses and Net Investment Income (Loss) reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

^  Effective September 9, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to maximum ratio of 0.80% for Class I shares. Prior to September 9, 2013, the maximum ratio was 0.85% for Class I shares.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
10

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Growth Portfolio

	Class II
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010			2009
Net Asset Value, Beginning of Period	$	30.39		$	21.50		$	19.77		$	20.39		$	16.63		$	10.07
Income (Loss) from Investment Operations:
Net Investment Income (Loss)†		(0.03	)		(0.09	)		0.04			(0.07	)		(0.02	)		(0.01	)
Net Realized and Unrealized Gain (Loss)		0.92			10.02			2.71			(0.55	)		3.78			6.57
Total from Investment Operations		0.89			9.93			2.75			(0.62	)		3.76			6.56
Distributions from and/or in Excess of:
Net Investment Income		—			(0.05	)		—			—			—			—
Net Realized Gain		—			(0.99	)		(1.02	)		—			—			—
Total Distributions		—			(1.04	)		(1.02	)		—			—			—
Net Asset Value, End of Period	$	31.28		$	30.39		$	21.50		$	19.77		$	20.39		$	16.63
Total Return ++		2.93	%#		47.72	%		14.05	%		(3.04	)%		22.61	%		65.14	%**
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	84,766		$	78,501		$	31,883		$	31,258		$	28,661		$	28,017
Ratio of Expenses to Average Net Assets(1)		1.05	%+††*		1.07	%+††^		1.10	%+††		1.10	%+††		1.10	%+††		1.10	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			N/A			N/A			1.10	%+††		N/A
Ratio of Net Investment Income (Loss) to Average Net Assets(1)		(0.20	)%+††*		(0.36	)%+††		0.20	%+††		(0.36	)%+††		(0.09	)%+††		(0.07	)%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%††§*		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%§
Portfolio Turnover Rate		17	%#		32	%		48	%		30	%		35	%		19	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.18	%††*		1.25	%††		1.23	%††		1.23	%††		1.22	%+††		1.25	%+
Net Investment Income (Loss) to Average Net Assets		(0.33	)%††*		(0.54	)%††		0.07	%††		(0.49	)%††		(0.21	)%+††		(0.22	)%+

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

**  Performance was positively impacted by approximately 0.19% due to the receipt of proceeds from the settlements of class action suits involving primarily one of the Portfolio's past holdings. This was a one-time settlement, and as a result, the impact on the NAV and consequently the performance will not likely be repeated in the future. Had these settlements not occurred, the total return for Class II would have been approximately 64.95%.

+  The Ratios of Expenses and Net Investment Income (Loss) reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

^  Effective September 9, 2013, the Adviser has agreed to limit the ratio of expenses to average net assets to maximum ratio of 1.05% for Class II shares. Prior to September 9, 2013, the maximum ratio was 1.10% for Class II shares.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
11

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements

The Universal Institutional Funds, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Fund is comprised of eleven separate active, diversified and non-diversified portfolios (individually referred to as a "Portfolio", collectively as the "Portfolios"). The Fund applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Growth Portfolio. The Portfolio seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of large capitalization companies. The Portfolio offers two classes of shares — Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Fund is intended to be the funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

On September 9, 2013, the Portfolio acquired the net assets of Morgan Stanley Select Dimensions Focus Growth Portfolio ("Focus Growth Portfolio"), Morgan Stanley Select Dimensions Growth Portfolio ("Growth Portfolio") and Morgan Stanley Select Dimensions Multi Cap Growth Portfolio ("Multi Cap Growth Portfolio") (collectively, the "Portfolios"), which are all open-end investment companies, based on the respective valuations as of the close of business on September 6, 2013, pursuant to a Plan of Reorganization approved by the shareholders of Focus Growth Portfolio, Growth Portfolio and Multi Cap Growth Portfolio on August 1, 2013 ("Reorganization"). The purpose of the transaction was to combine four portfolios managed by Morgan Stanley Investment Management Inc. (the "Adviser") with comparable investment objectives and strategies. The acquisition was accomplished by a tax-free exchange of 2,176,539 Class I shares of the Portfolio at a net asset value of $26.18 per share for 2,143,462 Class X shares of Focus Growth Portfolio; 594,537 Class II shares of the Portfolio at a net asset value of $25.66 for 583,763 Class Y shares of Focus Growth Portfolio; 368,811 Class I shares of the Portfolio at a net asset value of $26.18 per share for 370,503 Class X shares of Growth Portfolio; 414,085 Class II shares of the Portfolio at a net asset value of $25.66 for 420,515 Class Y shares of Growth Portfolio; 301,694 Class I shares of the Portfolio at a net asset value of $26.18 per share for 457,006 Class X shares of Multi Cap Growth Portfolio; 342,879 Class II shares of the Portfolio at a net asset value of $25.66 for 530,170 Class Y shares of Multi Cap Growth Portfolio. The net assets of Focus Growth Portfolio, Growth Portfolio and Multi Cap Growth

Portfolio before the Reorganization were approximately $72,237,000, $20,281,000 and $16,697,000, respectively, including unrealized appreciation of approximately $28,196,000, $7,877,000 and $6,192,000, respectively, at September 6, 2013. The investment portfolios of Focus Growth Portfolio, Growth Portfolio and Multi Cap Growth Portfolio, with fair values of approximately $72,260,000, $20,340,000 and $16,781,000, respectively, and identified cost of approximately $44,064,000, $12,463,000 and $10,589,000, respectively on September 6, 2013, were the principal assets acquired by the Portfolio. For financial reporting purposes, assets received and shares issued by the Portfolio were recorded at fair value; however, the cost basis of the investments received from the Portfolios was carried forward to align ongoing reporting of the Portfolio's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. Immediately prior to the Reorganization, the net assets of the Portfolio were approximately $88,264,000. Immediately after the merger, the net assets of the Portfolio were approximately $197,479,000.

Upon closing of the Reorganization, shareholders of the Portfolios received shares of the Portfolio as follows:

Focus Growth Portfolio	UIF Growth Portfolio
Class X	Class I
Class Y	Class II
Growth Portfolio	UIF Growth Portfolio
Class X	Class I
Class Y	Class II
Multi Cap Growth Portfolio	UIF Growth Portfolio
Class X	Class I
Class Y	Class II

Assuming the acquisition had been completed on January 1, 2013, the beginning of the annual reporting period of the Portfolio, the Portfolio's pro forma results of operations for the period ended December 31, 2013, are as follows:

Net investment income(1)	$	1,153,000
Net gain realized and unrealized gain(2)	$	64,941,000
Net increase (decrease) in net assets resulting from operations...	$	66,094,000

(1) Approximately $(255,000) as reported, plus approximately $394,000, $127,000 and $60,000 Focus Growth Portfolio, Growth Portfolio and Multi Cap Growth Portfolio, respectively, premerger, plus approximately $373,000, $220,000 and $234,000, respectively, of estimated pro-forma eliminated expenses.

(2) Approximately $54,627,000 as reported, plus approximately $6,855,000, $1,588,000 and $1,871,000 Focus Growth Portfolio, Growth Portfolio and Multi Cap Growth Portfolio, respectively, premerger.

12

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Portfolios that have been included in the Portfolio's Statement of Operations since September 6, 2013.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP 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: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) listed options are valued at the last reported sales price on the exchange on which they are listed (or at the exchange official closing price if such exchange reports an official closing price). If an official closing price or last reported sales price is unavailable, the listed option should be fair valued at the mean between their latest bid and asked price. Unlisted options are valued by an outside pricing service approved by the Fund's Board of Directors (the "Directors") or quotes from a broker or dealer; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such

periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been

13

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Portfolio's investments as of June 30, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Automobiles	$	7,979	$	—	$	—	$	7,979
Biotechnology		5,306		—		—		5,306
Capital Markets		3,264		—		—		3,264
Chemicals		4,592		—		—		4,592
Commercial Services & Supplies		4,682		—		—		4,682
Communications Equipment		5,022		—		—		5,022
Diversified Financial Services		5,799		—		—		5,799
Electrical Equipment		1,019		—		—		1,019
Food Products		8,088		—		—		8,088
Health Care Equipment & Supplies		7,994		—		—		7,994
Health Care Technology		2,099		—		—		2,099
Hotels, Restaurants & Leisure		4,432		—		—		4,432
Information Technology Services		12,298		—		—		12,298
Insurance		6,357		—		—		6,357
Internet & Catalog Retail		28,999		—		—		28,999
Internet Software & Services		48,109		—		—		48,109
Life Sciences Tools & Services		11,377		—		—		11,377
Media		3,429		—		—		3,429
Oil, Gas & Consumable Fuels		2,118		—		—		2,118
Pharmaceuticals		6,111		—		—		6,111
Professional Services		2,221		—		—		2,221
Semiconductors & Semiconductor Equipment		1,948		—		—		1,948
Software		14,763		—		—		14,763

14

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Common Stocks (cont'd)
Tech Hardware, Storage & Peripherals	$	6,342	$	—	$	—	$	6,342
Textiles, Apparel & Luxury Goods		7,406		—		—		7,406
Total Common Stocks		211,754		—		—		211,754
Preferred Stocks		—		—		1,802		1,802
Call Options Purchased		—		93		—		93
Short-Term Investments
Investment Company		3,694		—		—		3,694
Repurchase Agreements		—		367		—		367
Total Short-Term Investments		3,694		367		—		4,061
Total Assets	$	215,448	$	460	$	1,802	$	217,710

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of June 30, 2014, the Portfolio did not have any investments transfer between investment levels.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

Growth	Convertible Preferred Stocks (000)
Beginning Balance	$	—
Purchases		1,820
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate Action		—
Change in unrealized appreciation/depreciation		(18	)
Realized gains (losses)		—
Ending Balance	$	1,802
Net change in unrealized appreciation/ depreciation from investments still held as of June 30, 2014	$	(18	)

  The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2014.

	Fair Value at June 30, 2014 (000)		Valuation Technique	Unobservable Input	Range						Selected Value/ Weighted Average			Impact to Valuation from an Increase in Input
Internet & Catalog Retail
Preferred Stock	$	1,335	Market Transaction Method	Precedent Transaction of Preferred Stock	$	122.1391		$	122.1391		$	122.1391		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		16.5	%		18.5	%		17.5	%	Decrease
				Perpetual Growth Rate		3.0	%		4.0	%		3.5	%	Increase
			Market Comparable Companies	Enterprise Value /Revenue		11.5	x		17.1	x		15.5	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease
Internet Software & Services
Preferred Stock	$	467	Market Transaction Method	Precedent Transaction of Preferred Stock	$	19.1012		$	19.1012		$	19.1012		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		16.0%			18.0	%		17.0	%	Decrease
				Perpetual Growth Rate		2.5	%		3.5	%		3.0	%	Increase
			Market Comparable Companies	Enterprise Value /Revenue		6.7	x		16.7	x		12.3	x	Increase
				Discount for Lack of Marketability		15.0	%		15.0	%		15.0	%	Decrease

15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate 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 Portfolio are presented at the foreign exchange rates and market values at the close of the period, the Portfolio 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 securities held at period end. Similarly, the Portfolio 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) on investments in securities 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 forward exchange contracts, disposition of foreign currencies, currency gains (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 Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) on the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in 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, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower

levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Portfolio may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments. All of the Portfolio's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Portfolio to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation

16

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Portfolio to be more volatile than if the Portfolio had not been leveraged. Although the Adviser seeks to use derivatives to further the Portfolio's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Portfolio used during the period and their associated risks:

Options: In respect to options, the Portfolio is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Portfolio buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or futures contract on the underlying instrument, at an agreed-upon price typically in exchange for a premium paid by the Portfolio. The Portfolio may purchase and/or sell put and call options. Purchasing call options tends to increase the Portfolio's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Portfolio's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Portfolio bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Portfolio may not achieve the anticipated benefits of the purchased option contracts; however the risk of loss is limited to the premium paid. Purchased options are reported as part of "Total Investments" on the Statement of Assets and Liabilities. Premium paid for purchasing options which expired are treated as realized losses. If the Portfolio sells an option, it sells to another party the right to buy from or sell to the Portfolio a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed-upon price typically in exchange for a premium received by the Portfolio. When options are purchased OTC, the Portfolio bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Portfolio may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

FASB ASC 815, "Derivatives and Hedging: Overall" ("ASC 815"), is intended to improve financial reporting

about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Portfolio uses derivative instruments, how these derivative instruments are accounted for and their effects on the Portfolio's financial position and results of operations.

The following table sets forth the fair value of the Portfolio's derivative contracts by primary risk exposure as of June 30, 2014.

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Options Purchased	Investments, at Value (Options Purchased)	Currency Risk	$	93	(a)

(a)  Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following table sets forth by primary risk exposure the Portfolio's change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2014 in accordance with ASC 815.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments
	(Options Purchased)	$	(127	)(b)

(b) Amounts are included in Investments in the Statement of Operations.

At June 30, 2014, the Portfolio's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets (c) (000)		Liabilities (c) (000)
Options Purchased	$	93	$	—

(c) Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

The Portfolio typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Portfolio typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out

17

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

netting) in the event of default, termination and/or potentially deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Portfolio and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Portfolio exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Portfolio's net liability, may be delayed or denied.

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received(d) (000)			Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	93	$	—	$	(93	)	$	0

(d) In some instances, the actual collateral received may be more than the amount shown here due to overcollateralization.

For the six months ended June 30, 2014, the approximate average monthly amount outstanding for each derivative type is as follows:

Options Purchased:
Average monthly notional amount	72,350,000

5.  Securities Lending: The Portfolio lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Portfolio. The Portfolio would receive cash or securities as collateral in an amount equal to or exceeding 100% of

the current fair value of the loaned securities. The collateral is marked-to-market daily, by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned – Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	3,044	(e)	$	—	$	(3,044	)(f)(g)	$	0

(e)  Represents market value of loaned securities at period end.

(f)  The Portfolio received cash collateral of approximately $2,061,000, of which approximately $1,939,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2014 there was uninvested cash of approximately $122,000, which is not reflected in the Portfolio of Investments. In addition, the Portfolio received non-cash collateral of approximately $991,000 in the form of U.S. Government agency securities, which the Portfolio cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

(g)  The actual collateral received is greater than the amount shown here due to overcollateralization.

6.  Restricted Securities: The Portfolio invests in unregistered or otherwise restricted securities. The term "restricted securities" refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual restrictions on their resale. As a result, restricted securities may be more difficult to value and the Portfolio may have difficulty disposing of

18

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Portfolio, where it has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Portfolio could sell it. Contractual restrictions on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of the securities. The Portfolio would, in either case, bear market risks during that period. Restricted Securities are identified in the Portfolio of Investments.

7.  Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

8.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. 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 or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

9.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory

Agreement, paid quarterly, at the annual rate based on the average daily net assets as follows:

First $1 billion			Next $1 billion			Next $1 billion			Over $3 billion
	0.50	%		0.45	%		0.40	%		0.35	%

For the six months ended June 30, 2014, the advisory fee rate (net of waivers/rebate) was equivalent to an annual effective rate of 0.46% of the Portfolio's daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.80% for Class I shares and 1.05% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least two years from the date of the Reorganization or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2014, approximately $36,000 of advisory fees were waived pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.25% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Portfolio and provides the Portfolio's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Portfolio is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.35% of the Portfolio's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.10% of the 0.35% distribution fee that it may receive. This fee waiver will continue for at least one year from the date of the Reorganization or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such

19

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

action appropriate. For the six months ended June 30, 2014, this waiver amounted to approximately $41,000.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Federal Income Taxes: It is the Portfolio's intention to continue 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 based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, Income Taxes — Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2013, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as

ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2013 and 2012 was as follows:

2013 Distributions Paid From:				2012 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	315	$	3,346	$	—	$	4,101

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, a net operating loss and wash sales acquired from fund mergers, resulted in the following reclassifications among the components of net assets at December 31, 2013:

Distributions in Excess of Net Investment Income (000)		Accumulated Undistributed Net Realized Gain (000)			Paid-in- Capital (000)
$	251	$	(532	)	$	281

At December 31, 2013, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	2,039	$	13,021

At June 30, 2014, the aggregate cost for Federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $97,008,000 and the aggregate gross unrealized depreciation is approximately $1,738,000 resulting in net unrealized appreciation of approximately $95,270,000.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $36,178,000 and $36,592,000, respectively. There were no purchases and sales

20

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

of long-term U.S. Government securities for the six months ended June 30, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly, and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of advisory and administration fees paid by the Portfolio due to its investments in the Liquidity Funds. For the six months ended June 30, 2014, advisory fees paid were reduced by approximately $4,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Dividend Income (000)		Value June 30, 2014 (000)
$	21,684	$	24,405	$	42,395	$	2	$	3,694

I. Other: At June 30, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 68% and 78%, for Class I and Class II, respectively.

21

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Officers

Michael E. Nugent
Chairperson of the Board and Director

John H. Gernon
President and Principal Executive Officer

Stefanie V. Chang Yu
Chief Compliance Officer

Joseph C. Benedetti
Vice President

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semi-annual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing the Public Reference Room of the SEC, Washington, DC 20549-0102.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Fund's Proxy Voting Policy and Procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Portfolio. For more detailed information about the Portfolio, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Portfolio, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Portfolio unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFCGSAN
975251 EXP 08.31.15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Global Infrastructure Portfolio

The Portfolio is intended to be a funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

Semi-Annual Report – June 30, 2014

The Universal Institutional Funds, Inc.

Table of Contents

Expense Example		2
Investment Advisory Agreement Approval		3
Portfolio of Investments		5
Statement of Assets and Liabilities		7
Statement of Operations		8
Statements of Changes in Net Assets		9
Financial Highlights		10
Notes to Financial Statements		12
Director and Officer Information	Back Cover

1

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Expense Example (unaudited)

Global Infrastructure Portfolio

As a shareholder of the Global Infrastructure Portfolio (the "Portfolio"), you incur two types of costs: (1) insurance company charges; and (2) ongoing costs, including advisory fees, administration fees, distribution (12b-1) fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the six-month period ended June 30, 2014 and held for the entire six-month period.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any insurance company charges. Therefore, the table below is useful in comparing ongoing costs, but will not help you determine the relative total cost of owning different funds. In addition, if these insurance company charges were included, your costs would have been higher.

	Beginning Account Value 1/1/14		Actual Ending Account Value 6/30/14		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Infrastructure Portfolio Class I	$	1,000.00	$	1,150.00	$	1,020.53	$	4.58	$	4.31		0.86	%
Global Infrastructure Portfolio Class II		1,000.00		1,149.10		1,019.29		5.91		5.56		1.11

*  Expenses are calculated using each Portfolio Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the most recent one-half year period).

**  Annualized.

2

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited)

At the organizational meeting of the Portfolio, the Board of Directors, including the independent Directors, considered the following factors in approving the Investment Advisory Agreement with respect to the Portfolio:

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services to be provided by the Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board reviewed similar information and factors regarding the Sub-Advisers (as defined herein), to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services to be provided by the Adviser under the administration agreement, including accounting, clerical, bookkeeping, compliance, business management and planning, and the provision of supplies, office space and utilities at the Adviser's expense. (The Adviser and Sub-Advisers together are referred to as the "Adviser" and the advisory, sub-advisory and administration agreements together are referred to as the "Management Agreement.") The Board also compared the nature of the services to be provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who will provide the administrative and advisory services to the Portfolio. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services to be provided were necessary and appropriate for the conduct of the business and investment activities of the Portfolios and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Portfolio

The Board considered that the Adviser planned to arrange for a public offering of shares of the Portfolio to raise assets for investment and that the offering had not yet begun and concluded that, since the Portfolio currently had no assets to invest and had no track record of performance, this was not a factor it needed to address at the present time.

The Board reviewed the advisory and administrative fee rates (the "management fee rates") proposed to be paid by the Portfolio under the Management Agreement relative to comparable funds advised by the Adviser and compared to Lipper peers as determined by the Adviser, and reviewed the anticipated total expense ratio of the Portfolio. The Board considered that the Portfolio requires the Adviser to develop processes, invest in additional resources and incur additional risks to successfully manage the Portfolio and concluded that the proposed management fee rate and anticipated total expense ratio were acceptable.

Economies of Scale

The Board considered the growth prospects of the Portfolio and the structure of the proposed management fee schedule, which does not include breakpoints. The Board considered that the Portfolio's potential growth was uncertain and concluded that it would be premature to consider economies of scale as a factor in approving the Management Agreement at the present time.

Profitability of the Adviser and Affiliates

Since the Portfolio had not begun operations and had not paid any fees to the Adviser, the Board concluded that this was not a factor that needed to be considered at the present time.

Other Benefits of the Relationship

The Board considered other benefits to the Adviser and its affiliates derived from their relationship with the Portfolio and other funds advised by the Adviser. These benefits may include, among other things, research received by the Adviser generated from commission dollars spent on funds' portfolio trading, and fees for trading, distribution and/or shareholder servicing. Since the Portfolio had not begun operations and had not paid any fees to the Adviser, the Board concluded that these benefits were not a factor that needed to be considered at the present time.

3

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Investment Advisory Agreement Approval (unaudited) (cont'd)

Resources of the Adviser and Historical Relationship Between the Portfolio and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Portfolio's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Portfolio to enter into this relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Portfolio's business.

General Conclusion

After considering and weighing all of the above factors, the Board concluded that it would be in the best interest of the Portfolio and its future shareholders to approve the Management Agreement, which will remain in effect for two years and thereafter must be approved annually by the Board of the Fund if it is to continue in effect. In reaching this conclusion, the Board did not give particular weight to any single factor referenced above. It is possible that individual Board members may have weighed these factors differently in reaching their individual decisions to approve the Management Agreement.

4

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments

Global Infrastructure Portfolio

	Shares		Value (000)
Common Stocks (99.0%)
Australia (6.5%)
DUET Group (a)		755,202	$	1,723
Macquarie Atlas Roads Group		118,041		364
Spark Infrastructure Group		434,698		758
Sydney Airport		146,902		585
Transurban Group (a)		460,044		3,206
				6,636
Austria (1.3%)
Flughafen Wien AG		14,345		1,336
Brazil (2.0%)
CCR SA		37,900		309
Cia de Saneamento Basico do Estado de Sao Paulo ADR		156,422		1,677
				1,986
Canada (12.0%)
Enbridge, Inc.		103,148		4,894
TransCanada Corp. (a)		152,474		7,278
				12,172
China (4.0%)
Beijing Enterprises Holdings Ltd. (b)		77,500		734
China Everbright International Ltd. (b)		180,000		257
China Gas Holdings Ltd. (b)		175,000		363
China Merchants Holdings International Co., Ltd. (b)		172,898		540
ENN Energy Holdings Ltd. (b)		88,000		632
Guangdong Investment Ltd. (b)		896,000		1,034
Jiangsu Expressway Co., Ltd. H Shares (b)		422,000		499
				4,059
France (4.3%)
Eutelsat Communications SA		75,164		2,611
SES SA		46,319		1,757
				4,368
Germany (1.5%)
Fraport AG Frankfurt Airport Services Worldwide		21,688		1,532
Italy (5.6%)
Atlantia SpA		101,749		2,901
Snam SpA		368,593		2,221
Terna Rete Elettrica Nazionale SpA		98,152		517
				5,639
Japan (1.6%)
Tokyo Gas Co., Ltd.		284,000		1,660
Netherlands (0.9%)
Koninklijke Vopak N.V.		18,749		917
Spain (1.7%)
Ferrovial SA		49,318		1,098
Red Electrica Corp., SA (a)		6,940		635
				1,733
Switzerland (1.9%)
Flughafen Zuerich AG (Registered)		3,209		1,972

	Shares		Value (000)
United Kingdom (9.0%)
National Grid PLC		343,619	$	4,940
Pennon Group PLC		138,110		1,855
Severn Trent PLC		34,456		1,139
United Utilities Group PLC		80,419		1,214
				9,148
United States (46.7%)
American Tower Corp. REIT		51,550		4,639
American Water Works Co., Inc.		48,340		2,390
Atmos Energy Corp.		8,740		467
CenterPoint Energy, Inc.		20,968		536
Cheniere Energy, Inc. (c)		24,360		1,747
Crown Castle International Corp.		44,976		3,340
Enbridge Energy Management LLC (c)		71,301		2,513
ITC Holdings Corp.		111,167		4,055
Kinder Morgan, Inc.		57,770		2,095
NiSource, Inc.		31,420		1,236
Northeast Utilities		41,106		1,943
ONEOK, Inc.		34,130		2,324
PG&E Corp.		40,347		1,937
Plains GP Holdings LP, Class A		22,536		721
SBA Communications Corp., Class A (c)		15,262		1,561
SemGroup Corp., Class A		23,173		1,827
Sempra Energy		41,510		4,347
Spectra Energy Corp.		83,481		3,546
Union Pacific Corp.		10,820		1,079
Williams Cos., Inc. (The)		88,340		5,142
				47,445
Total Common Stocks (Cost $67,235)				100,603
Short-Term Investments (12.2%)
Securities held as Collateral on Loaned Securities (11.9%)
Investment Company (9.6%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note H)		9,761,945		9,762
	Face Amount (000)
Repurchase Agreements (2.3%)
Barclays Capital, Inc., (0.08%, dated 6/30/14, due 7/1/14; proceeds $1,012; fully collateralized by various U.S. Government agency securities; 3.50% – 4.50% due 9/1/33 – 6/20/44; valued at $1,032)	$	1,012		1,012
BNP Paribas Securities Corp., (0.11%, dated 6/30/14, due 7/1/14; proceeds $1,269; fully collateralized by a U.S. Government agency security; 4.00% due 6/20/44; valued at $1,295)		1,269		1,269
				2,281
Total Securities held as Collateral on Loaned Securities (Cost $12,043)				12,043

The accompanying notes are an integral part of the financial statements.
5

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Portfolio of Investments (cont'd)

Global Infrastructure Portfolio

	Shares		Value (000)
Investment Company (0.3%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note H) (Cost $323)		323,398	$	323
Total Short-Term Investments (Cost $12,366)				12,366
Total Investments (111.2%) (Cost $79,601) Including $12,218 of Securities Loaned				112,969
Liabilities in Excess of Other Assets (-11.2%)				(11,377	)
Net Assets (100.0%)			$	101,592

(a)  All or a portion of this security was on loan at June 30, 2014.

(b)  Security trades on the Hong Kong exchange.

(c)  Non-income producing security.

ADR  American Depositary Receipt.

REIT  Real Estate Investment Trust.

Portfolio Composition*

Classification	Percentage of Total Investments
Oil, Gas & Consumable Fuels		44.3	%
Transmission & Distribution		14.7
Communications		13.8
Other**		11.8
Water		8.2
Toll Roads		7.2
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2014.

**  Industries and/or investment types representing less than 5% of total investments.

The accompanying notes are an integral part of the financial statements.
6

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Global Infrastructure Portfolio

Statement of Assets and Liabilities	June 30, 2014 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $69,516)	$	102,884
Investment in Security of Affiliated Issuer, at Value (Cost $10,085)		10,085
Total Investments in Securities, at Value (Cost $79,601)		112,969
Foreign Currency, at Value (Cost $117)		118
Cash		760
Dividends Receivable		531
Receivable for Investments Sold		205
Prepaid Offering Costs		70
Tax Reclaim Receivable		23
Receivable for Portfolio Shares Sold		8
Receivable from Affiliate		—	@
Other Assets		1
Total Assets		114,685
Liabilities:
Collateral on Securities Loaned, at Value		12,803
Payable for Portfolio Shares Redeemed		144
Payable for Custodian Fees		44
Payable for Advisory Fees		26
Payable for Administration Fees		21
Payable for Offering Costs		21
Payable for Professional Fees		11
Payable for Distribution Fees — Class II Shares		5
Payable for Transfer Agent Fees		—	@
Payable for Reorganization Expense		—	@
Other Liabilities		18
Total Liabilities		13,093
NET ASSETS	$	101,592
Net Assets Consist of:
Paid-in-Capital	$	66,450
Accumulated Undistributed Net Investment Income		745
Accumulated Net Realized Gain		1,023
Unrealized Appreciation (Depreciation) on:
Investments		33,368
Foreign Currency Translations		6
Net Assets	$	101,592
CLASS I:
Net Assets	$	78,876
Net Asset Value, Offering and Redemption Price Per Share Applicable to 8,516,237 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	9.26
CLASS II:
Net Assets	$	22,716
Net Asset Value, Offering and Redemption Price Per Share Applicable to 2,458,448 Outstanding $0.001 Par Value Shares (Authorized 500,000,000 Shares)	$	9.24
(1) Including:
Securities on Loan, at Value:	$	12,218

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
7

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Global Infrastructure Portfolio

Statement of Operations	Six Months Ended June 30, 2014 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $141 of Foreign Taxes Withheld)	$	1,396
Income from Securities Loaned — Net		20
Dividends from Security of Affiliated Issuer (Note H)		—	@
Total Investment Income		1,416
Expenses:
Advisory Fees (Note B)		280
Administration Fees (Note C)		62
Custodian Fees (Note F)		61
Professional Fees		31
Distribution Fees — Class II Shares (Note D)		25
Offering Costs		15
Pricing Fees		4
Directors' Fees and Expenses		2
Transfer Agency Fees (Note E)		1
Other Expenses		13
Total Expenses		494
Waiver of Advisory Fees (Note B)		(122	)
Distribution Fees — Class II Shares Waived (Note D)		(4	)
Rebate from Morgan Stanley Affiliate (Note H)		(1	)
Net Expenses		367
Net Investment Income		1,049
Realized Gain (Loss):
Investments Sold		3,674
Foreign Currency Transactions		(2	)
Net Realized Gain		3,672
Change in Unrealized Appreciation (Depreciation):
Investments		7,522
Foreign Currency Translations		2
Net Change in Unrealized Appreciation (Depreciation)		7,524
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		11,196
Net Increase in Net Assets Resulting from Operations	$	12,245

@  Amount is less than $500.

The accompanying notes are an integral part of the financial statements.
8

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Global Infrastructure Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2014 (unaudited) (000)			Year Ended December 31, 2013 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,049		$	1,496
Net Realized Gain		3,672			7,942
Net Change in Unrealized Appreciation (Depreciation)		7,524			2,418
Net Increase in Net Assets Resulting from Operations		12,245			11,856
Distributions from and/or in Excess of:
Class I:
Net Investment Income		(1,423	)		(1,523	)
Net Realized Gain		(8,270	)		(4,698	)
Class II:
Net Investment Income		(311	)		(342	)
Net Realized Gain		(2,086	)		(1,165	)
Total Distributions		(12,090	)		(7,728	)
Capital Share Transactions:(1)
Class I:
Subscribed		264			804
Issued due to a tax-free reorganization		17,217			—
Distributions Reinvested		9,693			6,221
Redeemed		(5,984	)		(10,220	)
Class II:
Subscribed		286			367
Issued due to a tax-free reorganization		6,927			—
Distributions Reinvested		2,397			1,507
Redeemed		(1,620	)		(2,683	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		29,180			(4,004	)
Total Increase in Net Assets		29,335			124
Net Assets:
Beginning of Period		72,257			72,133
End of Period (Including Accumulated Undistributed Net Investment Income of $745 and $1,430)	$	101,592		$	72,257
(1) Capital Share Transactions:
Class I:
Shares Subscribed		28			84
Shares Issued due to a tax-free reorganization		2,010			—
Shares Issued on Distributions Reinvested		1,130			724
Shares Redeemed		(645	)		(1,085	)
Net Increase (Decrease) in Class I Shares Outstanding		2,523			(277	)
Class II:
Shares Subscribed		32			39
Shares Issued due to a tax-free reorganization		810			—
Shares Issued on Distributions Reinvested		280			176
Shares Redeemed		(176	)		(287	)
Net Increase (Decrease) in Class II Shares Outstanding		946			(72	)

The accompanying notes are an integral part of the financial statements.
9

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Global Infrastructure Portfolio

	Class I
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010^			2009^
Net Asset Value, Beginning of Period	$	9.64		$	9.19		$	8.72		$	8.13		$	8.68		$	11.30
Income from Investment Operations:
Net Investment Income†		0.12			0.20			0.22			0.21			0.21			0.31
Net Realized and Unrealized Gain		1.19			1.32			1.30			1.07			0.18			1.16
Total from Investment Operations		1.31			1.52			1.52			1.28			0.39			1.47
Distributions from and/or in Excess of:
Net Investment Income		(0.25	)		(0.26	)		(0.23	)		(0.23	)		(0.25	)		(0.38	)
Net Realized Gain		(1.44	)		(0.81	)		(0.82	)		(0.46	)		(0.69	)		(3.71	)
Total Distributions		(1.69	)		(1.07	)		(1.05	)		(0.69	)		(0.94	)		(4.09	)
Net Asset Value, End of Period	$	9.26		$	9.64		$	9.19		$	8.72		$	8.13		$	8.68
Total Return ++		15.00	%#		17.91	%		18.69	%		16.07	%		6.93	%		19.26	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	78,876		$	57,746		$	57,628		$	58,998		$	61,408		$	68,748
Ratio of Expenses to Average Net Assets(1)		0.86	%+††*		0.90	%+††		0.87	%+††		0.86	%+††		0.87	%+††		0.96	%+††
Ratio of Net Investment Income to Average Net Assets(1)		2.64	%+††*		2.12	%+††		2.51	%+††		2.48	%+††		2.71	%+††		3.37	%+††
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%††§*		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%††§
Portfolio Turnover Rate		16	%#		25	%		28	%		36	%		148	%		280	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.16	%††*		N/A			N/A			N/A			N/A			N/A
Net Investment Income to Average Net Assets		2.34	%††*		N/A			N/A			N/A			N/A			N/A

^  Beginning with the year ended December 31, 2011, the Fund was audited by Ernst & Young LLP. The previous years were audited by another independent registered public accounting firm.

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
10

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014

Financial Highlights

Global Infrastructure Portfolio

	Class II
	Six Months Ended June 30, 2014			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2013			2012			2011			2010^			2009^
Net Asset Value, Beginning of Period	$	9.60		$	9.16		$	8.69		$	8.10		$	8.64		$	11.27
Income from Investment Operations:
Net Investment Income†		0.11			0.17			0.20			0.19			0.19			0.28
Net Realized and Unrealized Gain		1.19			1.32			1.29			1.06			0.19			1.15
Total from Investment Operations		1.30			1.49			1.49			1.25			0.38			1.43
Distributions from and/or in Excess of:
Net Investment Income		(0.22	)		(0.24	)		(0.20	)		(0.20	)		(0.23	)		(0.35	)
Net Realized Gain		(1.44	)		(0.81	)		(0.82	)		(0.46	)		(0.69	)		(3.71	)
Total Distributions		(1.66	)		(1.05	)		(1.02	)		(0.66	)		(0.92	)		(4.06	)
Net Asset Value, End of Period	$	9.24		$	9.60		$	9.16		$	8.69		$	8.10		$	8.64
Total Return ++		14.91	%#		17.54	%		18.44	%		15.82	%		6.74	%		18.83	%
Ratios and Supplemental Data:
Net Assets, End of Period (Thousands)	$	22,716		$	14,511		$	14,506		$	14,472		$	15,789		$	17,818
Ratio of Expenses to Average Net Assets(1)		1.11	%+††*		1.15	%+††		1.12	%+††		1.11	%+††		1.12	%+††		1.21	%+††
Ratio of Net Investment Income to Average Net Assets(1)		2.39	%+††*		1.87	%+††		2.26	%+††		2.23	%+††		2.46	%+††		3.12	%+††
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%††§*		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%††§		0.00	%††§
Portfolio Turnover Rate		16	%#		25	%		28	%		36	%		148	%		280	%
(1) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expense Limitation:
Expenses to Average Net Assets		1.46	%††*		N/A			N/A			N/A			N/A			N/A
Net Investment Income to Average Net Assets		2.04	%††*		N/A			N/A			N/A			N/A			N/A

^  Beginning with the year ended December 31, 2011, the Fund was audited by Ernst & Young LLP. The previous years were audited by another independent registered public accounting firm.

†  Per share amount is based on average shares outstanding.

++  Calculated based on the net asset value as of the last business day of the period. Performance does not reflect fees and expenses imposed by your insurance company's separate account. If performance information included the effect of these additional charges, the total return would be lower.

+  The Ratios of Expenses and Net Investment Income reflect the rebate of certain Portfolio expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

††  Reflects overall Portfolio ratios for investment income and non-class specific expenses.

§  Amount is less than 0.005%.

#  Not Annualized.

*  Annualized.

The accompanying notes are an integral part of the financial statements.
11

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements

The Universal Institutional Funds, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Fund is comprised of eleven separate active, diversified and non-diversified portfolios (individually referred to as a "Portfolio", collectively as the "Portfolios"). The Fund applies investment company accounting and reporting guidance.

The accompanying financial statements relate to the Global Infrastructure Portfolio, formerly Morgan Stanley Variable Investment Series Global Infrastructure Portfolio. The Portfolio's adviser, Morgan Stanley Investment Management Inc. (the "Adviser") and sub-advisers, Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), seek to provide both capital appreciation and current income by investing primarily in equity securities issued by companies located throughout the world that are engaged in the infrastructure business. The Portfolio offers two classes of shares — Class I and Class II. Both classes of shares have identical voting rights (except that shareholders of a Class have exclusive voting rights regarding any matter relating solely to that Class of shares), dividend, liquidation and other rights.

The Fund is intended to be the funding vehicle for variable annuity contracts and variable life insurance policies offered by the separate accounts of certain life insurance companies.

On April 28, 2014, the Portfolio acquired the net assets of Morgan Stanley Select Dimensions Global Infrastructure Portfolio ("Global Infrastructure Portfolio"), an open-end investment company, based on the respective valuations as of the close of business on April 25, 2014, pursuant to a Plan of Reorganization approved by the shareholders of Global Infrastructure Portfolio on March 17, 2014 ("Reorganization"). The purpose of the transaction was to combine two portfolios managed by the Adviser with comparable investment objectives and strategies. The acquisition was accomplished by a tax-free exchange of 2,010,409 Class I shares of the Portfolio at a net asset value of $8.56 for 787,286 Class X shares of Global Infrastructure Portfolio; 810,385 Class II shares of the Portfolio at a net asset value of $8.55 per share for 316,316 Class Y shares of Global Infrastructure Portfolio; The net assets of Global Infrastructure Portfolio before the Reorganization were approximately $24,144,000, including unrealized appreciation of approximately $6,919,000 at April 25, 2014. The investment portfolio of Global Infrastructure Portfolio, with a fair value of approximately $24,089,000 and identified cost of approximately $17,171,000 on April 25, 2014, was the principal asset acquired by the Portfolio. For financial reporting purposes, assets received and shares issued by the

Portfolio were recorded at fair value; however, the cost basis of the investments received from Global Infrastructure Portfolio was carried forward to align ongoing reporting of the Portfolio's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. Immediately prior to the Reorganization, the net assets of the Portfolio were approximately $73,320,000. Immediately after the Reorganization, the net assets of the Portfolio were approximately $97,464,000.

Upon closing of the Reorganization, shareholders of Global Infrastructure Portfolio received shares of the Portfolio as follows:

Global Infrastructure Portfolio	UIF Global Infrastructure Portfolio
Class X	Class I
Class Y	Class II

Assuming the acquisition had been completed on January 1, 2013, the beginning of the annual reporting period of the Portfolio, the Portfolio's pro forma results of operations for the period ended June 30, 2014, are as follows:

Net investment income(1)	$	1,369,000
Net gain realized and unrealized gain(2)	$	12,428,000
Net increase (decrease) in net assets resulting from operations	$	13,797,000

(1)Approximately $1,049,000 as reported, plus approximately $169,000 Global Infrastructure Portfolio premerger, plus approximately $151,000 of estimated pro-forma eliminated expenses.

(2)Approximately $11,196,000 as reported, plus approximately $1,232,000 Global Infrastructure Portfolio premerger.

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of Global Infrastructure Portfolio that have been included in the Portfolio's Statement of Operations since April 28, 2014.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP 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: (1) An equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices;

12

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

(2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at its latest reported sales price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) when market quotations are not readily available, including circumstances under which the Adviser or Sub-Advisers determine that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (4) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (6) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures,

the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

2.  Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

•  Level 1 – unadjusted quoted prices in active markets for identical investments

•  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

13

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

•  Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Portfolio's investments as of June 30, 2014.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Common Stocks
Airports	$	5,425	$	—	$	—	$	5,425
Communications		13,908		—		—		13,908
Diversified		4,648		—		—		4,648
Oil & Gas Storage & Transportation		44,662		—		—		44,662
Ports		1,619		—		—		1,619
Toll Roads		7,278		—		—		7,278
Transmission & Distribution		14,787		—		—		14,787
Water		8,276		—		—		8,276
Total Common Stocks		100,603		—		—		100,603
Short-Term Investments
Investment Company		10,085		—		—		10,085
Repurchase Agreements		—		2,281		—		2,281
Total Short-Term Investments		10,085		2,281		—		12,366
Total Assets	$	110,688	$	2,281	$	—	$	112,969

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Portfolio recognizes transfers between the levels as of the end of the period. As of June 30, 2014, the Portfolio did not have any investments transfer between investment levels.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Portfolio are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

—  investments, other assets and liabilities at the prevailing rate 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 Portfolio are presented at the foreign exchange rates and market values at the close of the period, the Portfolio 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 securities held at period end. Similarly, the Portfolio 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) on investments in securities 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 forward exchange contracts, disposition of foreign currencies, currency gains (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 Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) on the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in 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

14

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

result of, among other factors, fluctuations of exchange rates in relation to the U.S. dollar, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

Governmental approval for foreign investments may be required in advance of making an investment under certain circumstances in some countries, and the extent of foreign investments in domestic companies may be subject to limitation in other countries. Foreign ownership limitations also may be imposed by the charters of individual companies to prevent, among other concerns, violations of foreign investment limitations. As a result, an additional class of shares (identified as "Foreign" in the Portfolio of Investments) may be created and offered for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Portfolio values the foreign shares at the closing exchange price of the local shares.

4.  Securities Lending: The Portfolio lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Portfolio. The Portfolio would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily, by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned-Net" in the Portfolio's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower.

The Portfolio has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2014.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	12,218	(a)	$	—	$	(12,218	)(b)(c)	$	0

(a)  Represents market value of loaned securities at period end.

(b)  The Portfolio received cash collateral of approximately $12,803,000, of which approximately $12,043,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2014 there was uninvested cash of approximately $760,000, which is not reflected in the Portfolio of Investments.

(c)  The actual collateral received is greater than the amount shown here due to overcollateralization.

5.  Indemnifications: The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

6.  Security Transactions, Income and Expenses: Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sale of investment securities are determined on the specific identified cost method. Interest income is recognized on the accrual basis except where collection is in doubt. Discounts are accreted and premiums are amortized over the life of the respective securities. 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 or other appropriate methods. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Portfolio owns shares of REITs which report information on the source of their distributions annually in the following calendar year. A portion of distributions received from REITs during the year is estimated to be a return of capital and is recorded as a reduction of their cost.

Settlement and registration of foreign securities transactions may be subject to significant risks not normally associated with investments in the United States. In certain

15

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

markets, ownership of shares is defined according to entries in the issuer's share register. It is possible that a Portfolio holding these securities could lose its share registration through fraud, negligence or even mere oversight. In addition, shares being delivered for sales and cash being paid for purchases may be delivered before the exchange is complete. This may subject the Portfolio to further risk of loss in the event of a failure to complete the transaction by the counterparty.

7.  Dividends and Distributions to Shareholders: Dividend income and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Portfolio with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 0.85% of the average daily net assets of the Portfolio.

Pursuant to the Reorganization, the Adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.87% for Class I shares and 1.12% for Class II shares. The fee waivers and/or expense reimbursements will continue for at least two years from the date of the Reorganization or until such time as the Directors act to discontinue all or a portion of such waivers and/or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2014, approximately $122,000 of advisory fees were waived pursuant to this arrangement.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Advisers, each a wholly-owned subsidiary of Morgan Stanley. The Sub-Advisers provide the Portfolio with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Advisers on a monthly basis a portion of the net advisory fees the Adviser receives from the Portfolio.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.25% of the Portfolio's average daily net assets. Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Portfolio.

D. Distribution Fees: Morgan Stanley Distribution, Inc. ("MSDI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, and an indirect subsidiary of Morgan Stanley, serves as the Distributor of the Portfolio and provides the Portfolio's Class II shareholders with distribution services pursuant to a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the Act. Under the Plan, the Portfolio is authorized to pay the Distributor a distribution fee, which is accrued daily and paid monthly, at an annual rate of 0.35% of the Portfolio's average daily net assets attributable to Class II shares. The Distributor has agreed to waive 0.10% of the 0.35% distribution fee that it may receive. This fee waiver will continue for at least two years from the date of the Reorganization or until such time as the Directors act to discontinue all or a portion of such waiver when they deem such action appropriate. For the six months ended June 30, 2014, this waiver amounted to approximately $4,000.

E. Dividend Disbursing and Transfer Agent: The Fund's dividend disbursing and transfer agent is Boston Financial Data Services, Inc. ("BFDS"). Pursuant to a Transfer Agency Agreement, the Fund pays BFDS a fee based on the number of classes, accounts and transactions relating to the Portfolios of the Fund.

F. Custodian Fees: State Street (the "Custodian") serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

G. Federal Income Taxes: It is the Portfolio's intention to continue 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 based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, Income Taxes — Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Portfolio recognizes

16

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Notes to Financial Statements (cont'd)

interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Portfolio files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax years in the four-year period ended December 31, 2013, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2013 and 2012 was as follows:

2013 Distributions Paid From:				2012 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	1,864	$	5,864	$	2,854	$	5,230

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are primarily due to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions and distribution redesignations, resulted in the following reclassifications among the components of net assets at December 31, 2013:

Distributions in Excess of Net Investment Income (000)			Accumulated Net Realized Gain (000)		Paid-in- Capital (000)
$	(1	)	$	1	$	—

At December 31, 2013, the components of distributable earnings for the Portfolio on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	1,852	$	7,463

At June 30, 2014, the aggregate cost for Federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $33,578,000 and the aggregate gross unrealized depreciation

is approximately $210,000 resulting in net unrealized appreciation of approximately $33,368,000.

H. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2014, purchases and sales of investment securities for the Portfolio, other than long-term U.S. Government securities and short-term investments, were approximately $13,430,000 and $15,620,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2014.

The Portfolio invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly, and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Portfolio are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Portfolio due to its investment in the Liquidity Funds. For the six months ended June 30, 2014, advisory fees paid were reduced by approximately $1,000 relating to the Portfolio's investment in the Liquidity Funds.

A summary of the Portfolio's transactions in shares of the Liquidity Funds during the six months ended June 30, 2014 is as follows:

Value December 31, 2013 (000)		Purchases at Cost (000)		Sales (000)		Dividend Income (000)			Value June 30, 2014 (000)
$	12,177	$	18,649	$	20,741	$	—	@	$	10,085

@  Amount is less than $500.

During the six months ended June 30, 2014, the Portfolio incurred approximately $1,000 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser, Sub-Advisers, Administrator and Distributor, for portfolio transactions executed on behalf of the Portfolio.

I. Other: At June 30, 2014, the Portfolio had otherwise unaffiliated record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Portfolio. The aggregate percentage of such owners was 91% and 94%, for Class I and Class II, respectively.

17

The Universal Institutional Funds, Inc.

Semi-Annual Report – June 30, 2014 (unaudited)

Director and Officer Information

Directors

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Adviser and Administrator

Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, New York 10036

Sub-Advisers

Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf
London, E14 4QA, England

Morgan Stanley Investment Management Company
23 Church Street
16-01 Capital Square, Singapore 049481

Distributor

Morgan Stanley Distribution, Inc.
522 Fifth Avenue
New York, New York 10036

Dividend Disbursing and Transfer Agent

Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

Officers

Michael E. Nugent
Chairperson of the Board and Director

John H. Gernon
President and Principal Executive Officer

Stefanie V. Chang Yu
Chief Compliance Officer

Joseph C. Benedetti
Vice President

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111

Legal Counsel

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

Reporting to Shareholders

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semi-annual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semi-annual and annual reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1 (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's email address (publicinfo@sec.gov) or by writing the Public Reference Room of the SEC, Washington, DC 20549-0102.

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Fund's Proxy Voting Policy and Procedures and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, without charge, upon request, by calling toll free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's website at www.sec.gov.

This report is submitted for the general information of the shareholders of the Portfolio. For more detailed information about the Portfolio, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Portfolio, including its Directors. It is available, without charge, by calling 1 (800) 548-7786.

This report is not authorized for distribution to prospective investors in the Portfolio unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing.

UIFGINSAN
975525 EXP 08.31.15

Item 2.  Code of Ethics.

Not applicable for semiannual reports.

Item 3.  Audit Committee Financial Expert.

Not applicable for semiannual reports.

Item 4. Principal Accountant Fees and Services

Not applicable for semiannual reports.

Item 5. Audit Committee of Listed Registrants.

Not applicable for semiannual reports.

Item 6.

(a) Refer to Item 1.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable for semiannual reports.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Applicable only to annual reports filed by closed-end funds.

Item 9. Closed-End Fund Repurchases

Applicable to reports filed by closed-end funds.

Item 10. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 11. Controls and Procedures

(a)  The Fund’s principal executive officer and principal financial officer have concluded that the Fund’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

(b)  There were no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits

(a) Code of Ethics — Not applicable for semiannual reports.

(b) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto as part of EX-99.CERT.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Morgan Stanley Universal Institutional Fund, Inc.

/s/ John H. Gernon

John H. Gernon

Principal Executive Officer

August 19, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ John H. Gernon

John H. Gernon

Principal Executive Officer

August 19, 2014

/s/ Francis Smith

Francis Smith

Principal Financial Officer

August 19, 2014

3